ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis presents the more significant factors that affected our financial condition as of December 31, 2025 and 2024 and results of operations for each of the years then ended. Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K filed with the SEC on February 27, 2025 (the “ 2024 Form 10-K ”) for a discussion and analysis of the more significant factors that affected the 2023 period, which are incorporated herein by reference. Certain immaterial reclassifications have been made to make prior periods comparable. This discussion and analysis should be read in conjunction with our financial statements, notes thereto and other financial information appearing elsewhere in this report, as well as the cautionary note regarding forward-looking statements and the risks discussed in Item 1A of Part I of this Form 10-K.
Critical Accounting Estimates
Overview
The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. While we base estimates on historical experience, current information and other factors deemed to be relevant, actual results could differ from those estimates.
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 credit losses, (b) acquisition accounting and valuation of loans, (c) the valuation of goodwill and the useful lives applied to intangible assets and (d) income taxes.
Allowance for Credit Losses
The allowance for credit losses is a reserve established through a provision for credit losses charged to expense, which represents management’s best estimate of lifetime expected losses based on reasonable and supportable forecasts, quantitative factors, and other qualitative considerations. The allowance, in the judgment of management, is necessary to reserve for expected credit losses and risks inherent in the loan portfolio. Our allowance for credit loss methodology includes reserve factors calculated to estimate current expected credit losses to amortized cost balances over the remaining contractual life of the portfolio, adjusted for prepayments, in accordance with Accounting Standard Codification (“ASC”) Topic 326-20, Financial Instruments - Credit Losses . Accordingly, the methodology is based on our reasonable and supportable economic forecasts, historical loss experience, and other qualitative adjustments. For further information see the section Allowance for Credit Losses below.
Our evaluation of the allowance for credit losses is inherently subjective as it requires material estimates. The actual amounts of credit losses realized in the near term could differ from the amounts estimated in arriving at the allowance for credit losses reported in the financial statements.
Acquisition Accounting, Loans
We account for our 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. The fair value for acquired loans at the time of acquisition is based on a variety of factors including discounted expected cash flows, adjusted for estimated prepayments and credit losses. In accordance with ASC 326, the fair value adjustment is recorded as premium or discount to the unpaid principal balance of each acquired loan. Loans that have been identified as having experienced a more-than-insignificant deterioration in credit quality since origination are purchased credit deteriorated (“PCD”) loans. The net premium or discount on PCD loans is adjusted by our allowance for credit losses recorded at the time of acquisition. The remaining net premium or discount is accreted or amortized into interest income over the remaining life of the loan using a constant yield method. The net premium or discount on loans that are not classified as PCD (“non-PCD”), that includes credit and non-credit components, is accreted or amortized into interest income over the remaining life of the loan using a constant yield method. We then record the necessary allowance for credit losses on the non-PCD loans through provision for credit expense.
Goodwill and Intangible Assets
Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Other intangible assets represent purchased assets that also lack physical substance but can be separately distinguished from goodwill because of contractual or other legal rights or because the asset is capable of being sold or exchanged either on its own or in combination with a related contract, asset or liability. We perform an annual goodwill impairment test, and more than annually if circumstances warrant, in accordance with ASC Topic 350, Intangibles – Goodwill and Other , as amended by ASU 2011-08 – T esting Goodwill for Impairment and ASU 2017-04 - Intangibles – Goodwill and Other . ASC Topic 350 requires that goodwill and intangible assets that have indefinite lives be reviewed for impairment annually or more frequently if certain conditions occur. Our assessment depends on several assumptions which are dependent on market and economic conditions. Impairment losses on recorded goodwill, if any, will be recorded as operating expenses.
To quantitatively test goodwill for impairment, a present value of discounted cash flows calculation is completed and relies on several assumptions that have a level of subjectivity and judgment. These assumptions are dependent on market and economic conditions. Key inputs to estimate terminal fair value of the Company include projected forecasts, noninterest expense savings and a pricing multiple based on a group of peer banks with similar characteristics. These inputs are discounted by the cost of equity, which includes assumptions involving our beta; equity risk, size and company premiums; and the 20-year treasury rate. Assumptions used in calculating the cost of equity are obtained from market and third-party data. Results are compared to book value; no impairment was indicated as of December 31, 2025. Judgment is inherent in assessing goodwill for impairment. The various assumptions used in assessing goodwill for impairment involve uncertainties that are beyond our control and could cause actual results to differ materially from those projected.
Income Taxes
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.
2025 Overview
2025 was a transformative year for the Company. We successfully raised $326.9 million of equity capital to help reposition our balance sheet. We effectively addressed a negative arbitrage between long-term bond yields and shorter-term funding costs, which freed up capital for future growth. We reclassified approximately $3.59 billion in held-to-maturity (“HTM”) securities to available-for-sale (“AFS”) securities and sold approximately $3.16 billion in amortized cost basis of AFS securities (including certain of those previously classified as HTM). The sale of investment securities resulted in a realized, after-tax loss of $625.6 million (based on actual tax rate of 21.946%). Proceeds from the sale of the investment securities were primarily used to help deleverage the balance sheet through the pay-down of higher rate, non-relationship wholesale and public fund deposits, as well as higher rate other borrowings primarily consisting of FHLB advances.
We followed the balance sheet repositioning by issuing $325.0 million in aggregate principal amount of 6.25% Fixed-to-Floating Rate Subordinated Notes (“2025 Notes”), which qualify as Tier 2 regulatory capital of the Company. The proceeds of this issuance were used to redeem $330.0 million of our 5.00% Fixed-to-Floating Rate Subordinated Notes (“2018 Notes”), which qualified as Tier 2 regulatory capital but were subject to amortizing regulatory capital treatment as they approached maturity. This redemption was effective October 1, 2025.
Our net loss for the year ended December 31, 2025 was $397.6 million, or $(2.95) diluted earnings per share, compared to net income of $152.7 million, or $1.21 diluted earnings per share, for the same period in 2024. Included in 2025 results were $630.7 million of certain items, net of tax, that were primarily related to the loss on sale of securities, branch right sizing initiatives, loss on sale of an equipment finance business and early retirement program costs. Included in 2024 results were $25.2 million of certain items, net of tax, that were primarily related to the loss on sale of securities, a FDIC special assessment and branch right sizing initiatives. Adjusting for these certain items, adjusted earnings for the year ended December 31, 2025 were $233.1 million, or $1.73 adjusted diluted earnings per share, compared to $177.9 million, or $1.41 adjusted diluted earnings per share, in 2024. See GAAP Reconciliation of Non-GAAP Financial Measures for additional discussion and reconciliations of non-GAAP measures.
While completing steps related to the balance sheet restructure during the year, we continued to focus on organic growth and building momentum in our current footprint. We are encouraged by our positive momentum, while maintaining solid capital and liquidity positions:
• Total deposits as of December 31, 2025 were $20.18 billion, compared to $21.89 billion as of December 31, 2024. Uninsured deposits (excluding collateralized deposits and intercompany deposits) as of December 31, 2025 were approximately $4.55 billion, or 23% of total deposits.
• Capital levels remained strong over the period, with all regulatory capital ratios remaining significantly above “well-capitalized” guidelines as of December 31, 2025 (see Table 18 in the Risk-Based Capital section below). As of December 31, 2025, our ratio of common equity to total assets was 13.93%, the ratio of tangible common equity to tangible assets was 8.71% and our Tier 1 leverage ratio was 10.06%.
• Key credit quality metrics as of December 31, 2025 also remained solid, with our nonperforming loan coverage ratio at 199% and our allowance for credit losses as a percent of total loans ratio was 1.28%.
• The loan to deposit ratio was 87% as of December 31, 2025, compared to 78% as of December 31, 2024. Additional liquidity sources available to us as of December 31, 2025 totaled $9.32 billion, and our uninsured, non-collateralized deposit coverage ratio was 2.0x.
During the year, we increased the provision for credit losses on two specific credit relationships that we have been watching for some time due to unfavorable events that occurred for both credits. Subsequently, we charged off the uncollectible portion related to both credits during the year ended December 31, 2025. Other than with respect to these two specific credit relationships, we believe the asset quality in our portfolio remains sound and reflects our conservative credit culture, as well as our focus on maintaining disciplined pricing and conservative underwriting standards given the current economic environment. Total nonperforming loans as of December 31, 2025 were $112.7 million, as compared to $110.8 million at December 31, 2024. Non-performing assets as a percent of total assets were 0.51% and 0.45% at December 31, 2025 and 2024, respectively.
Stockholders’ equity as of December 31, 2025 was $3.42 billion, book value per share was $23.62 and tangible book value per common share was $13.91.
Total loans were $17.49 billion at December 31, 2025, an increase of $486.2 million, or 2.9%, from the same time in 2024. Our unfunded commitments increased to $3.87 billion at December 31, 2025, as compared to $3.74 billion at December 31, 2024. Our commercial loan pipeline totaled $1.54 billion as of December 31, 2025, compared to $1.26 billion at December 31, 2024.
In our discussion and analysis of our financial condition and results of operation in this Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we provide certain financial information determined by methods other than in accordance with US GAAP. We believe the presentation of non-GAAP financial measures provides a meaningful basis for period-to-period and company-to-company comparisons, which we believe will assist investors and analysts in analyzing the core financial measures of the Company and predicting future performance. See the GAAP Reconciliation of Non-GAAP Financial Measures section below for additional discussion and reconciliations of non-GAAP measures.
Simmons First National Corporation is an Arkansas-based financial holding company that, as of December 31, 2025, has approximately $24.54 billion in consolidated assets and, through its subsidiaries, conducts financial operations in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas.
Net Interest Income
Net interest income, our principal source of earnings, is the difference between the interest income generated by earning assets and the total interest cost of the deposits and borrowings obtained to fund those assets. Factors that determine the level of net interest income include the volume of earning assets and interest bearing liabilities, yields earned and rates paid, the level of non-performing loans and the amount of noninterest bearing liabilities supporting earning assets. Net interest income is analyzed in the discussion and tables below on a fully taxable equivalent basis. The adjustment to convert certain income to a fully taxable equivalent basis consists of dividing tax-exempt income by one minus the combined federal and state income tax rate of 26.135%.
The FRB sets various benchmark interest rates which influence the general market rates of interest, including the deposit and loan rates offered by financial institutions. During March 2020, the Federal Open Market Committee (“FOMC”) of the FRB substantially reduced interest rates in response to the economic crisis brought on by the COVID-19 pandemic. The federal funds rate was cut to a range of 0% - 0.25%, where it remained throughout 2021 and into early 2022. During March 2022, the FOMC began a series of rate increases in an effort to curb rising inflation. From early 2022 through 2023, the federal funds rate range was increased on eleven occasions and ended 2023 with a range set at 5.25% - 5.50%. From 2024 through 2025, as inflation declined, the FOMC cut rates on six occasions to a period end range of 3.50% - 3.75%. To date in 2026, rates have held steady by the FOMC.
Our loan portfolio is significantly affected by changes in the prime interest rate. The prime interest rate, which is the rate offered on loans to borrowers with strong credit, also increased from 3.25% to 5.50% during the years 2015 through 2018. The prime interest rate remained flat until it began to decrease in July 2019 and was eventually reduced to 4.75% in October 2019. Similarly to the reduction in the federal funds rate, the prime rate was cut to 3.25% in mid-March of 2020 in response to the COVID-19 pandemic and remained unchanged throughout 2021 and into early 2022. Paralleling the federal funds rate, multiple increases by the Federal Reserve during 2022 and 2023 increased the prime rate to 8.50% as of the end of 2023 and a series of rate cuts during 2024 and 2025 decreased the prime rate to 6.75% at the end of 2025. To date in 2026, the prime interest rate has also held steady.
Our practice is to limit exposure to interest rate movements by maintaining a significant portion of earning assets and interest bearing liabilities in short-term repricing. In the last several years, on average, approximately 48% of our loan portfolio and approximately 94% of our time deposits have repriced in one year or less. As of December 31, 2025, our current interest rate sensitivity shows that approximately 60% of our loans and 96% of our time deposits will reprice in the next year.
For the year ended December 31, 2025, net interest income on a fully taxable equivalent basis was $738.7 million, an increase of $84.5 million, or 12.9%, over the same period in 2024. The increase in net interest income was primarily the result of a $74.5 million decrease in interest income, more than offset by a $159.0 million decrease in interest expense.
Several factors contributed to the increase in net interest income on a fully taxable equivalent basis over the comparative period. During the third quarter of 2025, we completed a balance sheet repositioning that included the transfer of approximately $3.59 billion of investment securities classified as HTM to the AFS investment securities portfolio, with a subsequent sale of approximately $3.16 billion in amortized cost basis of low-yielding AFS securities (including certain of those previously classified as HTM). Proceeds from the sale of the investment securities were primarily used to deleverage the balance sheet through the pay-down of higher rate, non-relationship wholesale and public fund deposits, as well as higher rate other borrowings primarily consisting of FHLB advances. The pay-down of higher rate funding was completed throughout the third quarter of 2025.
The decrease in interest income primarily resulted from a $61.2 million decrease in our investment portfolio average balances which decreased by $1.67 billion, or 25.6%, related to the balance sheet repositioning previously discussed. The decrease was partially offset by an increase of $3.7 million in interest income on non-taxable investment securities due to a yield increase over the period of 14 basis points. Interest income on loans decreased by $19.9 million largely attributable to a 10 basis point decline in yield that resulted in a $17.0 million decrease in interest income, while the incremental decline in loan volume resulted in a decrease of $2.9 million in interest income. The loan yield for 2025 was 6.25%, compared to 6.35% in 2024.
Included in interest income is the additional yield accretion recognized as a result of updated estimates of the cash flows of our loans acquired. 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 flows 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 years ended December 31, 2025, 2024 and 2023, interest income included $3.8 million, $6.1 million and $8.8 million, respectively, for the yield accretion recognized on loans acquired.
The $159.0 million decrease in interest expense is mostly due to the decrease in our deposit account rates over the period. Interest expense decreased $85.8 million due to the decline in rates of 57 basis points on interest-bearing deposit accounts and decreased $42.1 million related to the decrease in time deposit volume over the period. Further, a decrease of $31.7 million in interest expense was related to reductions in the amounts outstanding under and rates on wholesale borrowings sources over the comparative period. The decline in wholesale borrowings volume, including brokered time deposits, is largely due to the balance sheet repositioning. We continually monitor and look for opportunities to fairly reprice our deposits while remaining competitive in this current challenging rate environment.
Our net interest margin on a fully tax equivalent basis was 3.32% for the year ended December 31, 2025, up 58 basis points from 2024. The increase in the net interest margin was primarily due to the balance sheet repositioning during the period.
Over the course of 2026, we anticipate continued expansion on our margin primarily related to the full period benefit of the balance sheet repositioning previously discussed. We are cautiously optimistic regarding modest organic loan growth during 2026, subject to the underlying economy, with continued focus on soundness, profitability discipline and growth. We also expect noninterest income to be stable and incremental increases in noninterest expenses as we continue to focus on improvement initiatives and utilizing cost savings to partially fund targeted investments in technology and talent.
Tables 1 and 2 reflect an analysis of net interest income on a fully taxable equivalent basis for the years ended December 31, 2025, 2024 and 2023, respectively, as well as changes in fully taxable equivalent net interest margin for the years 2025 versus 2024 and 2024 versus 2023.
Table 1: Analysis of Net Interest Margin
(FTE = Fully Taxable Equivalent using an effective tax rate of 26.135%)
Years Ended December 31,
(In thousands)
Interest income
FTE adjustment
Interest income - FTE
Interest expense
Net interest income - FTE
Yield on earning assets - FTE
Cost of interest bearing liabilities
Net interest spread - FTE
Net interest margin - FTE
Table 2: Changes in Fully Taxable Equivalent Net Interest Margin
(In thousands)
Decrease due to change in earning assets
(Decrease) increase due to change in earning asset yields
Increase (decrease) due to change in interest bearing liabilities
Increase (decrease) due to change in interest rates paid on interest bearing liabilities
Increase (decrease) in net interest income
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 each of the years in the three-year period ended December 31, 2025. 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
(FTE = Fully Taxable Equivalent using an effective tax rate of 26.135%)
Years Ended December 31,
Average
Income/
Yield/
Average
Income/
Yield/
Average
Income/
Yield/
(In thousands)
Balance
Expense
Rate (%)
Balance
Expense
Rate (%)
Balance
Expense
Rate (%)
ASSETS
Earning assets:
Interest bearing balances due from banks and federal funds sold
Investment securities - taxable
Investment securities - non-taxable
Mortgage loans held for sale
Assets held in trading accounts
Loans - including fees
Total interest earning assets
Non-earning assets
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Interest bearing liabilities:
Interest bearing transaction and savings deposits
Time deposits
Total interest bearing deposits
Federal funds purchased and securities sold under agreements to repurchase
Other borrowings
Subordinated debt and debentures
Total interest bearing liabilities
Noninterest bearing liabilities:
Noninterest bearing deposits
Other liabilities
Total liabilities
Stockholders’ equity
Total liabilities and stockholders’ equity
Net interest spread
Net interest margin
Table 4 shows changes in interest income and interest expense resulting from changes in volume and changes in interest rates for the years 2025 versus 2024 and 2024 versus 2023. 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
Years Ended December 31,
Yield/
Yield/
(In thousands, on a fully taxable equivalent basis)
Volume
Rate
Total
Volume
Rate
Total
Increase (decrease) in:
Interest income:
Interest bearing balances due from banks and federal funds sold
Investment securities - taxable
Investment securities - non-taxable
Mortgage loans held for sale
Assets held in trading accounts
Loans - including fees
Total
Interest expense:
Interest bearing transaction and savings accounts
Time deposits
Federal funds purchased and securities sold under agreements to repurchase
Other borrowings
Subordinated notes and debentures
Total
Increase (decrease) in net interest income
Provision for Credit Losses
The provision for credit losses represents management’s determination of the amount necessary to be charged against the current period’s earnings in order to maintain the allowance for credit losses at a level considered appropriate in relation to the estimated lifetime risk inherent in the loan portfolio. The level of provision to the allowance is based on management’s judgment, with consideration given to the composition, maturity and other qualitative characteristics of the portfolio, assessment of current economic conditions, reasonable and supportable forecasts, past due and non-performing loans and historical net credit loss experience. It is management’s practice to review the allowance on a monthly basis and, after considering the factors previously noted, to determine the level of provision made to the allowance.
During 2025, our provision for credit loss expense was $65.8 million, as compared to an expense of $46.8 million during 2024 and an expense of $42.0 million during 2023. The provision for credit loss expense during 2025 and 2024 reflected loan growth, as well as the impact of updated economic assumptions. Additionally, during 2025, a provision expense of $15.6 million was recorded related to two specific credit relationships which migrated to nonperforming during the year.
The provision for credit loss expense during 2023 was impacted by several factors throughout the year, including a $47.4 million expense related to loans and reflected loan growth, as well as the impact of updated economic assumptions, which was partially offset by a $16.3 million release from the reserve for unfunded commitments primarily due to a decline in unfunded commitments resulting from customers utilizing lines of credit during the year. Additionally, provision expense related to AFS and HTM securities recorded during the twelve months ended December 31, 2023 was $9.1 million and $1.8 million, respectively, primarily due to decreases in the value of select corporate bonds in the investment securities portfolio.
Noninterest Income (Loss)
Noninterest income is principally derived from recurring fee income, which includes service charges, wealth management fees and debit and credit card fees. Noninterest income also includes income on the sale of mortgage loans, income from the increase in cash surrender values of bank owned life insurance and gains (losses) from sales of securities.
We incurred a noninterest loss of $616.0 million in 2025, compared to noninterest income of $147.2 million in 2024. Included in both 2025 and 2024 results were $801.5 million and $28.4 million, respectively, of certain items related to the loss on the sale of securities during the periods. Additionally during 2025, we recognized a $570,000 loss on early extinguishment of debt. Adjusting for these certain items, adjusted noninterest income for the year ended December 31, 2025 increased $10.5 million, or 6.0%, from the prior year. See the GAAP Reconciliation of Non-GAAP Financial Measures section for additional discussion and reconciliations of non-GAAP measures.
During 2025, we sold approximately $3.16 billion in amortized cost basis of low yielding investment securities as part of a balance sheet repositioning to deleverage the balance sheet through the pay-down of higher rate, non-relationship wholesale and public fund deposits, as well as higher rate other borrowings primarily consisting of FHLB advances. During 2024, we sold approximately $251.5 million of investment securities related to a strategic decision to sell low yield securities and use the proceeds to pay off higher rate wholesale fundings.
The increase in adjusted noninterest income (loss) during 2025 as compared to 2024, was primarily driven by $3.3 million in bank owned life insurance death benefits recognized during the period, which are included in other income in the table below. Further contributing to the increase were several incremental fee-based business increases during 2025.
Table 5 shows noninterest income for the years ended December 31, 2025, 2024 and 2023, respectively, as well as changes in 2025 from 2024 and in 2024 from 2023.
Table 5: Noninterest Income (Loss)
Years Ended December 31,
Change from
Change from
(Dollars in thousands)
Service charges on deposit accounts
Debit and credit card fees
Wealth management fees
Mortgage lending income
Bank owned life insurance income
Other service charges and fees
Loss on sale of securities, net
Other income
Total noninterest income
*Not meaningful
Recurring fee income (total service charges, wealth management fees, debit and credit card fees) for 2025 was $130.1 million, an increase of $5.3 million, or 4.3%, when compared to the 2024 amounts and was primarily related to the incremental increases discussed above.
Noninterest Expense
Noninterest expense consists of salaries and employee benefits, occupancy, equipment, foreclosure losses and other expenses necessary for our operations. Management remains committed to controlling the level of noninterest expense through the continued use of expense control 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 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.
Noninterest expense for 2025 was $565.1 million, as compared to noninterest expense for 2024 of $557.5 million, an increase of $7.5 million, or 1.3%, compared to the prior period. Adjusted noninterest expense, which excludes branch right sizing, early retirement program costs, termination of vendor and software services, loss on sale of an equipment finance business (for 2025 only) and an FDIC special assessment (for 2024 only), for the year ended December 31, 2025 increased $7.0 million, or 1.3%, from the prior year. See the GAAP Reconciliation of Non-GAAP Financial Measures section for additional discussion and reconciliations of non-GAAP measures.
Salaries and employee benefits expense increased by $13.7 million as compared to 2024. The increase in salaries and employee benefits expense reflects annual merit increases, in addition to incentive compensation accrual adjustments given the Company’s financial performance during the period.
Deposit insurance expense decreased by $3.7 million as compared to 2024. Excluding the FDIC special assessment of $1.8 million recorded during the year ended December 31, 2024, which was levied to support the Deposit Insurance Fund following the failure of certain banks in 2023, deposit insurance expense decreased by $1.9 million due to favorable changes in the mix of deposits, primarily related to the reduction of brokered deposits from the balance sheet restructuring during 2025.
Amortization of intangibles recorded for the years ended December 31, 2025, and 2024 was $12.8 million and $15.4 million, respectively. See Note 7, Goodwill and Other Intangible Assets, in the accompanying Notes to Consolidated Financial Statements for additional information regarding our intangibles.
Table 6 below shows noninterest expense for the years ended December 31, 2025, 2024 and 2023, respectively, as well as changes in 2025 from 2024 and in 2024 from 2023.
Table 6: Noninterest Expense
Years Ended December 31,
Change from
Change from
(Dollars in thousands)
Salaries and employee benefits
Occupancy expense, net
Furniture and equipment expense
Other real estate and foreclosure expense
Deposit insurance
Merger related costs
Other operating expenses:
Professional services
Postage
Telephone
Credit card expenses
Marketing
Software and technology
Operating supplies
Amortization of intangibles
Branch right sizing expense
Other expense
Total noninterest expense
Income Taxes
The provision for income taxes for 2025 was a benefit of $130.1 million, compared to an expense of $18.6 million in 2024 and $25.5 million in 2023. The effective income tax rates for the years ended 2025, 2024 and 2023 were 24.7%, 10.9% and 12.7%, respectively. The change in the provision for income taxes during 2025 as compared to the prior periods was primarily due to the $801.5 million gross realized loss from the sale of securities during the twelve months ended December 31, 2025 related to the balance sheet repositioning during the year.
Loan Portfolio
Our loan portfolio averaged $17.06 billion during 2025 and $17.11 billion during 2024. As of December 31, 2025, total loans were $17.49 billion, compared to $17.01 billion on December 31, 2024, an increase of $486.2 million, or 2.9%. The increase in the overall loan balance during 2025 was primarily due to widespread loan growth throughout our geographic markets during the year. 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).
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 credit losses and regularly reviewing loans through the internal loan review process. The loan portfolio is diversified by borrower, purpose, industry and 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 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.
Consumer loans consist of credit card loans and other consumer loans. Consumer loans were $291.2 million at December 31, 2025, or 1.7% of total loans, compared to $309.0 million, or 1.8% of total loans at December 31, 2024. The decrease in consumer loans was primarily due to loan payoffs and pay downs within both the credit card and other consumer portfolios during the year.
Real estate loans consist of construction and development (“C&D”) loans, single family residential loans and CRE loans. Real estate loans were $13.77 billion at December 31, 2025, or 78.7% of total loans, compared to $13.39 billion, or 78.7% of total loans at December 31, 2024, an increase of $379.7 million, or 2.8%. Our C&D loans increased by $84.6 million, or 3.0%, single family residential loans decreased by $82.5 million, or 3.1%, and CRE loans increased by $377.6 million, or 4.8%. The changes among our real estate portfolio reflected our focus on maintaining conservative underwriting standards and structure guidelines while emphasizing prudent pricing discipline during the period. 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. Total commercial loans were $2.69 billion at December 31, 2025, or 15.4% of total loans, compared to $2.70 billion, or 15.8% of total loans at December 31, 2024, an incremental decrease of $6.7 million, or 0.2%. The decrease in non-real estate loans related to business of $51.8 million, or 2.1%, was partially offset by the increase in agricultural loans of $45.1 million, or 17.3%.
Other loans mainly consists of mortgage warehouse lending and municipal loans. Mortgage volume experienced an increase in demand during 2025 as compared to 2024, and was coupled with continued organic growth in our municipal loans during the period, leading to an increase of $131.0 million in other loans.
Our commercial loan pipeline consisting of all commercial loan opportunities was $1.54 billion at December 31, 2025, compared to $1.26 billion at December 31, 2024. The pipeline includes $773.4 million in loans approved and ready to close at the end of the year.
The balances of loans outstanding at the indicated dates are reflected in Table 7, according to type of loan.
Table 7: Loan Portfolio
Years Ended December 31,
(In thousands)
Consumer:
Credit cards
Other consumer
Total consumer
Real Estate:
Construction and development
Single family residential
Other commercial
Total real estate
Commercial:
Commercial
Agricultural
Total commercial
Other
Total loans before allowance for credit losses
Table 8 reflects the remaining loan maturities by interest rate type at December 31, 2025.
Table 8: Maturity Distribution of Loan Portfolio by Rate Type
1 year
Over 1 year through
Over 5 years through
Over
(In thousands)
or less
5 years
15 years
15 years
Total
Consumer
Real estate
Commercial
Other
Total
Predetermined rate
Consumer
Real estate
Commercial
Other
Total
Variable rate
Consumer
Real estate
Commercial
Other
Total
Asset Quality
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 collectibility 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 credit losses.
When credit card loans 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 increased $3.8 million from December 31, 2024 to December 31, 2025. Nonaccrual loans increased by $1.6 million during 2025, in addition to an increase in foreclosed assets held for sale of $2.7 million. While nonaccrual loans were relatively flat over the comparative period, two specific credit relationships were placed on nonaccrual status during 2025. One relationship placed on nonaccrual status during 2025 totaled $26.7 million and was related to a downtown St. Louis hotel that was originated pre-pandemic and had been on our classified list since April of 2021. The other relationship totaled $22.6 million and was related to a fast-food operator and had been on our classified list since June of 2024 due to sector-related headwinds and global cash flow concerns with the borrower. Subsequent to being placed on nonaccrual status, both relationships were charged off in December 2025.
Total non-performing assets increased $31.0 million from December 31, 2023 to December 31, 2024. Nonaccrual loans increased by $26.8 million during 2024, in addition to an increase in foreclosed assets held for sale of $5.2 million. The increase in nonaccrual loans was primarily spread within our real estate and commercial loan portfolios. The increase in foreclosed assets held for sale was primarily related to the addition of two commercial properties with net book values totaling $7.4 million during the period.
Total non-performing assets increased by $27.8 million from December 31, 2022 to December 31, 2023. Nonaccrual loans increased by $24.9 million during 2023, in addition to an increase in foreclosed assets held for sale of $1.2 million. The increase in nonaccrual loans was primarily due to an increase in nonaccrual loans within our commercial loan portfolio.
Total non-performing assets decreased by $13.8 million from December 31, 2021 to December 31, 2022. Nonaccrual loans decreased by $9.8 million during 2022, in addition to a decrease in foreclosed assets held for sale of $3.1 million. The decrease in nonaccrual loans was primarily due to an overall improvement in economic conditions from pandemic related stresses.
From time to time, certain borrowers experience declines in income and cash flow. As a result, these borrowers 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 collectibility of the debt.
We have internal loan 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. We primarily use interest rate reduction and/or payment modifications or extensions, with an occasional forgiveness of principal.
The financial effects of the modified loans made to borrowers experiencing financial difficulty in the single family residential real estate portfolio were not significant during the year ended December 31, 2025 and did not significantly impact the Company’s determination of the allowance for credit losses on loans during the year.
We continue to maintain good asset quality compared to the industry, and strong asset quality remains a primary focus of our strategy. The allowance for credit losses as a percent of total loans was 1.28% as of December 31, 2025. Non-performing loans equaled 0.64% of total loans. Non-performing assets were 0.51% of total assets, a 6 basis point increase from December 31, 2024. The allowance for credit losses was 199% of non-performing loans. Our annualized net charge-offs to total loans for 2025 was 0.47%, a 25 basis point increase from December 31, 2024, primarily due to the charge-offs of two specific credit relationships previously discussed. Excluding credit cards, the annualized net charge-offs to total loans for the same period was 0.49%. Annualized net credit card charge-offs to average total credit card loans were 2.95%, compared to 2.93% during 2024, and 97 basis points better than the most recently published industry average charge-off ratio as reported by the Federal Reserve for all banks.
We do not own any securities backed by subprime mortgage assets, and offer no mortgage loan products that target subprime borrowers.
Table 9 presents information concerning non-performing assets, including nonaccrual loans at amortized cost and foreclosed assets held for sale.
Table 9: Non-performing Assets
Years Ended December 31,
(Dollars in thousands)
Nonaccrual loans (1)
Loans past due 90 days or more (principal or interest payments)
Total non-performing loans
Other non-performing assets:
Foreclosed assets held for sale and other real estate owned
Other non-performing assets
Total other non-performing assets
Total non-performing assets
Allowance for credit losses to non-performing loans
Non-performing loans to total loans
Non-performing assets to total assets
(1) Includes nonaccrual financial difficulty modifications (formerly known as troubled debt restructurings) of approximately $853,000, $597,000, $282,000, $1.6 million and $2.7 million at December 31, 2025, 2024, 2023, 2022 and 2021, respectively.
The interest income on nonaccrual loans is not considered material for the years ended December 31, 2025, 2024 and 2023.
Allowance for Credit Losses
The allowance for credit losses is a reserve established through a provision for credit losses charged to expense which represents management’s best estimate of lifetime expected losses based on reasonable and supportable forecasts, quantitative factors, and other qualitative considerations.
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 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 economic scenarios. We also include qualitative adjustments to the allowance based on factors and considerations that have not otherwise been fully accounted for.
Loans that have unique risk characteristics are evaluated on an individual basis. These evaluations are typically performed on loans with a deteriorated internal risk rating. For a collateral-dependent loan, our evaluation process includes a valuation by appraisal or other collateral 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 credit losses as a specific allocation.
Additional information related to net charge-offs is shown in Table 10.
Table 10: Ratio of Net Charge-offs to Average Loans
(Dollars in thousands)
Net Charge-offs
Average Loans
Ratio of Net Charge-offs to Average Loans
Credit cards
Other consumer
Real estate
Commercial
Other
Total
Credit cards
Other consumer
Real estate
Commercial
Other
Total
Allowance for Credit Losses Allocation
As of December 31, 2025, the allowance for credit losses reflected a decrease of approximately $10.6 million from December 31, 2024, while loans increased $486.2 million over the same period. The allocation in each category within the allowance generally reflects the overall changes in the loan portfolio mix.
The decrease in the allowance for credit losses during 2025 was predominantly due to the utilization of specific reserves related to a deep dive analysis of our nonperforming loans and the sale of a run-off portfolio consisting of small ticket equipment finance loans during the year. Loan growth experienced during the year and refreshed economic forecasts partially offset these reductions. Our allowance for credit losses at December 31, 2025 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 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 for each of the periods indicated. The allowance for credit losses by loan category is determined by i) our estimated reserve factors by category including applicable qualitative adjustments and ii) any specific 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: Allocation of Allowance for Credit Losses on Loans
December 31,
(Dollars in thousands)
Allowance Amount
% of loans (1)
Allowance Amount
% of loans (1)
Allowance Amount
% of loans (1)
Credit cards
Other consumer and Other
Real estate
Commercial
Total
Allowance for credit losses to period-end loans
(1) Percentage of loans in each category to total loans.
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 held-to-maturity (“HTM”), available-for-sale (“AFS”) or trading.
HTM securities, which include any security for which we have 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.
AFS securities, which include any security for which we have 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. 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.
Assets held in trading accounts, comprised of U.S. Treasury securities, are purchased with the intent of selling in the near term. Trading securities are carried at fair value with gains and losses included in other income.
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, mortgage-backed securities and municipal securities. Our general policy is not to invest in derivative type investments or high-risk securities, except for collateralized mortgage-backed securities for which collection of principal and interest is not subordinated to significant superior rights held by others.
AFS investment securities and assets held in trading accounts were $3.27 billion and $11.7 million at December 31, 2025, respectively, compared to the HTM amount of $3.64 billion and AFS amount of $2.53 billion at December 31, 2024. We will continue to look for opportunities to maximize the value of the investment portfolio.
As of December 31, 2025, $58.9 million, or 1.8%, of our total portfolio was invested in obligations of U.S. government agencies and U.S. Treasury securities. Our investment portfolio as of December 31, 2025 also included $812.3 million, or 24.8%, of tax-exempt obligations of state and political subdivisions. A portion of the state and political subdivision debt obligations are rated bonds, primarily issued in states in which we are located, and are evaluated on an ongoing basis. There are no securities of any one state or political subdivision issuer exceeding ten percent of our stockholders’ equity at December 31, 2025.
We had approximately $2.20 billion, or 67.2%, of our total portfolio invested in mortgaged-backed securities at December 31, 2025. These mortgage-backed securities were issued by agencies of the U.S. government.
During the third quarter of 2025, we initiated and completed steps taken to reposition our consolidated balance sheet and reclassified approximately $3.59 billion in HTM investment securities to AFS investment securities. Subsequently, we sold approximately $3.16 billion in amortized cost basis of AFS securities (including certain of those previously classified as HTM). The sale of investment securities resulted in a realized, after-tax loss of $625.6 million (based on actual tax rate of 21.946%). As a result of the balance sheet repositioning, we did not hold any investment securities classified as HTM as of December 31, 2025.
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. No gains or losses on these securities were recognized at the time of transfer. During the balance sheet repositioning that occurred during 2025, these securities were transferred out of the HTM portfolio to the AFS portfolio at fair value. The previous related remaining combined net unrealized losses in accumulated other comprehensive income (loss), which losses were $99.4 million, were either recognized as part of the securities transfer and subsequent sale of certain securities or will be amortized into income over the remaining life of the security.
During the third quarter of 2021, we began utilizing interest rate swaps designated as fair value hedges to mitigate the effect of changing interest rates on the fair values of $1.00 billion of fixed rate callable municipal securities held in the AFS portfolio. These swap agreements consist of a two year forward start date and involve the payment of fixed interest rates with a weighted average of 1.21% in exchange for variable interest rates based on federal funds rates, which became effective during the late third quarter of 2023. Securities within these swap agreements have maturity dates varying between 2028 and 2029. For the year ended December 31, 2025, the net amount included in interest income on investment securities in the consolidated statements of income related to these swap agreements was $31.3 million.
The adoption of ASU 2016-13 at the beginning of 2020 required us to replace the existing impairment models for financial assets, which includes investment securities. Under this model, an estimate of expected credit losses that represents all contractual cash flows that is deemed uncollectible over the contractual life of the financial asset must be recorded. An allowance for credit losses related to mortgage-backed securities and U.S. government agencies was not recorded as of December 31, 2025 due to those securities being explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses.
We recaptured $3.2 million of the allowance for credit loss related to HTM securities during the year ended December 31, 2025 due to the balance sheet repositioning. There was no provision for credit losses related to the Company’s securities portfolios recorded for the year ended December 31, 2024. Based upon our analysis of the underlying risk characteristics of the AFS portfolio, including credit ratings and other qualitative factors, no allowance for credit losses related to AFS securities was deemed necessary at December 31, 2025 and 2024. See Note 3, Investment Securities, in the accompanying Notes to Consolidated Financial Statements for additional information related to our allowance for credit losses on investment securities held.
We had no gross realized gains and $801.5 million of gross realized losses from the sale of securities related to the balance sheet repositioning discussed above during the year ended December 31, 2025, compared to no gross realized gains and $28.4 million of gross realized losses from the sale of securities during the year ended December 31, 2024. During 2024, we sold approximately $251.5 million of AFS investment securities as part of a strategic decision to sell low yielding securities to pay off higher rate wholesale fundings consisting of FHLB advances.
As of December 31, 2025, we had the ability to hold the securities classified as AFS for a period of time sufficient for a recovery of amortized cost and we believed the accounting standard of “more likely than not” has not been met regarding whether we would be required to sell any of the AFS securities before recovery of amortized cost. As of December 31, 2025, the unrealized losses were largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the bonds approach their maturity date or repricing date or if market yields for such investments decline. Accordingly, as of December 31, 2025, we believed the declines in fair value are temporary and we did not believe any of the securities are impaired due to reasons of credit quality. The contractual terms of those investments do not permit the issuer to settle the securities at a price less than the amortized cost bases of the investments. We expect the cash flows from principal maturities of securities to provide flexibility to fund future loan growth or reduce wholesale funding.
Table 12 presents the amortized cost, fair value and allowance for credit losses on investment securities for each of the years indicated.
Table 12: Investment Securities
(In thousands)
Amortized Cost
Allowance
for Credit Losses
Net Carrying Amount
Gross Unrealized
Gains
Gross Unrealized
(Losses)
Estimated Fair
Value
Held-to-maturity
December 31, 2024
U.S. Government agencies
Mortgage-backed securities
State and political subdivisions
Other securities
Total HTM
(In thousands)
Amortized
Cost
Allowance for Credit Losses
Gross Unrealized
Gains
Gross Unrealized
(Losses)
Estimated Fair
Value
Available-for-sale
December 31, 2025
U.S. Government agencies
Mortgage-backed securities
State and political subdivisions
Other securities
Total AFS
December 31, 2024
U.S. Treasury
U.S. Government agencies
Mortgage-backed securities
State and political subdivisions
Other securities
Total AFS
Table 13 reflects the amortized cost and estimated fair value of securities at December 31, 2025, by contractual maturity and the weighted average yields (for tax-exempt obligations on a fully taxable equivalent basis, assuming a 26.135% tax rate) of such securities. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations, with or without call or prepayment penalties.
Table 13: Maturity Distribution of Investment Securities
December 31, 2025
Over
Over
1 year
5 years
Total
1 year
through
through
Over
No fixed
Amortized
Par
Fair
(In thousands)
or less
5 years
10 years
10 years
maturity
Cost
Value
Value
Available-for-Sale
U.S. Government agencies
Mortgage-backed securities
State and political subdivisions
Other securities
Total
Percentage of total
Weighted average yield
Deposits
Deposits are our primary source of funding for earning assets and are primarily developed through our network of 222 financial centers as of December 31, 2025. 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 $250,000 or more and brokered deposits. As of December 31, 2025, core deposits comprised 83.2% 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. 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.
Our total deposits as of December 31, 2025, were $20.18 billion, a decrease of $1.70 billion from December 31, 2024. Noninterest bearing transaction accounts, interest bearing transaction accounts and savings accounts totaled $15.47 billion at December 31, 2025, compared to $15.44 billion at December 31, 2024, a modest increase of $28.8 million. Total time deposits decreased $1.73 billion to $4.71 billion at December 31, 2025 as compared to $6.44 billion at December 31, 2024. We had $1.89 billion and $3.30 billion of brokered deposits at December 31, 2025, and December 31, 2024, respectively. The decrease in time deposits and brokered deposits over the comparative period is largely due to the balance sheet repositioning during the third quarter of 2025, including the pay-down of higher rate, non-relationship wholesale and public fund deposits. Our uninsured deposits as of December 31, 2025 and 2024 were $4.55 billion and $4.63 billion, respectively.
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 interest rate environment.
Table 14 reflects the classification of the average deposits and the average rate paid on each deposit category which is in excess of 10 percent of average total deposits for the three years ended December 31, 2025.
Table 14: Average Deposit Balances and Rates
December 31,
(In thousands)
Average Amount
Average Rate Paid
Average Amount
Average Rate Paid
Average Amount
Average Rate Paid
Noninterest bearing transaction accounts
Interest bearing transaction and savings deposits
Time deposits
Total
Our maturities of time deposits not covered by deposit insurance at December 31, 2025 are presented in Table 15.
Table 15: Maturities of Time Deposits Not Covered by Deposit Insurance
December 31, 2025
(In thousands)
Balance
Percent
Maturing
Three months or less
Over 3 months to 6 months
Over 6 months to 12 months
Over 12 months
Total
Federal Funds Purchased and Securities Sold Under Agreements to Repurchase
Federal funds purchased and securities sold under agreements to repurchase were $21.4 million at December 31, 2025, as compared to $37.1 million at December 31, 2024.
We have historically funded our growth in earning assets through the use of core deposits, large certificates of deposits from local markets, brokered deposits, FHLB borrowings and Federal funds purchased. Management anticipates that these sources will provide necessary funding in the foreseeable future.
Other Borrowings and Subordinated Debentures
Our total debt was $620.0 million and $1.11 billion at December 31, 2025 and 2024, respectively. The outstanding balance for December 31, 2025 includes $286.6 million in FHLB advances; $317.7 million in subordinated notes and unamortized debt issuance costs; and $15.7 million of other long-term debt. The decrease in total debt during 2025 was due to the pay down of higher cost wholesale funding, primarily FHLB advances, as part of the balance sheet repositioning during the year.
A summary of information related to our FHLB short-term advances is presented in Table 16.
Table 16: Short-Term Borrowings
December 31,
(Dollars in thousands)
Amount outstanding at year-end
Weighted-average interest rate at year-end
Maximum amount outstanding at any month-end during the year
Average amount outstanding during the year
Weighted-average interest rate for the year
In March 2018, we issued $330.0 million in aggregate principal amount of 2018 Notes at a public offering price equal to 100% of the aggregate principal amount of the 2018 Notes. We incurred $3.6 million in debt issuance costs related to the offering. The 2018 Notes were to mature on April 1, 2028; during the third quarter of 2025, we issued a notice of redemption to redeem the 2018 Notes, which were redeemed in full on October 1, 2025. The related remaining $565,000 of unamortized debt issuance costs were written off during the third quarter of 2025.
We assumed Fixed-to-Floating Rate Subordinated Notes in an aggregate principal amount, net of premium adjustments, of $37.4 million in connection with the Spirit acquisition in April 2022 (“Spirit Notes”). During the second quarter of 2025, we issued a notice of redemption to redeem the Spirit Notes in an aggregate principal amount of $37.0 million. The Spirit Notes were redeemed in full on July 31, 2025.
In September 2025, we issued $325.0 million in aggregate principal amount of 2025 Notes at a public offering price equal to 100% of the aggregate principal amount of the 2025 Notes. The Company incurred $3.9 million in debt issuance costs related to the offering. Additionally, during the third quarter of 2025, the Company began utilizing interest rate swaps designated as fair value hedges to mitigate the risk of changes in the fair value of the aggregate principal amount of the 2025 Notes due to changes in market interest rates. The 2025 Notes will mature on October 1, 2035 and are subordinated in right of payment to the payment of our other existing and future senior indebtedness, including all our general creditors. The 2025 Notes are obligations of the Company only and are not obligations of, and are not guaranteed by, any of its subsidiaries.
Aggregate annual maturities of long-term debt at December 31, 2025 are presented in Table 17.
Table 17: Maturities of Long-Term Debt
Annual Maturities
Year
(In thousands)
Thereafter
Total
Capital
Overview
At December 31, 2025, total capital was $3.42 billion. Capital represents shareholder ownership in the Company – the book value of assets in excess of liabilities. At December 31, 2025, our common equity to asset ratio was 13.93% compared to 13.13% at year-end 2024.
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. On April 27, 2022, our shareholders approved an amendment 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 authorized shares of our Class A common stock from 175,000,000 to 350,000,000.
On October 29, 2019, we 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 our authorized preferred stock. On November 30, 2021, we redeemed all of the Series D Preferred Stock, including accrued and unpaid dividends. On April 27, 2022, our shareholders approved an amendment to our Articles of Incorporation to remove the classification and designation for the Series D Preferred Stock. As of December 31, 2025, there were no shares of preferred stock issued or outstanding.
On May 17, 2024, we filed a shelf registration with the SEC. The shelf registration statement provides increased flexibility and more efficient access to raise capital from time to time through the sale of common stock, preferred stock, debt securities, depository shares, warrants, purchase contracts, subscription rights, units or a combination thereof, subject to market conditions. Specific terms and prices are determined at the time of any offering under a separate prospectus supplement that we are required to file with the SEC at the time of the specific offering.
On July 23, 2025, the Company closed a public offering of 18,653,000 shares of its Class A common stock, at a price to the public of $18.50 per share, which included 2,433,000 shares of the Company’s Class A common stock granted pursuant to the underwriters’ option to purchase additional shares at the public offering price, less underwriting discounts. The net proceeds of $327.4 million from this public offering helped offset the one-time, realized after-tax loss of $625.6 million (based on an actual tax rate of 21.946%) incurred during the third quarter of 2025 from selling AFS securities discussed in the Investments and Securities section above.
Stock Repurchase Program
In January 2022, the Company’s Board of Directors authorized a stock repurchase program (“2022 Program”) under which the Company could repurchase up to $175.0 million of its Class A common stock currently issued and outstanding. Because the 2022 Program was set to terminate on January 31, 2024, the Company’s Board of Directors authorized a new stock repurchase program in January 2024 (“2024 Program”) under which the Company could repurchase up to $175.0 million of its Class A common stock currently issued and outstanding. The 2024 Program was executed in accordance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and was terminated in January 2026. The Company’s Board of Directors authorized a new stock repurchase program in January 2026 (“2026 Program”) under which the Company may repurchase up to $175.0 million of its Class A common stock currently issued and outstanding. The 2026 Program will be executed in accordance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended, and is set to terminate on January 31, 2028 (unless terminated sooner).
Under the 2026 Program, we may repurchase shares of our common stock through open market and privately negotiated transactions or otherwise. The timing, pricing, and amount of any repurchases under the 2026 Program will be determined by management at its discretion based on a variety of factors, including, but not limited to, trading volume and market price of our common stock, corporate considerations, our working capital and investment requirements, general market and economic conditions, and legal requirements. The 2026 Program does not obligate us to repurchase any common stock and may be modified, discontinued, or suspended at any time without prior notice. We anticipate funding for the 2026 Program to come from available sources of liquidity, including cash on hand and future cash flow.
No shares were repurchased during 2025 or 2024. Market conditions and the Company’s capital needs, among other things, will drive decisions regarding additional, future stock repurchases.
Cash Dividends
We declared cash dividends on our common stock of $0.85 per share for the twelve months ended December 31, 2025, compared to $0.84 per share for the twelve months ended December 31, 2024, an increase of $0.01, or 1%. 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 Simmons First National Corporation (the Parent Company) are the payment of dividends to shareholders, the funding of debt 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 Simmons Bank is subject to various regulatory limitations and, in certain instances, regulatory approval requirements. The Company continually assesses its capital and liquidity needs and the best way to meet them, including, without limitation, through capital raising in the market via stock or debt offerings. See Item 7A, “Quantitative and Qualitative Disclosures About Market Risk”, for additional information regarding the parent company’s liquidity, which is incorporated herein by reference.
Risk-Based Capital
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.
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 December 31, 2025, we met all capital adequacy requirements to which we are subject.
As of the most recent notification from regulatory agencies, Simmons Bank was well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Company and 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 bank’s categories.
Our risk-based capital ratios at December 31, 2025 and 2024 are presented in Table 18 below:
Table 18: Risk-Based Capital
December 31,
(Dollars in thousands)
Tier 1 capital:
Stockholders’ equity
CECL transition provision
Goodwill and other intangible assets
Unrealized loss on available-for-sale securities, net of income taxes
Total Tier 1 capital
Tier 2 capital:
Subordinated notes and debentures
Subordinated debt phase out
Qualifying allowance for credit losses and reserve for unfunded commitments
Total Tier 2 capital
Total risk-based capital
Risk weighted assets
Assets for leverage ratio
Ratios at end of year:
Common equity Tier 1 ratio (CET1)
Tier 1 leverage ratio
Tier 1 risk-based capital ratio
Total risk-based capital ratio
Minimum guidelines:
Common equity Tier 1 ratio (CET1)
Tier 1 leverage ratio
Tier 1 risk-based capital ratio
Total risk-based capital ratio
Regulatory Capital Changes
In December 2018, the Federal Reserve, Office of the Comptroller of the Currency and 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 “CECL Transition Provision”).
In March 2020, in response to the COVID-19 pandemic, the agencies issued a new regulatory capital 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 two years an estimate of CECL’s effect on regulatory capital, followed by a three-year transition period (the “2020 CECL Transition Provision”). The Company elected to apply the 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 with a more risk-sensitive approach. The Basel III Capital Rules established risk-weighting 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.
The final rules 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 raised the minimum ratio of Tier 1 capital to risk-weighted assets to 6.0% and require a minimum leverage ratio of 4.0%.
Qualifying subordinated debt of $317.7 million is included as Tier 2 and total capital of the Company as of December 31, 2025.
Liquidity
In the normal course of business we have entered into a number of contractual obligations and have made commitments to make future payments. Refer to the accompanying notes to consolidated financial statements elsewhere in this report for the expected timing of such payments as of December 31, 2025. Examples of these commitments include but are not limited to long-term debt financing (Note 11, Other Borrowings and Subordinated Debentures), operating lease obligations (Note, 5, Right-of-Use Lease Assets and Lease Liabilities), time deposits with stated maturity dates (Note 8, Time Deposits), and unfunded loan commitments and letters of credit (Note 18, Commitments and Credit Risk).
GAAP Reconciliation of Non-GAAP Financial Measures
The tables below present computations of adjusted earnings (net income excluding certain items {early retirement program costs, loss on early extinguishment of debt, loss on sale of equipment finance business, merger related costs, FDIC special assessment, loss on sale of securities, termination of vendor and software services, net branch right sizing costs and tax effect}) (non-GAAP) and adjusted diluted earnings per share (non-GAAP) as well as a computation of tangible book value per common share (non-GAAP), tangible common equity to tangible assets (non-GAAP), adjusted noninterest income (non-GAAP), adjusted noninterest expense (non-GAAP), uninsured, non-collateralized deposits (non-GAAP) and the coverage ratio of uninsured, non-collateralized deposits (non-GAAP). Adjusted items are included in financial results presented in accordance with generally accepted accounting principles (US GAAP). The Company has updated its calculation of certain non-GAAP financial measures to exclude the impact of gains or losses on the sale of AFS investment securities in light of the impact of the Company’s strategic AFS investment securities transactions during the fourth quarter of 2023 and has presented past periods on a comparable basis.
We believe the exclusion of these certain items in expressing earnings and certain other financial measures, including “adjusted earnings,” provides a meaningful basis for period-to-period and company-to-company comparisons, which management believes will assist investors and analysts in analyzing the 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 certain items to be relevant to ongoing financial performance. Management and the Board of Directors utilize “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)
• Investor presentations of Company performance
We believe the presentation of “adjusted earnings” on a diluted per share basis (non-GAAP) provides a meaningful basis for period-to-period and company-to-company comparisons, which management believes will assist investors and analysts in analyzing the 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 certain items to be relevant to ongoing financial performance on a per share basis. Management and the Board of Directors utilize “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
We have $1.41 billion and $1.42 billion total goodwill and other intangible assets for the periods ended December 31, 2025 and 2024, respectively. Because our acquisition strategy has resulted in a high level of intangible assets, management believes useful calculations include tangible book value per common share (non-GAAP) and tangible common equity to tangible assets (non-GAAP).
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 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, we have procedures in place to identify and approve each item that qualifies as adjusted to ensure that the Company’s “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, 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 certain items does not represent the amount that effectively accrues directly to stockholders (i.e., 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.
During 2025, adjusted items primarily consisted of net branch right sizing costs of $3.2 million, mainly due to costs associated with branch closures across our footprint during the year and a $801.5 million loss on sale of securities due to the balance sheet repositioning during the year. We also recorded an additional $1.9 million in early retirement program costs and $1.1 million related the loss on sale of an equipment finance business during the year. The net after-tax impact of all adjusted items on net income was $630.7 million, or a $4.68 impact on diluted earnings per share.
During 2024, adjusted items primarily consisted of net branch right sizing costs of $2.7 million, mainly due to branch closures across our footprint during the year, and a $28.4 million loss on sale of securities due to the strategic sale of AFS securities during the year. We also recorded an additional $1.8 million related to a FDIC special assessment levied to support the Deposit Insurance Fund following the failure of certain banks in 2023. The net after-tax impact of all adjusted items on net income was $25.2 million, or a $0.20 impact on diluted earnings per share.
During 2023, adjusted items primarily consisted of net branch right sizing costs of $5.5 million, mainly due to branch closures across our footprint during the year, $6.2 million in early retirement program costs related to our Better Bank Initiative, and a $20.6 million loss on sale of securities due to the strategic sale of AFS securities during the year. Additionally, we recorded $10.5 million related to a FDIC special assessment levied to support the Deposit Insurance Fund following the failure of certain banks in 2023. The net after-tax impact of all adjusted items on net income was $32.7 million, or a $0.26 impact on diluted earnings per share.
See Table 19 below for the reconciliation of adjusted earnings, which exclude certain items for the periods presented.
Table 19: Reconciliation of Adjusted Earnings (non-GAAP)
(In thousands, except per share data)
Net income (loss) available to common stockholders
Certain items:
Termination of vendor and software services
Loss on early extinguishment of debt
Loss on sale of equipment finance business
FDIC special assessment
Merger related costs
Early retirement program
Loss on sale of securities
Branch right sizing, net
Tax effect (1)
Certain items, net of tax
Adjusted earnings (non-GAAP)
Diluted earnings per share
Certain items:
Termination of vendor and software services
Loss on early extinguishment of debt
Loss on sale of equipment finance business
FDIC special assessment
Merger related costs
Early retirement program
Loss on sale of securities
Branch right sizing, net
Tax effect (1)
Certain items, net of tax
Adjusted diluted earnings per share (non-GAAP)
(1) Actual tax rate of 21.946% on 2025 loss on sale of securities. Effective tax rate of 26.135% on all other items.
See Table 20 below for the reconciliations of adjusted noninterest income and adjusted noninterest expense for the periods presented.
Table 20: Reconciliations of Adjusted Noninterest Income (non-GAAP) and Adjusted Noninterest Expense (non-GAAP)
(In thousands)
Noninterest income (loss)
Certain items:
Loss on early extinguishment of debt
Loss on sale of securities
Total certain items
Adjusted noninterest income (non-GAAP)
Noninterest expense
Certain items:
Termination of vendor and software services
Merger related costs
Loss on sale of equipment finance business
Early retirement program
FDIC special assessment
Branch right sizing
Total certain items
Adjusted noninterest expense (non-GAAP)
See Table 21 below for the reconciliation of tangible book value per common share.
Table 21: Reconciliation of Tangible Book Value per Common Share (non-GAAP)
(In thousands, except per share data)
Total common stockholders’ equity
Intangible assets:
Goodwill
Other intangible assets
Total intangibles
Tangible common stockholders’ equity
Shares of common stock outstanding
Book value per common share
Tangible book value per common share (non-GAAP)
See Table 22 below for the calculation of tangible common equity and the reconciliation of tangible common equity to tangible assets.
Table 22: Reconciliation of Tangible Common Equity and the Ratio of Tangible Common Equity to Tangible Assets (non-GAAP)
(Dollars in thousands)
Total common stockholders’ equity
Intangible assets:
Goodwill
Other intangible assets
Total intangibles
Tangible common stockholders’ equity
Total assets
Intangible assets:
Goodwill
Other intangible assets
Total intangibles
Tangible assets
Ratio of common equity to assets
Ratio of tangible common equity to tangible assets (non-GAAP)
See Table 23 below for the reconciliation of uninsured, non-collateralized deposits and the calculation of uninsured, non-collateralized deposit coverage ratio.
Table 23: Reconciliation of Uninsured, Non-Collateralized Deposits and the Calculation of Uninsured, Non-Collateralized Deposit Coverage Ratio (non-GAAP)
(In thousands)
Uninsured deposits at Simmons Bank
Less: Collateralized deposits (excluding portion that is FDIC insured)
Less: Intercompany eliminations
Total uninsured, non-collateralized deposits
FHLB borrowing availability
Unpledged securities
Fed funds lines, Fed discount window and Bank Term Funding Program (1)
Additional liquidity sources
Uninsured, non-collateralized deposit coverage ratio
(1) The Bank Term Funding Program closed for new loans on March 11, 2024. At no time did the Company borrow funds under this program.
