Companies: 10,793     total market cap: $139.375 T
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Home BancShares
HOMB
#2912
Rank
$5.65 B
Marketcap
๐Ÿ‡บ๐Ÿ‡ธ United States
Country
$27.99
Share price
-2.03%
Change (1 day)
12.50%
Change (1 year)
  1. Home BancShares
  2. Quarterly Reports (10-Q)
  3. Financial Year FY2024 Q3

Home BancShares - 10-Q quarterly report FY2024 Q3


Text size:
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
☑Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 2024
or
☐Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Transition period from ______ to ______
Commission File Number: 001-41093
HOME BANCSHARES, INC.
(Exact Name of Registrant as Specified in Its Charter)
Arkansas
71-0682831
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
719 Harkrider, Suite 100, Conway, Arkansas
72032
(Address of principal executive offices)(Zip Code)
(501) 339-2929
(Registrant's telephone number, including area code)
Not Applicable
Former name, former address and former fiscal year, if changed since last report
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareHOMBNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large Accelerated Filer☑Accelerated filer ☐
Non-accelerated filer☐Smaller reporting company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
Common Stock Issued and Outstanding: 198,798,186 shares as of October 31, 2024.

HOME BANCSHARES, INC.
FORM 10-Q
September 30, 2024
INDEX
Page No.
Part I:
Financial Information
Financial Statements
Consolidated Balance Sheets – September 30, 2024 (Unaudited) and December 31, 2023
4
Consolidated Statements of Income (Unaudited) – Three and nine months ended September 30, 2024 and 2023
5
Consolidated Statements of Comprehensive Income (Loss) (Unaudited) – Three and nine months ended September 30, 2024 and 2023
6
Consolidated Statements of Stockholders’ Equity (Unaudited) – Three and nine months ended September 30, 2024 and 2023
7-8
Consolidated Statements of Cash Flows (Unaudited) – Nine months ended September 30, 2024 and 2023
9
Condensed Notes to Consolidated Financial Statements (Unaudited)
10-49
Report of Independent Registered Public Accounting Firm
50
Management’s Discussion and Analysis of Financial Condition and Results of Operations
51-86
Quantitative and Qualitative Disclosures About Market Risk
86-88
Controls and Procedures
88-89
Part II:
Other Information
Legal Proceedings
89
Risk Factors
89
Unregistered Sales of Equity Securities and Use of Proceeds
89
Defaults Upon Senior Securities
89
Mine Safety Disclosures
89
Other Information
89
Exhibits
90-91
92

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of our statements contained in this document, including matters discussed under the caption “Management's Discussion and Analysis of Financial Condition and Results of Operation,” are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements relate to expectations, beliefs, projections, future financial performance, future plans and strategies, and anticipated events or trends, and include statements about the competitiveness of the banking industry, potential regulatory obligations, our entrance and expansion into other markets, including through potential acquisitions, our other business strategies and other statements that are not historical facts. Forward-looking statements are not guarantees of performance or results. When we use words like “may,” “plan,” “contemplate,” “anticipate,” “believe,” “intend,” “continue,” “expect,” “project,” “predict,” “estimate,” “could,” “should,” “would,” and similar expressions, you should consider them as identifying forward-looking statements, although we may use other phrasing. These forward-looking statements involve risks and uncertainties and are based on our beliefs and assumptions, and on the information available to us at the time that these disclosures were prepared. These forward-looking statements involve risks and uncertainties and may not be realized due to a variety of factors, including, but not limited to, the following:
•the effects of future local, regional, national and international economic conditions, including inflation or a decrease in commercial real estate and residential housing values;
•changes in the level of nonperforming assets and charge-offs, and credit risk generally;
•the risks of changes in interest rates or the level and composition of deposits, loan demand and the values of loan collateral, securities and interest-sensitive assets and liabilities;
•disruptions, uncertainties and related effects on credit quality, liquidity, other aspects of our business and our operations that may result from any future public health crises;
•the ability to identify, complete and successfully integrate new acquisitions;
•the risk that expected cost savings and other benefits from acquisitions may not be fully realized or may take longer to realize than expected;
•diversion of management time on acquisition-related issues;
•the availability of and access to capital and liquidity on terms acceptable to us;
•increased regulatory requirements and supervision that applies as a result of our having over $10 billion in total assets;
•legislation and regulation affecting the financial services industry as a whole, and the Company and its subsidiaries in particular, and future legislative and regulatory changes;
•changes in governmental monetary and fiscal policies;
•the effects of terrorism and efforts to combat it, political instability, war, military conflicts (including the ongoing military conflicts in the Middle East and Ukraine) and other major domestic or international events;
•the impacts of recent or future adverse weather events, including hurricanes, and other natural disasters;
•the ability to keep pace with technological changes, including changes regarding cybersecurity;
•an increase in the incidence or severity of, or any adverse effects resulting from, acts of fraud, illegal payments, cybersecurity breaches or other illegal acts impacting our bank subsidiary, our vendors or our customers;
•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 competitors offering banking products and services by mail, telephone and the Internet;
•potential claims, expenses and other adverse effects related to current or future litigation, regulatory examinations or other government actions;
•potential increases in deposit insurance assessments, increased regulatory scrutiny, investment portfolio losses, or market disruptions resulting from financial challenges in the banking industry;
•the effect of changes in accounting policies and practices and auditing requirements, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters;
•higher defaults on our loan portfolio than we expect; and

•the failure of assumptions underlying the establishment of our allowance for credit losses or changes in our estimate of the adequacy of the allowance for credit losses.
All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this Cautionary Note. Our actual results may differ significantly from those we discuss in these forward-looking statements. For other factors, risks and uncertainties that could cause our actual results to differ materially from estimates and projections contained in these forward-looking statements, see the “Risk Factors” section of our Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2024 and this Form 10-Q.

PART I: FINANCIAL INFORMATION
Item 1: Financial Statements
Home BancShares, Inc.
Consolidated Balance Sheets
(In thousands, except share data)September 30, 2024December 31, 2023
(Unaudited)  
Assets
Cash and due from banks$265,408 $226,363 
Interest-bearing deposits with other banks752,269 773,850 
Cash and cash equivalents1,017,677 1,000,213 
Fed funds sold6,425 5,100 
Investment securities — available-for-sale, net of allowance for credit losses of $2,195 and $2,525 at September 30, 2024 and December 31, 2023, respectively (amortized cost of $3,529,325 and $3,840,927 at September 30, 2024 and December 31, 2023, respectively)
3,270,620 3,507,841 
Investment securities — held-to-maturity, net of allowance for credit losses of $2,005 at both September 30, 2024 and December 31, 2023
1,277,090 1,281,982 
Total investment securities4,547,710 4,789,823 
Loans receivable14,823,979 14,424,728 
Allowance for credit losses(312,574)(288,234)
Loans receivable, net14,511,405 14,136,494 
Bank premises and equipment, net388,776 393,300 
Foreclosed assets held for sale43,040 30,486 
Cash value of life insurance219,353 214,516 
Accrued interest receivable118,871 118,966 
Deferred tax asset, net176,629 197,164 
Goodwill1,398,253 1,398,253 
Core deposit intangibles42,395 48,770 
Other assets352,583 323,573 
Total assets$22,823,117 $22,656,658 
Liabilities and Stockholders’ Equity
Deposits:
Demand and non-interest-bearing$3,937,168 $4,085,501 
Savings and interest-bearing transaction accounts10,966,426 11,050,347 
Time deposits1,802,116 1,651,863 
Total deposits16,705,710 16,787,711 
Securities sold under agreements to repurchase179,416 142,085 
FHLB and other borrowed funds1,300,750 1,301,300 
Accrued interest payable and other liabilities238,058 194,653 
Subordinated debentures439,394 439,834 
Total liabilities18,863,328 18,865,583 
Stockholders’ equity:
Common stock, par value $0.01; shares authorized 300,000,000 in 2024 and 2023; shares issued and
outstanding 198,878,950 in 2024 and 201,526,494 in 2023
1,989 2,015 
Capital surplus2,272,100 2,348,023 
Retained earnings1,880,562 1,690,112 
Accumulated other comprehensive loss(194,862)(249,075)
Total stockholders’ equity3,959,789 3,791,075 
Total liabilities and stockholders’ equity$22,823,117 $22,656,658 
See Condensed Notes to Consolidated Financial Statements.
4
Home BancShares, Inc.
Consolidated Statements of Income
Three Months Ended
September 30,		Nine Months Ended
September 30,
(In thousands, except per share data)2024202320242023
(Unaudited)
Interest income:
Loans$281,977 $249,464 $821,595 $729,613 
Investment securities
Taxable31,006 34,520 96,822 104,559 
Tax-exempt7,704 7,868 23,276 23,763 
Deposits – other banks12,096 2,328 35,188 10,742 
Federal funds sold62 82 182 156 
Total interest income332,845 294,262 977,063 868,833 
Interest expense:
Interest on deposits97,785 78,698 286,074 208,007 
Federal funds purchased1 1 1 3 
FHLB and other borrowed funds14,383 8,161 42,914 20,947 
Securities sold under agreements to repurchase1,335 1,344 4,102 3,333 
Subordinated debentures4,121 4,121 12,340 12,368 
Total interest expense117,625 92,325 345,431 244,658 
Net interest income215,220 201,937 631,632 624,175 
Provision for credit losses on loans18,200 2,800 31,700 6,300 
Provision for (recovery of) credit losses on unfunded commitments1,000 (1,500)— (1,500)
(Recovery of) provision for credit losses on investment securities(330)— (330)1,683 
Total credit loss expense 18,870 1,300 31,370 6,483 
Net interest income after credit loss expense 196,350 200,637 600,262 617,692 
Non-interest income:
Service charges on deposit accounts9,888 10,062 29,288 29,135 
Other service charges and fees10,490 10,128 31,358 33,766 
Trust fees4,403 4,660 14,191 13,576 
Mortgage lending income4,437 3,132 12,271 8,353 
Insurance commissions595 562 1,668 1,606 
Increase in cash value of life insurance1,161 1,170 3,635 3,485 
Dividends from FHLB, FRB, FNBB & other2,637 2,916 8,642 8,632 
Gain on sale of SBA loans145 97 399 236 
Gain on sale of branches, equipment and other assets, net32 — 2,076 924 
Gain on OREO, net85 — 151 319 
Fair value adjustment for marketable securities1,392 4,507 2,121 (6,118)
Other income7,514 6,179 21,552 33,172 
Total non-interest income42,779 43,413 127,352 127,086 
Non-interest expense:
Salaries and employee benefits58,861 64,512 180,198 193,536 
Occupancy and equipment14,546 15,463 43,505 45,338 
Data processing expense9,088 9,103 27,170 27,222 
Other operating expenses27,550 25,684 83,853 79,592 
Total non-interest expense110,045 114,762 334,726 345,688 
Income before income taxes129,084 129,288 392,888 399,090 
Income tax expense29,046 30,835 91,211 92,404 
Net income$100,038 $98,453 $301,677 $306,686 
Basic earnings per share$0.50 $0.49 $1.51 $1.51 
Diluted earnings per share$0.50 $0.49 $1.51 $1.51 
See Condensed Notes to Consolidated Financial Statements.
5
Home BancShares, Inc.
Consolidated Statements of Comprehensive Income (Loss)
Three Months Ended
September 30,		Nine Months Ended
September 30,
(In thousands)2024202320242023
(Unaudited)
Net income$100,038 $98,453 $301,677 $306,686 
Net unrealized gain (loss) on available-for-sale securities88,303 (76,279)74,062 (59,353)
Other comprehensive income (loss) before tax effect88,303 (76,279)74,062 (59,353)
Tax effect on other comprehensive (income) loss(21,366)18,427 (19,849)14,281 
Other comprehensive income (loss) 66,937 (57,852)54,213 (45,072)
Comprehensive income$166,975 $40,601 $355,890 $261,614 
See Condensed Notes to Consolidated Financial Statements.
6
Home BancShares, Inc.
Consolidated Statements of Stockholders’ Equity
Three and Nine Months Ended September 30, 2024
(In thousands, except share data)
Common
Stock
Capital
Surplus
Retained
Earnings
Accumulated
Other
Comprehensive Loss
Total
Balances at January 1, 2024$2,015 $2,348,023 $1,690,112 $(249,075)$3,791,075 
Comprehensive income:
Net income— — 100,109 — 100,109 
Other comprehensive loss— — — (22,350)(22,350)
Net issuance of 76,542 shares of common stock from exercise of stock options
1 670 — — 671 
Repurchase of 1,025,934 shares of common stock
(10)(24,007)— — (24,017)
Share-based compensation net issuance of 219,750 shares of restricted common stock
2 2,273 — — 2,275 
Excise tax from repurchase of common stock— (135)— — (135)
Cash dividends – Common Stock, $0.18 per share
— — (36,227)— (36,227)
Balances at March 31, 2024 (unaudited)$2,008 $2,326,824 $1,753,994 $(271,425)$3,811,401 
Comprehensive income:
Net income— — 101,530 — 101,530 
Other comprehensive income— — — 9,626 9,626 
Net issuance of 149,507 shares of common stock from exercise of stock options
1 (2)— — (1)
Repurchase of 1,400,094 shares of common stock
(14)(32,590)— — (32,604)
Share-based compensation net issuance of 200,000 shares of restricted common stock
2 1,946 — — 1,948 
Excise tax from repurchase of common stock— (285)— — (285)
Cash dividends – Common Stock, $0.18 per share
— — (36,112)— (36,112)
Balances at June 30, 2024 (unaudited)$1,997 $2,295,893 $1,819,412 $(261,799)$3,855,503 
Comprehensive income:
Net Income— — 100,038 — 100,038 
Other comprehensive loss— — — 66,937 66,937 
Net issuance of 95,852 shares of common stock from exercise of stock options
1 698 — — 699 
Repurchase of 1,000,000 shares of common stock
(10)(26,922)— — (26,932)
Share-based compensation net forfeiture of 36,833 shares of restricted stock
1 2,494 — — 2,495 
Excise tax from repurchase of common stock— (63)— — (63)
Cash dividends – Common Stock, $0.195 per share
— — (38,888)— (38,888)
Balances at September 30, 2024 (unaudited)$1,989 $2,272,100 $1,880,562 $(194,862)$3,959,789 
See Condensed Notes to Consolidated Financial Statements.
7
Home BancShares, Inc.
Consolidated Statements of Stockholders’ Equity
For the Three and Nine Months Ended September 30, 2023
(In thousands, except share data)
Common
Stock
Capital
Surplus
Retained
Earnings
Accumulated
Other
Comprehensive
Loss
Total
Balances at January 1, 2023$2,034 $2,386,699 $1,443,087 $(305,458)$3,526,362 
Comprehensive income:
Net income— — 102,962 — 102,962 
Other comprehensive income— — — 49,157 49,157 
Net issuance of 66,451 shares of common stock from exercise of stock options
1 85 — — 86 
Repurchase of 590,000 shares of common stock
(6)(13,534)— — (13,540)
Share-based compensation net issuance of 258,000 shares of restricted common stock
3 2,504 — — 2,507 
Cash dividends – Common Stock, $0.18 per share
— — (36,649)— (36,649)
Balances at March 31, 2023 (unaudited)$2,032 $2,375,754 $1,509,400 $(256,301)$3,630,885 
Comprehensive income:
Net Income— — 105,271 — 105,271 
Other comprehensive loss— — — (36,377)(36,377)
Net issuance of 15,575 shares of common stock from exercise of stock options
— 275 — — 275 
Repurchase of 560,849 shares of common stock
(5)(11,804)— — (11,809)
Share-based compensation net forfeiture of 50,000 shares of restricted common stock
(1)2,335 — — 2,334 
Cash dividends – Common Stock, $0.18 per share
— — (36,495)— (36,495)
Balances at June 30, 2023 (unaudited)$2,026 $2,366,560 $1,578,176 $(292,678)$3,654,084 
Comprehensive income:
Net Income— — 98,453 — 98,453 
Other comprehensive loss— — — (57,852)(57,852)
Net issuance of 11,538 shares of common stock from exercise of stock options
— 70 — — 70 
Repurchase of 260,000 shares of common stock
(3)(5,655)— — (5,658)
Share-based compensation net forfeiture of 1,000 shares of restricted stock
— 2,235 — — 2,235 
Cash dividends – Common Stock, $0.18 per share
— — (36,458)— (36,458)
Balances at September 30, 2023 (unaudited)$2,023 $2,363,210 $1,640,171 $(350,530)$3,654,874 
See Condensed Notes to Consolidated Financial Statements.
8
Home BancShares, Inc.
Consolidated Statements of Cash Flows
Nine Months Ended September 30,
(In thousands)20242023
(Unaudited)
Operating Activities
Net income$301,677 $306,686 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation & amortization21,994 22,677 
(Increase) decrease in value of equity securities(2,121)6,118 
Amortization of securities, net11,083 12,441 
Accretion of purchased loans(6,523)(8,263)
Share-based compensation6,718 7,076 
Gain on assets(2,627)(1,479)
Provision for credit losses - loans 31,700 6,300 
Recovery of credit losses - unfunded commitments— (1,500)
(Recovery of) provision for credit losses - investment securities(330)1,683 
Deferred income tax effect686 861 
Increase in cash value of life insurance(3,635)(3,485)
Originations of mortgage loans held for sale(467,339)(365,412)
Proceeds from sales of mortgage loans held for sale477,185 315,520 
Changes in assets and liabilities:
Accrued interest receivable95 (7,747)
Other assets(26,428)(7,293)
Accrued interest payable and other liabilities43,405 (20,010)
Net cash provided by operating activities385,540 264,173 
Investing Activities
Net increase in federal funds sold(1,325)(3,925)
Net (increase) decrease in loans(428,985)181,505 
Purchases of investment securities – available-for-sale(62,643)(8,433)
Proceeds from maturities of investment securities – available-for-sale363,011 504,220 
Proceeds from maturities of investment securities – held-to-maturity5,054 4,383 
Proceeds from sales of equity securities— 1,522 
Purchase of other investments(445)(1,798)
Proceeds from foreclosed assets held for sale1,475 846 
Proceeds from sale of SBA loans5,573 3,454 
Purchases of premises and equipment(24,277)(17,503)
Proceeds from sales of premises and equipment14,818 10,724 
(Purchase of) return of investment on cash value of life insurance, net(1,218)3,813 
Net cash (used in) provided by investing activities(128,962)678,808 
Financing Activities
Net decrease in deposits(82,001)(1,420,038)
Net increase in securities sold under agreements to repurchase37,331 28,974 
Decrease in FHLB and other borrowed funds(1,400,550)(1,065,000)
Increase in FHLB and other borrowed funds1,400,000 1,416,550 
Proceeds from exercise of stock options, net1,369 431 
Repurchase of common stock(84,036)(31,007)
Dividends paid on common stock(111,227)(109,602)
Net cash used in financing activities(239,114)(1,179,692)
Net change in cash and cash equivalents17,464 (236,711)
Cash and cash equivalents – beginning of year1,000,213 724,790 
Cash and cash equivalents – end of period$1,017,677 $488,079 
See Condensed Notes to Consolidated Financial Statements.
9
Home BancShares, Inc.
Condensed Notes to Consolidated Financial Statements
(Unaudited)
1. Nature of Operations and Summary of Significant Accounting Policies
Nature of Operations
Home BancShares, Inc. (the “Company” or “HBI”) is a bank holding company headquartered in Conway, Arkansas. The Company is primarily engaged in providing a full range of banking services to individual and corporate customers through its wholly-owned community bank subsidiary – Centennial Bank (sometimes referred to as “Centennial” or the “Bank”). The Bank has branch locations in Arkansas, Florida, South Alabama, Texas and New York City. The Company is subject to competition from other financial institutions. The Company also is subject to the regulation of certain federal and state agencies and undergoes periodic examinations by those regulatory authorities.
A summary of the significant accounting policies of the Company follows:
Operating Segments
Operating segments are components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Bank is the only significant subsidiary upon which management makes decisions regarding how to allocate resources and assess performance. Each of the branches of the Bank provides a group of similar banking services, including such products and services as commercial, real estate and consumer loans, time deposits, checking and savings accounts. The individual bank branches have similar operating and economic characteristics. While the chief decision maker monitors the revenue streams of the various products, services and branch locations, operations are managed, and financial performance is evaluated on a company-wide basis. Accordingly, all of the banking services and branch locations are considered by management to be aggregated into one reportable operating segment.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses, the valuation of investment securities, the valuation of foreclosed assets and the valuations of assets acquired, and liabilities assumed in business combinations. In connection with the determination of the allowance for credit losses and the valuation of foreclosed assets, management obtains independent appraisals for significant properties.
Principles of Consolidation
The consolidated financial statements include the accounts of HBI and its subsidiaries. Significant intercompany accounts and transactions have been eliminated in consolidation.
Reclassifications
Various items within the accompanying consolidated financial statements for previous years have been reclassified to provide more comparative information. These reclassifications had no effect on net earnings or stockholders’ equity.
Interim financial information
The accompanying unaudited consolidated financial statements have been prepared in condensed format, and therefore do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.
The information furnished in these interim statements reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the results for each respective period presented. Such adjustments are of a normal recurring nature. The results of operations in the interim statements are not necessarily indicative of the results that may be expected for any other quarter or for the full year. The interim financial information should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2023 Form 10-K, filed with the Securities and Exchange Commission on February 26, 2024.
10
Loans Receivable and Allowance for Credit Losses
Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding principal balance adjusted for any charge-offs, deferred fees or costs on originated loans. Interest income on loans is accrued over the term of the loans based on the principal balance outstanding. Loan origination fees and direct origination costs are capitalized and recognized as adjustments to yield on the related loans.
The allowance for credit losses on loans receivable is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectability of a loan balance is confirmed and expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.
Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in the national unemployment rate, gross domestic product, national retail sales index, FHFA housing price index and rental vacancy rate index.
The allowance for credit losses is measured based on call report segment as these types of loans exhibit similar risk characteristics. The identified loan segments are as follows:
•1-4 family construction
•All other construction
•1-4 family revolving home equity lines of credit (“HELOC”) & junior liens
•1-4 family senior liens
•Multifamily
•Owner occupied commercial real estate
•Non-owner occupied commercial real estate
•Commercial & industrial, agricultural, non-depository financial institutions, purchase/carry securities, other
•Consumer auto
•Other consumer
•Other consumer - Shore Premier Finance ("SPF")
The allowance for credit losses for each segment is measured through the use of the discounted cash flow method. Loans evaluated individually that are considered to be collateral dependent are not included in the collective evaluation. For these loans, where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the loan to be provided substantially through the operation or sale of the collateral, the allowance for credit losses is measured based on the difference between the fair value of the collateral, net of estimated costs to sell, and the amortized cost basis of the loan as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the present value of expected cash flows from the operation of the collateral. The allowance for credit losses may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the loan, net of estimated costs to sell. For individually analyzed loans which are not considered to be collateral dependent, an allowance is recorded based on the loss rate for the respective pool within the collective evaluation.
Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments and curtailments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies:
•Management has a reasonable expectation at the reporting date that restructured loans made to borrowers experiencing financial difficulty will be executed with an individual borrower.
•The extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Company.

11
Management qualitatively adjusts model results for risk factors that are not considered within our modeling processes but are nonetheless relevant in assessing the expected credit losses within our loan pools. These qualitative factors ("Q-Factors") and other qualitative adjustments may increase or decrease management's estimate of expected credit losses by a calculated percentage or amount based upon the estimated level of risk. The various risks that may be considered in making Q-Factor and other qualitative adjustments include, among other things, the impact of (i) changes in lending policies, procedures and strategies; (ii) changes in nature and volume of the portfolio; (iii) staff experience; (iv) changes in volume and trends in classified loans, delinquencies and nonaccruals; (v) concentration risk; (vi) trends in underlying collateral values; (vii) external factors such as competition, legal and regulatory environment; (viii) changes in the quality of the loan review system; and (ix) economic conditions.
Loans are placed on non-accrual status when management believes that the borrower’s financial condition, after giving consideration to economic and business conditions and collection efforts, is such that collection of interest is doubtful, or generally when loans are 90 days or more past due. Loans are charged against the allowance for credit losses when management believes that the collectability of the principal is unlikely. Accrued interest related to non-accrual loans is generally charged against the allowance for credit losses when accrued in prior years and reversed from interest income if accrued in the current year. Interest income on non-accrual loans may be recognized to the extent cash payments are received, although the majority of payments received are usually applied to principal. Non-accrual loans are generally returned to accrual status when principal and interest payments are less than 90 days past due, the customer has made required payments for at least six months, and we reasonably expect to collect all principal and interest.
Purchased loans that have experienced more than insignificant credit deterioration since origination are purchase credit deteriorated (“PCD”) loans. An allowance for credit losses is determined using the same methodology as other loans. The Company develops separate PCD models for each loan segment with PCD loans not individually analyzed for credit losses. These models utilize a peer group benchmark in order to determine the probability of default and loss given default to be used in the calculation. The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a non-credit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through the provision for credit losses.
For further discussion of the Company’s acquisitions, see Note 2 to the Notes to Consolidated Financial Statements.
Allowance for Credit Losses on Off-Balance Sheet Credit Exposures
The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit unless that obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is adjusted as a provision for or recovery of credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.
Earnings per Share
Basic earnings per share is computed based on the weighted-average number of shares outstanding during each year. Diluted earnings per share is computed using the weighted-average shares and all potential dilutive shares outstanding during the period. The following table sets forth the computation of basic and diluted earnings per share (“EPS”) for the following periods:
Three Months Ended
September 30,		Nine Months Ended
September 30,
2024202320242023
(In thousands)
Net income$100,038 $98,453 $301,677 $306,686 
Average shares outstanding199,380 202,526 200,300 202,921 
Effect of common stock options81 124 130 147 
Average diluted shares outstanding199,461 202,650 200,430 203,068 
Basic earnings per share$0.50 $0.49 $1.51 $1.51 
Diluted earnings per share$0.50 $0.49 $1.51 $1.51 
The impact of anti-dilutive shares to the diluted earnings per share calculation was considered immaterial for the periods ended September 30, 2024 and 2023.
12
2. Business Combinations
Acquisition of Happy Bancshares, Inc.
The Company's most recent acquisition occurred on April 1, 2022, when the Company completed the acquisition of Happy Bancshares, Inc. (“Happy”), and merged Happy State Bank into Centennial Bank. For additional discussion regarding the acquisition of Happy, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 2 "Business Combinations" in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2023.
3. Investment Securities
The following table summarizes the amortized cost and fair value of securities that are classified as available-for-sale and held-to-maturity:
September 30, 2024
Available-for-Sale
Amortized
Cost
Allowance for Credit LossesNet Carrying Amount
Gross
Unrealized
Gains
Gross
Unrealized
(Losses)
Estimated
Fair Value
(In thousands)
U.S. government-sponsored enterprises$321,233 $— $321,233 $1,800 $(11,248)$311,785 
U.S. government-sponsored mortgage-backed securities1,574,430 — 1,574,430 1,105 (150,070)1,425,465 
Private mortgage-backed securities186,916 — 186,916 115 (9,090)177,941 
Non-government-sponsored asset backed securities264,497 — 264,497 646 (2,945)262,198 
State and political subdivisions966,644 — 966,644 1,094 (66,804)900,934 
Other securities215,605 (2,195)213,410 539 (21,652)192,297 
Total$3,529,325 $(2,195)$3,527,130 $5,299 $(261,809)$3,270,620 
September 30, 2024
Held-to-Maturity
Amortized
Cost
Allowance for Credit LossesNet Carrying Amount
Gross
Unrealized
Gains
Gross
Unrealized
(Losses)
Estimated
Fair Value
(In thousands)
U.S. government-sponsored enterprises$43,490 $— $43,490 $— $(1,712)$41,778 
U.S. government-sponsored mortgage-backed securities125,920 — 125,920 754 (2,288)124,386 
State and political subdivisions1,109,685 (2,005)1,107,680 197 (79,586)1,028,291 
Total$1,279,095 $(2,005)$1,277,090 $951 $(83,586)$1,194,455 
13
December 31, 2023
Available-for-Sale
Amortized
Cost
Allowance for Credit LossesNet Carrying Amount
Gross
Unrealized
Gains
Gross
Unrealized
(Losses)
Estimated
Fair Value
(In thousands)
U.S. government-sponsored enterprises$361,494 $— $361,494 $2,247 $(17,093)$346,648 
U.S. government-sponsored mortgage-backed securities1,711,668 — 1,711,668 310 (191,557)1,520,421 
Private mortgage-backed securities191,522 — 191,522 — (16,117)175,405 
Non-government-sponsored asset backed securities370,203 370,203 821 (7,551)363,473 
State and political subdivisions990,318 — 990,318 1,938 (75,931)916,325 
Other securities215,722 (2,525)213,197 402 (28,030)185,569 
Total$3,840,927 $(2,525)$3,838,402 $5,718 $(336,279)$3,507,841 
December 31, 2023
Held-to-Maturity
Amortized
Cost		Allowance for Credit LossesNet Carrying AmountGross
Unrealized
Gains		Gross
Unrealized
(Losses)		Estimated
Fair Value
(In thousands)
U.S. government-sponsored enterprises$43,285 $— $43,285 $— $(2,607)$40,678 
U.S. government-sponsored mortgage-backed securities130,278 — 130,278 106 (4,362)126,022 
State and political subdivisions1,110,424 (2,005)1,108,419 456 (105,094)1,003,781 
Total$1,283,987 $(2,005)$1,281,982 $562 $(112,063)$1,170,481 
Assets, principally investment securities, having a carrying value of approximately $2.37 billion and $3.57 billion at September 30, 2024 and December 31, 2023, respectively, were pledged to secure public deposits, as collateral for repurchase agreements, and for other purposes required or permitted by law. Investment securities pledged as collateral for repurchase agreements totaled approximately $179.4 million and $142.1 million at September 30, 2024 and December 31, 2023, respectively.
The amortized cost and estimated fair value of securities classified as available-for-sale and held-to-maturity at September 30, 2024, by contractual maturity, are shown below. Expected maturities could differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately.
Available-for-SaleHeld-to-Maturity
Amortized
Cost
Estimated
Fair Value
Amortized
Cost
Estimated
Fair Value
(In thousands)
Due in one year or less$29,837 $29,449 $— $— 
Due after one year through five years256,357 245,060 43,548 42,380 
Due after five years through ten years377,774 346,905 341,352 321,196 
Due after ten years839,514 783,602 768,275 706,493 
U.S. government-sponsored mortgage-backed securities1,574,430 1,425,465 125,920 124,386 
Private mortgage-backed securities186,916 177,941 — — 
Non-government-sponsored asset backed securities264,497 262,198 — — 
Total$3,529,325 $3,270,620 $1,279,095 $1,194,455 
During the three and nine months ended September 30, 2024 and 2023, no available-for-sale securities were sold.
14
The following table shows gross unrealized losses and estimated fair value of investment securities classified as available-for-sale and held-to-maturity, aggregated by investment category and length of time that individual investment securities have been in a continuous loss position as of September 30, 2024 and December 31, 2023.
September 30, 2024
Less Than 12 Months 12 Months or More Total
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
(In thousands)
Available-for-sale:
U.S. government-sponsored enterprises$18,911 $(132)$171,503 $(11,116)$190,414 $(11,248)
U.S. government-sponsored mortgage-backed securities2,314 (23)1,322,911 (150,047)1,325,225 (150,070)
Private mortgage-backed securities— — 168,230 (9,090)168,230 (9,090)
Non-government-sponsored asset backed securities— — 106,450 (2,945)106,450 (2,945)
State and political subdivisions22,859 (504)771,340 (66,300)794,199 (66,804)
Other securities6,976 (1,079)171,574 (20,573)178,550 (21,652)
Total$51,060 $(1,738)$2,712,008 $(260,071)$2,763,068 $(261,809)
Held-to-maturity:
U.S. government-sponsored enterprises$— $— $41,779 $(1,712)$41,779 $(1,712)
U.S. government-sponsored mortgage-backed securities— — 72,591 (2,288)72,591 (2,288)
State and political subdivisions22,950 (483)994,010 (79,103)1,016,960 (79,586)
Total$22,950 $(483)$1,108,380 $(83,103)$1,131,330 $(83,586)
December 31, 2023
Less Than 12 Months 12 Months or More Total
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
Fair
Value
Unrealized
Losses
(In thousands)
Available-for-sale:
U.S. government-sponsored enterprises$2,742 $(2)$180,569 $(17,091)$183,311 $(17,093)
U.S. government-sponsored mortgage-backed securities102,831 (2,166)1,392,318 (189,391)1,495,149 (191,557)
Private mortgage-backed securities9,298 (226)166,107 (15,891)175,405 (16,117)
Non-government-sponsored asset backed securities— — 213,838 (7,551)213,838 (7,551)
State and political subdivisions28,596 (400)769,860 (75,531)798,456 (75,931)
Other securities— — 164,430 (28,030)164,430 (28,030)
Total$143,467 $(2,794)$2,887,122 $(333,485)$3,030,589 $(336,279)
Held-to-maturity:
U.S. government-sponsored enterprises$— $— $40,677 $(2,607)$40,677 $(2,607)
U.S. government-sponsored mortgage-backed securities48,498 (861)65,573 (3,501)114,071 (4,362)
State and political subdivisions21,493 (297)956,578 (104,797)978,071 (105,094)
Total$69,991 $(1,158)$1,062,828 $(110,905)$1,132,819 $(112,063)
Debt securities available-for-sale ("AFS") are reported at fair value with unrealized holding gains and losses reported as a separate component of stockholders’ equity and other comprehensive income (loss), net of taxes. Securities that are held as available-for-sale are used as a part of our asset/liability management strategy. Securities that may be sold in response to interest rate changes, changes in prepayment risk, the need to increase regulatory capital, and other similar factors are classified as available-for-sale. The Company evaluates all securities quarterly to determine if any securities in a loss position require a provision for credit losses. The Company first assesses whether it intends to sell or is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For securities that do not meet these criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, and changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows
15
expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. The Company has made the election to exclude accrued interest receivable on AFS securities from the estimate of credit losses and report accrued interest separately on the consolidated balance sheets. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of a security is confirmed or when either of the criteria regarding intent or requirement to sell is met.
Debt securities held-to-maturity ("HTM"), which include any security for which we have the positive intent and ability to hold until maturity, are reported at historical cost adjusted for amortization of premiums and accretion of discounts. Premiums and discounts are amortized/accreted to the call date to interest income using the constant effective yield method over the estimated life of the security. The Company evaluates all securities quarterly to determine if any securities in a loss position require a provision for credit losses. The Company measures expected credit losses on HTM securities on a collective basis by major security type, with each type sharing similar risk characteristics. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The Company has made the election to exclude accrued interest receivable on HTM securities from the estimate of credit losses and report accrued interest separately on the consolidated balance sheets. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of a security is confirmed.
During the quarter ended September 30, 2024, the Company recovered $330,000 in AFS reserves due to an improvement in the unrealized loss position of one of the Company's subordinated debt investments. For both the three and nine month periods ended September 30, 2024, the Company determined the $2.0 million allowance for credit losses on the held-to-maturity portfolio was adequate. Therefore, no additional provision was considered necessary for the HTM portfolio.
Available-for-Sale Investment Securities
September 30, 2024December 31, 2023
Allowance for credit losses:(In thousands)
Beginning balance$2,525 $842 
(Recovery of) provision for credit loss(330)1,683 
Balance, September 30
$2,195 $2,525 
Provision for credit loss— 
Balance, December 31, 2023
$2,525 
Held-to-Maturity Investment Securities
September 30, 2024December 31, 2023
Allowance for credit losses:(In thousands)
Beginning balance$2,005 $2,005 
Provision for credit loss— — 
Balance, September 30
$2,005 $2,005 
Provision for credit loss— 
Balance, December 31, 2023
$2,005 
For the nine months ended September 30, 2024, the Company had available-for-sale investment securities with approximately $261.8 million in unrealized losses, of which $260.1 million had been in continuous loss positions for more than twelve months. With the exception of the subordinated debt investment securities which were downgraded during 2023 resulting in the allowance, the Company’s assessments indicated the cause of the market depreciation was primarily due to the change in interest rates and not the issuer’s financial condition or downgrades by rating agencies. In addition, approximately 38.6% of the principal balance from the Company’s investment portfolio will mature or are expected to pay down within five years or less. As a result, the Company has the ability and intent to hold such securities until maturity.

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As of September 30, 2024, the Company's available-for-sale securities portfolio consisted of 1,550 investment securities, 1,256 of which were in an unrealized loss position. As noted in the table above, the total amount of the unrealized loss was $261.8 million. The U.S. government-sponsored enterprises portfolio contained unrealized losses of $11.2 million on 54 securities. The U.S. government-sponsored mortgage-backed securities portfolio contained $150.1 million of unrealized losses on 645 securities, and the private mortgage-backed securities portfolio contained $9.1 million of unrealized losses on 31 securities. The non-government-sponsored asset backed securities portfolio contained $2.9 million of unrealized losses on 24 securities. The state and political subdivisions portfolio contained $66.8 million of unrealized losses on 439 securities. In addition, the other securities portfolio contained $21.7 million of unrealized losses on 63 securities. With the exception of the investments for which an allowance for credit losses has been established, the unrealized losses on the Company's investments were primarily a result of interest rate changes, and the Company expects to recover the amortized cost basis over the term of the securities. The Company has determined that, as of September 30, 2024, an additional provision for credit losses is not necessary because the decline in market value was attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity.
As of September 30, 2024, the Company's held-to-maturity securities portfolio consisted of 510 investment securities, 488 of which were in an unrealized loss position. As noted in the table above, the total amount of the unrealized loss was $83.6 million. The U.S. government-sponsored enterprises portfolio contained unrealized losses of $1.7 million on 5 securities. The U.S. government-sponsored mortgage-backed securities portfolio contained unrealized losses of $2.3 million on 12 securities. The state and political subdivisions portfolio contained $79.6 million of unrealized losses on 471 securities. The unrealized losses on the Company's investments were a result of interest rate changes. The Company expects to recover the amortized cost basis over the term of the securities. Because the decline in market value was attributable to changes in interest rates and not credit quality, the Company has determined that an additional provision for credit losses was not necessary as of September 30, 2024.
The following table summarizes bond ratings for the Company’s held-to-maturity portfolio, based upon amortized cost, issued by state and political subdivisions and other securities as of September 30, 2024:
State and political subdivisionsU.S. government-sponsored enterprisesU.S. government-sponsored mortgage-backed securitiesTotal
(In thousands)
Aaa/AAA$238,872 $43,490 $— $282,362 
Aa/AA845,788 — — 845,788 
A23,200 — — 23,200 
Not rated1,825 — — 1,825 
Agency Backed— — 125,920 125,920 
Total$1,109,685 $43,490 $125,920 $1,279,095 
Income earned on securities for the three months ended September 30, 2024 and 2023, is as follows:
Three Months Ended
September 30,		For the Nine Months Ended
September 30,
2024202320242023
(In thousands)
Taxable
Available-for-sale$23,550 $27,028 $74,439 $82,080 
Held-to-maturity7,456 7,492 22,383 22,479 
Non-taxable
Available-for-sale4,612 4,746 13,971 14,369 
Held-to-maturity3,092 3,122 9,305 9,394 
Total$38,710 $42,388 $120,098 $128,322 
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4. Loans Receivable
The various categories of loans receivable are summarized as follows:
 September 30, 2024December 31, 2023
 (In thousands)
Real estate:
Commercial real estate loans
Non-farm/non-residential$5,496,536 $5,549,954 
Construction/land development2,741,419 2,293,047 
Agricultural335,965 325,156 
Residential real estate loans
Residential 1-4 family1,932,352 1,844,260 
Multifamily residential482,648 435,736 
Total real estate10,988,920 10,448,153 
Consumer1,219,197 1,153,690 
Commercial and industrial2,084,667 2,324,991 
Agricultural352,963 307,327 
Other178,232 190,567 
Total loans receivable14,823,979 14,424,728 
Allowance for credit losses(312,574)(288,234)
Loans receivable, net$14,511,405 $14,136,494 
During the three months ended September 30, 2024, the Company sold $1.8 million of the guaranteed portions of certain SBA loans, which resulted in a gain of approximately $145,000. During the nine months ended September 30, 2024, the Company sold $5.1 million of the guaranteed portions of certain SBA loans, which resulted in a gain of approximately $399,000. During the three months ended September 30, 2023, the Company sold $1.0 million guaranteed portions of certain SBA loans, which resulted in a gain of approximately $97,000. During the nine months ended September 30, 2023, the Company sold $3.2 million guaranteed portions of certain SBA loans, which resulted in a gain of approximately $236,000.
Mortgage loans held for sale of approximately $92.0 million and $123.4 million at September 30, 2024 and December 31, 2023, respectively, are included in residential 1-4 family loans. Mortgage loans held for sale are carried at the lower of cost or fair value, determined using an aggregate basis. Gains and losses resulting from sales of mortgage loans are recognized when the respective loans are sold to investors. Gains and losses are determined by the difference between the selling price and the carrying amount of the loans sold, net of discounts collected or paid. The Company obtains forward commitments to sell mortgage loans to reduce market risk on mortgage loans in the process of origination and mortgage loans held for sale. The forward commitments acquired by the Company for mortgage loans in process of origination are considered mandatory forward commitments. Because these commitments are structured on a mandatory basis, the Company is required to substitute another loan or to buy back the commitment if the original loan does not fund. The Company regularly sells mortgages into the capital markets to mitigate the effects of interest rate volatility during the period from the time an interest rate lock commitment (“IRLC”) is issued until the IRLC funds creating a mortgage loan held for sale and its subsequent sale into the secondary/capital markets. Loan sales are typically executed on a mandatory basis. Under a mandatory commitment, the Company agrees to deliver a specified dollar amount with predetermined terms by a certain date. Generally, the commitment is not loan specific, and any combination of loans can be delivered into the outstanding commitment provided the terms fall within the parameters of the commitment. Upon failure to deliver, the Company is subject to fees based on market movement. These commitments and IRLCs are derivative instruments and their fair values at September 30, 2024 and December 31, 2023 were not material.

18
Purchased loans that have experienced more than insignificant credit deterioration since origination are PCD loans. An allowance for credit losses is determined using the same methodology as other loans. The Company develops separate PCD models for each loan segment with PCD loans not individually analyzed for credit losses. The initial allowance for credit losses determined on a collective basis is allocated to individual loans. The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a non-credit discount or premium which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through the provision for credit losses. The Company held approximately $79.6 million and $130.7 million in PCD loans, as of September 30, 2024 and December 31, 2023, respectively. The balance, as of September 30, 2024, results entirely from the acquisition of Happy.
A description of our accounting policies for loans and impaired loans (which includes loans individually analyzed for credit losses for which a specific reserve has been recorded, non-accrual loans, loans past due 90 days or more and restructured loans made to borrowers experiencing financial difficulty) are set forth in our 2023 Form 10-K filed with the SEC on February 26, 2024.
5. Allowance for Credit Losses, Credit Quality and Other
The Company uses the discounted cash flow (“DCF”) method to estimate expected losses for all of the Company’s loan pools. These pools are as follows: construction & land development; other commercial real estate; residential real estate; commercial & industrial; and consumer & other. The loan portfolio pools were selected in order to generally align with the loan categories specified in the quarterly call reports required to be filed with the Federal Financial Institutions Examination Council. For each of these loan pools, the Company generates cash flow projections at the instrument level wherein payment expectations are adjusted for estimated prepayment speed, curtailments, time to recovery, probability of default, and loss given default. The modeling of expected prepayment speeds, curtailment rates, and time to recovery are based on historical internal data. The Company uses regression analysis of historical internal and peer data to determine suitable loss drivers to utilize when modeling lifetime probability of default and loss given default. This analysis also determines how expected probability of default and loss given default will react to forecasted levels of the loss drivers.
Management qualitatively adjusts model results for risk factors ("Q-Factors") that are not considered within our modeling processes but are, nonetheless, relevant in assessing the expected credit losses within our loan pools. These Q-Factors and other qualitative adjustments may increase or decrease management's estimate of expected credit losses by a calculated percentage or amount based upon the estimated level of risk. The various risks that may be considered in making Q-Factor and other qualitative adjustments include, among other things, the impact of (i) changes in lending policies, procedures and strategies; (ii) changes in nature and volume of the portfolio; (iii) staff experience; (iv) changes in volume and trends in classified loans, delinquencies and nonaccruals; (v) concentration risk; (vi) trends in underlying collateral values; (vii) external factors such as competition, legal and regulatory environment; (viii) changes in the quality of the loan review system; and (ix) economic conditions.
Each year management evaluates the performance of the selected models used in the CECL calculation through backtesting. Based on the results of the testing, management determines if the various models produced accurate results compared to the actual losses incurred for the current economic environment. Management then determines if changes to the input assumptions and economic factors would produce a stronger overall calculation that is more responsive to changes in economic conditions. The Company continues to use regression analysis to determine suitable loss drivers to utilize when modeling lifetime probability of default and loss given default for the changes in the economic factors for the loss driver segments. Based on this analysis, management determined that changes to several of the economic factors for the loss driver segments, along with other model improvements and updates, were necessary, and updated models were implemented beginning with the June 30, 2024 allowance for credit losses calculation. The identified loss drivers by segment are included below as of both September 30, 2024 and December 31, 2023.
19
September 30, 2024
Loss Driver SegmentCall Report Segment(s)Modeled Economic Factors
1-4 Family Construction1a1National Unemployment (%) & Housing Price Index (%)
All Other Construction1a2National Unemployment (%) & Gross Domestic Product (%)
Farmland & Agriculture1b, 3National Unemployment (%)
Residential 1-4 Family1c1, 1c2a, 1c2b
National Unemployment (%) & Housing Price Index (%)
Multifamily1dRental Vacancy Rate (%) & Housing Price Index (%)
Non-Farm/ Non-Residential CRE1e1, 1e2National Unemployment (%) & Gross Domestic Product (%)
Commercial & Industrial, Non-Depository Financial Institutions, Purchase/Carry Securities, Leases, Other4a, 9a, 9b1, 9b2, 10, OtherNational Unemployment (%) & National Retail Sales (%)
Consumer Auto6cNational Unemployment (%) & National Retail Sales (%)
Other Consumer6b, 6dNational Unemployment (%) & National Retail Sales (%)
Other Consumer - SPF6dNational Unemployment (%)
Obligations of States and Political Subdivisions8National Unemployment (%) & Gross Domestic Product (%)
December 31, 2023
Loss Driver SegmentCall Report Segment(s)Modeled Economic Factors
1-4 Family Construction1a1National Unemployment (%) & Housing Price Index (%)
All Other Construction1a2National Unemployment (%) & Gross Domestic Product (%)
1-4 Family Revolving HELOC & Junior Liens1c1National Unemployment (%) & Housing Price Index – CoreLogic (%)
1-4 Family Revolving HELOC & Junior Liens1c2bNational Unemployment (%) & Gross Domestic Product (%)
1-4 Family Senior Liens1c2aNational Unemployment (%) & Gross Domestic Product (%)
Multifamily1dRental Vacancy Rate (%) & Housing Price Index – Case-Schiller (%)
Owner Occupied CRE1e1National Unemployment (%) & Gross Domestic Product (%)
Non-Owner Occupied CRE1e2,1b,8National Unemployment (%) & Gross Domestic Product (%)
Commercial & Industrial, Agricultural, Non-Depository Financial Institutions, Purchase/Carry Securities, Other4a, 3, 9a, 9b1, 9b2, 10, OtherNational Unemployment (%) & National Retail Sales (%)
Consumer Auto6cNational Unemployment (%) & National Retail Sales (%)
Other Consumer6b, 6dNational Unemployment (%) & National Retail Sales (%)
Other Consumer - SPF6dNational Unemployment (%)
For all DCF models, management has determined that four quarters represents a reasonable and supportable forecast period and reverts to a historical loss rate over four quarters on a straight-line basis. Management leverages economic projections from a reputable and independent third party to inform its loss driver forecasts over the four-quarter forecast period. Other internal and external indicators of economic forecasts are also considered by management when developing the forecast metrics.
The combination of adjustments for credit expectations (default and loss) and time expectations (prepayment, curtailment, and time to recovery) produces an expected cash flow stream at the instrument level. Instrument effective yield is calculated, net of the impacts of prepayment assumptions, and the instrument expected cash flows are then discounted at that effective yield to produce an instrument-level net present value of expected cash flows (“NPV”). An allowance for credit loss is established for the difference between the instrument’s NPV and amortized cost basis.
Construction/Land Development and Other Commercial Real Estate Loans. We originate non-farm and non-residential loans (primarily secured by commercial real estate), construction/land development loans, and agricultural loans, which are generally secured by real estate located in our market areas. Our commercial mortgage loans are generally collateralized by first liens on real estate and amortized (where defined) over a 15 to 30 year period with balloon payments due at the end of one to five years. These loans are generally underwritten by assessing cash flow (debt service coverage), primary and secondary source of repayment, the financial strength of any guarantor, the strength of the tenant (if any), the borrower’s liquidity and leverage, management experience, ownership structure, economic conditions and industry specific trends and collateral. Generally, we will loan up to 85% of the value of improved property, 65% of the value of raw land and 75% of the value of land to be acquired and developed. A first lien on the property and assignment of lease is required if the collateral is rental property, with second lien positions considered on a case-by-case basis.

20
Residential Real Estate Loans. We originate one to four family, residential mortgage loans generally secured by property located in our primary market areas. Residential real estate loans generally have a loan-to-value ratio of up to 90%. These loans are underwritten by giving consideration to many factors including the borrower’s ability to pay, stability of employment or source of income, debt-to-income ratio, credit history and loan-to-value ratio.
Commercial and Industrial Loans. Commercial and industrial loans are made for a variety of business purposes, including working capital, inventory, equipment and capital expansion. The terms for commercial loans are generally one to seven years. Commercial loan applications must be supported by current financial information on the borrower and, where appropriate, by adequate collateral. Commercial loans are generally underwritten by addressing cash flow (debt service coverage), primary and secondary sources of repayment, the financial strength of any guarantor, the borrower’s liquidity and leverage, management experience, ownership structure, economic conditions and industry specific trends and collateral. The loan to value ratio depends on the type of collateral. Generally, accounts receivable are financed at between 50% and 80% of accounts receivable less than 60 days past due. Inventory financing will range between 50% and 80% (with no work in process) depending on the borrower and nature of inventory. We require a first lien position for those loans.
Consumer & Other Loans. Our consumer & other loans are primarily composed of loans to finance USCG registered high-end sail and power boats. The performance of consumer & other loans will be affected by the local and regional economies as well as the rates of personal bankruptcies, job loss, divorce and other individual-specific characteristics.
Off-Balance Sheet Credit Exposures. The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for credit loss on off-balance sheet credit exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The Company uses the DCF method to estimate expected losses for all of the Company’s off-balance sheet credit exposures through the use of the existing DCF models for the Company’s loan portfolio pools. The off-balance sheet credit exposures exhibit similar risk characteristics as loans currently in the Company’s loan portfolio.
During the three and nine months ended September 30, 2024, the Company recorded $18.2 million and $31.7 million in provision for credit losses on loans, respectively. $16.7 million of the provision for credit losses recorded during 2024 was used to establish a hurricane reserve for loans located in the Federal Emergency Management Agency ("FEMA") disaster areas impacted by Hurricane Helene, which made landfall during the third quarter of 2024. In addition, during the three months ended September 30, 2024, the Company recorded $1.0 million in provision for unfunded commitments, which completely offset the $1.0 million recovery of credit losses on unfunded commitments that was recorded during the first quarter of 2024. During the three and nine months ended September 30, 2023, the Company recorded $2.8 million and $6.3 million in provision for credit losses on loans, respectively. For the three and nine months ended September 30, 2023, the Company recovered $1.5 million in credit losses on unfunded commitments.
The following table presents the activity in the allowance for credit losses for the three and nine months ended September 30, 2024:
Three Months Ended September 30, 2024
Construction/
Land
Development 		Other
Commercial
Real Estate 		Residential
Real Estate 		Commercial
& Industrial 		Consumer
& Other 		Total
(In thousands)
Allowance for credit losses:
Beginning balance$58,673 $86,842 $51,354 $69,635 $29,352 $295,856 
Loans charged off— — (42)(741)(1,218)(2,001)
Recoveries of loans previously charged off
7 34 54 143 281 519 
Net loans recovered (charged off)
7 34 12 (598)(937)(1,482)
Provision for credit losses4,718 9,799 8,059 (8,434)4,058 18,200 
Balance, September 30$63,398 $96,675 $59,425 $60,603 $32,473 $312,574 
21
Nine Months Ended September 30, 2024
Construction/
Land
Development 		Other
Commercial
Real Estate 		Residential
Real Estate 		Commercial
& Industrial 		Consumer
& Other 		Total
(In thousands)
Allowance for credit losses:
Beginning balance$33,877 $78,635 $55,860 $92,810 $27,052 $288,234 
Loans charged off(81)(1,164)(260)(4,500)(3,072)(9,077)
Recoveries of loans previously charged off96 59 149 503 910 1,717 
Net loans recovered (charged off)15 (1,105)(111)(3,997)(2,162)(7,360)
Provision for credit losses29,506 19,145 3,676 (28,210)7,583 31,700 
Balance, September 30$63,398 $96,675 $59,425 $60,603 $32,473 $312,574 
During the second quarter of 2024, the Company implemented updated allowance for credit loss models as part of the annual model review and challenge process. In light of the current commercial real estate ("CRE") environment, the allowance calculation called for a higher level of reserves for the CRE portfolio and a corresponding reduction in reserves for the commercial and industrial portfolio.
The following table presents the activity in the allowance for credit losses for the three and nine months ended September 30, 2023 and the year ended December 31, 2023:
Three Months Ended September 30, 2023
Construction/
Land
Development 		Other
Commercial
Real Estate 		Residential
Real Estate 		Commercial
& Industrial 		Consumer
& Other 		Total
(In thousands)
Allowance for credit losses:
Beginning balance$32,275 $85,158 $51,732 $90,474 $26,044 $285,683 
Loans charged off(150)(1,950)(103)(183)(1,063)(3,449)
Recoveries of loans previously charged off33 25 22 119 329 528 
Net loans recovered (charged off)(117)(1,925)(81)(64)(734)(2,921)
Provision for credit losses484 (4,680)3,233 2,059 1,704 2,800 
Balance, September 30$32,642 $78,553 $54,884 $92,469 $27,014 $285,562 
Nine Months Ended September 30, 2023 and Year Ended December 31, 2023
Construction/
Land
Development 		Other
Commercial
Real Estate 		Residential
Real Estate
Commercial
& Industrial
Consumer
& Other 		Total
(In thousands)
Allowance for credit losses:
Beginning balance$32,243 $93,848 $50,963 $89,354 $23,261 $289,669 
Loans charged off(175)(2,023)(192)(7,015)(3,058)(12,463)
Recoveries of loans previously charged off
103 517 161 375 900 2,056 
Net loans (charged off) recovered
(72)(1,506)(31)(6,640)(2,158)(10,407)
Provision for credit loss - loans471 (13,789)3,952 9,755 5,911 6,300 
Balance, September 30
32,642 78,553 54,884 92,469 27,014 285,562 
Loans charged off(88)(312)(77)(2,142)(973)(3,592)
Recoveries of loans previously charged off
10 16 168 208 212 614 
Net loans (charged off) recovered
(78)(296)91 (1,934)(761)(2,978)
Provision for credit loss - loans1,313 378 885 2,275 799 5,650 
Balance, December 31
$33,877 $78,635 $55,860 $92,810 $27,052 $288,234 
22
The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 90 days still accruing as of September 30, 2024 and December 31, 2023:
September 30, 2024
NonaccrualNonaccrual
with Reserve		Loans Past Due
Over 90 Days
Still Accruing
(In thousands)
Real estate:
Commercial real estate loans
Non-farm/non-residential$48,086 $42,025 $709 
Construction/land development5,403 — 657 
Agricultural737 — — 
Residential real estate loans
Residential 1-4 family23,905 — 1,495 
Multifamily residential592 — — 
Total real estate78,723 42,025 2,861 
Consumer7,501 2,340 28 
Commercial and industrial8,511 2,162 2,405 
Agricultural & other1,012 — 62 
Total$95,747 $46,527 $5,356 
 December 31, 2023
NonaccrualNonaccrual
with Reserve		Loans Past Due
Over 90 Days
Still Accruing
(In thousands)
Real estate:
Commercial real estate loans
Non-farm/non-residential$13,178 $— $2,177 
Construction/land development12,094 — 255 
Agricultural431 — — 
Residential real estate loans
Residential 1-4 family20,351 — 84 
Total real estate46,054 — 2,516 
Consumer3,423 — 79 
Commercial and industrial9,982 2,534 1,535 
Agricultural & other512 — — 
Total$59,971 $2,534 $4,130 
The Company had $95.7 million and $60.0 million in nonaccrual loans for the periods ended September 30, 2024 and December 31, 2023, respectively. In addition, the Company had $5.4 million and $4.1 million in loans past due 90 days or more and still accruing for the periods ended September 30, 2024 and December 31, 2023, respectively.
The Company had $46.5 million and $2.5 million in nonaccrual loans with a specific reserve as of September 30, 2024 and December 31, 2023, respectively. Interest income recognized on the non-accrual loans for the periods ended September 30, 2024 and September 30, 2023 was considered immaterial.
23
The following table presents the amortized cost basis of impaired loans (which includes loans individually analyzed for credit losses for which a specific reserve has been recorded, non-accrual loans, loans past due 90 days or more and restructured loans made to borrowers experiencing financial difficulty) by class of loans as of September 30, 2024 and December 31, 2023:
September 30, 2024
Commercial
Real Estate		Residential
Real Estate		Other
(In thousands)
Real estate:
Commercial real estate loans
Non-farm/non-residential$54,382 $— $— 
Construction/land development6,060 — — 
Agricultural737 — — 
Residential real estate loans
Residential 1-4 family— 26,695 — 
Multifamily residential— 21,494 — 
Total real estate61,179 48,189 — 
Consumer— — 10,527 
Commercial and industrial— — 13,157 
Agricultural & other— — 1,074 
Total$61,179 $48,189 $24,758 
 December 31, 2023
Commercial
Real Estate		Residential
Real Estate		Other
(In thousands)
Real estate:
Commercial real estate loans
Non-farm/non-residential$39,813 $— $— 
Construction/land development12,350 — — 
Agricultural431 — — 
Residential real estate loans
Residential 1-4 family— 21,386 — 
Multifamily residential— — — 
Total real estate52,594 21,386 — 
Consumer— — 3,511 
Commercial and industrial— — 16,890 
Agricultural & other— — 512 
Total$52,594 $21,386 $20,913 
The Company had $134.1 million and $94.9 million in impaired loans for the periods ended September 30, 2024 and December 31, 2023, respectively.
Loans that do not share risk characteristics are evaluated on an individual basis. For these loans, where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the allowance for credit losses is measured based on the difference between the fair value of the collateral, net of estimated costs to sell, and the amortized cost basis of the loan as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the present value of expected cash flows from the operation of the collateral. When repayment is expected to be from the sale of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the fair value of the underlying collateral less
24
estimated costs to sell. The allowance for credit losses may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the loan, net of estimated costs to sell.
The following is an aging analysis for loans receivable as of September 30, 2024 and December 31, 2023:
September 30, 2024
Loans
Past Due
30-59 Days		Loans
Past Due
60-89 Days		Loans
Past Due
90 Days
or More		Total
Past Due		Current
Loans		Total
Loans
Receivable		Accruing
Loans
Past Due
90 Days
or More
(In thousands)
Real estate:
Commercial real estate loans
Non-farm/non-residential$4,391 $837 $48,795 $54,023 $5,442,513 $5,496,536 $709 
Construction/land development778 221 6,060 7,059 2,734,360 2,741,419 657 
Agricultural177 198 737 1,112 334,853 335,965 — 
Residential real estate loans
Residential 1-4 family2,329 6,698 25,400 34,427 1,897,925 1,932,352 1,495 
Multifamily residential20,902 — 592 21,494 461,154 482,648 — 
Total real estate28,577 7,954 81,584 118,115 10,870,805 10,988,920 2,861 
Consumer2,928 155 7,529 10,612 1,208,585 1,219,197 28 
Commercial and industrial1,071 567 10,916 12,554 2,072,113 2,084,667 2,405 
Agricultural & other1,120 91 1,074 2,285 528,910 531,195 62 
Total$33,696 $8,767 $101,103 $143,566 $14,680,413 $14,823,979 $5,356 
December 31, 2023
Loans
Past Due
30-59 Days		Loans
Past Due
60-89 Days		Loans
Past Due
90 Days
or More		Total
Past Due		Current
Loans		Total
Loans
Receivable		Accruing
Loans
Past Due
90 Days
or More
(In thousands)
Real estate:
Commercial real estate loans
Non-farm/non-residential$8,124 $416 $15,355 $23,895 $5,526,059 $5,549,954 $2,177 
Construction/land development1,430 — 12,349 13,779 2,279,268 2,293,047 255 
Agricultural474 314 431 1,219 323,937 325,156 — 
Residential real estate loans
Residential 1-4 family4,346 1,423 20,435 26,204 1,818,056 1,844,260 84 
Multifamily residential— — — — 435,736 435,736 — 
Total real estate14,374 2,153 48,570 65,097 10,383,056 10,448,153 2,516 
Consumer1,022 303 3,502 4,827 1,148,863 1,153,690 79 
Commercial and industrial2,089 3,378 11,517 16,984 2,308,007 2,324,991 1,535 
Agricultural and other1,074 113 512 1,699 496,195 497,894 — 
Total$18,559 $5,947 $64,101 $88,607 $14,336,121 $14,424,728 $4,130 
Non-accruing loans at September 30, 2024 and December 31, 2023 were $95.7 million and $60.0 million, respectively.
Interest recognized on impaired loans during the three and nine months ended September 30, 2024 was approximately $1.3 million and $3.7 million, respectively. Interest recognized on impaired loans during the three and nine months ended September 30, 2023 was approximately $347,000 and $1.0 million, respectively. The amount of interest recognized on impaired loans on the cash basis is not materially different than the accrual basis.
25
Credit Quality Indicators. As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to (i) the risk rating of loans, (ii) the level of classified loans, (iii) net charge-offs, (iv) non-performing loans and (v) the general economic conditions in Arkansas, Florida, Texas, Alabama and New York.
The Company utilizes a risk rating matrix to assign a risk rating to each of its loans. Loans are rated on a scale from 1 to 8. Descriptions of the general characteristics of the 8 risk ratings are as follows:
•Risk rating 1 – Excellent. Loans in this category are to persons or entities of unquestionable financial strength, a highly liquid financial position, with collateral that is liquid and well margined. These borrowers have performed without question on past obligations, and the Bank expects their performance to continue. Internally generated cash flow covers current maturities of long-term debt by a substantial margin. Loans secured by bank certificates of deposit and savings accounts, with appropriate holds placed on the accounts, are to be rated in this category.
•Risk rating 2 – Good. These are loans to persons or entities with strong financial condition and above-average liquidity that have previously satisfactorily handled their obligations with the Bank. Collateral securing the Bank’s debt is margined in accordance with policy guidelines. Internally generated cash flow covers current maturities of long-term debt more than adequately. Unsecured loans to individuals supported by strong financial statements and on which repayment is satisfactory may be included in this classification.
•Risk rating 3 – Satisfactory. Loans to persons or entities with an average financial condition, adequate collateral margins, adequate cash flow to service long-term debt, and net worth comprised mainly of fixed assets are included in this category. These entities are minimally profitable now, with projections indicating continued profitability into the foreseeable future. Closely held corporations or businesses where a majority of the profits are withdrawn by the owners or paid in dividends are included in this rating category. Overall, these loans are basically sound.
•Risk rating 4 – Watch. Borrowers who have marginal cash flow, marginal profitability or have experienced an unprofitable year and a declining financial condition characterize these loans. The borrower has in the past satisfactorily handled debts with the Bank, but in recent months has either been late, delinquent in making payments, or made sporadic payments. While the Bank continues to be adequately secured, margins have decreased or are decreasing, despite the borrower’s continued satisfactory condition. Other characteristics of borrowers in this class include inadequate credit information, weakness of financial statement and repayment capacity, but with collateral that appears to limit exposure.
•Risk rating 5 – Other Loans Especially Mentioned (“OLEM”). A loan criticized as OLEM 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. OLEM assets are not adversely classified and do not expose the institution to sufficient risk to warrant adverse classification.
•Risk rating 6 – Substandard. A loan classified as substandard is inadequately protected by the sound worth and paying capacity of the borrower or the collateral pledged. Loss potential, while existing in the aggregate amount of substandard loans, does not have to exist in individual assets.
•Risk rating 7 – Doubtful. A loan classified as doubtful has all the weaknesses inherent in a loan classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. These are poor quality loans in which neither the collateral, if any, nor the financial condition of the borrower presently ensure collectability in full in a reasonable period of time; in fact, there is permanent impairment in the collateral securing the loan.
•Risk rating 8 – Loss. Assets classified as loss are considered uncollectible and of such little value that the continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather, it is not practical or desirable to defer writing off this basically worthless asset, even though partial recovery may occur in the future. This classification is based upon current facts, not probabilities. Assets classified as loss should be charged-off in the period in which they became uncollectible.
The Company’s classified loans include loans in risk ratings 6, 7 and 8. Loans may be classified, but not considered collateral dependent, due to one of the following reasons: (1) The Company has established minimum dollar amount thresholds for credit loss testing. All loans over $2.0 million that are rated 5 – 8 are individually assessed for credit losses on a quarterly basis. Loans rated 5 – 8 that fall under the threshold amount are not individually tested for credit losses and therefore are not included in collateral dependent loans; (2) of the loans that are above the threshold amount and tested for credit losses after testing, some are considered to not be collateral dependent and are not included in collateral dependent loans.
26
Based on the most recent analysis performed, the risk category of loans by class of loans as of September 30, 2024 and December 31, 2023 is as follows:
September 30, 2024
Term Loans Amortized Cost Basis by Origination Year
20242023202220212020PriorRevolving Loans Amortized Cost BasisTotal
(In thousands)
Real estate:
Commercial real estate loans
Non-farm/non-residential
Risk rating 1$— $— $— $— $— $331 $74 $405 
Risk rating 2— — — — — — — — 
Risk rating 3163,941 312,252 601,970 562,043 230,931 1,021,405 256,875 3,149,417 
Risk rating 454,483 169,205 457,070 268,482 145,758 665,513 322,795 2,083,306 
Risk rating 527 — 1,265 — 960 26,353 383 28,988 
Risk rating 6— — 8,155 5,720 23,967 196,483 95 234,420 
Risk rating 7— — — — — — — — 
Risk rating 8— — — — — — — — 
Total non-farm/non-residential218,451 481,457 1,068,460 836,245 401,616 1,910,085 580,222 5,496,536 
Construction/land development
Risk rating 1$— $— $— $10 $— $— $— $10 
Risk rating 2— 136 — — — 165 37 338 
Risk rating 3535,815 411,289 424,306 84,734 41,633 62,671 65,049 1,625,497 
Risk rating 4131,982 189,494 466,044 79,663 9,720 24,720 205,071 1,106,694 
Risk rating 5— 623 1,431 — — — — 2,054 
Risk rating 6— 73 2,559 1,909 299 933 981 6,754 
Risk rating 7— — — — — — — — 
Risk rating 8— — — 72 — — — 72 
Total construction/land development667,797 601,615 894,340 166,388 51,652 88,489 271,138 2,741,419 
Agricultural
Risk rating 1$700 $— $1,462 $— $— $— $— $2,162 
Risk rating 2278 241 — 1,853 — — — 2,372 
Risk rating 335,210 34,159 32,111 15,598 21,231 44,924 31,107 214,340 
Risk rating 413,118 10,178 27,185 19,868 10,503 26,221 5,214 112,287 
Risk rating 5— — — — — 571 — 571 
Risk rating 6— — — 1,621 1,084 1,335 193 4,233 
Risk rating 7— — — — — — — — 
Risk rating 8— — — — — — — — 
Total agricultural49,306 44,578 60,758 38,940 32,818 73,051 36,514 335,965 
Total commercial real estate loans$935,554 $1,127,650 $2,023,558 $1,041,573 $486,086 $2,071,625 $887,874 $8,573,920 
Residential real estate loans
Residential 1-4 family
Risk rating 1$— $— $— $— $— $92 $2 $94 
Risk rating 2— 230 — — — 11 5 246 
Risk rating 3181,112 232,086 368,096 232,800 131,378 361,150 114,114 1,620,736 
Risk rating 46,592 22,038 44,936 24,590 20,640 72,339 82,201 273,336 
Risk rating 5— 1,015 601 293 397 1,073 778 4,157 
Risk rating 6— 1,533 8,904 3,568 4,276 14,977 523 33,781 
Risk rating 7— — — — — — — — 
Risk rating 8— — — — — 2 — 2 
Total residential 1-4 family187,704 256,902 422,537 261,251 156,691 449,644 197,623 1,932,352 
27
September 30, 2024
Term Loans Amortized Cost Basis by Origination Year
20242023202220212020PriorRevolving Loans Amortized Cost BasisTotal
(In thousands)
Multifamily residential
Risk rating 1$— $— $— $— $— $— $— $— 
Risk rating 2— — — — — — — — 
Risk rating 31,876 11,133 34,052 36,223 52,758 76,818 11,449 224,309 
Risk rating 4— 689 130,725 10,228 59,023 20,830 14,970 236,465 
Risk rating 5— — — — — — — — 
Risk rating 6— — 21,052 592 — 230 — 21,874 
Risk rating 7— — — — — — — — 
Risk rating 8— — — — — — — — 
Total multifamily residential1,876 11,822 185,829 47,043 111,781 97,878 26,419 482,648 
Total real estate$1,125,134 $1,396,374 $2,631,924 $1,349,867 $754,558 $2,619,147 $1,111,916 $10,988,920 
Consumer
Risk rating 1$4,480 $2,582 $1,667 $1,291 $642 $1,064 $1,506 $13,232 
Risk rating 2— — — — — 150 — 150 
Risk rating 3210,168 213,187 217,177 181,131 90,901 252,855 1,124 1,166,543 
Risk rating 44,342 4,633 5,151 1,381 166 5,688 184 21,545 
Risk rating 5— 433 — 214 156 83 — 886 
Risk rating 671 5,287 4,533 343 583 5,944 65 16,826 
Risk rating 7— 9 — — — — — 9 
Risk rating 8— — — 6 — — — 6 
Total consumer219,061 226,131 228,528 184,366 92,448 265,784 2,879 1,219,197 
Commercial and industrial
Risk rating 1$3,402 $1,207 $793 $651 $219 $21,338 $10,740 $38,350 
Risk rating 248 132 1,074 185 5 19 2,142 3,605 
Risk rating 372,780 511,791 239,265 62,304 42,767 210,038 205,363 1,344,308 
Risk rating 457,244 34,109 29,322 29,917 8,695 66,115 308,873 534,275 
Risk rating 5— 86 485 4,526 33 — 1,305 6,435 
Risk rating 638 12,082 68,479 13,365 34 13,526 50,159 157,683 
Risk rating 7— — — — — — — — 
Risk rating 8— 1 — — 1 9 — 11 
Total commercial and industrial133,512 559,408 339,418 110,948 51,754 311,045 578,582 2,084,667 
Agricultural and other
Risk rating 1$643 $378 $222 $16 $105 $— $782 $2,146 
Risk rating 2537 304 28 — — — 2,447 3,316 
Risk rating 345,944 51,932 39,142 27,332 24,600 32,955 106,271 328,176 
Risk rating 430,475 4,469 8,446 6,964 388 15,305 127,762 193,809 
Risk rating 51,915 — 312 — 61 543 5 2,836 
Risk rating 6— 4 — 46 59 683 120 912 
Risk rating 7— — — — — — — — 
Risk rating 8— — — — — — — — 
Total agricultural and other79,514 57,087 48,150 34,358 25,213 49,486 237,387 531,195 
Total$1,557,221 $2,239,000 $3,248,020 $1,679,539 $923,973 $3,245,462 $1,930,764 $14,823,979 
28
December 31, 2023
Term Loans Amortized Cost Basis by Origination Year
20232022202120202019PriorRevolving Loans Amortized Cost BasisTotal
(In thousands)
Real estate:
Commercial real estate loans
Non-farm/non-residential
Risk rating 1$— $— $— $— $232 $116 $55 $403 
Risk rating 2— — — — 111 — — 111 
Risk rating 3305,742 584,860 568,413 243,177 216,746 934,111 440,414 3,293,463 
Risk rating 483,089 557,540 242,217 224,378 149,258 590,864 95,360 1,942,706 
Risk rating 5— — 10,000 — 14,095 42,694 758 67,547 
Risk rating 6— 8,198 9,958 23,743 24,380 179,350 95 245,724 
Risk rating 7— — — — — — — — 
Risk rating 8— — — — — — — — 
Total non-farm/non-residential388,831 1,150,598 830,588 491,298 404,822 1,747,135 536,682 5,549,954 
Construction/land development
Risk rating 1$— $— $10 $— $— $— $— $10 
Risk rating 2759 — — — — 186 — 945 
Risk rating 3300,941 499,984 130,342 62,134 22,656 56,180 44,603 1,116,840 
Risk rating 4198,874 417,244 252,602 22,713 32,342 24,527 209,063 1,157,365 
Risk rating 5641 1,163 — 3,306 218 69 — 5,397 
Risk rating 6— 7,817 1,631 748 641 254 1,327 12,418 
Risk rating 7— — — — — — — — 
Risk rating 8— — 72 — — — — 72 
Total construction/land development501,215 926,208 384,657 88,901 55,857 81,216 254,993 2,293,047 
Agricultural
Risk rating 1$— $1,605 $— $— $— $— $— $1,605 
Risk rating 2247 — 1,936 — — — — 2,183 
Risk rating 330,252 43,291 22,919 25,992 10,678 43,284 20,104 196,520 
Risk rating 49,477 24,688 20,358 19,532 7,873 32,692 4,612 119,232 
Risk rating 5— — — — 314 571 — 885 
Risk rating 6— — 1,675 1,084 1,620 352 — 4,731 
Risk rating 7— — — — — — — — 
Risk rating 8— — — — — — — — 
Total agricultural39,976 69,584 46,888 46,608 20,485 76,899 24,716 325,156 
Total commercial real estate loans$930,022 $2,146,390 $1,262,133 $626,807 $481,164 $1,905,250 $816,391 $8,168,157 
Residential real estate loans
Residential 1-4 family
Risk rating 1$— $— $— $— $— $144 $2 $146 
Risk rating 2259 — — — — 20 1 280 
Risk rating 3246,462 366,149 241,985 145,339 93,751 324,569 122,950 1,541,205 
Risk rating 414,992 37,444 55,406 21,240 13,313 67,084 62,356 271,835 
Risk rating 5— 243 246 479 831 1,343 40 3,182 
Risk rating 671 5,361 2,926 4,064 3,432 10,567 1,189 27,610 
Risk rating 7— — — — — — — — 
Risk rating 8— — — — — 2 — 2 
Total residential 1-4 family261,784 409,197 300,563 171,122 111,327 403,729 186,538 1,844,260 
29
December 31, 2023
Term Loans Amortized Cost Basis by Origination Year
20232022202120202019PriorRevolving Loans Amortized Cost BasisTotal
(In thousands)
Multifamily residential
Risk rating 1$— $— $— $— $— $— $— $— 
Risk rating 2— — — — — — — — 
Risk rating 33,314 9,827 37,755 44,407 31,436 53,068 6,537 186,344 
Risk rating 4669 77,185 69,546 64,295 8,116 18,490 7,822 246,123 
Risk rating 5— — — — — 3,006 — 3,006 
Risk rating 6— — — — 263 — — 263 
Risk rating 7— — — — — — — — 
Risk rating 8— — — — — — — — 
Total multifamily residential3,983 87,012 107,301 108,702 39,815 74,564 14,359 435,736 
Total real estate$1,195,789 $2,642,599 $1,669,997 $906,631 $632,306 $2,383,543 $1,017,288 $10,448,153 
Consumer
Risk rating 1$5,195 $2,952 $2,002 $839 $355 $1,114 $1,580 $14,037 
Risk rating 2— — — — 126 54 — 180 
Risk rating 3240,897 245,543 211,312 108,009 108,063 191,220 1,264 1,106,308 
Risk rating 49,597 7,534 2,479 69 109 6,073 214 26,075 
Risk rating 522 — 22 483 872 261 — 1,660 
Risk rating 6204 1,559 830 581 881 1,349 11 5,415 
Risk rating 715 — — — — — — 15 
Risk rating 8— — — — — — — — 
Total consumer255,930 257,588 216,645 109,981 110,406 200,071 3,069 1,153,690 
Commercial and industrial
Risk rating 1$3,757 $918 $1,120 $236 $121 $20,835 $12,644 $39,631 
Risk rating 2174 1,293 220 12 164 218 963 3,044 
Risk rating 3487,896 272,608 78,507 50,340 77,761 170,610 227,043 1,364,765 
Risk rating 4115,025 34,474 55,812 33,000 27,189 71,854 378,417 715,771 
Risk rating 521 547 16,318 3,352 201 980 1,767 23,186 
Risk rating 612,498 75,536 4,942 1,154 9,086 12,180 63,198 178,594 
Risk rating 7— — — — — — — — 
Risk rating 8— — — — — — — — 
Total commercial and industrial619,371 385,376 156,919 88,094 114,522 276,677 684,032 2,324,991 
Agricultural and other
Risk rating 1$408 $131 $16 $105 $— $2 $563 $1,225 
Risk rating 2396 28 1 — 1,181 100 693 2,399 
Risk rating 352,758 45,796 31,378 26,918 3,059 43,984 145,419 349,312 
Risk rating 414,007 7,663 8,025 955 10,955 3,188 94,186 138,979 
Risk rating 5— 2,286 — 134 — 593 665 3,678 
Risk rating 671 33 63 108 — 370 1,656 2,301 
Risk rating 7— — — — — — — — 
Risk rating 8— — — — — — — — 
Total agricultural and other67,640 55,937 39,483 28,220 15,195 48,237 243,182 497,894 
Total$2,138,730 $3,341,500 $2,083,044 $1,132,926 $872,429 $2,908,528 $1,947,571 $14,424,728 

30
The following table presents gross write-offs by origination date as of September 30, 2024 and December 31, 2023.
September 30, 2024
Gross Loan Write-Offs by Origination Year
20242023202220212020PriorRevolving Loans Amortized Cost BasisTotal
(In thousands)
Real estate
Commercial real estate loans
Non-farm/non-residential$— $— $— $780 $1 $383 $— $1,164 
Construction/land development— — — 48 33 — — 81 
Agricultural— — — — — — — — 
Residential real estate loans
Residential 1-4 family— 1 100 1 26 132 — 260 
Total real estate— 1 100 829 60 515 — 1,505 
Consumer4 86 75 40 109 485 — 799 
Commercial and industrial— 557 89 292 108 199 3,255 4,500 
Agricultural & other2,202 *71 — — — — — 2,273 
Total$2,206 $715 $264 $1,161 $277 $1,199 $3,255 $9,077 
*The 2024 write-off consists entirely of overdrafts.
December 31, 2023
Gross Loan Write-Offs by Origination Year
20232022202120202019PriorRevolving Loans Amortized Cost BasisTotal
(In thousands)
Real estate
Commercial real estate loans
Non-farm/non-residential$— $— $— $— $1,826 $502 $— $2,328 
Construction/land development— 2 168 5 — 88 — 263 
Agricultural— — — — 1 6 — 7 
Residential real estate loans
Residential 1-4 family— 29 28 73 13 126 — 269 
Total real estate— 31 196 78 1,840 722 — 2,867 
Consumer— 51 44 98 63 263 25 544 
Commercial and industrial— 407 1,110 894 911 5,369 466 9,157 
Agricultural & other3,252 **1 1 2 64 3 164 3,487 
Total$3,252 $490 $1,351 $1,072 $2,878 $6,357 $655 $16,055 
**The 2023 write-offs consist entirely of overdrafts.

31
The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. The Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following tables present the amortized cost of performing and nonperforming loans as of September 30, 2024 and December 31, 2023.
September 30, 2024
Term Loans Amortized Cost Basis by Origination Year
20242023202220212020PriorRevolving Loans Amortized Cost BasisTotal
(In thousands)
Real estate:
Commercial real estate loans
Non-farm/non-residential
Performing$218,451 $481,457 $1,068,305 $835,292 $387,389 $1,871,118 $580,142 $5,442,154 
Non-performing— — 155 953 14,227 38,967 80 54,382 
Total non-farm/non-residential
218,451 481,457 1,068,460 836,245 401,616 1,910,085 580,222 5,496,536 
Construction/land development
Performing$667,797 $601,542 $891,810 $164,990 $51,470 $87,594 $270,156 $2,735,359 
Non-performing— 73 2,530 1,398 182 895 982 6,060 
Total construction/ land development
667,797 601,615 894,340 166,388 51,652 88,489 271,138 2,741,419 
Agricultural
Performing$49,306 $44,578 $60,758 $38,875 $32,818 $72,572 $36,321 $335,228 
Non-performing— — — 65 — 479 193 737 
Total agricultural49,306 44,578 60,758 38,940 32,818 73,051 36,514 335,965 
Total commercial real estate loans
$935,554 $1,127,650 $2,023,558 $1,041,573 $486,086 $2,071,625 $887,874 $8,573,920 
Residential real estate loans
Residential 1-4 family
Performing$187,704 $255,185 $416,753 $257,574 $153,384 $437,827 $197,230 $1,905,657 
Non-performing— 1,717 5,784 3,677 3,307 11,817 393 26,695 
Total residential 1-4 family
187,704 256,902 422,537 261,251 156,691 449,644 197,623 1,932,352 
Multifamily residential
Performing$1,876 $11,822 $164,927 $46,451 $111,781 $97,878 $26,419 $461,154 
Non-performing— — 20,902 592 — — — 21,494 
Total multifamily residential
1,876 11,822 185,829 47,043 111,781 97,878 26,419 482,648 
Total real estate$1,125,134 $1,396,374 $2,631,924 $1,349,867 $754,558 $2,619,147 $1,111,916 $10,988,920 
Consumer
Performing$218,988 $225,480 $225,577 $184,063 $91,893 $259,861 $2,808 $1,208,670 
Non-performing73 651 2,951 303 555 5,923 71 10,527 
Total consumer219,061 226,131 228,528 184,366 92,448 265,784 2,879 1,219,197 
Commercial and industrial
Performing$133,512 $556,469 $336,274 $109,586 $51,740 $306,000 $577,929 $2,071,510 
Non-performing— 2,939 3,144 1,362 14 5,045 653 13,157 
Total commercial and industrial133,512 559,408 339,418 110,948 51,754 311,045 578,582 2,084,667 
Agricultural and other
Performing$79,514 $57,083 $48,150 $34,312 $25,209 $48,579 $237,274 $530,121 
Non-performing— 4 — 46 4 907 113 1,074 
Total agricultural and other79,514 57,087 48,150 34,358 25,213 49,486 237,387 531,195 
Total$1,557,221 $2,239,000 $3,248,020 $1,679,539 $923,973 $3,245,462 $1,930,764 $14,823,979 



32
December 31, 2023
Term Loans Amortized Cost Basis by Origination Year
20232022202120202019PriorRevolving Loans Amortized Cost BasisTotal
(In thousands)
Real estate:
Commercial real estate loans
Non-farm/non-residential
Performing$388,831 $1,150,598 $821,373 $490,153 $404,061 $1,718,776 $536,349 $5,510,141 
Non-performing— — 9,215 1,145 761 28,359 333 39,813 
Total non-farm/non-residential
388,831 1,150,598 830,588 491,298 404,822 1,747,135 536,682 5,549,954 
Construction/land development
Performing$501,215 $918,390 $382,954 $88,204 $55,239 $81,028 $253,667 $2,280,697 
Non-performing— 7,818 1,703 697 618 188 1,326 12,350 
Total construction/land development
501,215 926,208 384,657 88,901 55,857 81,216 254,993 2,293,047 
Agricultural
Performing$39,976 $69,584 $46,809 $46,608 $20,485 $76,547 $24,716 $324,725 
Non-performing— — 79 — — 352 — 431 
Total agricultural39,976 69,584 46,888 46,608 20,485 76,899 24,716 325,156 
Total commercial real estate loans
$930,022 $2,146,390 $1,262,133 $626,807 $481,164 $1,905,250 $816,391 $8,168,157 
Residential real estate loans
Residential 1-4 family
Performing$261,784 $405,239 $298,207 $167,475 $108,091 $396,130 $185,948 $1,822,874 
Non-performing— 3,958 2,356 3,647 3,236 7,599 590 21,386 
Total residential 1-4 family
261,784 409,197 300,563 171,122 111,327 403,729 186,538 1,844,260 
Multifamily residential
Performing$3,983 $87,012 $107,301 $108,702 $39,815 $74,564 $14,359 $435,736 
Non-performing— — — — — — — — 
Total multifamily residential
3,983 87,012 107,301 108,702 39,815 74,564 14,359 435,736 
Total real estate$1,195,789 $2,642,599 $1,669,997 $906,631 $632,306 $2,383,543 $1,017,288 $10,448,153 
Consumer
Performing$255,771 $256,826 $215,831 $109,442 $110,267 $198,982 $3,060 $1,150,179 
Non-performing159 762 814 539 139 1,089 9 3,511 
Total consumer255,930 257,588 216,645 109,981 110,406 200,071 3,069 1,153,690 
Commercial and industrial
Performing$616,809 $382,190 $156,056 $87,531 $111,529 $273,434 $680,552 $2,308,101 
Non-performing2,562 3,186 863 563 2,993 3,243 3,480 16,890 
Total commercial and industrial619,371 385,376 156,919 88,094 114,522 276,677 684,032 2,324,991 
Agricultural and other
Performing$67,569 $55,904 $39,473 $28,220 $15,195 $48,203 $242,818 $497,382 
Non-performing71 33 10 — — 34 364 512 
Total agricultural and other67,640 55,937 39,483 28,220 15,195 48,237 243,182 497,894 
Total$2,138,730 $3,341,500 $2,083,044 $1,132,926 $872,429 $2,908,528 $1,947,571 $14,424,728 
The Company had approximately $45.3 million or 180 total revolving loans convert to term loans for the nine months ended September 30, 2024 compared to $32.1 million or 182 total revolving loans convert to term loans for the nine months ended September 30, 2023. These loans were considered immaterial for vintage disclosure inclusion.

33
The following table presents the amortized cost basis of modified loans to borrowers experiencing financial difficulty by class and modification type at September 30, 2024 and December 31, 2023. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below.
September 30, 2024
Combination of Modifications
Term ExtensionInterest Rate ReductionPrincipal ReductionInterest OnlyInterest Rate Reduction and Term ExtensionPrincipal Reduction and Interest Rate ReductionTerm Extension and Interest OnlyTerm Extension and Principal ReductionPost-
Modification
Outstanding
Balance		Percentage of Total Class of Loans Receivable
(In thousands)
Real estate:
Commercial real estate loans
    Non-farm/non-residential$389 $— $— $1,307 $342 $— $15,874 $— $17,912 0.33 %
    Construction/land development— — — 78 — — — — 78 — 
Residential real estate loans
    Residential 1-4 family1,061 951 103 23 606 — — 117 2,861 0.15 
Total real estate1,450 951 103 1,408 948 — 15,874 117 20,851 0.19 
Consumer6 — — 9 — 3 — — 18 — 
Commercial and industrial2,308 — — 992 74 — — — 3,374 0.16 
Total$3,764 $951 $103 $2,409 $1,022 $3 $15,874 $117 $24,243 0.16 %
December 31, 2023
Combination of Modifications
Term ExtensionInterest Rate ReductionPrincipal ReductionInterest OnlyInterest Rate Reduction and Term ExtensionPrincipal Reduction and Interest Rate ReductionTerm Extension and Interest OnlyTerm Extension and Principal ReductionPost-
Modification
Outstanding
Balance		Percentage of Total Class of Loans Receivable
(In thousands)
Real estate:
Commercial real estate loans
    Non-farm/non-residential$398 $— $— $1,537 $348 $— $16,023 $— $18,306 0.33 %
    Construction/land development— — — 149 — — — — 149 0.01 
Residential real estate loans
    Residential 1-4 family560 598 106 59 516 — — 116 1,955 0.11 
Total real estate958 598 106 1,745 864 — 16,023 116 20,410 0.20 
Consumer14 — 1 10 — 5 — — 30 — 
Commercial and industrial2,253 38 42 1,763 74 — — — 4,170 0.18 
Total$3,225 $636 $149 $3,518 $938 $5 $16,023 $116 $24,610 0.17 %
During the nine months ended September 30, 2024, the Company restructured approximately $1.2 million in loans to eight borrowers. The ending balance of these loans as of September 30, 2024, was $1.1 million. During the nine months ended September 30, 2023, the Company restructured approximately $19.4 million in loans to 18 borrowers. The ending balance of these loans as of September 30, 2023, was $20.8 million. The Company considered the financial effect of these loan modifications to borrowers experiencing financial difficulty during the nine months ended September 30, 2024 and September 30, 2023 as well as the unadvanced balances to these borrowers immaterial for tabular disclosure inclusion.
34
The following table presents the amortized cost basis of loans that had a payment default during the nine months ended September 30, 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty.
September 30, 2024
Term ExtensionInterest Rate ReductionCombination Interest Rate Reduction and Term Extension
(Dollars in thousands)
Real estate
Commercial real estate loans
Non-farm/non-residential$— $— $— 
Residential real estate loans
Residential 1-4 family385 511 238 
Total real estate385 511 238 
Consumer6 — — 
Commercial and industrial— — — 
Total$391 $511 $238 
The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The Company has modified 11 loans over the past 12 months to borrowers experiencing financial difficulty. The pre-modification balance of the loans was $1.4 million, and the ending balance as of September 30, 2024 was $1.3 million. The $1.3 million balance consists of $1.1 million of non-accrual loans and $193,000 of current loans, of which $92,000 were 60-89 days past due. The remaining balance of the loans was current as of September 30, 2024.
Upon the Company's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses on loans is adjusted by the same amount. The defaults impact the loss rate by applicable loan pool for the quarterly CECL calculation. For individually analyzed loans which are not considered to be collateral dependent, an allowance is recorded based on the loss rate for the respective pool within the collective evaluation.
The following is a presentation of total foreclosed assets as of September 30, 2024 and December 31, 2023:
September 30, 2024December 31, 2023
(In thousands)
Commercial real estate loans
Non-farm/non-residential$29,824 $29,894 
Construction/land development12,919 47 
Residential real estate loans
Residential 1-4 family297 545 
Total foreclosed assets held for sale$43,040 $30,486 
6. Goodwill and Core Deposits and Other Intangibles
Changes in the carrying amount and accumulated amortization of the Company’s goodwill and core deposits and other intangibles at September 30, 2024 and December 31, 2023, were as follows:
September 30, 2024December 31, 2023
(In thousands)
Goodwill
Balance, beginning of period$1,398,253 $1,398,253 
Balance, end of period$1,398,253 $1,398,253 
35
September 30, 2024December 31, 2023
(In thousands)
Core Deposit Intangibles
Balance, beginning of period$48,770 $58,455 
Amortization expense(6,375)(7,432)
Balance, September 30$42,395 51,023 
Amortization expense(2,253)
Balance, end of year$48,770 
The carrying basis and accumulated amortization of core deposit intangibles at September 30, 2024 and December 31, 2023 were:
September 30, 2024December 31, 2023
(In thousands)
Gross carrying basis$128,888 $128,888 
Accumulated amortization(86,493)(80,118)
Net carrying amount$42,395 $48,770 
Core deposit intangible amortization expense was approximately $2.1 million and $2.5 million for the three months ended September 30, 2024 and 2023, respectively. Core deposit intangible amortization expense was approximately $6.4 million and $7.4 million for the nine months ended September 30, 2024 and 2023, respectively. The Company’s estimated amortization expense of core deposits intangibles for each of the years 2024 through 2028 is approximately: 2024 – $8.4 million; 2025 – $8.0 million; 2026 – $7.8 million; 2027– $6.6 million; 2028 – $4.2 million.
The carrying amount of the Company’s goodwill was $1.40 billion at both September 30, 2024 and December 31, 2023. Goodwill is tested annually for impairment during the fourth quarter or more often if events and circumstances indicate there may be an impairment. During the 2023 review, no impairment was found. 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 consolidated financial statements.
7. Other Assets
Other assets consist primarily of equity securities without a readily determinable fair value and other miscellaneous assets. As of September 30, 2024 and December 31, 2023, other assets were $352.6 million and $323.6 million, respectively.
The Company has equity securities without readily determinable fair values such as stock holdings in the Federal Home Loan Bank (“FHLB”) and the Federal Reserve Bank (“Federal Reserve”) which are outside the scope of ASC Topic 321, Investments – Equity Securities (“ASC Topic 321”). These equity securities without a readily determinable fair value were $133.3 million and $133.4 million at September 30, 2024 and December 31, 2023, and are accounted for at cost.
The Company has equity securities such as stock holdings in First National Bankers’ Bank and other miscellaneous holdings which are accounted for under ASC Topic 321. These equity securities without a readily determinable fair value were $93.3 million and $90.3 million at September 30, 2024 and December 31, 2023, respectively. There were no transactions during the period that would indicate a material change in fair value.
8. Deposits
The aggregate amount of time deposits with a minimum denomination of $250,000 was $923.9 million and $836.7 million at September 30, 2024 and December 31, 2023, respectively. The aggregate amount of time deposits with a minimum denomination of $100,000 was $1.20 billion and $1.09 billion at September 30, 2024 and December 31, 2023, respectively. Interest expense applicable to certificates in excess of $100,000 totaled $12.7 million and $7.5 million for the three months ended September 30, 2024 and 2023, respectively. Interest expense applicable to certificates in excess of $100,000 totaled $36.5 million and $15.7 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024 and December 31, 2023, brokered deposits were $421.3 million and $401.0 million, respectively.
Deposits totaling approximately $2.84 billion and $3.05 billion at September 30, 2024 and December 31, 2023, respectively, were public funds obtained primarily from state and political subdivisions in the United States.
36
9. Securities Sold Under Agreements to Repurchase
At September 30, 2024 and December 31, 2023, securities sold under agreements to repurchase totaled $179.4 million and $142.1 million, respectively. For the three-month periods ended September 30, 2024 and 2023, securities sold under agreements to repurchase daily weighted-average totaled $157.2 million and $154.7 million, respectively. For the nine-month periods ended September 30, 2024 and 2023, securities sold under agreements to repurchase daily weighted-average totaled $163.0 million and $144.6 million, respectively.
The remaining contractual maturity of securities sold under agreements to repurchase in the consolidated balance sheets as of September 30, 2024 and December 31, 2023 is presented in the following table:
September 30, 2024December 31, 2023
Overnight and
Continuous
Total
Overnight and
Continuous
Total
(In thousands)
Securities sold under agreements to repurchase:
U.S. government-sponsored enterprises$9,964 $9,964 $— $— 
Mortgage-backed securities51,314 51,314 — — 
State and political subdivisions21,808 21,808 — — 
Other securities96,330 96,330 142,085 142,085 
Total borrowings$179,416 $179,416 $142,085 $142,085 
10. FHLB and Other Borrowed Funds
The Company’s FHLB borrowed funds, which are secured by our loan portfolio, were $600.0 million at both September 30, 2024 and December 31, 2023. At September 30, 2024 and December 31, 2023, the entire $600.0 million of the outstanding balances were classified as long-term advances. The FHLB advances mature from 2025 to 2037 with fixed interest rates ranging from 3.37% to 4.84%. Expected maturities could differ from contractual maturities because FHLB may have the right to call, or the Company may have the right to prepay certain obligations.
Other borrowed funds were $700.8 million as of September 30, 2024 and were classified as short-term advances. The Company had $701.3 million in other borrowed funds as of December 31, 2023. As of both September 30, 2024 and December 31, 2023, the Company had drawn $700.0 million from the Bank Term Funding Program in the ordinary course of business, and these advances mature on January 16, 2025.
Additionally, the Company had $1.24 billion and $1.33 billion at September 30, 2024 and December 31, 2023, respectively, in letters of credit under a FHLB blanket borrowing line of credit, which are used to collateralize public deposits.
11. Subordinated Debentures
Subordinated debentures at September 30, 2024 and December 31, 2023 consisted of the following components:
As of
September 30, 2024
As of
December 31, 2023
(In thousands)
Subordinated debt securities
Subordinated notes, net of issuance costs, issued in 2020, due 2030, fixed rate of 5.50% during the first five years and at a floating rate of 534.5 basis points above the then three-month SOFR rate, reset quarterly, thereafter, callable in 2025 without penalty
$141,096 $142,084 
Subordinated notes, net of issuance costs, issued in 2022, due 2032, fixed rate of 3.125% during the first five years and at a floating rate of 182 basis points above the then three-month SOFR rate, reset quarterly, thereafter, callable in 2027 without penalty
298,298 297,750 
Total$439,394 $439,834 

37
Subordinated Debt Securities. On April 1, 2022, the Company acquired $140.0 million in aggregate principal amount of 5.500% Fixed-to-Floating Rate Subordinated Notes due 2030 (the “2030 Notes”) from Happy, and the Company recorded approximately $144.4 million which included fair value adjustments. The 2030 Notes are unsecured, subordinated debt obligations of the Company and will mature on July 31, 2030. From and including the date of issuance to, but excluding July 31, 2025 or the date of earlier redemption, the 2030 Notes will bear interest at an initial rate of 5.50% per annum, payable in arrears on January 31 and July 31 of each year. From and including July 31, 2025 to, but excluding, the maturity date or earlier redemption, the 2030 Notes will bear interest at a floating rate equal to the Benchmark rate (which is expected to be 3-month Secured Overnight Funding Rate (SOFR)), each as defined in and subject to the provisions of the applicable supplemental indenture for the 2030 Notes, plus 5.345%, payable quarterly in arrears on January 31, April 30, July 31, and October 31 of each year, commencing on October 31, 2025.
The Company may, beginning with the interest payment date of July 31, 2025, and on any interest payment date thereafter, redeem the 2030 Notes, in whole or in part, subject to prior approval of the Federal Reserve if then required, at a redemption price equal to 100% of the principal amount of the 2030 Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption. The Company may also redeem the 2030 Notes at any time, including prior to July 31, 2025, at the Company’s option, in whole but not in part, subject to prior approval of the Federal Reserve if then required, if certain events occur that could impact the Company’s ability to deduct interest payable on the 2030 Notes for U.S. federal income tax purposes or preclude the 2030 Notes from being recognized as Tier 2 capital for regulatory capital purposes, or if the Company is required to register as an investment company under the Investment Company Act of 1940, as amended. In each case, the redemption would be at a redemption price equal to 100% of the principal amount of the 2030 Notes plus any accrued and unpaid interest to, but excluding, the redemption date.
On January 18, 2022, the Company completed an underwritten public offering of $300.0 million in aggregate principal amount of its 3.125% Fixed-to-Floating Rate Subordinated Notes due 2032 (the “2032 Notes”) for net proceeds, after underwriting discounts and issuance costs of approximately $296.4 million. The 2032 Notes are unsecured, subordinated debt obligations of the Company and will mature on January 30, 2032. From and including the date of issuance to, but excluding January 30, 2027 or the date of earlier redemption, the 2032 Notes will bear interest at an initial rate of 3.125% per annum, payable in arrears on January 30 and July 30 of each year. From and including January 30, 2027 to, but excluding, the maturity date or earlier redemption, the 2032 Notes will bear interest at a floating rate equal to the Benchmark rate (which is expected to be Three-Month Term SOFR), each as defined in and subject to the provisions of the applicable supplemental indenture for the 2032 Notes, plus 182 basis points, payable quarterly in arrears on January 30, April 30, July 30, and October 30 of each year, commencing on April 30, 2027.
The Company may, beginning with the interest payment date of January 30, 2027, and on any interest payment date thereafter, redeem the 2032 Notes, in whole or in part, subject to prior approval of the Federal Reserve if then required, at a redemption price equal to 100% of the principal amount of the 2032 Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption. The Company may also redeem the 2032 Notes at any time, including prior to January 30, 2027, at the Company’s option, in whole but not in part, subject to prior approval of the Federal Reserve if then required, if certain events occur that could impact the Company’s ability to deduct interest payable on the 2032 Notes for U.S. federal income tax purposes or preclude the 2032 Notes from being recognized as Tier 2 capital for regulatory capital purposes, or if the Company is required to register as an investment company under the Investment Company Act of 1940, as amended. In each case, the redemption would be at a redemption price equal to 100% of the principal amount of the 2032 Notes plus any accrued and unpaid interest to, but excluding, the redemption date.
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12. Income Taxes
The following is a summary of the components of the provision for income taxes for the three and nine months ended September 30, 2024 and 2023:
For the Three Months Ended September 30,For the Nine Months Ended September 30,
2024202320242023
(In thousands)
Current:
Federal$26,586 $23,861 $75,213 $76,059 
State5,412 4,858 15,312 15,484 
Total current31,998 28,719 90,525 91,543 
Deferred:
Federal(2,453)1,758 570 715 
State(499)358 116 146 
Total deferred(2,952)2,116 686 861 
Income tax expense$29,046 $30,835 $91,211 $92,404 
The reconciliation between the statutory federal income tax rate and effective income tax rate is as follows for the three and nine months ended September 30, 2024 and 2023:
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Statutory federal income tax rate21.00 %21.00 %21.00 %21.00 %
Effect of non-taxable interest income(1.28)(0.64)(0.98)(0.71)
Stock compensation0.58 0.29 0.57 0.29 
State income taxes, net of federal benefit2.45 2.73 2.57 2.64 
Executive officer compensation & other(0.25)0.47 0.06 (0.07)
Effective income tax rate22.50 %23.85 %23.22 %23.15 %
39
The types of temporary differences between the tax basis of assets and liabilities and their financial reporting amounts that give rise to deferred income tax assets and liabilities, and their approximate tax effects, are as follows:
September 30,
2024		December 31,
2023
(In thousands)
Deferred tax assets:
Allowance for credit losses$86,628 $81,251 
Deferred compensation6,448 7,619 
Stock compensation5,344 6,803 
Non-accrual interest income1,786 1,463 
Real estate owned70 79 
Unrealized loss on investment securities, available-for-sale62,211 81,493 
Loan discounts3,689 5,119 
Investments23,580 25,789 
Other19,084 14,691 
Gross deferred tax assets208,840 224,307 
Deferred tax liabilities:
Accelerated depreciation on premises and equipment— 1,477 
Tax basis on acquisitions6,691 4,061 
Core deposit intangibles9,610 11,021 
FHLB dividends2,835 2,351 
Other13,075 8,233 
Gross deferred tax liabilities32,211 27,143 
Net deferred tax assets$176,629 $197,164 
The Company files income tax returns in the U.S. federal jurisdiction. The Company's income tax returns are open and subject to examinations from the 2020 tax year and forward. The Company's various state income tax returns are generally open from the 2020 and later tax return years based on individual state statute of limitations.
13. Common Stock, Compensation Plans and Other
Common Stock
The Company’s Restated Articles of Incorporation, as amended, authorize the issuance of up to 300,000,000 shares of common stock, par value $0.01 per share.
The Company also has the authority to issue up to 5,500,000 shares of preferred stock, par value $0.01 per share under the Company’s Restated Articles of Incorporation, as amended.
Stock Repurchases
During the nine months ended September 30, 2024, the Company repurchased a total of 3,426,028 shares with a weighted-average stock price of $24.36 per share. Shares repurchased under the program as of September 30, 2024 since its inception total 26,411,743 shares. The remaining balance available for repurchase is 13,340,257 shares at September 30, 2024.
Stock Compensation Plans
The Company has a stock option and performance incentive plan known as the Home BancShares, Inc. 2022 Equity Incentive Plan (the “Plan”). The purpose of the Plan is to attract and retain highly qualified officers, directors, key employees, and other persons, and to motivate those persons to improve the Company’s business results. As of September 30, 2024, the maximum total number of shares of the Company’s common stock available for issuance under the Plan was 14,788,000 shares. At September 30, 2024, the Company had 2,072,278 shares of common stock available for future grants and 3,863,313 shares of common stock reserved for issuance pursuant to the Plan.
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The intrinsic value of the stock options outstanding was $8.4 million, which includes the intrinsic value of vested stock options of $6.2 million at September 30, 2024. The intrinsic value of stock options exercised during the nine months ended September 30, 2024 was approximately $6.8 million. Total unrecognized compensation cost related to non-vested stock option awards, which are expected to be recognized over the vesting periods, was approximately $1.7 million as of September 30, 2024.
The table below summarizes the stock option transactions under the Plan at September 30, 2024 and December 31, 2023 and changes during the nine-month period and year then ended:
For the Nine Months Ended September 30, 2024
For the Year Ended
December 31, 2023
Shares (000) Weighted-
Average
Exercisable
Price		Shares (000) Weighted-
Average
Exercisable
Price
Outstanding, beginning of year2,776 $20.95 2,971 $20.45 
Granted— — 25 22.63 
Forfeited/Expired(33)21.87 (10)23.38 
Exercised(952)18.13 (210)14.01 
Outstanding, end of period1,791 22.43 2,776 20.95 
Exercisable, end of period1,253 22.11 1,940 20.05 
Stock-based compensation expense for stock-based compensation awards granted is based on the grant-date fair value. For stock option awards, the fair value is estimated at 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. Additionally, there may be other factors that would otherwise have a significant effect on the value of employee stock options granted but are not considered by the model. Accordingly, while management believes that the Black-Scholes option-pricing model provides a reasonable estimate of fair value, the model does not necessarily provide the best single measure of fair value for the Company's employee stock options. There were no options granted during the nine months ended September 30, 2024. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model based on the weighted-average assumptions for expected dividend yield, expected stock price volatility, risk-free interest rate, and expected life of options granted.
The assumptions used in determining the fair value of the 2024 and 2023 stock option grants were as follows:
For the Nine Months Ended September 30, 2024
For the Year Ended December 31, 2023
Expected dividend yieldNot Applicable2.98 %
Expected stock price volatilityNot Applicable27.97 %
Risk-free interest rateNot Applicable3.37 %
Expected life of optionsNot Applicable6.5 years
The following is a summary of currently outstanding and exercisable options at September 30, 2024:
Options OutstandingOptions Exercisable
Exercise PricesOptions
Outstanding
Shares
(000)		Weighted-
Average
Remaining
Contractual
Life (in years)		Weighted-
Average
Exercise
Price		Options
Exercisable
Shares (000)		Weighted-
Average
Exercise
Price
$16.00 to $17.99
40 0.54$17.12 40 $17.12 
$18.00 to $19.99
188 1.3218.53 188 18.53 
$20.00 to $21.99
220 3.7320.88 186 20.92 
$22.00 to $23.99
1,253 3.9023.22 767 23.19 
$24.00 to $25.99
90 3.6525.59 72 25.93 
1,791 1,253 
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The table below summarized the activity for the Company’s restricted stock issued and outstanding at September 30, 2024 and December 31, 2023 and changes during the period and year then ended:
As of
September 30, 2024
As of
December 31, 2023
(In thousands)
Beginning of year1,429 1,381 
Issued516 261 
Vested(461)(152)
Forfeited(59)(61)
End of period1,425 1,429 
Amount of expense for the nine months and twelve months ended, respectively
$5,963 $8,016 
Total unrecognized compensation cost related to non-vested restricted stock awards, which are expected to be recognized over the vesting periods, was approximately $16.5 million as of September 30, 2024.
14. Non-Interest Expense
The table below shows the components of non-interest expense for the three and nine months ended September 30, 2024 and 2023:
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(In thousands)
Salaries and employee benefits$58,861 $64,512 $180,198 $193,536 
Occupancy and equipment14,546 15,463 43,505 45,338 
Data processing expense9,088 9,103 27,170 27,222 
Other operating expenses:
Advertising1,810 2,295 5,156 6,624 
Amortization of intangibles2,095 2,477 6,375 7,432 
Electronic banking expense3,569 3,709 10,137 10,714 
Directors’ fees362 417 1,283 1,415 
Due from bank service charges302 282 860 841 
FDIC and state assessment3,360 2,794 12,172 9,514 
Insurance926 878 2,734 2,694 
Legal and accounting1,902 1,514 6,600 4,038 
Other professional fees2,062 2,117 6,406 7,175 
Operating supplies673 860 1,969 2,361 
Postage522 491 1,542 1,578 
Telephone455 544 1,369 1,645 
Other expense9,512 7,306 27,250 23,561 
Total other operating expenses27,550 25,684 83,853 79,592 
Total non-interest expense$110,045 $114,762 $334,726 $345,688 



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15. Leases
The Company leases land and office facilities under long-term, non-cancelable operating lease agreements. The leases expire at various dates through 2044 and do not include renewal options based on economic factors that would have implied that continuation of the lease was reasonably certain. Certain leases provide for increases in future minimum annual rental payments as defined in the lease agreements. The leases generally include real estate taxes and common area maintenance charges in the rental payments. Short-term leases are leases having a term of twelve months or less. The Company does not separate nonlease components from the associated lease component of our operating leases. As a result, the Company accounts for these components as a single component since (i) the timing and pattern of transfer of the nonlease components and the associated lease component are the same and (ii) the lease component, if accounted for separately, would be classified as an operating lease. The Company recognizes short term leases on a straight-line basis and does not record a related right-of-use ("ROU") asset and liability for such leases. In addition, equipment leases were determined to be immaterial and a related ROU asset and liability for such leases is not recorded.
As of September 30, 2024, the balances of the ROU asset and lease liability were $43.0 million and $45.8 million, respectively. As of December 31, 2023, the balances of the ROU asset and lease liability were $42.2 million and $45.0 million, respectively. The ROU asset is included in bank premises and equipment, net, and the lease liability is included in accrued interest payable and other liabilities.
The minimum rental commitments under these noncancelable operating leases are as follows (in thousands) as of September 30, 2024 and December 31, 2023:
September 30, 2024December 31, 2023
2024$2,678 $9,373 
202510,201 8,549 
20269,468 8,111 
20278,144 7,223 
20286,368 5,496 
Thereafter22,053 19,827 
Total future minimum lease payments$58,912 $58,579 
Discount effect of cash flows(13,064)(13,551)
Present value of net future minimum lease payments$45,848 $45,028 
Additional information (dollar amounts in thousands):
Three Months Ended
Nine Months Ended
Lease expense:September 30, 2024September 30, 2023September 30, 2024September 30, 2023
Operating lease expense$2,266$2,059$6,901$5,937
Short-term lease expense————
Variable lease expense302289895810
Total lease expense$2,568$2,348$7,796$6,747
Other information:
Cash paid for amounts included in the measurement of lease liabilities
$1,972$2,136$6,802$6,146
Weighted-average remaining lease term (in years)
7.648.337.758.62
Weighted-average discount rate3.52 %3.43 %3.46 %3.44 %
The Company currently leases two properties from two related parties. Total rent expense from the leases was $35,000, or 1.37% of total lease expense and $97,000, or 1.25% of total lease expense, for the three and nine months ended September 30, 2024, respectively.
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16. Significant Estimates and Concentrations of Credit Risks
Accounting principles generally accepted in the United States of America require disclosure of certain significant estimates and current vulnerabilities due to certain concentrations. Estimates related to the allowance for credit losses and certain concentrations of credit risk are reflected in Note 5, while deposit concentrations are reflected in Note 8.
The Company’s primary market areas are in Arkansas, Florida, Texas, South Alabama and New York. The Company primarily grants loans to customers located within these markets unless the borrower has an established relationship with the Company.
The diversity of the Company’s economic base tends to provide a stable lending environment. Although the Company has a loan portfolio that is diversified in both industry and geographic area, a substantial portion of its debtors’ ability to honor their contracts is dependent upon real estate values, tourism demand and the economic conditions prevailing in its market areas.
Although the Company has a diversified loan portfolio, at September 30, 2024 and December 31, 2023, commercial real estate loans represented 57.8% and 56.7% of total loans receivable, respectively, and 216.5% and 215.5% of total stockholders’ equity at September 30, 2024 and December 31, 2023, respectively. Residential real estate loans represented 16.3% and 15.8% of total loans receivable and 61.0% and 60.1% of total stockholders’ equity at September 30, 2024 and December 31, 2023, respectively.
Approximately 79.6% of the Company’s total loans and 83.5% of the Company’s real estate loans as of September 30, 2024, are to borrowers whose collateral is located in Alabama, Arkansas, Florida, Texas and New York, the states in which the Company has its branch locations.
Any future volatility in the economy could cause the values of assets and liabilities recorded in the financial statements to change rapidly, resulting in material future adjustments in asset values, the allowance for credit losses and capital that could negatively impact the Company’s ability to meet regulatory capital requirements and maintain sufficient liquidity.
17. Commitments and Contingencies
In the ordinary course of business, the Company makes various commitments and incurs certain contingent liabilities to fulfill the financing needs of its customers. These commitments and contingent liabilities include lines of credit and commitments to extend credit and issue standby letters of credit. The Company applies the same credit policies and standards as they do in the lending process when making these commitments. The collateral obtained is based on the assessed creditworthiness of the borrower.
At September 30, 2024 and December 31, 2023, commitments to extend credit of $4.53 billion and $4.59 billion, respectively, were outstanding. A percentage of these balances are participated out to other banks; therefore, the Company can call on the participating banks to fund future draws. Since some of these commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future cash requirements.
Outstanding standby letters of credit are contingent commitments issued by the Company, generally to guarantee the performance of a customer in third-party borrowing arrangements. The term of the guarantee is dependent upon the creditworthiness of the borrower, some of which are long-term. The amount of collateral obtained, if deemed necessary, is based on 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. Management uses the same credit policies in granting lines of credit as it does for on-balance-sheet instruments. The maximum amount of future payments the Company could be required to make under these guarantees at September 30, 2024 and December 31, 2023, was $154.4 million and $185.5 million, respectively.
The Company and/or its bank subsidiary have various unrelated legal proceedings, most of which involve loan foreclosure activity pending, which, in the aggregate, are not expected to have a material adverse effect on the financial position or results of operations or cash flows of the Company and its subsidiary.
18. Regulatory Matters
The Bank is subject to a legal limitation on dividends that can be paid to the parent company without prior approval of the applicable regulatory agencies. Arkansas bank regulators have specified that the maximum dividend limit state banks may pay to the parent company without prior approval is 75% of the current year earnings plus 75% of the retained net earnings of the preceding year. Since the Bank is also under supervision of the Federal Reserve, it is further limited if the total of all dividends declared in any calendar year by the Bank exceeds the Bank’s net profits to date for that year combined with its retained net profits for the preceding two years. During the nine months ended September 30, 2024, the Company requested approximately $232.4 million in regular dividends from its banking subsidiary.

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The Company’s banking subsidiary is 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 the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Furthermore, the Company’s regulators could require adjustments to regulatory capital not reflected in the consolidated financial statements.
Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios of total, Tier 1 common equity Tier 1 ("CET1") and 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, 2024, the Company meets all capital adequacy requirements to which it is subject.
On December 31, 2018, the federal banking agencies issued a joint final rule to revise their regulatory capital rules to permit bank holding companies and banks to phase-in, for regulatory capital purposes, the day-one impact of the new CECL accounting rule on retained earnings over a period of three years. As part of its response to the impact of COVID-19, on March 27, 2020, the federal banking regulatory agencies issued an interim final rule that provided the option to temporarily delay certain effects of CECL on regulatory capital for two years, followed by a three-year transition period. The interim final rule allows bank holding companies and banks to delay for two years 100% of the day-one impact of adopting CECL and 25% of the cumulative change in the reported allowance for credit losses since adopting CECL. The Company elected to adopt the interim final rule, which is reflected in the Company's risk-based capital ratios.
Basel III became effective for the Company and its bank subsidiary on January 1, 2015. Basel III amended the prompt corrective action rules to incorporate a CET1 requirement and to raise the capital requirements for certain capital categories. In order to be adequately capitalized for purposes of the prompt corrective action rules, a banking organization is required to have at least a 4.5% CET1 risk-based capital ratio, a 4% Tier 1 leverage capital ratio, a 6% Tier 1 risk-based capital ratio and an 8% total risk-based capital ratio.
The Federal Reserve Board’s risk-based capital guidelines include the definitions for (1) a well-capitalized institution, (2) an adequately-capitalized institution, and (3) an undercapitalized institution. Under Basel III, the criteria for a well-capitalized institution are: a 6.5% CET1 risk-based capital ratio, a 5% Tier 1 leverage capital ratio, an 8% Tier 1 risk-based capital ratio, and a 10% total risk-based capital ratio. As of September 30, 2024, the Bank met the capital standards for a well-capitalized institution. The Company’s CET1 risk-based capital ratio, Tier 1 leverage capital ratio, Tier 1 risk-based capital ratio, and total risk-based capital ratio were 14.65%, 12.54%, 14.65%, and 18.28%, respectively, as of September 30, 2024.
19. Additional Cash Flow Information
The following is a summary of the Company’s additional cash flow information during the nine-month periods ended:
September 30,
20242023
(In thousands)
Interest paid$324,658 $241,466 
Income taxes paid80,075 106,619 
Assets acquired by foreclosure11,734 383 




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20. Financial Instruments
Fair value is the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair values:
Level 1Quoted prices in active markets for identical assets or liabilities
Level 2Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices 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 3Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities
A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Transfers of financial instruments between levels within the fair value hierarchy are recognized on the date management determines that the underlying circumstances or assumptions have changed.
Available-for-sale securities – the Company's available-for-sale securities are considered to be Level 2 securities. The Level 2 securities consist primarily of U.S. government-sponsored enterprises, mortgage-backed securities plus state and political subdivisions. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things.
The Company reviews the prices supplied by the independent pricing service, as well as their underlying pricing methodologies, for reasonableness and to ensure such prices are aligned with traditional pricing matrices. In general, the Company does not purchase investment portfolio securities with complicated structures. Pricing for the Company’s investment securities is fairly generic and is easily obtained. The Company uses a third-party comparison pricing vendor in order to reflect consistency in the fair values of the investment securities sampled by the Company each quarter.
Held-to-maturity securities – the Company's held-to-maturity securities are considered to be Level 2 securities. The Level 2 securities consist primarily of U.S. government-sponsored enterprises, mortgage-backed securities plus state and political subdivisions. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and conditions, among other things.
Impaired loans – Impaired loans include loans individually analyzed for credit losses for which a specific reserve has been recorded, non-accrual loans, loans past due 90 days or more and restructured loans made to borrowers experiencing financial difficulty. Impaired loans are carried at the net realizable value of the collateral if the loan is collateral dependent. A portion of the allowance for credit losses is allocated to impaired loans if the value of such loans is deemed to be less than the unpaid balance. If these allocations cause the allowance for credit losses to require an increase, such increase is reported as a component of the provision for credit losses. The fair value of loans with specific allocated losses was $74.3 million and $10.5 million as of September 30, 2024 and December 31, 2023, respectively. This valuation is considered Level 3, consisting of appraisals of underlying collateral. The Company reversed $470,000 and $1.3 million of accrued interest receivable when impaired loans were put on non-accrual status during the three months ended September 30, 2024 and 2023, respectively. The Company reversed $956,000 and $1.9 million of accrued interest receivable when impaired loans were put on non-accrual status during the nine months ended September 30, 2024 and 2023, respectively.
Foreclosed assets held for sale – Foreclosed assets held for sale are held by the Company at fair value, less estimated costs to sell. At foreclosure, if the fair value, less estimated costs to sell, of the real estate acquired is less than the Company’s recorded investment in the related loan, a write-down is recognized through a charge to the allowance for credit losses. Additionally, valuations are periodically performed by management and any subsequent reduction in value is recognized by a charge to income. The fair value of foreclosed assets held for sale is estimated using Level 3 inputs based on appraisals of underlying collateral. As of September 30, 2024 and December 31, 2023, the fair value of foreclosed assets held for sale, less estimated costs to sell, was $43.0 million and $30.5 million, respectively.
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No foreclosed assets held for sale were remeasured during the nine months ended September 30, 2024. Regulatory guidelines require the Company to reevaluate the fair value of foreclosed assets held for sale on at least an annual basis. The Company’s policy is to comply with the regulatory guidelines.
The significant unobservable (Level 3) inputs used in the fair value measurement of collateral for collateral-dependent impaired loans and foreclosed assets primarily relate to customized discounting criteria applied to the customer’s reported amount of collateral. The amount of the collateral discount depends upon the condition and marketability of the underlying collateral. As the Company’s primary objective in the event of default would be to monetize the collateral to settle the outstanding balance of the loan, less marketable collateral would receive a larger discount.
Fair Values of Financial Instruments
The following table presents the estimated fair values of the Company’s financial instruments. Fair value is the exchange price that would be received for an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date.
September 30, 2024
Carrying
Amount		Fair ValueLevel
(In thousands)
Financial assets:
Cash and cash equivalents$1,017,677 $1,017,677 1
Federal funds sold6,425 6,425 1
Investment securities - available-for-sale
3,270,620 3,270,620 2
Investment securities - held-to-maturity 1,277,090 1,194,455 2
Loans receivable, net of impaired loans and allowance14,397,652 14,489,849 3
Accrued interest receivable118,871 118,871 1
FHLB, FRB & FNBB Bank stock; other equity investments
226,631 226,631 3
Marketable equity securities51,540 51,540 1
Financial liabilities:
Deposits:
Demand and non-interest bearing$3,937,168 $3,937,168 1
Savings and interest-bearing transaction accounts10,966,426 10,966,426 1
Time deposits1,802,116 1,792,949 3
Securities sold under agreements to repurchase179,416 179,416 1
FHLB and other borrowed funds1,300,750 1,277,447 2
Accrued interest payable39,897 39,897 1
Subordinated debentures439,394 388,048 3
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December 31, 2023
Carrying
Amount		Fair ValueLevel
(In thousands)
Financial assets:
Cash and cash equivalents$1,000,213 $1,000,213 1
Federal funds sold5,100 5,100 1
Investment securities - available-for-sale3,507,841 3,507,841 2
Investment securities - held-to-maturity1,281,982 1,170,481 2
Loans receivable, net of impaired loans and allowance14,048,002 14,071,775 3
Accrued interest receivable118,966 118,966 1
FHLB, FRB & FNBB Bank stock; other equity investments
223,748 223,748 3
Marketable equity securities49,419 49,419 1
Financial liabilities:
Deposits:
Demand and non-interest bearing$4,085,501 $4,085,501 1
Savings and interest-bearing transaction accounts11,050,347 11,050,347 1
Time deposits1,651,863 1,633,091 3
Securities sold under agreements to repurchase142,085 142,085 1
FHLB and other borrowed funds1,301,300 1,291,926 2
Accrued interest payable19,124 19,124 1
Subordinated debentures439,834 358,682 3
21. Recent Accounting Pronouncements
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). ASU 2020-04 provides optional expedients and exceptions for accounting related to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. ASU 2020-04 applies only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform and do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. ASU 2020-04 was effective upon issuance and generally can be applied through December 31, 2022. To ensure the relief in Topic 848 covers the period of time during which a significant number of modifications may take place, ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848 (ASU 2022-06) defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848.
In January 2021, the FASB issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope ("ASU 2022-01"). The amendments in the update clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. Specifically, certain provisions in Topic 848, if elected by an entity, apply to derivative instruments that use an interest rate for margining, discounting, or contract price alignment that is modified as a result of reference rate reform. Amendments in the update to the expedients and exceptions in Topic 848 capture the incremental consequences of the scope clarification and tailor the existing guidance to derivative instruments affected by the discounting transition. The amendments in this Update do not apply to contract modifications made after December 31, 2022, new hedging relationships entered into after December 31, 2022, and existing hedging relationships evaluated for effectiveness in periods after December 31, 2022, except for hedging relationships existing as of December 31, 2022, that apply certain optional expedients in which the accounting effects are recorded through the end of the hedging relationship. ASU 2020-04 was effective upon issuance and generally can be applied through December 31, 2022. To ensure the relief in Topic 848 covers the period of time during which a significant number of modifications may take place, ASU 2022-06 defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848.

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In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848. These amendments extend the period of time preparers can utilize the reference rate reform relief guidance in Topic 848. The objective of the guidance in Topic 848 is to provide relief during the temporary transition period, so the FASB included a sunset provision within Topic 848 based on expectations of when the London Interbank Offered Rate (LIBOR) would cease being published. In 2021, the UK Financial Conduct Authority (FCA) delayed the intended cessation date of certain tenors of USD LIBOR to June 30, 2023. To ensure the relief in Topic 848 covers the period of time during which a significant number of modifications may take place, the ASU defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. ASU 2022-06 was effective upon issuance.
In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." The amendments apply to all public entities that are required to report segment information in accordance with FASB ASC Topic 280, Segment Reporting. The amendments in the ASU are intended to improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. The amendments require that a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss. Public entities are required to disclose, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition. In addition, public entities must provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by FASB ASC Topic 280, Segment Reporting, in interim periods. The amendments clarify that if the CODM uses more than one measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources, a public entity may report one or more of those additional measures of segment profit. However, at least one of the reported segment profit or loss measures (or the single reported measure, if only one is disclosed) should be the measure that is most consistent with the measurement principles used in measuring the corresponding amounts in the public entity’s consolidated financial statements. The Amendments require that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Finally, the amendments require that a public entity that has a single reportable segment provide all the disclosures required by the amendments in the ASU and all existing segment disclosures in ASC Topic 280. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. A public entity should apply the amendments retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The Company is currently evaluating the potential impacts related to the adoption of the ASU.    
In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." The amendments require that public business entities on an annual basis (a) disclose specific categories in the rate reconciliation and (b) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate). The amendments also require that all entities disclose on an annual basis the amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign taxes, and the amount of income taxes paid (net of refunds received) disaggregated by individual jurisdictions in which income taxes paid (net of refunds received) is equal to or greater than 5 percent of total income taxes paid (net of refunds received). The amendments require that all entities disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign and income tax expense (or benefit) from continuing operations disaggregated by federal (national), state, and foreign. The ASU is effective for public business entities for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments should be applied on a prospective basis. Retrospective application is permitted. The Company is currently evaluating the potential impacts related to the adoption of the ASU.    
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Report of Independent Registered Public Accounting Firm
Audit Committee, Board of Directors and Stockholders
Home BancShares, Inc.
Conway, Arkansas
Results of Review of Interim Consolidated Financial Statements
We have reviewed the condensed consolidated balance sheet of Home BancShares Inc. (the “Company”) and subsidiaries as of September 30, 2024, and the related condensed consolidated statements of income, comprehensive income (loss), and stockholder’s equity for the three-month and nine-month periods ended September 30, 2024 and 2023, and cash flows for the nine-month periods ended September 30, 2024 and 2023, and the related notes (collectively referred to as the “interim financial information or statements”). Based on our reviews, we are not aware of any material modifications that should be made to the condensed 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, 2023, and the related consolidated statements of income, comprehensive income (loss), stockholders’ equity, and cash flows for the year then ended (not presented herein), and in our report dated February 26, 2024, 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, 2023, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
Basis for Review Results
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 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.
/s/ Forvis Mazars, LLP

Little Rock, Arkansas
November 1, 2024
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Item 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with our Form 10-K, filed with the Securities and Exchange Commission on February 26, 2024, which includes the audited financial statements for the year ended December 31, 2023. Unless the context requires otherwise, the terms “Company,” “us,” “we,” and “our” refer to Home BancShares, Inc. on a consolidated basis.
General
We are a bank holding company headquartered in Conway, Arkansas, offering a broad array of financial services through our wholly-owned bank subsidiary, Centennial Bank (sometimes referred to as “Centennial” or the “Bank”). As of September 30, 2024, we had, on a consolidated basis, total assets of $22.82 billion, loans receivable, net of allowance for credit losses of $14.51 billion, total deposits of $16.71 billion, and stockholders’ equity of $3.96 billion.
We generate the majority of our revenue from interest on loans and investments, service charges, and mortgage banking income. Deposits and Federal Home Loan Bank (“FHLB”) and other borrowed funds are our primary sources of funding. Our largest expenses are interest on our funding sources, salaries and related employee benefits and occupancy and equipment. We measure our performance by calculating our return on average common equity, return on average assets and net interest margin. We also measure our performance by our efficiency ratio, which is calculated by dividing non-interest expense less amortization of core deposit intangibles by the sum of net interest income on a tax equivalent basis and non-interest income. The efficiency ratio, as adjusted, is a non-GAAP measure and is calculated by dividing non-interest expense less amortization of core deposit intangibles by the sum of net interest income on a tax equivalent basis and non-interest income excluding adjustments such as merger and acquisition expenses and/or certain gains, losses and other non-interest income and expenses.
Table 1: Key Financial Measures
As of or for the Three Months Ended September 30,As of or for the Nine Months Ended September 30,
2024202320242023
(Dollars in thousands, except per share data)
Total assets$22,823,117$21,950,638$22,823,117$21,950,638
Loans receivable14,823,97914,271,83314,823,97914,271,833
Allowance for credit losses(312,574)(285,562)(312,574)(285,562)
Total deposits16,705,71016,518,74516,705,71016,518,745
Total stockholders’ equity3,959,7893,654,8743,959,7893,654,874
Net income100,03898,453301,677306,686
Basic earnings per share0.500.491.511.51
Diluted earnings per share0.500.491.511.51
Book value per share19.9118.0619.9118.06
Tangible book value per share (non-GAAP)(1)
12.6710.9012.6710.90
Annualized net interest margin - FTE4.28%4.19%4.23%4.28%
Efficiency ratio41.4245.5342.9144.76
Efficiency ratio, as adjusted (non-GAAP)(2)
41.6646.4442.8744.86
Return on average assets1.741.781.771.84
Return on average common equity10.2310.6510.5311.32
(1)See Table 21 for the non-GAAP tabular reconciliation.
(2)See Table 25 for the non-GAAP tabular reconciliation.




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Overview
Results of Operations for the Three Months Ended September 30, 2024 and 2023
Our net income increased $1.6 million, or 1.6%, to $100.0 million for the three-month period ended September 30, 2024, from $98.5 million for the same period in 2023. On a diluted earnings per share basis, our earnings were $0.50 per share for the three-month period ended September 30, 2024 compared to $0.49 per share for the three-month period ended September 30, 2023. The Company recorded $18.9 million in credit loss expense for the quarter ended September 30, 2024. The $18.9 million of credit loss expense includes $18.2 million in provision for credit losses on loans. Of the $18.2 million provision for credit losses on loans recorded, $16.7 million was used to establish a hurricane reserve for loans located in the Federal Emergency Management Agency ("FEMA") disaster areas impacted by Hurricane Helene, which made landfall during the quarter. The hurricane related reserve had a six-cent impact to diluted earnings per share for the quarter. The remaining portion of the provision was related to loan growth. The Company also recorded a $1.0 million provision for credit losses on unfunded commitments, and we recorded a $330,000 recovery of credit losses on available-for-sale investments due to an improvement in the unrealized losses for one of our subordinated debt investments. During the three months ended September 30, 2024, the Company recorded a $1.4 million increase in the fair value of marketable securities.
Total interest income increased by $38.6 million, or 13.1%, and non-interest expense decreased $4.7 million, or 4.1%. This was partially offset by a $25.3 million, or 27.4% increase in total interest expense and a $634,000, or 1.5%, decrease in non-interest income. These fluctuations are primarily due to the high interest rate environment. The increase in interest income resulted from a $32.5 million, or 13.0%, increase in loan interest income and a $9.8 million, or 419.6%, increase in interest income on deposits at other banks, which was partially offset by a $3.7 million, or 8.7%, decrease in investment interest income. The decrease in non-interest expense was due to a decrease of $5.7 million, or 8.8%, in salaries and employee benefits and a decrease of $917,000, or 5.9%, in occupancy and equipment expense, which was partially offset by an increase of $1.9 million, or 7.3%, in other operating expenses. The increase in interest expense was primarily due to a $19.1 million, or 24.3%, increase in interest on deposits and a $6.2 million, or 76.2%, increase in interest on FHLB and other borrowed funds. The decrease in non-interest income was primarily due to a $3.1 million, or 69.1%, decrease in the fair value adjustment for marketable securities which was partially offset by a $1.3 million, or 41.7%, increase in mortgage lending income and a $1.3 million, or 21.6%, increase in other income.
Our net interest margin increased from 4.19% for the three-month period ended September 30, 2023 to 4.28% for the three-month period ended September 30, 2024. The yield on interest earning assets was 6.60% and 6.09% for the three months ended September 30, 2024 and 2023, respectively, and average interest earning assets increased from $19.26 billion to $20.23 billion. The increase in average interest earning assets is primarily due to a $706.1 million increase in average interest-bearing balances due from banks and a $571.2 million increase in average loans receivable, partially offset by a $315.8 million decrease in average investment securities. During the third quarter of 2024, the Company held excess liquidity of approximately $500.0 million which was dilutive to the net interest margin by approximately 10 basis points. For the three months ended September 30, 2024 and 2023, we recognized $1.9 million and $2.4 million, respectively, in total net accretion for acquired loans and deposits. The reduction in accretion was dilutive to the net interest margin by two basis points. We recognized $573,000 in event income for the three-months ended September 30, 2024 compared to $521,000 for the three-months ended September 30, 2023. The remaining increase in the net interest margin was due to an increase in interest income resulting from an increase in average interest-bearing assets at higher interest rates primarily as a result of the high interest rate environment.
Our efficiency ratio was 41.42% for the three months ended September 30, 2024, compared to 45.53% for the same period in 2023. For the third quarter of 2024, our efficiency ratio, as adjusted (non-GAAP), was 41.66%, compared to 46.44% reported for the third quarter of 2023. (See Table 25 for the non-GAAP tabular reconciliation).
Our annualized return on average assets was 1.74% for the three months ended September 30, 2024, compared to 1.78% for the same period in 2023. (See Table 22 for the related non-GAAP financial measures and tabular reconciliation). Our annualized return on average common equity was 10.23% and 10.65% for the three months ended September 30, 2024, and 2023, respectively. (See Table 23 for the related non-GAAP financial measures and tabular reconciliation).

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Results of Operations for the Nine Months Ended September 30, 2024 and 2023
Our net income decreased $5.0 million, or 1.63%, to $301.7 million for the nine-month period ended September 30, 2024, from $306.7 million for the same period in 2023. On a diluted earnings per share basis, our earnings were $1.51 per share for both the nine-month periods ended September 30, 2024 and 2023. The Company recorded $31.4 million in credit loss expense for the nine-month period ended September 30, 2024, The $31.4 million of credit loss expense includes $31.7 million in provision for credit losses on loans, which was partially offset by a a $330,000 recovery of credit losses on available-for-sale investments due to an improvement in the unrealized losses for one of our subordinated debt investments. Of the $31.7 million provision for credit losses on loans recorded, $16.7 million was used to establish a hurricane reserve for loans located in the FEMA disaster areas impacted by Hurricane Helene, which made landfall during the third quarter of 2024. The hurricane related reserve had a six-cent impact to diluted earnings per share. The remaining portion of the provision was related to loan growth. During the nine months ended September 30, 2024, the Company recorded a $2.1 million gain on sale of building from our Texas region, a $2.1 million increase in the fair value of marketable securities and $162,000 in bank owned life insurance bank owned life insurance ("BOLI") death benefits, partially offset by $2.3 million of Federal Deposit Insurance Corporation ("FDIC") special assessment and a $2.0 million deferred tax asset write-down.
Total interest income increased by $108.2 million, or 12.5% and non-interest expense decreased by $11.0 million, or 3.2%. This was partially offset by a $100.8 million, or 41.2% increase in total interest expense. These fluctuations are primarily due to the high interest rate environment. The increase in interest income resulted from a $92.0 million, or 12.6%, increase in loan interest income and a $24.4 million, or 227.6%, increase in interest income on deposits at other banks, partially offset by an $8.2 million, or 6.4%, decrease in investment income. The decrease in non-interest expense was due to a decrease of $13.3 million, or 6.9%, in salaries and employee benefits and a decrease of $1.8 million, or 4.0%, in occupancy and equipment expense, which was partially offset by an increase of $4.3 million, or 5.4%, in other operating expenses. The increase in interest expense was primarily due to a $78.1 million, or 37.5%, increase in interest on deposits, a $22.0 million, or 104.9%, increase in interest on FHLB and other borrowed funds and a $769,000, or 23.1%, increase in interest on securities sold under agreements to repurchase.
Our net interest margin decreased from 4.28% for the nine-month period ended September 30, 2023 to 4.23% for the nine-month period ended September 30, 2024. The yield on interest earning assets was 6.52% and 5.95% for the nine months ended September 30, 2024 and 2023, respectively, as average interest earning assets increased from $19.63 billion to $20.16 billion. The increase in average interest earning assets is primarily due to a $564.7 million increase in average interest-bearing balances due from banks, a $326.0 million increase in average loans receivable and a $1.1 million increase in average federal funds sold, partially offset by a $368.8 million decrease in average investment securities. During the nine-month period ended September 30, 2024, the Company held excess liquidity of approximately $500.0 million which was dilutive to the net interest margin by approximately 10 basis points. For the nine months ended September 30, 2024 and 2023, we recognized $6.5 million and $8.3 million, respectively, in total net accretion for acquired loans and deposits. The reduction in accretion was dilutive to the net interest margin by one basis point. We recognized $3.4 million in event income for the nine-months ended September 30, 2024 compared to $2.8 million for the nine-months ended September 30, 2023.
Our efficiency ratio was 42.91% for the nine months ended September 30, 2024, compared to 44.76% for the same period in 2023. For the nine months ended September 30, 2024, our efficiency ratio, as adjusted (non-GAAP), was 42.87%, compared to 44.86% reported for the third quarter of 2023. (See Table 25 for the non-GAAP tabular reconciliation).
Our annualized return on average assets was 1.77% for the nine months ended September 30, 2024, compared to 1.84% for the same period in 2023. (See Table 22 for the related non-GAAP financial measures and tabular reconciliation). Our annualized return on average common equity was 10.53% and 11.32% for the nine months ended September 30, 2024, and 2023, respectively. (See Table 23 for the related non-GAAP financial measures and tabular reconciliation).
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Financial Condition as of and for the Period Ended September 30, 2024 and December 31, 2023
Our total assets as of September 30, 2024 increased $166.5 million to $22.82 billion from $22.66 billion reported as of December 31, 2023. Cash and cash equivalents increased $17.5 million for the nine months ended September 30, 2024. Our loan portfolio balance increased to $14.82 billion as of September 30, 2024 from $14.42 billion at December 31, 2023. The increase in loans was primarily due to $350.4 million of organic loan growth in our community banking footprint and $48.9 million of organic loan growth from our Centennial Commercial Finance Group ("Centennial CFG") franchise. These increases were partially offset by a $242.1 million decrease in investment securities resulting from paydowns and maturities during the first nine months of 2024. Total deposits decreased $82.0 million to $16.71 billion as of September 30, 2024 from $16.79 billion as of December 31, 2023. Stockholders’ equity increased $168.7 million to $3.96 billion as of September 30, 2024, compared to $3.79 billion as of December 31, 2023. The $168.7 million increase in stockholders’ equity is primarily associated with the $301.7 million in net income and $54.2 million in other comprehensive income for the nine months ended September 30, 2024, which was partially offset by the $111.2 million of shareholder dividends paid and stock repurchases of $83.6 million.
Our non-performing loans were $101.1 million, or 0.68% of total loans as of September 30, 2024, compared to $64.1 million, or 0.44% of total loans, as of December 31, 2023. The allowance for credit losses as a percentage of non-performing loans decreased to 309.16% as of September 30, 2024, from 449.66% as of December 31, 2023. Non-performing loans from our Arkansas franchise were $30.4 million at September 30, 2024 compared to $15.4 million as of December 31, 2023. Non-performing loans from our Florida franchise were $40.8 million at September 30, 2024 compared to $9.3 million as of December 31, 2023. Non-performing loans from our Texas franchise were $20.0 million at September 30, 2024 compared to $33.5 million as of December 31, 2023. Non-performing loans from our Alabama franchise were $391,000 at September 30, 2024 compared to $413,000 as of December 31, 2023. Non-performing loans from our Shore Premier Finance ("SPF") franchise were $6.8 million at September 30, 2024 compared to $2.8 million as of December 31, 2023. Non-performing loans from our Centennial CFG franchise were $2.8 million at September 30, 2024 compared to $2.7 million as of December 31, 2023.
As of September 30, 2024, our non-performing assets increased to $144.2 million, or 0.63% of total assets, from $95.4 million, or 0.42% of total assets, as of December 31, 2023. Non-performing assets from our Arkansas franchise were $30.4 million at September 30, 2024 compared to $15.5 million as of December 31, 2023. Non-performing assets from our Florida franchise were $48.1 million at September 30, 2024 compared to $17.3 million as of December 31, 2023. Non-performing assets from our Texas franchise were $33.0 million at September 30, 2024 compared to $33.8 million as of December 31, 2023. Non-performing assets from our Alabama franchise were $391,000 at September 30, 2024 compared to $413,000 as of December 31, 2023. Non-performing assets from our SPF franchise were $6.8 million at September 30, 2024 compared to $2.8 million as of December 31, 2023. Non-performing assets from our Centennial CFG franchise were $25.5 million at September 30, 2024 compared to $25.6 million as of December 31, 2023.
The $2.8 million balance of non-accrual loans for our Centennial CFG Capital Markets Group consists of two loans that are assessed for credit risk by the Federal Reserve under the Shared National Credit Program. The loans are not current on either principal or interest, and we have reversed any interest that had accrued subsequent to the non-accrual date designated by the Federal Reserve. Any interest payments that are received will be applied to the principal balance. In addition, the $22.8 million balance of foreclosed assets held for sale for our Centennial CFG Property Finance Group consists of an office building located in California. This represents the largest component of the Company's $43.0 million in foreclosed assets held for sale.

Critical Accounting Policies and Estimates
Overview. We prepare our consolidated financial statements based on the selection of certain accounting policies, generally accepted accounting principles and customary practices in the banking industry. These policies, in certain areas, require us to make significant estimates and assumptions. Our accounting policies are described in detail in the notes to our consolidated financial statements included as part of this document.
We consider a policy critical if (i) the accounting estimate requires assumptions about matters that are highly uncertain at the time of the accounting estimate; and (ii) different estimates that could reasonably have been used in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, would have a material impact on our financial statements. Using these criteria, we believe that the accounting policies most critical to us are those associated with our lending practices, including the accounting for the allowance for credit losses, foreclosed assets, investments, intangible assets, income taxes and stock options.

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Credit Losses. We account for credit losses in accordance with ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASC 326" or "CECL"). The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with Topic 842 on leases.
Investments – Available-for-sale. Securities available-for-sale ("AFS") are reported at fair value with unrealized holding gains and losses reported as a separate component of stockholders’ equity and other comprehensive income (loss), net of taxes. Securities that are held as available-for-sale are used as a part of our asset/liability management strategy. Securities that may be sold in response to interest rate changes, changes in prepayment risk, the need to increase regulatory capital, and other similar factors are classified as available-for-sale. The Company evaluates all securities quarterly to determine if any securities in a loss position require a provision for credit losses in accordance with ASC 326. The Company first assesses whether it intends to sell or is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For securities that do not meet this criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, and changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. The Company has made the election to exclude accrued interest receivable on AFS securities from the estimate of credit losses and report accrued interest separately on the consolidated balance sheets. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of a security is confirmed or when either of the criteria regarding intent or requirement to sell is met.
Investments – Held-to-Maturity. Debt securities held-to-maturity ("HTM"), which include any security for which we have the positive intent and ability to hold until maturity, are reported at historical cost adjusted for amortization of premiums and accretion of discounts. Premiums and discounts are amortized/accreted to the call date to interest income using the constant effective yield method over the estimated life of the security. The Company evaluates all securities quarterly to determine if any securities in a loss position require a provision for credit losses in accordance with ASC 326. The Company measures expected credit losses on HTM securities on a collective basis by major security type, with each type sharing similar risk characteristics. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The Company has made the election to exclude accrued interest receivable on HTM securities from the estimate of credit losses and report accrued interest separately on the consolidated balance sheets. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of a security is confirmed.
Loans Receivable and Allowance for Credit Losses. Except for loans acquired during our acquisitions, substantially all of our loans receivable are reported at their outstanding principal balance adjusted for any charge-offs, as it is management’s intent to hold them for the foreseeable future or until maturity or payoff, except for mortgage loans held for sale. Interest income on loans is accrued over the term of the loans based on the principal balance outstanding.
The allowance for credit losses on loans receivable is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectability of a loan balance is confirmed and expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.
Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in the national unemployment rate, gross domestic product, rental vacancy rate, housing price index and rental vacancy rate index.

55
The allowance for credit losses is measured based on call report segment as these types of loans exhibit similar risk characteristics. The identified loan segments are as follows:
•1-4 family construction
•All other construction
•1-4 family revolving home equity lines of credit (“HELOC”) & junior liens
•1-4 family senior liens
•Multifamily
•Owner occupies commercial real estate
•Non-owner occupied commercial real estate
•Commercial & industrial, agricultural, non-depository financial institutions, purchase/carry securities, other
•Consumer auto
•Other consumer
•Other consumer - Shore Premier Finance ("SPF")
The allowance for credit losses for each segment is measured through the use of the discounted cash flow method ("DCF"). Loans evaluated individually that are considered to be collateral dependent are not included in the collective evaluation. For these loans, where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the loan to be provided substantially through the operation or sale of the collateral, the allowance for credit losses is measured based on the difference between the fair value of the collateral, net of estimated costs to sell, and the amortized cost basis of the loan as of the measurement date. When repayment is expected to be from the operation of the collateral, expected credit losses are calculated as the amount by which the amortized cost basis of the loan exceeds the present value of expected cash flows from the operation of the collateral. The allowance for credit losses may be zero if the fair value of the collateral at the measurement date exceeds the amortized cost basis of the loan, net of estimated costs to sell. For individually analyzed loans which are not considered to be collateral dependent, an allowance is recorded based on the loss rate for the respective pool within the collective evaluation.
Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The contractual term excludes expected extensions, renewals, and modifications unless either of the following applies:
•Management has a reasonable expectation at the reporting date that restructured loans made to borrowers experiencing financial difficulty will be executed with an individual borrower.
•The extension or renewal options are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the Company.
Management qualitatively adjusts model results for risk factors that are not considered within our modeling processes but are nonetheless relevant in assessing the expected credit losses within our loan pools. These qualitative factors ("Q-Factors") and other qualitative adjustments may increase or decrease management's estimate of expected credit losses by a calculated percentage or amount based upon the estimated level of risk. The various risks that may be considered in making Q-Factor and other qualitative adjustments include, among other things, the impact of (i) changes in lending policies, procedures and strategies; (ii) changes in nature and volume of the portfolio; (iii) staff experience; (iv) changes in volume and trends in classified loans, delinquencies and nonaccruals; (v) concentration risk; (vi) trends in underlying collateral values; (vii) external factors such as competition, legal and regulatory environment; (viii) changes in the quality of the loan review system; and (ix) economic conditions.
Loans are placed on non-accrual status when management believes that the borrower’s financial condition, after giving consideration to economic and business conditions and collection efforts, is such that collection of interest is doubtful, or generally when loans are 90 days or more past due. Loans are charged against the allowance for credit losses when management believes that the collectability of the principal is unlikely. Accrued interest related to non-accrual loans is generally charged against the allowance for credit losses when accrued in prior years and reversed from interest income if accrued in the current year. Interest income on non-accrual loans may be recognized to the extent cash payments are received, although the majority of payments received are usually applied to principal. Non-accrual loans are generally returned to accrual status when principal and interest payments are less than 90 days past due, the customer has made required payments for at least six months, and we reasonably expect to collect all principal and interest.

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The Company has purchased loans, some of which have experienced more than insignificant credit deterioration since origination. Purchase credit deteriorated (“PCD”) loans are recorded at the amount paid. An allowance for credit losses is determined using the same methodology as other loans. The initial allowance for credit losses determined on a collective basis is allocated to individual loans. The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through the provision for credit loss.
Allowance for Credit Losses on Off-Balance Sheet Credit Exposures. The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit unless that obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is adjusted as a provision for or reversal of credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life.
Foreclosed Assets Held for Sale. Real estate and personal property acquired through or in lieu of loan foreclosure are to be sold and are initially recorded at fair value at the date of foreclosure, establishing a new cost basis. Valuations are periodically performed by management, and the real estate and personal property are carried at fair value less costs to sell. Gains and losses from the sale of other real estate and personal property are recorded in non-interest income, and expenses used to maintain the properties are included in non-interest expenses.
Intangible Assets. Intangible assets consist of goodwill and core deposit intangibles. Goodwill represents the excess purchase price over the fair value of net assets acquired in business acquisitions. The core deposit intangible represents the excess intangible value of acquired deposit customer relationships as determined by valuation specialists. The core deposit intangibles are being amortized over 48 months to 121 months on a straight-line basis. Goodwill is not amortized but rather is evaluated for impairment on at least an annual basis. We perform an annual impairment test of goodwill and core deposit intangibles as required by FASB ASC 350, Intangibles - Goodwill and Other, in the fourth quarter or more often if events and circumstances indicate there may be an impairment.
Income Taxes. We account for income taxes in accordance with income tax accounting guidance (ASC 740, Income Taxes). The income tax accounting guidance results in two components of income tax expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. We determine deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax basis of assets and liabilities, and enacted changes in tax rates and laws are recognized in the period in which they occur.
Deferred income tax expense results from changes in deferred tax assets and liabilities between periods. Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or sustained upon examination. The term “more likely than not” means a likelihood of more than 50 percent; the terms “examined” and “upon examination” also include resolution of the related appeals or litigation processes, if any. A tax position that meets the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances and information available at the reporting date and is subject to the management’s judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.
Both we and our subsidiary file consolidated tax returns. Our subsidiary provides for income taxes on a separate return basis, and remits to us amounts determined to be currently payable.
Stock Compensation. In accordance with FASB ASC 718, Compensation - Stock Compensation, and FASB ASC 505-50, Equity-Based Payments to Non-Employees, the fair value of each option award is estimated on the date of grant. We recognize compensation expense for the grant-date fair value of the option award over the vesting period of the award.

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Acquisitions
Acquisition of Happy Bancshares, Inc.
The Company's most recent acquisition occurred on April 1, 2022, when the Company completed the acquisition of Happy Bancshares, Inc. (“Happy”), and merged Happy State Bank into Centennial Bank. For additional discussion regarding the acquisition of Happy, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 2 "Business Combinations" in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2023.
Branches
As opportunities arise, we will continue to open new (commonly referred to as de novo) branches in our current markets and in other attractive market areas.
As of September 30, 2024, we had 218 branch locations. There were 76 branches in Arkansas, 78 branches in Florida, 58 branches in Texas, five branches in Alabama and one branch in New York City.
Results of Operations
For the three and nine months ended September 30, 2024 and 2023
Our net income increased $1.6 million, or 1.6%, to $100.0 million for the three-month period ended September 30, 2024, from $98.5 million for the same period in 2023. On a diluted earnings per share basis, our earnings were $0.50 per share for the three-month period ended September 30, 2024 compared to $0.49 per share for the three-month period ended September 30, 2023. The Company recorded $18.9 million in credit loss expense for the quarter ended September 30, 2024. The $18.9 million of credit loss expense includes $18.2 million in provision for credit losses on loans. Of the $18.2 million provision for credit losses on loans recorded, $16.7 million was used to establish a hurricane reserve for loans located in the FEMA disaster areas impacted by Hurricane Helene, which made landfall during the quarter. The hurricane related reserve had a six-cent impact to diluted earnings per share for the quarter. The remaining portion of the provision was related to loan growth. The Company also recorded a $1.0 million provision for credit losses on unfunded commitments, and we recorded a $330,000 recovery of credit losses on available-for-sale investments due to an improvement in the unrealized losses for one of our subordinated debt investments. During the three months ended September 30, 2024, the Company recorded a $1.4 million increase in the fair value of marketable securities.
Our net income decreased $5.0 million, or 1.63%, to $301.7 million for the nine-month period ended September 30, 2024, from $306.7 million for the same period in 2023. On a diluted earnings per share basis, our earnings were $1.51 per share for both the nine-month periods ended September 30, 2024 and 2023. The Company recorded $31.4 million in credit loss expense for the nine-month period ended September 30, 2024, The $31.4 million of credit loss expense includes $31.7 million in provision for credit losses on loans, which was partially offset by a a $330,000 recovery of credit losses on available-for-sale investments due to an improvement in the unrealized losses for one of our subordinated debt investments. Of the $31.7 million provision for credit losses on loans recorded, $16.7 million was used to establish a hurricane reserve for loans located in the FEMA disaster areas impacted by Hurricane Helene, which made landfall during the third quarter of 2024. The hurricane related reserve had a six-cent impact to diluted earnings per share. The remaining portion of the provision was related to loan growth. During the nine months ended September 30, 2024, the Company recorded a $2.1 million gain on sale of building from our Texas region, a $2.1 million increase in the fair value of marketable securities and $162,000 in bank owned life insurance BOLI death benefits, partially offset by $2.3 million of FDIC special assessment and a $2.0 million deferred tax asset write-down.
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 affecting the level of net interest income include the volume of earning assets and interest-bearing liabilities, yields earned on loans and investments, rates paid on deposits and other borrowings, the level of non-performing loans and the amount of non-interest-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 (24.989% for 2024 and 24.6735% for 2023).

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The Federal Reserve Board sets various benchmark rates, including the Federal Funds rate, and thereby influences the general market rates of interest, including the deposit and loan rates offered by financial institutions. The Federal Reserve increased the target rate four times during 2023. First, on February 1, 2023, the target rate was increased to 4.50% to 4.75%, second, on March 22, 2023, the target rate was increased to 4.75% to 5.00%, third, on May 3, 2023, the target rate was increased to 5.00% to 5.25% and fourth, on July 26, 2023, the target rate was increased to 5.25% to 5.50%. On September 18, 2024, the Federal Reserve reduced the target rate to 4.75% to 5.00%.
Our net interest margin increased from 4.19% for the three-month period ended September 30, 2023 to 4.28% for the three-month period ended September 30, 2024. The yield on interest earning assets was 6.60% and 6.09% for the three months ended September 30, 2024 and 2023, respectively, and average interest earning assets increased from $19.26 billion to $20.23 billion. The increase in average interest earning assets is primarily due to a $706.1 million increase in average interest-bearing balances due from banks and a $571.2 million increase in average loans receivable, partially offset by a $315.8 million decrease in average investment securities. During the third quarter of 2024, the Company held excess liquidity of approximately $500.0 million which was dilutive to the net interest margin by 10 basis points. For the three months ended September 30, 2024 and 2023, we recognized $1.9 million and $2.4 million, respectively, in total net accretion for acquired loans and deposits. The reduction in accretion was dilutive to the net interest margin by two basis points. We recognized $573,000 in event income for the three-months ended September 30, 2024 compared to $521,000 for the three-months ended September 30, 2023. The remaining increase in the net interest margin was due to an increase in interest income resulting from an increase in average interest-bearing assets at higher interest rates primarily as a result of the high interest rate environment.
Our net interest margin decreased from 4.28% for the nine-month period ended September 30, 2023 to 4.23% for the nine-month period ended September 30, 2024. The yield on interest earning assets was 6.52% and 5.95% for the nine months ended September 30, 2024 and 2023, respectively, as average interest earning assets increased from $19.63 billion to $20.16 billion. The increase in average interest earning assets is primarily due to a $564.7 million increase in average interest-bearing balances due from banks, a $326.0 million increase in average loans receivable and a $1.1 million increase in average federal funds sold, partially offset by a $368.8 million decrease in average investment securities. During the nine-month period ended September 30, 2024, the Company held excess liquidity of approximately $500.0 million which was dilutive to the net interest margin by 10 basis points. For the nine months ended September 30, 2024 and 2023, we recognized $6.5 million and $8.3 million, respectively, in total net accretion for acquired loans and deposits. The reduction in accretion was dilutive to the net interest margin by one basis point. We recognized $3.4 million in event income for the nine-months ended September 30, 2024 compared to $2.8 million for the nine-months ended September 30, 2023.
Net interest income on a fully taxable equivalent basis increased $14.6 million, or 7.2%, to $217.8 million for the three-month period ended September 30, 2024, from $203.2 million for the same period in 2023. This increase in net interest income for the three-month period ended September 30, 2024 was the result of a $39.9 million increase in interest income, which was partially offset by a $25.3 million increase in interest expense, on a fully taxable equivalent basis. The $39.9 million increase in interest income was primarily the result of the high interest rate environment. The higher yield on earning assets resulted in an increase in interest income of approximately $22.9 million, in addition to an increase of $17.0 million in interest income due to the change in average interest earning asset balances. The $25.3 million increase in interest expense is also primarily the result of the high interest rate environment. The higher rates on interest bearing liabilities resulted in an increase in interest expense of approximately $14.2 million, in addition to an increase in average interest bearing liabilities which increased interest expense by approximately $11.1 million.
Net interest income on a fully taxable equivalent basis increased $9.2 million, or 1.5%, to $637.8 million for the nine-month period ended September 30, 2024, from $628.6 million for the same period in 2023. This increase in net interest income for the nine-month period ended September 30, 2024 was the result of a $110.0 million increase in interest income, which was partially offset by a $100.8 million increase in interest expense, on a fully taxable equivalent basis. The $110.0 million increase in interest income was primarily the result of the high interest rate environment. The higher yield on earning assets resulted in an increase in interest income of approximately $80.6 million, in addition to an increase of $29.4 million in interest income due to the change in average interest earning asset balances. The $100.8 million increase in interest expense is also primarily the result of the high interest rate environment. The higher rates on interest bearing liabilities resulted in an increase in interest expense of approximately $70.6 million, in addition to an increase in average interest bearing liabilities which increased interest expense by approximately $30.2 million.

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Tables 2 and 3 reflect an analysis of net interest income on a fully taxable equivalent basis for the three and nine months ended September 30, 2024 and 2023, as well as changes in the fully taxable equivalent net interest margin for the three and nine months ended September 30, 2024 compared to the same period in 2023.
Table 2: Analysis of Net Interest Income
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(Dollars in thousands)
Interest income$332,845 $294,262 $977,063 $868,833 
Fully taxable equivalent adjustment2,616 1,293 6,136 4,415 
Interest income – fully taxable equivalent335,461 295,555 983,199 873,248 
Interest expense117,625 92,325 345,431 244,658 
Net interest income – fully taxable equivalent$217,836 $203,230 $637,768 $628,590 
Yield on earning assets – fully taxable equivalent6.60 %6.09 %6.52 %5.95 %
Cost of interest-bearing liabilities3.17 2.69 3.14 2.38 
Net interest spread – fully taxable equivalent3.43 3.40 3.38 3.57 
Net interest margin – fully taxable equivalent4.28 4.19 4.23 4.28 
Table 3: Changes in Fully Taxable Equivalent Net Interest Margin
Three Months Ended September 30,Nine Months Ended September 30,
2024 vs. 20232024 vs. 2023
(In thousands)
Increase in interest income due to change in earning assets$16,977 $29,381 
Increase in interest income due to change in earning asset yields22,929 80,570 
Increase in interest expense due to change in interest-bearing liabilities(11,129)(30,161)
Increase in interest expense due to change in interest rates paid on interest-bearing liabilities(14,171)(70,612)
Increase in net interest income$14,606 $9,178 

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Table 4 shows, for each major category of earning assets and interest-bearing liabilities, the average amount outstanding, the interest income or expense on that amount and the average rate earned or expensed for the three and nine months ended September 30, 2024 and 2023, respectively. The table also shows the average rate earned on all earning assets, the average rate expensed on all interest-bearing liabilities, the net interest spread and the net interest margin for the same periods. The analysis is presented on a fully taxable equivalent basis. Non-accrual loans were included in average loans for the purpose of calculating the rate earned on total loans.
Table 4: Average Balance Sheets and Net Interest Income Analysis
Three Months Ended September 30,
20242023
Average
Balance
Income /
Expense
Yield /
Rate
Average
Balance
Income /
Expense		Yield /
Rate
(Dollars in thousands)
ASSETS
Earnings assets
Interest-bearing balances due from banks$903,456 $12,096 5.33 %$197,336 $2,328 4.68 %
Federal funds sold4,629 62 5.33 4,859 82 6.70 
Investment securities – taxable3,391,838 31,006 3.64 3,598,513 34,520 3.81 
Investment securities – non-taxable1,163,568 10,181 3.48 1,272,680 9,034 2.82 
Loans receivable14,762,667 282,116 7.60 14,191,461 249,591 6.98 
Total interest-earning assets20,226,158 335,461 6.60 %19,264,849 295,555 6.09 %
Non-earning assets2,667,626 2,637,585 
Total assets$22,893,784 $21,902,434 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts$11,095,572 $79,232 2.84 %$10,923,936 68,067 2.47 %
Time deposits1,769,952 18,553 4.17 1,319,126 10,631 3.20 
Total interest-bearing deposits12,865,524 97,785 3.02 12,243,062 78,698 2.55 
Federal funds purchased43 1 9.25 54 1 7.35 
Securities sold under agreement to repurchase157,178 1,335 3.38 154,687 1,344 3.45 
FHLB and other borrowed funds1,300,876 14,383 4.40 773,345 8,161 4.19 
Subordinated debentures439,467 4,121 3.73 440,054 4,121 3.72 
Total interest-bearing liabilities14,763,088 117,625 3.17 %13,611,202 92,325 2.69 %
Non-interest-bearing liabilities
Non-interest-bearing deposits3,993,187 4,434,394 
Other liabilities247,797 189,499 
Total liabilities19,004,072 18,235,095 
Stockholders’ equity3,889,712 3,667,339 
Total liabilities and stockholders’ equity$22,893,784 $21,902,434 
Net interest spread3.43 %3.40 %
Net interest income and margin$217,836 4.28 %$203,230 4.19 %
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Nine Months Ended September 30,
20242023
Average
Balance
Income /
Expense
Yield /
Rate
Average
Balance
Income /
Expense		Yield /
Rate
(Dollars in thousands)
ASSETS
Earnings assets
Interest-bearing balances due from banks$878,368 $35,188 5.35 %$313,637 $10,742 4.58 %
Federal funds sold4,688 182 5.19 3,577 156 5.83 
Investment securities – taxable3,436,874 96,822 3.76 3,726,710 104,559 3.75 
Investment securities – non-taxable1,202,003 29,077 3.23 1,280,947 27,848 2.91 
Loans receivable14,633,382 821,930 7.50 14,307,358 729,943 6.82 
Total interest-earning assets20,155,315 983,199 6.52 %19,632,229 873,248 5.95 %
Non-earning assets2,662,627 2,640,096 
Total assets$22,817,942 $22,272,325 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts$11,084,397 $232,757 2.80 %$11,246,350 185,560 2.21 %
Time deposits1,729,400 53,317 4.12 1,189,620 22,447 2.52 
Total interest-bearing deposits12,813,797 286,074 2.98 12,435,970 208,007 2.24 
Federal funds purchased26 1 5.14 59 3 6.80 
Securities sold under agreement to repurchase163,013 4,102 3.36 144,603 3,333 3.08 
FHLB and other borrowed funds1,301,005 42,914 4.41 701,748 20,947 3.99 
Subordinated debentures439,613 12,340 3.75 440,199 12,368 3.76 
Total interest-bearing liabilities14,717,454 345,431 3.14 %13,722,579 244,658 2.38 %
Non-interest-bearing liabilities
Non-interest-bearing deposits4,031,447 4,729,515 
Other liabilities242,422 197,498 
Total liabilities18,991,323 18,649,592 
Stockholders’ equity3,826,619 3,622,733 
Total liabilities and stockholders’ equity$22,817,942 $22,272,325 
Net interest spread3.38 %3.57 %
Net interest income and margin$637,768 4.23 %$628,590 4.28 %
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Table 5 shows changes in interest income and interest expense resulting from changes in volume and changes in interest rates for the three and nine months ended September 30, 2024 compared to the same period in 2023, on a fully taxable basis. 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 5: Volume/Rate Analysis
Three Months Ended September 30,Nine Months Ended September 30,
2024 over 20232024 over 2023
VolumeYield /
Rate		TotalVolumeYield /
Rate		Total
(In thousands)
Increase (decrease) in:
Interest income:
Interest-bearing balances due from banks$9,413 $355 $9,768 $22,341 $2,105 $24,446 
Federal funds sold(4)(16)(20)45 (19)26 
Investment securities – taxable(1,931)(1,583)(3,514)(8,163)426 (7,737)
Investment securities – non-taxable(823)1,970 1,147 (1,785)3,014 1,229 
Loans receivable10,322 22,203 32,525 16,943 75,044 91,987 
Total interest income16,977 22,929 39,906 29,381 80,570 109,951 
Interest expense:
Interest-bearing transaction and savings deposits1,085 10,080 11,165 (2,709)49,906 47,197 
Time deposits4,214 3,708 7,922 12,879 17,991 30,870 
Federal funds purchased— — — (1)(1)(2)
Securities sold under agreement to repurchase21 (30)(9)447 322 769 
FHLB and other borrowed funds5,815 407 6,222 19,561 2,406 21,967 
Subordinated debentures(6)6 — (16)(12)(28)
Total interest expense11,129 14,171 25,300 30,161 70,612 100,773 
Increase (decrease) in net interest income$5,848 $8,758 $14,606 $(780)$9,958 $9,178 
Provision for Credit Losses
Credit Loss Expense: During the three months ended September 30, 2024, the Company recorded $18.9 million in credit loss expense. The $18.9 million of credit loss expense includes $18.2 million in provision for credit losses on loans. Of the $18.2 million provision for credit losses on loans recorded, $16.7 million was used to establish a hurricane reserve for loans located in the FEMA disaster areas impacted by Hurricane Helene, which made landfall during the quarter. The hurricane related reserve had a six-cent impact to diluted earnings per share for the quarter. The remaining portion of the provision was related to loan growth. The Company also recorded a $1.0 million provision for credit losses on unfunded commitments and recorded a $330,000 recovery of credit losses on available-for-sale investments due to an improvement in the unrealized losses for one of our subordinated debt investments. During the nine months ended September 30, 2024, the Company recorded $31.4 million in credit loss expense. The $31.4 million of credit loss expense includes $31.7 million in provision for credit losses on loans, which as partially offset by the $330,000 recovery of credit losses on available-for-sale investments due to an improvement in the unrealized losses for one of our subordinated debt investments. Of the $31.7 million provision for credit losses on loans recorded, $16.7 million was used to establish a hurricane reserve for loans. The remaining portion of the provision was related to loan growth. For both the three and nine month periods ended September 30, 2024, the Company determined the $2.0 million allowance for credit losses on the held-to-maturity portfolio was adequate. Therefore, no additional provision was considered necessary for the HTM portfolio.
Net charge-offs to average total loans was 0.04% and 0.08% for the three months ended September 30, 2024 and 2023, respectively, and net charge-offs to average total loans was 0.07% and 0.10% for the nine months ended September 30, 2024 and 2023, respectively.


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Non-Interest Income
Total non-interest income was $42.8 million and $127.4 million for the three and nine months ended September 30, 2024, compared to $43.4 million and $127.1 million for the same period in 2023. Our recurring non-interest income includes service charges on deposit accounts, other service charges and fees, trust fees, mortgage lending income, insurance commissions, increase in cash value of life insurance, fair value adjustment for marketable securities and dividends.
Table 6 measures the various components of our non-interest income for the three and nine months ended September 30, 2024 and 2023.
Table 6: Non-Interest Income
Three Months Ended September 30,2024 Change
from 2023		Nine Months Ended September 30,2024 Change
from 2023
2024202320242023
(Dollars in thousands)
Service charges on deposit accounts$9,888 $10,062 $(174)(1.7)%$29,288 $29,135 $153 0.5 %
Other service charges and fees10,490 10,128 362 3.6 31,358 33,766 (2,408)(7.1)
Trust fees4,403 4,660 (257)(5.5)14,191 13,576 615 4.5 
Mortgage lending income4,437 3,132 1,305 41.7 12,271 8,353 3,918 46.9 
Insurance commissions595 562 33 5.9 1,668 1,606 62 3.9 
Increase in cash value of life insurance1,161 1,170 (9)(0.8)3,635 3,485 150 4.3 
Dividends from FHLB, FRB, FNBB & other2,637 2,916 (279)(9.6)8,642 8,632 10 0.1 
Gain on sale of SBA loans145 97 48 49.5 399 236 163 69.1 
Gain on sale of branches, equipment and other assets, net32 — 32 100.0 2,076 924 1,152 124.7 
Gain on OREO, net85 — 85 100.0 151 319 (168)(52.7)
Fair value adjustment for marketable securities1,392 4,507 (3,115)(69.1)2,121 (6,118)8,239 134.7 
Other income7,514 6,179 1,335 21.6 21,552 33,172 (11,620)(35.0)
Total non-interest income$42,779 $43,413 $(634)(1.5)%$127,352 $127,086 $266 0.2 %
Non-interest income decreased $634,000, or 1.5%, to $42.8 million for the three months ended September 30, 2024 from $43.4 million for the same period in 2023. The primary factor that resulted in this decrease was the decreases in fair value adjustment for marketable securities, which was partially offset by increases in other service charges and fees, mortgage lending income and other income.
Additional details for the three months ended September 30, 2024 on some of the more significant changes are as follows:
•The $362,000 increase in other service charges and fees is primarily related to an increase in Centennial CFG property finance loan fees.
•The $1.3 million increase in mortgage lending income is primarily related to an increase in volume of secondary market loans from the lower volume of loans during 2023.
•The $3.1 million decrease in the fair value adjustment for marketable securities is due to the changes in the fair value of marketable securities held by the Company.
•The $1.3 million increase in other income is primarily due to a $737,000 increase in rental income from other real estate owned ("OREO"), a $230,000 increase in investment brokerage fee income and a $705,000 increase in recoveries on historic losses, partially offset by a $338,000 reduction in BOLI death benefit income.
Non-interest income increased $266,000, or 0.2%, to $127.4 million for the nine months ended September 30, 2024 from $127.1 million for the same period in 2023. The primary factors that resulted in this increase were the increases in fair value adjustment for marketable securities, trust fees, mortgage lending income and the gain on sale of branches, equipment and other assets, net, which was partially offset by decreases in other service charges and fees and other income.

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Additional details for the nine months ended September 30, 2024 on some of the more significant changes are as follows:
•The $2.4 million decrease in other service charges and fees is primarily related to decreases in Centennial CFG property finance loan fees and Mastercard income.
•The $614,000 increase in trust fees is primarily related to increases in personal trust fees, employee trust fees, IRA fees and retirement fees.
•The $3.9 million increase in mortgage lending income is primarily related to an increase in volume of secondary market loans from the lower volume of loans during 2023.
•The $1.1 million increase in gain on sale of branches, equipment and other assets, net is primarily due to the sale of a building from our Texas region.
•The $8.2 million increase in the fair value adjustment for marketable securities is due to the changes in the fair value of marketable securities held by the Company.
•The $11.6 million decrease in other income is primarily due to a $9.9 million reduction in income for equity method investments, a $3.0 million reduction in BOLI death benefit income and a $3.5 million decrease in recoveries on historic losses, partially offset by a $2.9 million increase in rental income from OREO and a $1.5 million increase in investment brokerage fee income.
Non-Interest Expense
Non-interest expense primarily consists of salaries and employee benefits, occupancy and equipment, data processing, and other expenses such as advertising, amortization of intangibles, electronic banking expense, FDIC and state assessment, insurance, legal and accounting fees, other professional fees and other expenses.
Table 7 below sets forth a summary of non-interest expense for the three and nine months ended September 30, 2024 and 2023.
Table 7: Non-Interest Expense
Three Months Ended September 30,2024 Change
from 2023		Nine Months Ended September 30,2024 Change
from 2023
2024202320242023
(Dollars in thousands)
Salaries and employee benefits$58,861 $64,512 $(5,651)(8.8)%$180,198 $193,536 $(13,338)(6.9)%
Occupancy and equipment14,546 15,463 (917)(5.9)43,505 45,338 (1,833)(4.0)
Data processing expense9,088 9,103 (15)(0.2)27,170 27,222 (52)(0.2)
Other operating expenses:
Advertising1,810 2,295 (485)(21.1)5,156 6,624 (1,468)(22.2)
Amortization of intangibles2,095 2,477 (382)(15.4)6,375 7,432 (1,057)(14.2)
Electronic banking expense3,569 3,709 (140)(3.8)10,137 10,714 (577)(5.4)
Directors' fees362 417 (55)(13.2)1,283 1,415 (132)(9.3)
Due from bank service charges302 282 20 7.1 860 841 19 2.3 
FDIC and state assessment3,360 2,794 566 20.3 12,172 9,514 2,658 27.9 
Insurance926 878 48 5.5 2,734 2,694 40 1.5 
Legal and accounting1,902 1,514 388 25.6 6,600 4,038 2,562 63.4 
Other professional fees2,062 2,117 (55)(2.6)6,406 7,175 (769)(10.7)
Operating supplies673 860 (187)(21.7)1,969 2,361 (392)(16.6)
Postage522 491 31 6.3 1,542 1,578 (36)(2.3)
Telephone455 544 (89)(16.4)1,369 1,645 (276)(16.8)
Other expense9,512 7,306 2,206 30.2 27,250 23,561 3,689 15.7 
Total non-interest expense$110,045 $114,762 $(4,717)(4.1)%$334,726 $345,688 $(10,962)(3.2)%

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Non-interest expense decreased $4.7 million, or 4.1%, to $110.0 million for the three months ended September 30, 2024 from $114.8 million for the same period in 2023. The primary factors that resulted in this decrease were the decrease in salaries and employee benefits, occupancy and equipment expense, advertising expense and amortization of intangibles, which were partially offset by increases in FDIC and state assessment expense, legal and accounting expense and other expense.
Additional details for the three months ended September 30, 2024 on some of the more significant changes are as follows:
•The $5.7 million decrease in salaries and employee benefits expense is primarily due to the Company's project to reduce the size of its workforce and a decrease in deferred loan costs.
•The $917,000 decrease in occupancy and equipment expense is primarily due to decreased lease, utility and maintenance expenses.
•The $485,000 decrease in advertising expense is primarily due to a decreased volume of advertising.
•The $382,000 decrease in amortization of intangibles is due to the core deposit intangible ("CDI") from the acquisition of Liberty Bank being fully amortized in 2023.
•The $566,000 increase in FDIC and state assessment expense is primarily due to a true-up which was recorded in September 2023 as a result of an FDIC assessment rate reduction.
•The $388,000 increase in legal and accounting expense is primarily due to ongoing legal matters.
•The $2.2 million increase in other expense is primarily due to increases in OREO expense.
Non-interest expense decreased $11.0 million, or 3.2%, to $334.7 million for the nine months ended September 30, 2024 from $345.7 million for the same period in 2023. The primary factors that resulted in this decrease were the decrease in salaries and employee benefits, occupancy and equipment expense, advertising expense, amortization of intangibles, electronic banking expense and other professional fees, which were partially offset by an increase in FDIC and state assessment, legal and accounting expense and other expense.
Additional details for the nine months ended September 30, 2024 on some of the more significant changes are as follows:
•The $13.3 million decrease in salaries and employee benefits expense is primarily due to the Company's project to reduce the size of its workforce and a decrease in deferred loan costs.
•The $1.8 million decrease in occupancy and equipment expense is primarily due to decreases in lease, utility, maintenance and other occupancy expenses.
•The $1.5 million decrease in advertising expense is primarily due to a decreased volume of advertising.
•The $1.1 million decrease in amortization of intangibles is primarily due to the CDI from the acquisition of Liberty Bank being fully amortized in 2023.
•The $577,000 decrease in electronic banking expense is primarily due to a decrease in debit card processing fees and interchange network expenses.
•The $2.7 million increase in FDIC and state assessment expense is primarily due to the remaining portion of the FDIC special assessment expense being incurred during the second quarter of 2024.
•The $2.6 million increase in legal and accounting expense is primarily due to ongoing legal matters.
•The $770,000 decrease in other professional fees is primarily due to cost saving measures following the acquisition of Happy.
•The $3.7 million increase in other expense is primarily due to an increase in OREO expense and miscellaneous loan costs, partially offset by decreases in travel expenses, reimbursable loan fees and other losses.

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Income Taxes
Income tax expense decreased $1.8 million, or 5.8%, to $29.0 million for the three-month period ended September 30, 2024, from $30.8 million for the same period in 2023. Income tax expense decreased $1.2 million, or 1.3%, to $91.2 million for the nine-month period ended September 30, 2024, from $92.4 million for the same period in 2023. The effective income tax rate was 22.50% and 23.22% for the three and nine months ended September 30, 2024, respectively, compared to 23.85% and 23.15% for the same periods in 2023, respectively. The marginal tax rate was 24.989% and 24.6735% for 2024 and 2023, respectively.
Financial Condition as of and for the Period Ended September 30, 2024 and December 31, 2023
Our total assets as of September 30, 2024 increased $166.5 million to $22.82 billion from $22.66 billion reported as of December 31, 2023. Cash and cash equivalents increased $17.5 million for the nine months ended September 30, 2024. Our loan portfolio balance increased to $14.82 billion as of September 30, 2024 from $14.42 billion at December 31, 2023. The increase in loans was primarily due to $350.4 million of organic loan growth in our community banking footprint and $48.9 million of organic loan growth from our Centennial CFG franchise. These increases were partially offset by a $242.1 million decrease in investment securities resulting from paydowns and maturities during the first nine months of 2024. Total deposits decreased $82.0 million to $16.71 billion as of September 30, 2024 from $16.79 billion as of December 31, 2023. Stockholders’ equity increased $168.7 million to $3.96 billion as of September 30, 2024, compared to $3.79 billion as of December 31, 2023. The $168.7 million increase in stockholders’ equity is primarily associated with the $301.7 million in net income and $54.2 million in other comprehensive income for the nine months ended September 30, 2024, which was partially offset by the $111.2 million of shareholder dividends paid and stock repurchases of $83.6 million.
Loan Portfolio
Loans Receivable
Our loan portfolio averaged $14.76 billion and $14.19 billion during the three months ended September 30, 2024 and 2023, respectively. Our loan portfolio averaged $14.63 billion and $14.31 billion during the nine months ended September 30, 2024 and 2023, respectively. Loans receivable were $14.82 billion and $14.42 billion as of September 30, 2024 and December 31, 2023, respectively.
From December 31, 2023 to September 30, 2024, the Company experienced an increase of approximately $399.3 million in loans. The increase in loans was primarily due to $350.4 million of organic loan growth in our community banking footprint and $48.9 million of organic loan growth from our Centennial CFG franchise.
The most significant components of the loan portfolio were commercial real estate, residential real estate, consumer and commercial and industrial loans. These loans are generally secured by residential or commercial real estate or business or personal property. Although these loans are primarily originated within our franchises in Arkansas, Florida, Texas, Alabama and Centennial CFG, the property securing these loans may not physically be located within our market areas of Arkansas, Florida, Texas, Alabama and New York. Loans receivable were approximately $3.38 billion, $4.10 billion, $3.90 billion, $115.8 million, $1.32 billion and $2.00 billion as of September 30, 2024 in Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG, respectively.
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Table 8 presents our loans receivable balances by category as of September 30, 2024 and December 31, 2023.
Table 8: Loans Receivable
September 30, 2024December 31, 2023
(In thousands)
Real estate:
Commercial real estate loans:
Non-farm/non-residential$5,496,536 $5,549,954 
Construction/land development2,741,419 2,293,047 
Agricultural335,965 325,156 
Residential real estate loans:
Residential 1-4 family1,932,352 1,844,260 
Multifamily residential482,648 435,736 
Total real estate10,988,920 10,448,153 
Consumer1,219,197 1,153,690 
Commercial and industrial2,084,667 2,324,991 
Agricultural352,963 307,327 
Other178,232 190,567 
Total loans receivable$14,823,979 $14,424,728 
Commercial Real Estate Loans. We originate non-farm and non-residential loans (primarily secured by commercial real estate), construction/land development loans, and agricultural loans, which are generally secured by real estate located in our market areas. Our commercial mortgage loans are generally collateralized by first liens on real estate and amortized (where defined) over a 15 to 30-year period with balloon payments due at the end of one to five years. These loans are generally underwritten by assessing cash flow (debt service coverage), primary and secondary source of repayment, the financial strength of any guarantor, the strength of the tenant (if any), the borrower’s liquidity and leverage, management experience, ownership structure, economic conditions and industry specific trends and collateral. Generally, we will loan up to 85% of the value of improved property, 65% of the value of raw land and 75% of the value of land to be acquired and developed. A first lien on the property and assignment of lease is required if the collateral is rental property, with second lien positions considered on a case-by-case basis.
As of September 30, 2024, we had approximately $1.13 billion of construction/land development loans which were collateralized by land. This consisted of approximately $104.8 million for raw land and approximately $1.02 billion for land with commercial and/or residential lots.
As of September 30, 2024, commercial real estate ("CRE") loans totaled $8.57 billion, or 57.8%, of loans receivable, as compared to $8.17 billion, or 56.7%, of loans receivable, as of December 31, 2023. CRE loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $2.18 billion, $2.57 billion, $2.19 billion, $46.7 million, zero and $1.59 billion at September 30, 2024, respectively.
Table 9 presents the composition of the funded and unfunded balances of our CRE portfolio by loan type, as of September 30, 2024 and December 31, 2023, and their respective percentages of our total CRE portfolio.

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Table 9: CRE Loan Concentrations
September 30, 2024
Funded Balance% of CRE LoansUnfunded Balance% of CRE Loans
(Dollars in thousands)
Non-Farm/Non-Residential:
Single Purpose Building$839,534 9.8 %$74,073 2.8 %
Office Building994,304 11.6 70,082 2.6 
Hotel1,090,495 12.7 27,495 1.0 
Industrial454,249 5.3 36,031 1.4 
Retail529,578 6.2 10,939 0.4 
Owner-Occupied (1)
1,588,376 18.5 138,205 5.2 
Construction/Land Development:
 Construction Residential-Spec443,594 5.2 379,275 14.3 
 Residential Land Development526,361 6.1 86,761 3.3 
 Construction Commercial452,200 5.3 401,987 15.2 
 Construction Multi Family435,895 5.1 979,162 36.9 
 Commercial Land Development495,569 5.8 57,107 2.2 
 Construction Residential-Presold180,635 2.1 143,082 5.4 
 Construction Hotel102,415 1.2 194,169 7.3 
 Raw Land104,750 1.2 9,831 0.4 
Agricultural (1)
335,965 3.9 43,743 1.6 
Total Commercial Real Estate (2)
$8,573,920 100.0 %$2,651,942 100.0 %
December 31, 2023
Funded Balance% of CRE LoansUnfunded Balance% of CRE Loans
(Dollars in thousands)
Non-Farm/Non-Residential:
Single Purpose Building$979,802 12.0 %$79,598 3.2 %
Office Building1,023,917 12.5 89,464 3.6 
Hotel1,067,028 13.1 34,374 1.4 
Industrial401,125 4.9 37,342 1.5 
Retail579,886 7.1 19,744 0.8 
Owner-Occupied (1)
1,498,196 18.4 98,681 4.0 
Construction/Land Development:
 Construction Residential-Spec408,023 5.0 427,563 17.2 
 Residential Land Development475,615 5.8 88,856 3.6 
 Construction Commercial492,421 6.0 388,486 15.7 
 Construction Multi Family189,711 2.3 753,285 30.3 
 Commercial Land Development327,194 4.0 51,303 2.1 
 Construction Residential-Presold200,114 2.4 160,809 6.5 
 Construction Hotel127,784 1.6 227,530 9.2 
 Raw Land72,185 0.9 1,119 — 
Agricultural (1)
325,156 4.0 21,640 0.9 
Total Commercial Real Estate (2)
$8,168,157 100.0 %$2,479,794 100.0 %
(1)     Agriculture real estate loans and owner-occupied non-farm non-residential loans are not included within CRE for regulatory reporting purposes.
(2)     Excludes multi-family residential loans of $482.6 million and $435.7 million as of September 30, 2024 and December 31, 2023, respectively, which are included in the residential real estate loans throughout the filing. Multi-family residential loans are included in CRE for regulatory purposes.

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Table 10 presents the composition of our CRE loan portfolio by the ten largest geographical locations of the collateral as of September 30, 2024 and December 31, 2023.
Table 10: Geographical Locations of CRE Loans
Top 10 Geographical States for CRE Loan Collateral Concentrations
FloridaTexasArkansasNew YorkGeorgiaCaliforniaAlabamaUtahPennsylvaniaTennesseeAll OtherTotal
As of September 30, 2024
Non-Farm/Non-Residential:
Single Purpose Building$270,620 $227,606 $173,900 $51,347 $17,589 $— $11,974 $— $— $2,324 $84,174 $839,534 
Office Building327,949 267,300 78,942 50,172 91,735 — 19,059 — 25,615 — 133,532 994,304 
Hotel571,392 237,400 100,769 4,949 23,524 16,419 18,787 — — 7,307 109,948 1,090,495 
Industrial40,732 89,917 40,520 57,518 — 21,263 68,821 — — — 135,478 454,249 
Retail151,221 267,717 55,988 4,159 — (115)12,254 — — 442 37,912 529,578 
Owner-Occupied (1)
493,186 427,909 367,675 — 21,807 5,808 27,414 — 84,067 6,966 153,544 1,588,376 
Construction/Land Development:
 Construction Residential -
 Spec		141,263 98,077 39,050 117,732 — 38,387 (8)— — — 9,093 443,594 
 Residential Land
 Development		147,206 98,772 53,025 — 215 — 2,882 166,309 — 2,197 55,755 526,361 
 Construction Commercial146,142 188,651 54,608 — 2,817 (235)6,407 10,510 419 9,049 33,832 452,200 
 Construction Multi Family174,172 70,570 26,626 112,218 — 22,005 — — 218 25,159 4,927 435,895 
 Commercial Land
 Development		75,012 63,063 30,375 80,035 38,585 50,644 9,757 — — 44,019 104,079 495,569 
 Construction Residential -
 Presold		89,669 60,187 29,043 — — — 601 — — — 1,135 180,635 
 Construction Hotel16,018 50,906 15,915 — 10,497 — 2,687 — — — 6,392 102,415 
 Raw Land8,858 9,003 29,773 — — 32,548 1,677 — — — 22,891 104,750 
Agricultural (1)
30,811 173,443 109,692 — — — 4,161 — — — 17,858 335,965 
Total Commercial Real Estate (2)
$2,684,251 $2,330,521 $1,205,901 $478,130 $206,769 $186,724 $186,473 $176,819 $110,319 $97,463 $910,550 $8,573,920 
Top 10 Geographical States for CRE Loan Collateral Concentrations
FloridaTexasArkansasNew YorkUtahAlabamaGeorgiaCaliforniaPennsylvaniaOklahomaAll OtherTotal
As of December 31, 2023
Non-Farm/Non-Residential:
Single Purpose Building$301,505 $330,203 $183,961 $52,945 $— $11,810 $5,228 $1,396 $2,317 $5,200 $85,237 $979,802 
Office Building323,320 276,425 86,951 50,294 — 19,686 95,457 — 28,501 42,885 100,398 1,023,917 
Hotel518,592 223,750 106,975 59,910 — 19,374 23,760 — — 24,254 90,413 1,067,028 
Industrial41,138 64,060 39,517 93,323 — 71,465 — 24,796 — — 66,826 401,125 
Retail177,569 243,364 64,049 7,285 — 11,977 — 23,372 — 319 51,951 579,886 
Owner-Occupied (1)
476,507 429,440 309,584 — 9,376 15,654 23,991 4,617 86,874 18,993 123,160 1,498,196 
Construction/Land Development:— 
 Construction Residential -
 Spec		124,019 103,483 35,461 88,670 — 2,763 497 40,624 — — 12,506 408,023 
 Residential Land
 Development		93,644 123,284 47,952 — 189,435 2,868 226 — — — 18,206 475,615 
 Construction Commercial115,757 226,684 31,964 — — 4,293 11,248 — — — 102,475 492,421 
 Construction Multi Family44,179 26,082 48,485 53,711 — — — 8,376 189 — 8,689 189,711 
 Commercial Land
 Development		71,670 35,647 33,294 81,004 — 5,764 — 19,029 — — 80,786 327,194 
 Construction Residential -
 Presold		125,004 49,654 23,248 — — 1,184 — — — 125 899 200,114 
 Construction Hotel70,781 50,346 3,208 — — (208)(130)— — — 3,787 127,784 
 Raw Land8,283 15,334 23,649 — — 2,837 — 20,894 — — 1,188 72,185 
Agricultural (1)
23,637 182,495 99,243 — — 3,104 360 — — 1,227 15,090 325,156 
Total Commercial Real Estate (2)
$2,515,605 $2,380,251 $1,137,541 $487,142 $198,811 $172,571 $160,637 $143,104 $117,881 $93,003 $761,611 $8,168,157 
(1)     Agriculture real estate loans and owner-occupied non-farm non-residential loans are not included within CRE for regulatory reporting purposes.
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(2)     Excludes multi-family residential loans of $482.6 million and $435.7 million as of September 30, 2024 and December 31, 2023, respectively, which are included in the residential real estate loans throughout the filing. Multi-family residential loans are included in CRE for regulatory purposes.
Our loan policy states that in order to achieve a well-balanced, diversified credit portfolio, concentrations containing inappropriate or excessive risk are to be avoided. It is the goal of the Company to maintain a prudent diversification of loans. We define a concentration of credit as direct or indirect obligations according to the following guidelines: (i) concentrations of 25% or more of total risk-based capital by individual borrower, small, interrelated group of individuals, single repayment source or individual project; (ii) concentrations of 100% or more of total risk-based capital by industry or product line. As of September 30, 2024, we have not met the threshold for the concentration limits. In addition, the Bank's Board of Directors monitors the CRE loan portfolio for concentrations related to geography, industry, and collateral type and determines applicable guidelines. The Chief Lending Officer also reviews the portfolio periodically to determine if any concentrations exist and makes recommendations with respect to setting internal guidelines.
The Company also monitors key risk indicators ("KRIs") on a quarterly basis for the overall loan portfolio as well as specific KRIs for the CRE portfolio. The KRIs are tied to the Bank's appetite for credit risk which is reflected in the Bank's credit policy and underwriting criteria. The KRIs related to underwriting include loan downgrades by loan review, loan downgrades to classified levels and loan policy exceptions (loan to value, debt coverage ratio and credit score). The KRIs related to CRE loans include concentrations of construction and land loans, concentrations of total CRE loans, CRE loans in excess of loan to value guidelines and total real estate loans in excess of loan to value guidelines. The results of the KRI analysis are presented to the Bank's Asset Quality Committee on a quarterly basis. Any exceptions to established limits and thresholds are monitored and addressed in a timely manner as required by the Asset Quality Committee.
The Company has a CRE strategy and contingency plan which outlines the principles required to adequately manage our CRE exposures. It discusses the inherent risks within CRE lending, as well as the risks unique to specific lending activities and property taxes. In addition, the plan outlines internal limits related to CRE lending, reasoning for operating outside those limits, and provides for a contingency plan to reduce the CRE exposures under adverse economic conditions or other situations where it is deemed necessary to do so. The responsibility for monitoring the CRE Strategy and Contingency Plan, and subsequent reporting to Management and the Board of Directors lies with the Chief Lending Officer and the Asset Quality Committee of the Board of Directors. Within the CRE Strategy and Contingency Plan, we established four adverse economic triggers to measure on an ongoing basis to attempt to determine when a change in CRE strategy might be warranted, at least from an external economic perspective. If one or a combination of these triggers have exceeded Board approved thresholds, the Executive Risk Committee will determine which action or combination of actions to take based on the specific situation. The required actions are likely to focus on tightening/loosening of underwriting criteria, potential capital raises or loan distribution actions such as selling or participating loans. However, other action steps may be considered necessary depending upon the specific situation. As of September 30, 2024, the leading economic indicator trigger exceeded our internal guidelines, but we have not recommended any additional changes to our underwriting standards because the Company considers the current standards to be adequate in addressing the risks to our CRE portfolio.
Residential Real Estate Loans. We originate one to four family, residential mortgage loans generally secured by property located in our primary market areas. Approximately 55.8% and 37.5% of our residential mortgage loans consist of owner occupied 1-4 family properties and non-owner occupied 1-4 family properties (rental), respectively, as of September 30, 2024, with the remaining 6.7% relating to condominiums and mobile homes. Residential real estate loans generally have a loan-to-value ratio of up to 90%. These loans are underwritten by giving consideration to the borrower’s ability to pay, stability of employment or source of income, debt-to-income ratio, credit history and loan-to-value ratio.
As of September 30, 2024, residential real estate loans totaled $2.42 billion, or 16.3%, of loans receivable, compared to $2.28 billion, or 15.8%, of loans receivable, as of December 31, 2023. Residential real estate loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $572.2 million, $1.03 billion, $621.0 million, $37.9 million, zero and $149.8 million at September 30, 2024, respectively.
Consumer Loans. Our consumer loans are composed of secured and unsecured loans originated by our bank, the primary portion of which consists of loans to finance United States Coast Guard registered high-end sail and power boats within our SPF division. The performance of consumer loans will be affected by the local and regional economies as well as the rates of personal bankruptcies, job loss, divorce and other individual-specific characteristics.
As of September 30, 2024, consumer loans totaled $1.22 billion, or 8.2%, of loans receivable, compared to $1.15 billion, or 8.0%, of loans receivable, as of December 31, 2023. Consumer loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $23.0 million, $7.0 million, $11.8 million, $454,000, $1.18 billion and zero at September 30, 2024, respectively.
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Commercial and Industrial Loans. Commercial and industrial loans are made for a variety of business purposes, including working capital, inventory, equipment and capital expansion. The terms for commercial loans are generally one to seven years. Commercial loan applications must be supported by current financial information of the borrower and, where appropriate, by adequate collateral. Commercial loans are generally underwritten by addressing cash flow (debt service coverage), primary and secondary sources of repayment, the financial strength of any guarantor, the borrower’s liquidity and leverage, management experience, ownership structure, economic conditions and industry specific trends and collateral. The loan to value ratio depends on the type of collateral. Generally, accounts receivable are financed at between 50% and 80% of accounts receivable less than 60 days past due. Inventory financing will range between 50% and 80% (with no work in process) depending on the borrower and nature of inventory. We require a first lien position for those loans.
As of September 30, 2024, commercial and industrial loans totaled $2.08 billion, or 14.1%, of loans receivable, compared to $2.32 billion, or 16.1%, of loans receivable, as of December 31, 2023. Commercial and industrial loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $416.1 million, $448.5 million, $821.4 million, $25.2 million, $143.2 million and $230.2 million at September 30, 2024, respectively.
Non-Performing Assets
We classify our problem loans into three categories: past due loans, special mention loans and classified loans (accruing and non-accruing).
When management determines that a loan is no longer performing, and that collection of interest appears doubtful, the loan is placed on non-accrual status. Loans that are 90 days past due are placed on non-accrual status unless they are adequately secured and there is reasonable assurance of full collection of both principal and interest. Our management closely monitors all loans that are contractually 90 days past due, treated as “special mention” or otherwise classified or on non-accrual status.
Purchased loans that have experienced more than insignificant credit deterioration since origination are PCD loans. An allowance for credit losses is determined using the same methodology as other loans. The Company develops separate PCD models for each loan segment with PCD loans not individually analyzed for credit losses. The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a non-credit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through the provision for credit losses. The Company held approximately $79.6 million and $130.7 million in PCD loans, as of September 30, 2024 and December 31, 2023, respectively.
Table 11 sets forth information with respect to our non-performing assets as of September 30, 2024 and December 31, 2023. As of these dates, all non-performing restructured loans are included in non-accrual loans.
Table 11: Non-performing Assets
As of September 30, 2024As of December 31, 2023
(Dollars in thousands)
Non-accrual loans$95,747 $59,971 
Loans past due 90 days or more (principal or interest payments)5,356 4,130 
Total non-performing loans101,103 64,101 
Other non-performing assets
Foreclosed assets held for sale, net43,040 30,486 
Other non-performing assets63 785 
Total other non-performing assets43,103 31,271 
Total non-performing assets$144,206 $95,372 
Allowance for credit losses to non-accrual loans326.46 %480.62 %
Allowance for credit losses to non-performing loans309.16 449.66 
Non-accrual loans to total loans0.65 0.42 
Non-performing loans to total loans0.68 0.44 
Non-performing assets to total assets0.63 0.42 

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Our non-performing loans are comprised of non-accrual loans and accruing loans that are contractually past due 90 days. Our bank subsidiary recognizes income principally on the accrual basis of accounting. When loans are classified as non-accrual, the accrued interest is charged off and no further interest is accrued, unless the credit characteristics of the loan improve. 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.
Total non-performing loans were $101.1 million and $64.1 million as of September 30, 2024 and December 31, 2023, respectively. Non-performing loans at September 30, 2024 were $30.4 million, $40.8 million, $20.0 million, $391,000, $6.8 million and $2.8 million in the Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets, respectively.
The $2.8 million balance of non-accrual loans for our Centennial CFG Capital Markets Group consists of two loans that are assessed for credit risk by the Federal Reserve under the Shared National Credit Program. The loans are not current on either principal or interest, and we have reversed any interest that had accrued subsequent to the non-accrual date designated by the Federal Reserve. Any interest payments that are received will be applied to the principal balance. In addition, the $22.8 million balance of foreclosed assets held for sale for our Centennial CFG Property Finance Group consists of an office building located in California. This represents the largest component of the Company's $43.0 million in foreclosed assets held for sale.
Debt restructuring generally occurs when a borrower is experiencing, or is expected to experience, financial difficulties in the near term. As a result, we will work with the borrower to prevent further difficulties, and ultimately to improve the likelihood of recovery on the loan. In those circumstances it may be beneficial to restructure the terms of a loan and work with the borrower for the benefit of both parties, versus forcing the property into foreclosure and having to dispose of it in potentially an unfavorable and depressed real estate market. When we have modified the terms of a loan, we usually either reduce the monthly payment and/or interest rate for generally about three to twelve months. For our restructured loans that accrue interest at the time the loan is restructured, it would be a rare exception to have charged-off any portion of the loan. As of September 30, 2024, we had $6.5 million of restructured loans that are in compliance with the modified terms and are not reported as past due or non-accrual, and we had $17.7 million of restructured loans that are not in compliance with the modified terms and are reported as non-accrual. Of the $6.5 million of restructured loans that are in compliance with the modified terms, our Arkansas market contained $1.5 million, our Florida market contained $1.2 million, our Texas market contained $1.5 million and our New York region contained $2.2 million of these restructured loans. Of the $17.7 million of restructured loans not in compliance with the modified terms, our Arkansas market contained $1.3 million, our Florida market contained $16.0 million and our Texas market contained $425,000.
A loan modification that might not otherwise be considered may be granted. These loans can involve loans remaining on non-accrual, moving to non-accrual, or continuing on an accrual status, depending on the individual facts and circumstances of the borrower. Generally, a non-accrual loan that is restructured remains on non-accrual for a period of nine months to demonstrate that the borrower can meet the restructured terms. However, performance prior to the restructuring, or significant events that coincide with the restructuring, are considered in assessing whether the borrower can pay under the new terms and may result in the loan being returned to an accrual status after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is not reasonably assured, the loan will remain in a non-accrual status.
The majority of the Bank’s restructured loans relate to real estate lending and generally involve reducing the interest rate, changing from a principal and interest payment to interest-only, lengthening the amortization period, or a combination of some or all of the three. In addition, it is common for the Bank to seek additional collateral or guarantor support when modifying a loan. At September 30, 2024, the amount of restructured loans was $24.2 million. As of September 30, 2024, 26.8% of all restructured loans were performing to the terms of the restructure.
Total foreclosed assets held for sale were $43.0 million as of September 30, 2024, compared to $30.5 million as of December 31, 2023, for an increase of $12.6 million. The foreclosed assets held for sale as of September 30, 2024 are comprised of $21,000 located in Arkansas, $7.3 million located in Florida, $13.0 million located in Texas, zero in Alabama, zero in SPF and $22.8 million in Centennial CFG. The majority of the foreclosed assets held for sale is comprised of three properties. The first is an office building located in Santa Monica, California with a carrying value of $22.8 million. The second is an apartment complex which is under construction in Gunter, Texas with a carrying value of $12.8 million, and the third is an office building located in Miami, Florida with a carrying value of $7.0 million. These three properties account for $42.6 million of the balance of foreclosed assets held for sale at September 30, 2024.

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Table 12 shows the summary of foreclosed assets held for sale as of September 30, 2024 and December 31, 2023.
Table 12: Foreclosed Assets Held For Sale
As of September 30, 2024As of December 31, 2023
(In thousands)
Commercial real estate loans
Non-farm/non-residential$29,824 $29,894 
Construction/land development12,919 47 
Residential real estate loans
Residential 1-4 family297 545 
Total foreclosed assets held for sale$43,040 $30,486 
The Company had $134.1 million and $94.9 million in impaired loans (which includes loans individually analyzed for credit losses for which a specific reserve has been recorded, non-accrual loans, loans past due 90 days or more and restructured loans made to borrowers experiencing financial difficulty) for the periods ended September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024, our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets accounted for approximately $35.7 million, $42.0 million, $41.3 million, $391,000, $9.7 million and $5.0 million of the impaired loans, respectively.
The amortized cost balance for loans with a specific allocation increased from $10.5 million to $74.3 million, and the specific allocation for impaired loans increased by approximately $14.0 million at September 30, 2024 compared to December 31, 2023.
Past Due and Non-Accrual Loans
Table 13 shows the summary of non-accrual loans as of September 30, 2024 and December 31, 2023:
Table 13: Total Non-Accrual Loans
As of September 30, 2024As of December 31, 2023
(In thousands)
Real estate:
Commercial real estate loans
Non-farm/non-residential$48,086 $13,178 
Construction/land development5,403 12,094 
Agricultural737 431 
Residential real estate loans
Residential 1-4 family23,905 20,351 
Total real estate78,723 46,054 
Consumer7,501 3,423 
Commercial and industrial8,511 9,982 
Agricultural & other1,012 512 
Total non-accrual loans$95,747 $59,971 
If non-accrual loans had been accruing interest in accordance with the original terms of their respective agreements, interest income of approximately $1.5 million and $1.9 million, respectively, would have been recorded for both of the three-month periods ended September 30, 2024 and 2023. If non-accrual loans had been accruing interest in accordance with the original terms of their respective agreements, interest income of approximately $4.5 million and $5.5 million, respectively, would have been recorded for both of the nine-month periods ended September 30, 2024 and 2023. The interest income recognized on non-accrual loans for the three months ended September 30, 2024 and 2023 was considered immaterial.
Table 14 shows the summary of accruing past due loans 90 days or more as of September 30, 2024 and December 31, 2023:
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Table 14: Loans Accruing Past Due 90 Days or More
As of September 30, 2024As of December 31, 2023
(In thousands)
Real estate:
Commercial real estate loans
Non-farm/non-residential$709 $2,177 
Construction/land development657 255 
Residential real estate loans
Residential 1-4 family1,495 84 
Total real estate2,861 2,516 
Consumer28 79 
Commercial and industrial2,405 1,535 
 Agricultural & Other62 — 
Total loans accruing past due 90 days or more$5,356 $4,130 
Our ratio of total loans accruing past due 90 days or more and non-accrual loans to total loans was 0.68% and 0.44% at September 30, 2024 and December 31, 2023, respectively.
Allowance for Credit Losses
Overview. The allowance for credit losses on loans receivable increased from $288.2 million as of December 31, 2023 to $312.6 million as of September 30, 2024. The specific reserve for loans individually analyzed for credit losses was $20.4 million on $206.8 million of individually analyzed loans as of September 30, 2024, compared to a reserve of $6.4 million on $171.7 million of individually analyzed loans as of December 31, 2023. The allowance for credit losses as a percentage of loans was 2.11% and 2.00% at September 30, 2024 and December 31, 2023, respectively.
Loans Collectively Evaluated for Credit Loss. Loans receivable collectively evaluated for credit loss increased by approximately $364.1 million from $14.25 billion at December 31, 2023 to $14.62 billion at September 30, 2024. The percentage of the allowance for credit losses allocated to loans receivable collectively evaluated for credit loss to the total loans collectively evaluated for credit loss was 2.00% and 1.98% at September 30, 2024 and December 31, 2023, respectively.
Charge-offs and Recoveries. Total charge-offs decreased to $2.0 million for the three months ended September 30, 2024, compared to $3.4 million for the same period in 2023. Total charge-offs decreased to $9.1 million for the nine months ended September 30, 2024, compared to $12.5 million for the same period in 2023. Total recoveries were $519,000 and $528,000 for the three months ended September 30, 2024 and 2023, respectively. Total recoveries were $1.7 million and $2.1 million for the nine months ended September 30, 2024 and 2023, respectively. For the three months ended September 30, 2024, net charge-offs were $538,000 for Arkansas, $310,000 for Florida, $503,000 for Texas, $4,000 for Alabama, $127,000 for SPF and zero for Centennial CFG. These equal a net charge-off position of $1.5 million. For the nine months ended September 30, 2024, net charge-offs were $3.1 million for Arkansas, $835,000 for Florida, $2.9 million for Texas, $23,000 for Alabama, $287,000 for SPF and $222,000 for Centennial CFG. These equal a net charge-off position of $7.4 million.
We have not charged off an amount less than what was determined to be the fair value of the collateral as presented in the appraisal, less estimated costs to sell (for collateral dependent loans), for any period presented. Loans partially charged-off are placed on non-accrual status until it is proven that the borrower's repayment ability with respect to the remaining principal balance can be reasonably assured. This is usually established over a period of 6-12 months of timely payment performance.
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Table 15 shows the allowance for credit losses, charge-offs and recoveries as of and for the three and nine months ended September 30, 2024 and 2023.
Table 15: Analysis of Allowance for Credit Losses
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(Dollars in thousands)
Balance, beginning of period$295,856 $285,683 $288,234 $289,669 
Loans charged off
Real estate:
Commercial real estate loans:
Non-farm/non-residential— 1,945 1,164 2,016 
Construction/land development— 150 81 175 
Agricultural— 5 — 7 
Residential real estate loans:
Residential 1-4 family42 103 260 192 
Total real estate42 2,203 1,505 2,390 
Consumer402 102 799 464 
Commercial and industrial741 183 4,500 7,015 
Other816 961 2,273 2,594 
Total loans charged off2,001 3,449 9,077 12,463 
Recoveries of loans previously charged off
Real estate:
Commercial real estate loans:
Non-farm/non-residential34 25 59 517 
Construction/land development7 33 96 103 
Residential real estate loans:
Residential 1-4 family54 22 149 153 
Multifamily residential— — — 8 
Total real estate95 80 304 781 
Consumer13 22 74 79 
Commercial and industrial143 119 503 375 
Other268 307 836 821 
Total recoveries519 528 1,717 2,056 
Net loans charged off 1,482 2,921 7,360 10,407 
Provision for credit loss 18,200 2,800 31,700 6,300 
Balance, September 30$312,574 $285,562 $312,574 $285,562 
Net charge-offs to average loans receivable0.04 %0.08 %0.07 %0.10 %
Allowance for credit losses to total loans2.11 2.00 2.11 2.00 
Allowance for credit losses to net charge-offs 5,301.65 2,464.13 3,179.40 2,052.32 


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Table 16 presents the allocation of allowance for credit losses as of September 30, 2024 and December 31, 2023.
Table 16: Allocation of Allowance for Credit Losses
As of September 30, 2024As of December 31, 2023
Allowance
Amount
% of
loans(1)
Allowance
Amount
% of
loans(1)
(Dollars in thousands)
Real estate:
Commercial real estate loans:
Non-farm/non- residential$93,121 37.0 %$77,194 38.5 %
Construction/land development63,398 18.5 33,877 15.9 
Agricultural residential real estate loans3,554 2.3 1,441 2.3 
Residential real estate loans:
Residential 1-4 family41,544 13.0 51,313 12.8 
Multifamily residential17,881 3.3 4,547 3.0 
Total real estate219,498 74.1 168,372 72.5 
Consumer28,113 8.2 24,728 8.0 
Commercial and industrial59,079 14.1 91,551 16.1 
Agricultural1,524 2.4 1,259 2.1 
Other4,360 1.2 2,324 1.3 
Total$312,574 100.0 %$288,234 100.0 %
(1)Percentage of loans in each category to total loans receivable.
Investment 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 held-to-maturity, available-for-sale, or trading based on the intent and objective of the investment and the ability to hold to maturity. Fair values of securities are based on quoted market prices where available. If quoted market prices are not available, estimated fair values are based on quoted market prices of comparable securities. The estimated effective duration of our securities portfolio was 4.6 years as of September 30, 2024.
Securities held-to-maturity, which include any security for which we have the positive intent and ability to hold until maturity, are reported at historical cost adjusted for amortization of premiums and accretion of discounts. Premiums and discounts are amortized/accreted to the call date to interest income using the constant effective yield method over the estimated life of the security. We had $1.28 billion of held-to-maturity securities at both September 30, 2024 and December 31, 2023.
At September 30, 2024, $1.11 billion, or 86.7%, was invested in obligations of state and political subdivisions, compared to $1.11 billion, or 86.5%, as of December 31, 2023. As of September 30, 2024, $43.5 million, or 3.4%, was invested in obligations of U.S. Government-sponsored enterprises, compared to $43.3 million, or 3.4%, as of December 31, 2023. We had $125.9 million, or 9.9%, invested in U.S. government-sponsored mortgage-backed securities at September 30, 2024, compared to $130.3 million, or 10.2%, at December 31, 2023.
Securities available-for-sale are reported at fair value with unrealized holding gains and losses reported as a separate component of stockholders’ equity as other comprehensive (loss) income. Securities that may be sold in response to interest rate changes, changes in prepayment risk, the need to increase regulatory capital, and other similar factors are classified as available-for-sale. Available-for-sale securities were $3.27 billion and $3.51 billion as September 30, 2024 and December 31, 2023, respectively.

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As of September 30, 2024, $1.43 billion, or 43.6%, of our available-for-sale securities were invested in U.S. government-sponsored mortgage-backed securities, compared to $1.52 billion, or 43.3%, of our available-for-sale securities as of December 31, 2023. To reduce our income tax burden, $900.9 million, or 27.5%, of our available-for-sale securities portfolio as of September 30, 2024, were primarily invested in tax-exempt obligations of state and political subdivisions, compared to $916.3 million, or 26.1%, of our available-for-sale securities as of December 31, 2023. We had $311.8 million, or 9.5%, invested in obligations of U.S. Government-sponsored enterprises as of September 30, 2024, compared to $346.6 million, or 9.9%, of our available-for-sale securities as of December 31, 2023. We had $262.2 million, or 8.0%, invested in non-government-sponsored asset backed securities as of September 30, 2024, compared to $363.5 million, or 10.4%, of our available-for-sale securities as of December 31, 2023. As of September 30, 2024, $177.9 million, or 5.4%, of our available-for-sale securities were invested in private mortgage-backed securities, compared to $175.4 million, or 5.0%, of our available-for-sale securities as of December 31, 2023. Also, we had approximately $192.3 million, or 5.9%, invested in other securities as of September 30, 2024, compared to $185.6 million, or 5.3% of our available-for-sale securities as of December 31, 2023.
During the quarter ended September 30, 2024, the Company recovered $330,000 in AFS reserves due to an improvement in the unrealized loss position of one of the Company's subordinated debt investments. For both the three and nine month periods ended September 30, 2024, the Company determined the $2.0 million allowance for credit losses on the held-to-maturity portfolio was adequate. Therefore, no additional provision was considered necessary for the HTM portfolio.
See Note 3 to the Condensed Notes to Consolidated Financial Statements for the carrying value and fair value of investment securities.
Deposits
Our deposits averaged $16.86 billion and $16.85 billion for the three and nine months ended September 30, 2024, respectively. Our deposits averaged $16.68 billion and $17.17 billion for the three and nine months ended September 30, 2023, respectively. Total deposits were $16.71 billion as of September 30, 2024, and $16.79 billion as of December 31, 2023. Deposits are our primary source of funds. We offer a variety of products designed to attract and retain deposit customers. Those products consist of checking accounts, regular savings deposits, NOW accounts, money market accounts and certificates of deposit. Deposits are gathered from individuals, partnerships and corporations in our market areas. In addition, we obtain deposits from state and local entities and, to a lesser extent, U.S. Government and other depository institutions.
Our policy also permits the acceptance of brokered deposits. From time to time, when appropriate in order to fund strong loan demand, we accept brokered time deposits, generally in denominations of less than $250,000, from a regional brokerage firm, and other national brokerage networks. We also participate in the One-Way Buy Insured Cash Sweep (“ICS”) service and similar services, which provide for one-way buy transactions among banks for the purpose of purchasing cost-effective floating-rate funding without collateralization or stock purchase requirements. Management believes these sources represent a reliable and cost-efficient alternative funding source for the Company. However, to the extent that our condition or reputation deteriorates, or to the extent that there are significant changes in market interest rates which we do not elect to match, we may experience an outflow of brokered deposits. In that event we would be required to obtain alternate sources for funding.
Table 17 reflects the classification of the brokered deposits as of September 30, 2024 and December 31, 2023.
Table 17: Brokered Deposits
September 30, 2024December 31, 2023
(In thousands)
Insured Cash Sweep and Other Transaction Accounts$421,274 $401,004 
Total Brokered Deposits$421,274 $401,004 
The interest rates paid are competitively priced for each particular deposit product and structured to meet our funding requirements. We will continue to manage interest expense through deposit pricing. We may allow higher rate deposits to run off during periods of limited loan demand. We believe that additional funds can be attracted, and deposit growth can be realized through deposit pricing if we experience increased loan demand or other liquidity needs.
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The Federal Reserve Board sets various benchmark rates, including the Federal Funds rate, and thereby influences the general market rates of interest, including the deposit and loan rates offered by financial institutions. The Federal Reserve increased the target rate four times during 2023. First, on February 1, 2023, the target rate was increased to 4.50% to 4.75%, second, on March 22, 2023, the target rate was increased to 4.75% to 5.00%, third, on May 3, 2023, the target rate was increased to 5.00% to 5.25% and fourth, on July 26, 2023, the target rate was increased to 5.25% to 5.50%. On September 18, 2024, the Federal Reserve reduced the target rate to 4.75% to 5.00%.
Table 18 reflects the classification of the average deposits and the average rate paid on each deposit category, which are in excess of 10 percent of average total deposits, for the three and nine months ended September 30, 2024 and 2023.
Table 18: Average Deposit Balances and Rates
Three Months Ended September 30,
20242023
Average
Amount		Average
Rate Paid		Average
Amount		Average
Rate Paid
(Dollars in thousands)
Non-interest-bearing transaction accounts$3,993,187 — %$4,434,394 — %
Interest-bearing transaction accounts9,979,924 3.06 9,700,273 2.68 
Savings deposits1,115,648 0.88 1,223,663 0.79 
Time deposits:
$100,000 or more1,163,122 4.35 854,338 3.46 
Other time deposits606,830 3.82 464,788 2.71 
Total$16,858,711 2.31 %$16,677,456 1.87 %
Nine Months Ended September 30,
20242023
Average
Amount		Average
Rate Paid		Average
Amount		Average
Rate Paid
(Dollars in thousands)
Non-interest-bearing transaction accounts$4,031,447 — %$4,729,515 — %
Interest-bearing transaction accounts9,947,966 3.03 9,961,524 2.39 
Savings deposits1,136,431 0.87 1,284,826 0.77 
Time deposits:
$100,000 or more1,135,059 4.30 752,952 2.78 
Other time deposits594,341 3.77 436,668 2.08 
Total$16,845,244 2.27 %$17,165,485 1.62 %
Securities Sold Under Agreements to Repurchase
We enter into short-term purchases of securities under agreements to resell (resale agreements) and sales of securities under agreements to repurchase (repurchase agreements) of substantially identical securities. The amounts advanced under resale agreements and the amounts borrowed under repurchase agreements are carried on the balance sheet at the amount advanced. Interest incurred on repurchase agreements is reported as interest expense. Securities sold under agreements to repurchase increased $37.3 million, or 26.3%, from $142.1 million as of December 31, 2023 to $179.4 million as of September 30, 2024.
FHLB and Other Borrowed Funds
The Company’s FHLB borrowed funds, which are secured by our loan portfolio, were $600.0 million at both September 30, 2024 and December 31, 2023. At September 30, 2024 and December 31, 2023, the entire $600.0 million of the outstanding balances were classified as long-term advances. The FHLB advances mature from 2025 to 2037 with fixed interest rates ranging from 3.37% to 4.84%. Expected maturities could differ from contractual maturities because FHLB may have the right to call, or the Company may have the right to prepay certain obligations.

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Other borrowed funds were $700.8 million as of September 30, 2024 and were classified as short-term advances. The Company had $701.3 million in other borrowed funds as of December 31, 2023. As of both September 30, 2024 and December 31, 2023, the Company had drawn $700.0 million from the Bank Term Funding Program in the ordinary course of business, and these advances mature on January 16, 2025.
Additionally, the Company had $1.24 billion and $1.33 billion at September 30, 2024 and December 31, 2023, respectively, in letters of credit under a FHLB blanket borrowing line of credit, which are used to collateralize public deposits.
Subordinated Debentures
Subordinated debentures were $439.4 million and $439.8 million as of September 30, 2024 and December 31, 2023, respectively.
On April 1, 2022, the Company acquired $140.0 million in aggregate principal amount of 5.500% Fixed-to-Floating Rate Subordinated Notes due 2030 (the “2030 Notes”) from Happy, and the Company recorded approximately $144.4 million which included fair value adjustments. The 2030 Notes are unsecured, subordinated debt obligations of the Company and will mature on July 31, 2030. From and including the date of issuance to, but excluding July 31, 2025 or the date of earlier redemption, the 2030 Notes will bear interest at an initial rate of 5.50% per annum, payable in arrears on January 31 and July 31 of each year. From and including July 31, 2025 to, but excluding, the maturity date or earlier redemption, the 2030 Notes will bear interest at a floating rate equal to the Benchmark rate (which is expected to be 3-month Secured Overnight Funding Rate (SOFR)), each as defined in and subject to the provisions of the applicable supplemental indenture for the 2030 Notes, plus 5.345%, payable quarterly in arrears on January 31, April 30, July 31, and October 31 of each year, commencing on October 31, 2025.

The Company may, beginning with the interest payment date of July 31, 2025, and on any interest payment date thereafter, redeem the 2030 Notes, in whole or in part, subject to prior approval of the Federal Reserve if then required, at a redemption price equal to 100% of the principal amount of the 2030 Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption. The Company may also redeem the 2030 Notes at any time, including prior to July 31, 2025, at the Company’s option, in whole but not in part, subject to prior approval of the Federal Reserve if then required, if certain events occur that could impact the Company’s ability to deduct interest payable on the 2030 Notes for U.S. federal income tax purposes or preclude the 2030 Notes from being recognized as Tier 2 capital for regulatory capital purposes, or if the Company is required to register as an investment company under the Investment Company Act of 1940, as amended. In each case, the redemption would be at a redemption price equal to 100% of the principal amount of the 2030 Notes plus any accrued and unpaid interest to, but excluding, the redemption date.
On January 18, 2022, the Company completed an underwritten public offering of $300.0 million in aggregate principal amount of its 3.125% Fixed-to-Floating Rate Subordinated Notes due 2032 (the “2032 Notes”) for net proceeds, after underwriting discounts and issuance costs, of approximately $296.4 million. The 2032 Notes are unsecured, subordinated debt obligations of the Company and will mature on January 30, 2032. From and including the date of issuance to, but excluding January 30, 2027 or the date of earlier redemption, the 2032 Notes will bear interest at an initial rate of 3.125% per annum, payable in arrears on January 30 and July 30 of each year. From and including January 30, 2027 to, but excluding the maturity date or earlier redemption, the 2032 Notes will bear interest at a floating rate equal to the Benchmark rate (which is expected to be Three-Month Term SOFR), each as defined in and subject to the provisions of the applicable supplemental indenture for the 2032 Notes, plus 182 basis points, payable quarterly in arrears on January 30, April 30, July 30, and October 30 of each year, commencing on April 30, 2027.
The Company may, beginning with the interest payment date of January 30, 2027, and on any interest payment date thereafter, redeem the 2032 Notes, in whole or in part, subject to prior approval of the Federal Reserve if then required, at a redemption price equal to 100% of the principal amount of the 2032 Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption. The Company may also redeem the 2032 Notes at any time, including prior to January 30, 2027, at the Company’s option, in whole but not in part, subject to prior approval of the Federal Reserve if then required, if certain events occur that could impact the Company’s ability to deduct interest payable on the 2032 Notes for U.S. federal income tax purposes or preclude the 2032 Notes from being recognized as Tier 2 capital for regulatory capital purposes, or if the Company is required to register as an investment company under the Investment Company Act of 1940, as amended. In each case, the redemption would be at a redemption price equal to 100% of the principal amount of the 2032 Notes plus any accrued and unpaid interest to, but excluding, the redemption date.
Stockholders’ Equity
Stockholders’ equity increased $168.7 million to $3.96 billion as of September 30, 2024, compared to $3.79 billion as of December 31, 2023. The $168.7 million increase in stockholders’ equity is primarily associated with the $301.7 million in net income and the $54.2 million in other comprehensive income for the nine months ended September 30, 2024, which was partially offset by the $111.2 million of shareholder dividends paid and stock repurchases of $83.6 million in 2024. As of September 30, 2024 and December 31, 2023, our equity to asset ratio was 17.35% and 16.73%, respectively. Book value per share was $19.91 as of September 30, 2024, compared to $18.81 as of December 31, 2023, a 7.8% annualized increase.
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Common Stock Cash Dividends. We declared cash dividends on our common stock of $0.195 and $0.180 per share for the three months ended September 30, 2024 and 2023, respectively, and $0.555 and $0.54 per share for the nine months ended September 30, 2024 and 2023, respectively. The common stock dividend payout ratio for the three months ended September 30, 2024 and 2023 was 38.9% and 37.0%, respectively. The common stock dividend payout ratio for the nine months ended September 30, 2024 and 2023 was 36.9% and 35.7%, respectively. On October 18, 2024, the Board of Directors declared a regular $0.195 per share quarterly cash dividend payable December 4, 2024, to shareholders of record November 13, 2024.
Stock Repurchase Program. During the first nine months of 2024, the Company repurchased a total of 3,426,028 shares with a weighted-average stock price of $24.36 per share. Shares repurchased under the program as of September 30, 2024 since its inception total 26,411,743 shares. The remaining balance available for repurchase was 13,340,257 shares at September 30, 2024.
Liquidity and Capital Adequacy Requirements
Risk-Based Capital. We, as well as our bank subsidiary, are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and other discretionary actions by regulators that, if enforced, 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 as to components, risk weightings and other factors.
In July 2013, the Federal Reserve Board and the other federal bank regulatory agencies issued a final rule to revise their risk-based and leverage capital requirements and their method for calculating risk-weighted assets to make them consistent with the agreements that were reached by the Basel Committee on Banking Supervision in “Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems” and certain provisions of the Dodd-Frank Act (“Basel III”). Basel III applies to all depository institutions, bank holding companies with total consolidated assets of $500 million or more, and savings and loan holding companies. Basel III became effective for the Company and its bank subsidiary on January 1, 2015. Basel III limits a banking organization’s capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” of 2.5% of common equity Tier 1 capital to risk-weighted assets, which is in addition to the amount necessary to meet its minimum risk-based capital requirements.
Basel III amended the prompt corrective action rules to incorporate a common equity Tier 1 ("CET1") capital requirement and to raise the capital requirements for certain capital categories. In order to be adequately capitalized for purposes of the prompt corrective action rules, a banking organization is required to have at least a 4.5% CET1 risk-based capital ratio, a 4% Tier 1 leverage ratio, a 6% Tier 1 risk-based capital ratio and an 8% total risk-based capital ratio.
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 and Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets. Management believes that, as of September 30, 2024 and December 31, 2023, we met all regulatory capital adequacy requirements to which we were subject.
On December 21, 2018, the federal banking agencies issued a joint final rule to revise their regulatory capital rules to permit bank holding companies and banks to phase-in, for regulatory capital purposes, the day-one impact of the new CECL accounting rule on retained earnings over a period of three years. As part of its response to the impact of COVID-19, on March 27, 2020, the federal banking regulatory agencies issued an interim final rule that provided the option to temporarily delay certain effects of CECL on regulatory capital for two years, followed by a three-year transition period. The interim final rule allows bank holding companies and banks to delay for two years 100% of the day-one impact of adopting CECL and 25% of the cumulative change in the reported allowance for credit losses since adopting CECL. The Company has elected to adopt the interim final rule, which is reflected in the risk-based capital ratios presented below.
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Table 19 presents our risk-based capital ratios on a consolidated basis as of September 30, 2024 and December 31, 2023.
Table 19: Risk-Based Capital
As of September 30, 2024As of December 31, 2023
(Dollars in thousands)
Tier 1 capital
Stockholders’ equity$3,959,789 $3,791,075 
ASC 326 transitional period adjustment8,123 16,246 
Goodwill and core deposit intangibles, net(1,440,198)(1,446,573)
Unrealized loss on available-for-sale securities194,862 249,075 
Total common equity Tier 1 capital2,722,576 2,609,823 
Total Tier 1 capital2,722,576 2,609,823 
Tier 2 capital
Allowance for credit losses312,574 288,234 
ASC 326 transitional period adjustment(8,123)(16,246)
Disallowed allowance for credit losses (limited to 1.25% of risk weighted assets)(70,729)(40,509)
Qualifying allowance for credit losses233,722 231,479 
Qualifying subordinated notes439,394 439,834 
Total Tier 2 capital673,116 671,313 
Total risk-based capital$3,395,692 $3,281,136 
Average total assets for leverage ratio$21,704,064 $20,981,774 
Risk weighted assets$18,578,700 $18,440,964 
Ratios at end of period
Common equity Tier 1 capital14.65 %14.15 %
Leverage ratio12.54 12.44 
Tier 1 risk-based capital14.65 14.15 
Total risk-based capital18.28 17.79 
Minimum guidelines – Basel III
Common equity Tier 1 capital7.00 %7.00 %
Leverage ratio4.00 4.00 
Tier 1 risk-based capital8.50 8.50 
Total risk-based capital10.50 10.50 
Well-capitalized guidelines
Common equity Tier 1 capital6.50 %6.50 %
Leverage ratio5.00 5.00 
Tier 1 risk-based capital8.00 8.00 
Total risk-based capital10.00 10.00 
As of the most recent notification from regulatory agencies, our bank subsidiary was “well-capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well-capitalized,” we, as well as our banking subsidiary, must maintain minimum CET1 capital, leverage, Tier 1 risk-based capital, and total risk-based capital ratios as set forth in the table. There are no conditions or events since that notification that we believe have changed the bank subsidiary’s category.
Non-GAAP Financial Measurements
Our accounting and reporting policies conform to generally accepted accounting principles in the United States (“GAAP”) and the prevailing practices in the banking industry. However, this report contains financial information determined by methods other than in accordance with GAAP, including earnings, as adjusted; diluted earnings per common share, as adjusted; tangible book value per share; return on average assets, excluding intangible amortization; return on average assets, as adjusted; return on average common equity, as adjusted; return on average tangible equity, excluding intangible amortization; return on average tangible equity, as adjusted; tangible equity to tangible assets; and efficiency ratio, as adjusted.
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We believe these non-GAAP measures and ratios, when taken together with the corresponding GAAP measures and ratios, provide meaningful supplemental information regarding our performance. We believe investors benefit from referring to these non-GAAP measures and ratios in assessing our operating results and related trends, and when planning and forecasting future periods. However, these non-GAAP measures and ratios should be considered in addition to, and not as a substitute for or preferable to, ratios prepared in accordance with GAAP.
The tables below present non-GAAP reconciliations of earnings, as adjusted, and diluted earnings per share, as adjusted, as well as the non-GAAP computations of tangible book value per share; return on average assets, excluding intangible amortization; return on average assets, as adjusted; return on average common equity, as adjusted; return on average tangible equity excluding intangible amortization; return on average tangible equity, as adjusted; tangible equity to tangible assets; and efficiency ratio, as adjusted. The items used in these calculations are included in financial results presented in accordance with GAAP.
Earnings, as adjusted, and diluted earnings per common share, as adjusted, are meaningful non-GAAP financial measures for management, as they exclude certain items such as merger expenses and/or certain gains and losses. Management believes the exclusion of these items in expressing earnings provides a meaningful foundation for period-to-period and company-to-company comparisons, which management believes will aid both investors and analysts in analyzing our financial measures and predicting future performance. These non-GAAP financial measures are also used by management to assess the performance of our business, because management does not consider these items to be relevant to ongoing financial performance.
In Table 20 below, we have provided a reconciliation of the non-GAAP calculation of the financial measure for the periods indicated.
Table 20: Earnings, As Adjusted
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(Dollars in thousands)
GAAP net income available to common shareholders (A)$100,038 $98,453 $301,677 $306,686 
Pre-tax adjustments:
FDIC special assessment— — 2,260 — 
Fair value adjustment for marketable securities(1,392)(4,507)(2,121)6,118 
Gain on sale of building— — (2,059)— 
Recoveries on historic losses— — — (3,461)
BOLI death benefits— (338)(162)(3,117)
Total pre-tax adjustments(1,392)(4,845)(2,082)(460)
Tax-effect of adjustments(1)
(348)(1,112)(480)(30)
Investment DTA write-off2,030 — 2,030 — 
Total adjustments after-tax (B)(1,044)(3,733)428 (430)
Earnings, as adjusted (C)$98,994 $94,720 $302,105 $306,256 
Average diluted shares outstanding (D)199,461 202,650 200,430 203,068 
GAAP diluted earnings per share: A/D$0.50 $0.49 $1.51 $1.51 
Adjustments after-tax: B/D— (0.02)— — 
Diluted earnings per common share excluding adjustments: C/D$0.50 $0.47 $1.51 $1.51 
(1) Blended statutory rate of 24.989% for 2024 and 24.6735% for 2023.

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We had $1.44 billion, $1.45 billion, and $1.45 billion in total goodwill and core deposit intangibles as of September 30, 2024, December 31, 2023 and September 30, 2023, respectively. Because of our level of intangible assets and related amortization expenses, management believes tangible book value per share, return on average assets excluding intangible amortization, return on average tangible equity, return on average tangible equity excluding intangible amortization, and tangible equity to tangible assets are useful in evaluating our company. Management also believes return on average assets, as adjusted, return on average equity, as adjusted, and return on average tangible equity, as adjusted, are meaningful non-GAAP financial measures, as they exclude items such as certain non-interest income and expenses that management believes are not indicative of our primary business operating results. These calculations, which are similar to the GAAP calculations of book value per share, return on average assets, return on average equity, and equity to assets, are presented in Tables 21 through 24, respectively.
Table 21: Tangible Book Value Per Share
As of September 30, 2024As of December 31, 2023
(In thousands, except per share data)
Book value per share: A/B$19.91 $18.81 
Tangible book value per share: (A-C-D)/B12.67 11.63 
(A) Total equity$3,959,789 $3,791,075 
(B) Shares outstanding198,879 201,526 
(C) Goodwill1,398,253 1,398,253 
(D) Core deposit intangibles42,395 48,770 
Table 22: Return on Average Assets, As Adjusted
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(Dollars in thousands)
Return on average assets: A/D1.74 %1.78 %1.77 %1.84 %
Return on average assets, as adjusted: (A+C)/D1.72 1.72 1.77 1.84 
Return on average assets excluding intangible amortization: B/(D-E)1.88 1.95 1.92 2.01 
(A) Net income$100,038 $98,453 $301,677 $306,686 
  Intangible amortization after-tax1,572 1,866 4,782 5,598 
(B) Earnings excluding intangible amortization$101,610 $100,319 $306,459 $312,284 
(C) Adjustments after-tax$(1,044)$(3,733)$428 $(430)
(D) Average assets22,893,784 21,902,434 22,817,942 22,272,325 
(E) Average goodwill, core deposits and other intangible assets1,441,654 1,450,478 1,443,770 1,452,933 
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Table 23: Return on Average Equity, As Adjusted
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(Dollars in thousands)
Return on average equity: A/D10.23 %10.65 %10.53 %11.32 %
Return on average common equity, as adjusted: (A+C)/D10.12 10.25 10.55 11.30 
Return on average tangible common equity: A/(D-E)16.26 17.62 16.91 18.90 
Return on average tangible equity excluding intangible amortization: B/(D-E)16.51 17.95 17.18 19.24 
Return on average tangible common equity, as adjusted: (A+C)/(D-E)16.09 16.95 16.94 18.87 
(A) Net income$100,038 $98,453 $301,677 $306,686 
(B) Earnings excluding intangible amortization101,610 100,319 306,459 312,284 
(C) Adjustments after-tax(1,044)(3,733)428 (430)
(D) Average equity3,889,712 3,667,339 3,826,619 3,622,733 
(E) Average goodwill, core deposits and other intangible assets1,441,654 1,450,478 1,443,770 1,452,933 
Table 24: Tangible Equity to Tangible Assets
As of September 30, 2024As of December 31, 2023
(Dollars in thousands)
Equity to assets: B/A17.35 %16.73 %
Tangible equity to tangible assets: (B-C-D)/(A-C-D)11.78 11.05 
(A) Total assets$22,823,117 $22,656,658 
(B) Total equity3,959,789 3,791,075 
(C) Goodwill1,398,253 1,398,253 
(D) Core deposit intangibles42,395 48,770 

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The efficiency ratio is a standard measure used in the banking industry and is calculated by dividing non-interest expense less amortization of core deposit intangibles by the sum of net interest income on a tax equivalent basis and non-interest income. The efficiency ratio, as adjusted, is a meaningful non-GAAP measure for management, as it excludes certain items and is calculated by dividing non-interest expense less amortization of core deposit intangibles by the sum of net interest income on a tax equivalent basis and non-interest income excluding items such as merger expenses and/or certain gains, losses and other non-interest income and expenses. In Table 25 below, we have provided a reconciliation of the non-GAAP calculation of the financial measure for the periods indicated.
Table 25: Efficiency Ratio, As Adjusted
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
(Dollars in thousands)
Net interest income (A)$215,220 $201,937 $631,632 $624,175 
Non-interest income (B)42,779 43,413 127,352 127,086 
Non-interest expense (C)110,045 114,762 334,726 345,688 
FTE Adjustment (D)2,616 1,293 6,136 4,415 
Amortization of intangibles (E)2,095 2,478 4,280 4,955 
Adjustments:
Non-interest income:
Fair value adjustment for marketable securities$1,392 $4,507 $2,121 $(6,118)
Gain on OREO, net85 — 151 319 
Gain on branches, equipment and other assets, net32 — 2,076 924 
BOLI death benefits— 338 162 3,117 
Recoveries on historic losses— — — 3,461 
Total non-interest income adjustments (F)$1,509 $4,845 $4,510 $1,703 
Non-interest expense:
FDIC special assessment$— $— $2,260 $— 
Total non-interest expense adjustments (G)$— $— $2,260 $— 
Efficiency ratio (reported): ((C-E)/(A+B+D))41.42 %45.53 %42.91 %44.76 %
Efficiency ratio, as adjusted (non-GAAP): ((C-E-G)/(A+B+D-F))41.66 46.44 42.87 44.86 
Recently Issued Accounting Pronouncements
See Note 21 to the Condensed Notes to Consolidated Financial Statements for a discussion of certain recently issued and recently adopted accounting pronouncements.
Item 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Liquidity and Market Risk Management
At September 30, 2024, we held $2.50 billion in assets that could be used for liquidity purposes, which we refer to as net available internal liquidity. This balance consisted of $1.51 billion in unpledged investment securities which could be used for additional secured borrowing capacity, $718.9 million in cash on deposit with the Federal Reserve Bank ("FRB") and $270.4 million in other liquid cash accounts.
Consistent with our practice of maintaining access to significant external liquidity, we had $3.15 billion in net available sources of borrowed funds, which we refer to as net available external liquidity, as of September 30, 2024. This included $4.80 billion in total borrowing capacity with the Federal Home Loan Bank ("FHLB"), of which $1.84 billion has been drawn upon in the ordinary course of business, resulting in $2.97 billion in net available liquidity with the FHLB as of September 30, 2024. The $1.84 billion consisted of $600.0 million in outstanding FHLB advances and $1.24 billion used for pledging purposes. We also had access to approximately $785.6 million in liquidity with the FRB as of September 30, 2024, of which $700.0 million has been drawn upon in the ordinary course of business, resulting in $85.6 million in net available liquidity with the FRB as of September 30, 2024. As of September 30, 2024, the Company also had access to $55.0 million from First National Bankers’ Bank ("FNBB"), and $45.0 million from other various external sources.
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Overall, we had $5.65 billion net available liquidity as of September 30, 2024, which consisted of $2.50 billion of net available internal liquidity and $3.15 billion in net available external liquidity. Details on our available liquidity as of September 30, 2024 is available below.
(in thousands)Total AvailableAmount UsedNet Availability
Internal Sources
Unpledged investment securities (market value)$1,509,661 $— $1,509,661 
Cash at FRB718,881 — 718,881 
Other liquid cash accounts270,411 — 270,411 
Total Internal Liquidity2,498,953 — 2,498,953 
External Sources
FHLB4,804,845 1,838,171 2,966,674 
FRB Discount Window85,624 — 85,624 
BTFP (par value)700,000 700,000 — 
FNBB55,000 — 55,000 
Other45,000 — 45,000 
Total External Liquidity5,690,469 2,538,171 3,152,298 
Total Available Liquidity$8,189,422 $2,538,171 $5,651,251 

We have continued to limit our exposure to uninsured deposits and have been actively monitoring this exposure in light of the current banking environment. As of September 30, 2024, we held approximately $8.18 billion in uninsured deposits of which $766.2 million were intercompany subsidiary deposit balances and $2.81 billion were collateralized deposits, for a net position of $4.61 billion. This represented approximately 27.6% of total deposits. In addition, net available liquidity exceeded uninsured and uncollateralized deposits by $1.04 billion as of September 30, 2024.

(in thousands)
As of September 30, 2024
Uninsured Deposits$8,179,825 
Intercompany Subsidiary and Affiliate Balances766,247 
Collateralized Deposits2,806,436 
Net Uninsured Position$4,607,142 
Total Available Liquidity$5,651,251 
Net Uninsured Position4,607,142 
Net Available Liquidity in Excess of Uninsured Deposits$1,044,109 
Asset/Liability Management. Our management actively measures and manages interest rate risk. The asset/liability committees of the boards of directors of our holding company and bank subsidiary are also responsible for approving our asset/liability management policies, overseeing the formulation and implementation of strategies to improve balance sheet positioning and earnings, and reviewing our interest rate sensitivity position.
Our objective is to manage liquidity in a way that ensures cash flow requirements of depositors and borrowers are met in a timely and orderly fashion while ensuring the reliance on various funding sources does not become so heavily weighted to any one source that it causes undue risk to the bank. Our liquidity sources are prioritized based on availability and ease of activation. Our current liquidity condition is a primary driver in determining our funding needs and is a key component of our asset and liability management.
Various sources of liquidity are available to meet the cash flow needs of depositors and borrowers. Our principal source of funds is core deposits, including checking, savings, money market accounts and certificates of deposit. We may also from time to time obtain wholesale funding through brokered deposits. Secondary sources of funding include advances from the Federal Home Loan Bank of Dallas, the Federal Reserve Bank Discount Window and other borrowings, such as through correspondent banking relationships. These secondary sources enable us to borrow funds at rates and terms which, at times, are more beneficial to us. Additionally, as needed, we can liquidate or utilize our available-for-sale investment portfolio as collateral to provide funds for an intermediate source of liquidity.
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Interest Rate Sensitivity. Our primary business is banking and the resulting earnings, primarily net interest income, are susceptible to changes in market interest rates. It is management’s goal to maximize net interest income within acceptable levels of interest rate and liquidity risks.
A key element in the financial performance of financial institutions is the level and type of interest rate risk assumed. The single most significant measure of interest rate risk is the relationship of the repricing periods of earning assets and interest-bearing liabilities. The more closely the repricing periods are correlated, the less interest rate risk we assume. We use net interest income simulation modeling and economic value of equity as the primary methods in analyzing and managing interest rate risk.
One of the tools that our management uses to measure short-term interest rate risk is a net interest income simulation model. This analysis calculates the difference between net interest income forecasted using base market rates and using a rising and a falling interest rate scenario. The income simulation model includes various assumptions regarding the re-pricing relationships for each of our products. Many of our assets are floating rate loans, which are assumed to re-price immediately, and proportional to the change in market rates, depending on their contracted index. Some loans and investments include the opportunity of prepayment (embedded options), and accordingly, the simulation model uses indexes to estimate these prepayments and reinvest their proceeds at current yields. Our non-term deposit products re-price overnight in the model while we project certain other deposits by product type to have stable balances based on our deposit history. This accounts for the portion of our portfolio that moves more slowly than market rates and changes at our discretion.
This analysis indicates the impact of changes in net interest income for the given set of rate changes and assumptions. It assumes the balance sheet remains static and that its structure does not change over the course of the year. It does not account for all factors that impact this analysis, including changes by management to mitigate the impact of interest rate changes or secondary impacts such as changes to our credit risk profile as interest rates change.
Furthermore, loan prepayment rate estimates and spread relationships change regularly. Interest rate changes create changes in actual loan prepayment rates that will differ from the market estimates incorporated in this analysis. Changes that vary significantly from the assumptions may have significant effects on our net interest income.

For the rising and falling interest rate scenarios, the base market interest rate forecast was increased and decreased over twelve months by 200 and 100 basis points, respectively. At September 30, 2024, our net interest margin exposure related to these hypothetical changes in market interest rates was within the current guidelines established by us.
Table 26 presents our sensitivity to net interest income as of September 30, 2024 and September 30, 2023.
Table 26: Sensitivity of Net Interest Income
Percentage Change from BasePercentage Change from Base
September 30,
Interest Rate ScenarioSeptember 30, 2024September 30, 2023
2024 vs. 2023
Up 200 basis points9.92 %7.50 %2.42 %
Up 100 basis points5.17 3.80 1.37 
Down 100 basis points(5.78)(4.70)(1.08)
Down 200 basis points(11.74)(9.60)(2.14)
There have been no material changes in our market risk exposure from September 30, 2023 to September 30, 2024. Our balance sheet mix has remained consistent, and there has been only one target rate change by the Federal Reserve reducing the target rate from 5.25% to 5.50% as of July 26, 2023, to 4.75% to 5.00% on September 18, 2024.
Item 4: CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls
Based on their evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, the Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. Additionally, our disclosure controls and procedures were also effective in ensuring that information required to be disclosed in our Exchange Act report is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures.
88
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, 2024, which have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II: OTHER INFORMATION
Item 1: Legal Proceedings
There are no material pending legal proceedings, other than ordinary routine litigation incidental to its business, to which the Company or its subsidiaries are a party or of which any of their property is the subject.
Item 1A: Risk Factors
There were no material changes from the risk factors set forth in Part I, Item 1A, “Risk Factors,” of our Form 10-K for the year ended December 31, 2023. See the discussion of our risk factors in the Form 10-K, as filed with the SEC. The risks described are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended September 30, 2024, the Company utilized a portion of its stock repurchase program most recently amended and approved by the Board of Directors on January 22, 2021, which authorized the repurchase of up to an additional 20,000,000 shares of the Company’s common stock. The following table sets forth information with respect to purchases made by or on behalf of the Company of shares of the Company’s common stock during the periods indicated:
PeriodNumber of
Shares
Purchased		Average Price
Paid Per Share
Purchased		Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
Maximum Number
of Shares That May
Yet Be Purchased
Under the Plans or
Programs(1)
July 1 through July 31, 2024150,000 $28.35 150,000 14,190,257 
August 1 through August 31, 2024500,000 26.35 500,000 13,690,257 
September 1 through September 30, 2024350,000 27.07 350,000 13,340,257 
Total1,000,000  1,000,000  
(1)The above described stock repurchase program has no expiration date.
Item 3: Defaults Upon Senior Securities
Not applicable.
Item 4: Mine Safety Disclosures
Not applicable.
Item 5: Other Information
During the three months ended September 30, 2024, none of the Company’s directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.





89
Table of Contents
Item 6: Exhibits
Exhibit No.Description of Exhibit
3.1
3.2
 
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
3.12
3.13
4.1
4.2Instruments defining the rights of security holders including indentures. Home BancShares hereby agrees to furnish to the SEC upon request copies of instruments defining the rights of holders of long-term debt of Home BancShares and its consolidated subsidiaries. No issuance of debt exceeds ten percent of the assets of Home BancShares and its subsidiaries on a consolidated basis.
15
31.1
31.2
32.1
32.2
101.INSInline 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.*
90
Table of Contents
101.SCHInline XBRL Taxonomy Extension Schema Document*
101.CALInlineXBRL Taxonomy Extension Calculation Linkbase Document*
101.LABInline XBRL Taxonomy Extension Label Linkbase Document*
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document*
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document*
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
*    Filed herewith
**    The disclosure schedules referenced in the Agreement and Plan of Merger have been omitted pursuant to Item 601(a)(5) of SEC Regulation S-K. The Company hereby agrees to furnish supplementally a copy of any omitted disclosure schedule to the SEC upon request.

91
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.
HOME BANCSHARES, INC.
(Registrant)
Date:November 1, 2024/s/ John W. Allison
John W. Allison, Chairman and Chief Executive Officer
Date:November 1, 2024/s/ Brian S. Davis
Brian S. Davis, Chief Financial Officer
Date:November 1, 2024/s/ Jennifer C. Floyd
Jennifer C. Floyd, Chief Accounting Officer
92

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