HOME BANCSHARES INC (HOMB)

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 27, 2026, which includes the audited financial statements for the year ended December 31, 2025. 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 March 31, 2026, we had, on a consolidated basis, total assets of $23.20 billion, loans receivable, net of allowance for credit losses, of $15.34 billion, total deposits of $17.74 billion, and stockholders’ equity of $4.35 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

(1)See Table 25 for the non-GAAP tabular reconciliation.

(2)See Table 29 for the non-GAAP tabular reconciliation.

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Overview

Results of Operations for the Three Months Ended March 31, 2026 and 2025

Our net income increased $3.0 million, or 2.6%, to $118.2 million for the three-month period ended March 31, 2026, from $115.2 million for the same period in 2025. On a diluted earnings per share basis, our earnings were $0.60 per share for the three-month period ended March 31, 2026 compared to $0.58 per share for the three-month period ended March 31, 2025. During the three months ended March 31, 2026, the Company recorded $1.5 million in provision for credit losses on loans, and the Company recorded a $1.0 million recovery of credit losses on unfunded commitments. As a result, total credit loss expense for the three-month period ended March 31, 2026 was $500,000. During the three months ended March 31, 2026, the Company recorded $1.7 million in income from an FDIC special assessment credit, $1.2 million in expense from the fair value adjustment for marketable securities and $394,000 in merger and acquisition expense.

Total interest expense decreased $10.8 million, or 11.0%. This was partially offset by a $2.6 million, or 5.8%, decrease in non-interest income, a $1.5 million, or 0.5%, decrease in total interest income and a $1.0 million, or 0.9%, increase in non-interest expense. The decrease in interest expense was primarily due to a $7.6 million, or 8.8%, decrease in interest on deposits, a $1.8 million, or 42.9%, decrease in interest on subordinated debentures, and a $1.2 million, or 20.5%, decrease in interest on FHLB and other borrowed funds. The decrease in non-interest income was primarily due to a $2.3 million, or 20.5%, decrease in other income, a $1.7 million, or 382.4%, decrease in fair value adjustment for marketable securities and an $879,000, or 8.2%, decrease in other service charges and fees, which was partially offset by a $1.1 million, or 288.0%, increase in gain (loss) on OREO. Included within March 31, 2025 other income was $3.9 million in special income from equity investments. The decrease in interest income resulted from a $2.5 million, or 7.2%, decrease in investment interest income and a $1.7 million, or 25.3%, decrease in interest income on deposits at other banks, which were partially offset by a $2.7 million, or 1.0%, increase in loan interest income. The increase in non-interest expense was primarily due to a $1.4 million, or 2.2%, increase in salaries and employee benefits expense, $442,000, or 3.1%, increase in occupancy and equipment expense, $394,000 in merger and acquisition expense in the first quarter of 2026 compared to none in the prior year period, and a $326,000, or 3.8%, increase in data processing expense. These expenses were partially offset by a $1.5 million, or 5.33%, decrease in other operating expenses. Included within other operating expenses was the $1.7 million in FDIC special assessment credits.

Our net interest margin increased from 4.44% for the three-month period ended March 31, 2025 to 4.51% for the three-month period ended March 31, 2026. The yield on interest earning assets decreased from 6.45% for the three-months ended March 31, 2025 to 6.25% for the three-months ended March 31, 2026, and average interest earning assets increased from $19.83 billion to $20.35 billion. The increase in average interest earning assets is primarily due to a $786.7 million increase in average loans receivable, partially offset by a $203.5 million decrease in average investment securities and a $54.5 million decrease in average interest-bearing balances due from banks. For the three months ended March 31, 2026 and 2025, we recognized $1.1 million and $1.4 million, respectively, in total net accretion for acquired loans and deposits. We recognized no event income for the three-months ended March 31, 2026 compared to $1.3 million for the three-months ended March 31, 2025. The cost of interest bearing liabilities decreased from 2.76% for the three-months ended March 31, 2025 to 2.42% for the three-months ended March 31, 2026, and average interest-bearing liabilities increased from $14.40 billion to $14.60 billion. The increase in average interest-bearing liabilities is primarily due to a $460.3 million increase in average interest-bearing deposits, which was partially offset by a $159.8 million decrease in average subordinated debentures and a $100.4 million decrease in FHLB and other borrowed funds. The reduction in subordinated debentures was due to the Company completing the payoff of its $140.0 million 5.50% Fixed-to-Floating Rate Subordinated Notes due 2030 and the Company also repurchasing $20.0 million of its $300.0 million Fixed-to-Floating Rate Subordinated Notes due 2032 during the third quarter of 2025. The two payoff events were accretive to the net interest margin by approximately four basis points. The overall increase in the net interest margin was due to an increase in interest income resulting from the increase in the average balance of interest-earning assets and a decrease in interest expense resulting from a decrease in interest rates paid on interest-bearing liabilities, which were partially offset by a decrease in interest income due to a reduction in asset yields and an increase in interest expense resulting from an increase in the average balance of interest-bearing liabilities.

Our efficiency ratio was 41.59% for the three months ended March 31, 2026, compared to 42.22% for the same period in 2025. For the first quarter of 2026, our efficiency ratio, as adjusted (non-GAAP), was 41.99%, compared to 42.84% reported for the first quarter of 2025. (See Table 29 for the non-GAAP tabular reconciliation).

Our annualized return on average assets was 2.09% for the three months ended March 31, 2026, compared to 2.07% for the same period in 2025. (See Table 26 for the related non-GAAP financial measures and tabular reconciliation). Our annualized return on average common equity was 11.09% and 11.75% for the three months ended March 31, 2026, and 2025, respectively. (See Table 27 for the related non-GAAP financial measures and tabular reconciliation).

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Financial Condition as of and for the Period Ended March 31, 2026 and December 31, 2025

Our total assets, as of March 31, 2026, increased $319.8 million to $23.20 billion from $22.88 billion reported as of December 31, 2025. Cash and cash equivalents increased $444.6 million for the three months ended March 31, 2026. Our loan portfolio balance decreased to $15.63 billion, as of March 31, 2026, from $15.69 billion at December 31, 2025. The decrease in loans was primarily due to $100.5 million of organic loan decline in our community banking footprint, which was partially offset by $47.9 million of loan growth from our Centennial Commercial Finance Group ("Centennial CFG") franchise. Investment securities decreased by $70.7 million resulting from paydowns and maturities during the first three months of 2026. Total deposits increased $258.3 million to $17.74 billion as of March 31, 2026 from $17.48 billion as of December 31, 2025. Stockholders’ equity increased $52.7 million to $4.35 billion as of March 31, 2026, compared to $4.30 billion as of December 31, 2025. The $52.7 million increase in stockholders’ equity is primarily associated with the $118.2 million in net income for the three months ended March 31, 2026, partially offset by the $13.5 million in other comprehensive loss, the $41.3 million in shareholder dividends paid and stock repurchases of $13.9 million.

Our non-performing loans were $182.1 million, or 1.16% of total loans as of March 31, 2026, compared to $85.0 million, or 0.54% of total loans, as of December 31, 2025. The allowance for credit losses as a percentage of non-performing loans decreased to 163.43% as of March 31, 2026, from 350.17% as of December 31, 2025. As of March 31, 2026, our non-performing assets increased to $224.1 million, or 0.97% of total assets, from $124.8 million, or 0.55% of total assets, as of December 31, 2025. The increase in non-performing loans and assets was primarily due to one loan relationship with a balance of $92.1 million being placed on non-accrual status during the quarter ended March 31, 2026.

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 acco

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Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis presents our consolidated financial condition and results of operations for the years ended December 31, 2025, 2024 and 2023. This discussion should be read together with the “Summary Consolidated Financial Data,” our consolidated financial statements and the notes thereto, and other financial data included in this document. In addition to the historical information provided below, we have made certain estimates and forward-looking statements that involve risks and uncertainties. Our actual results could differ significantly from those anticipated in these estimates and in the forward-looking statements as a result of certain factors, including those discussed in the section of this document captioned “Risk Factors,” and elsewhere in this document. Unless the context requires otherwise, the terms “Company,” “HBI,” “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 (“Centennial” or the "Bank"). As of December 31, 2025, we had, on a consolidated basis, total assets of $22.88 billion, loans receivable, net, of $15.39 billion, total deposits of $17.48 billion, and stockholders’ equity of $4.30 billion.

We generate most of our revenue from interest on loans and investments, service charges, and mortgage banking income. Deposits and Federal Home Loan Bank ("FHLB") borrowed funds are our primary source 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 net interest margin, return on average assets and return on average common equity. We also measure our performance by our efficiency ratio and efficiency ratio, as adjusted (non-GAAP). The efficiency ratio 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 certain items such as merger expenses, hurricane expenses and/or gains and losses.

Table 1: Key Financial Measures

(1)See Table 31 for the non-GAAP tabular reconciliation.

(2)Fully taxable equivalent (assuming an income tax rate of 24.989% for 2023, 24.433% for 2024 and 24.359% for 2025).

(3)See Table 35 for the non-GAAP tabular reconciliation.

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2025 Overview

Results of Operations for the Years Ended December 31, 2025 and 2024

Our net income increased $73.2 million, or 18.2%, to $475.4 million for the year ended December 31, 2025, from $402.2 million for the same period in 2024. On a diluted earnings per share basis, our earnings were $2.41 per share for the year ended December 31, 2025 and $2.01 per share for the year ended December 31, 2024. The Company recorded $20.9 million in credit loss expense for the year ended December 31, 2025. This consisted of a $24.1 million provision for credit losses on loans, which was partially offset by a $2.2 million recovery of credit losses on available-for-sale investments and a $1.0 million recovery of credit losses on unfunded commitments. For the year ended December 31, 2025, the Company recorded $7.4 million in special income from equity investments, a $2.4 million increase in the fair value of marketable securities, $2.0 million in recoveries on historic losses, a $1.9 million gain on the retirement of subordinated debentures, $1.5 million in income from a Federal Deposit Insurance Corporation ("FDIC") assessment reduction, $1.4 million in bank owned life insurance ("BOLI") death benefits, a $983,000 gain on sale of a building from our Texas market and $885,000 in legal fee reimbursements, which were partially offset by $3.3 million in legal claims expense and $580,000 in merger expense.

Interest expense decreased by $64.5 million, or 14.3%, and non-interest income increased by $29.9 million, or 17.8%. This was partially offset by a $21.0 million, or 1.6%, decrease in interest income and an $11.2 million, or 2.5%, increase in non-interest expense. The decrease in interest expense was primarily due to a $30.7 million, or 58.4%, decrease in interest on FHLB and other borrowed funds, a $29.7 million, or 7.9%, decrease in interest on deposits, a $2.8 million, or 17.3%, decrease in interest on subordinated debentures and a $1.4 million, or 25.3%, decrease in interest on securities sold under agreements to repurchase. The increase in non-interest income was primarily due to a $21.7 million, or 72.6%, increase in other income, a $3.6 million, or 8.4% increase, in other service charges and fees, a $2.1 million, or 92.9% decrease, in the loss on OREO, a $2.0 million, or 12.4%, increase in mortgage lending income, and a $1.2 million, or 25.0%, increase in cash value of life insurance, which were partially offset by a $1.3 million, or 64.1%, decrease in gain on branches, equipment and other assets, a $751,000, or 6.6%, decrease in dividends from FHLB, FRB, FNBB and other and a $574,000, or 19.3%, decrease in income from the fair value adjustment for marketable securities. Included within other income was the $7.4 million in special income from equity investments, $2.0 million in recoveries on historic losses, $1.9 million gain on retirement of subordinated debt, $1.4 million in BOLI death benefits and $885,000 in legal fee reimbursements. The decrease in interest income resulted from a $19.8 million, or 12.7%, decrease in investment income and a $16.6 million, or 38.7%, decrease in interest income on deposits at other banks, which was partially offset by a $15.5 million, or 1.4%, increase in loan interest income. The increase in non-interest expense was due to an $11.8 million, or 4.9%, increase in salaries and employee benefits and a $1.2 million, or 1.1%, increase in other operating expenses, which was partially offset by a $2.0 million, or 5.6%, decrease in data processing expense.

Our net interest margin on a fully taxable equivalent basis increased from 4.27% for the year ended December 31, 2024 to 4.51% for the year ended December 31, 2025. The yield on interest earning assets was 6.45% and 6.51% for the year ended December 31, 2025 and 2024, respectively, as average interest earning assets decreased from $20.09 billion to $20.00 billion. The decrease in average interest earning assets is primarily due to a $379.3 million decrease in average investment securities and a $209.1 million decrease in average interest-bearing balances due from banks, which was partially offset by a $494.9 million increase in average loans receivable. For the years ended December 31, 2025 and 2024, we recognized $5.1 million and $8.1 million, respectively, in total net accretion for acquired loans and deposits. The reduction in accretion was dilutive to the net interest margin by approximately 2 basis points. We recognized $6.0 million in event income for the year ended December 31, 2025, compared to $4.9 million for the year ended December 31, 2024. The cost of interest-bearing liabilities decreased from 3.08% for the year ended December 31, 2024 to 2.68% for the year ended December 31, 2025, and average interest-bearing liabilities decreased from $14.63 billion to $14.44 billion. The decrease in average-interest bearing liabilities is primarily due to a $638.8 million decrease in FHLB & other borrowed funds, a $66.0 million decrease in subordinated debentures and a $17.4 million decrease in securities sold under agreement to repurchase, which was partially offset by a $531.3 million increase in average interest-bearing deposits. The reduction in FHLB & other borrowed funds was due to the Company paying off its Bank Term Funding Program ("BTFP") advance in November 2024. Prior to paying off the advance, the Company held approximately $500 million in excess liquidity, which was dilutive to the net interest margin by approximately 8 basis points. The reduction in subordinated debentures was due to the Company completing the payoff of its $140.0 million 5.50% Fixed-to-Floating Rate Subordinated Notes due 2030 and the Company also repurchasing $20.0 million of its $300.0 million Fixed-to-Floating Rate Subordinated Notes due 2032 during the third quarter of 2025. The two payoff events were accretive to the net interest margin by approximately one basis point. The overall increase in the net interest margin was due to a decrease in interest expense resulting from a decrease in interest rates paid on interest-bearing liabilities, a decrease in interest expense resulting from a reduction in the average balance of interest-bearing liabilities and an increase in interest income resulting from the increase in the average balance of interest-earning assets which was partially offset by a decrease in interest income due to a reduction in asset yields.

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Our efficiency ratio was 40.88% for the year ended December 31, 2025, compared to 42.74% for the same period in 2024. For the year ended December 31, 2025, our efficiency ratio, as adjusted (non-GAAP), was 41.29%, compared to 42.65% reported for the year ended December 31, 2024. (See Table 35 for the non-GAAP tabular reconciliation.)

Our return on average assets was 2.10% for the year ended December 31, 2025, compared to 1.77% for the same period in 2024, and our return on average assets, as adjusted (non-GAAP), was 2.05% for the year ended December 31, 2025, compared to 1.77% for the same period in 2024. (See Table 32 for the non-GAAP tabular reconciliation.) Our return on average common equity was 11.61% for the year ended December 31, 2025, compared to 10.43% for the same period in 2024.

Financial Condition as of and for the Years Ended December 31, 2025 and 2024

Our total assets as of December 31, 2025 increased $391.1 million to $22.88 billion from the $22.49 billion reported as of December 31, 2024. The increase in total assets is primarily due to a $921.7 million increase in loans receivable, which was partially offset by a $243.0 million decrease in cash and cash equivalents and a $216.7 million decrease in investment securities resulting from paydowns and maturities. Our loan portfolio balance increased $921.7 million to $15.69 billion as of December 31, 2025, from $14.76 billion as of December 31, 2024. The increase in loans was due to $727.5 million in organic loan growth within our legacy footprint and $194.2 million of organic loan growth from our Centennial Commercial Finance Group ("CFG") franchise during 2025. Total deposits increased $333.7 million to $17.48 billion as of December 31, 2025 compared to $17.15 billion as of December 31, 2024. Subordinated debentures decreased by $160.0 million due to the Company completing the payoff of its $140.0 million 5.50% Fixed-to-Floating Rate Subordinated Notes due 2030 and the Company also repurchasing $20.0 million of its $300.0 million Fixed-to-Floating Rate Subordinated Notes due 2032 during the third quarter of 2025. FHLB and other borrowed funds decreased by $100.5 million, due to maturities of FHLB borrowings. Stockholders’ equity increased $335.8 million to $4.30 billion as of December 31, 2025, compared to $3.96 billion as of December 31, 2024. The increase in stockholders’ equity is primarily associated with the $475.4 million in net income and the $90.2 million in accumulated other comprehensive income, which were partially offset by the $158.9 million of shareholder dividends paid and the repurchase of $81.4 million of our common stock during 2025. The improvement in stockholders’ equity was 8.5% for the year ended December 31, 2025 compared to December 31, 2024.

As of December 31, 2025, our non-performing loans decreased to $85.0 million, or 0.54%, of total loans from $98.9 million, or 0.67%, of total loans as of December 31, 2024. The allowance for credit losses as a percentage of non-performing loans increased to 350.17% as of December 31, 2025, compared to 278.99% as of December 31, 2024. As of December 31, 2025, our non-performing assets decreased to $124.8 million, or 0.55%, of total assets from $142.4 million, or 0.63%, of total assets as of December 31, 2024.

2024 Overview

Results of Operations for the Years Ended December 31, 2024 and 2023

Our net income increased $9.3 million, or 2.4%, to $402.2 million for the year ended December 31, 2024, from $392.9 million for the same period in 2023. On a diluted earnings per share basis, our earnings were $2.01 per share for the year ended December 31, 2024 and $1.94 per share for the year ended December 31, 2023. The Company recorded $48.1 million in credit loss expense for the year ended December 31, 2024. This consisted of a $48.4 million provision for credit losses on loans, which was partially offset by a $330,000 recovery of credit losses on available-for-sale investments due to an improvement in the unrealized loss position for one of our subordinated debt investments. Of the $48.4 million provision for credit losses on loans recorded, $33.4 million was used to establish a hurricane reserve for loans located in the Federal Emergency Management Agency ("FEMA") disaster areas impacted by Hurricanes Helene and Milton, which made landfall during the third and fourth quarters of 2024. The hurricane related reserve had a $0.13 impact to diluted earnings per share. The remaining portion of the provision was related to loan growth. For the year ended December 31, 2024, the Company recorded a $3.0 million increase in the fair value of marketable securities, a $2.1 million gain on sale of a building from our Texas market, $257,000 in BOLI death benefits and $2.3 million in Federal Deposit Insurance Corporation ("FDIC") special assessment expense.

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Total interest income increased by $124.7 million, or 10.6%, and non-interest expense decreased by $25.9 million, or 5.5%. This was partially offset by a $102.9 million, or 29.6%, increase in interest expense and a $1.4 million, or 0.8%, decrease in non-interest income. The increase in interest income resulted from a $110.4 million, or 11.2%, increase in loan interest income and a $27.8 million, or 184.7%, increase in interest income on deposits at other banks, which was partially offset by a $13.4 million, or 7.9%, decrease in investment income. The decrease in non-interest expense was due to a $15.9 million, or 6.2%, decrease in salaries and employee benefits, a $7.9 million, or 6.6%, decrease in other operating expenses and a $2.3 million, or 3.8%, decrease in occupancy and equipment expense. The increase in interest expense was primarily due to an $80.7 million, or 27.3%, increase in interest on deposits, a $21.6 million, or 70.2%, increase in interest on FHLB and other borrowed funds and a $635,000, or 13.2%, increase in interest on securities sold under agreements to repurchase. The decrease in non-interest income was primarily due to an $8.5 million, or 22.2%, decrease in other income, a $2.6 million, or 784.3% decrease, in the gain/loss on OREO and a $1.2 million, or 2.7% decrease, in other service charges and fees, which were partially offset by a $5.1 million, or 47.0%, increase in mortgage lending income and a $4.1 million, or 371.6%, increase in income from the fair value adjustment for marketable securities.

Our net interest margin on a fully taxable equivalent basis increased from 4.25% for the year ended December 31, 2023 to 4.27% for the year ended December 31, 2024. The yield on interest earning assets was 6.51% and 6.03% for the year ended December 31, 2024 and 2023, respectively, as average interest earning assets increased from $19.57 billion to $20.09 billion. The increase in average interest earning assets is primarily due to a $499.7 million increase in average interest-bearing balances due from banks and a $360.3 million increase in average loans receivable, which were partially offset by a $341.8 million decrease in average investment securities. For the years ended December 31, 2024 and 2023, we recognized $8.1 million and $10.6 million, respectively, in total net accretion for acquired loans and deposits. The reduction in accretion was dilutive to the net interest margin by approximately 1 basis point. We recognized $4.9 million in event income for the year ended December 31, 2024, compared to $3.0 million for the year ended December 31, 2023. This increase was accretive to the net interest margin by 1 basis point. During the year ended December 31, 2024, the Company held approximately $500 million in excess liquidity, which was dilutive to the net interest margin by 8 basis points. The overall increase in the net interest margin was due to an increase in interest income from higher yields on average interest-earning assets and an increase in interest income due to changes in interest earning assets, partially offset by an increase in interest expense due to changes in interest-bearing liabilities and a change in interest rates paid on interest-bearing liabilities.

Our efficiency ratio was 42.74% for the year ended December 31, 2024, compared to 46.21% for the same period in 2023. For the year ended December 31, 2024, our efficiency ratio, as adjusted (non-GAAP), was 42.65%, compared to 45.24% reported for the year ended December 31, 2023. (See Table 35 for the non-GAAP tabular reconciliation.)

Our return on average assets was 1.77% for the both the years ended December 31, 2024 and 2023, and our return on average assets, as adjusted (non-GAAP), was 1.77% for the year ended December 31, 2024, compared to 1.79% for the same period in 2023. (See Table 32 for the non-GAAP tabular reconciliation.) Our return on average common equity was 10.43% for the year ended December 31, 2024, compared to 10.82% for the same period in 2023.

Financial Condition as of and for the Years Ended December 31, 2024 and 2023

Our total assets as of December 31, 2024 decreased $165.9 million to $22.49 billion from the $22.66 billion reported as of December 31, 2023. The decrease in total assets is primarily due to a $442.0 million decrease in investment securities resulting from paydowns and maturities and a $89.9 million decrease in cash and cash equivalents during the year. Our loan portfolio balance increased $339.8 million to $14.76 billion as of December 31, 2024, from $14.42 billion as of December 31, 2023. The increase in loans was due to $471.4 million in organic loan growth within our legacy footprint, which was partially offset by $131.7 million of organic loan decline from our CFG franchise during 2024. Total deposits increased $358.6 million to $17.15 billion as of December 31, 2024 compared to $16.79 billion as of December 31, 2023. Stockholders’ equity increased $170.0 million to $3.96 billion as of December 31, 2024, compared to $3.79 billion as of December 31, 2023. The increase in stockholders’ equity is primarily associated with the $402.2 million in net income, which was partially offset by the $150.0 million of shareholder dividends paid, the repurchase of $86.1 million of our common stock during 2024 and the $7.0 million decrease in accumulated other comprehensive income. The improvement in stockholders’ equity was 4.5% for the year ended December 31, 2024 compared to December 31, 2023.

As of December 31, 2024, our non-performing loans increased to $98.9 million, or 0.67%, of total loans from $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 278.99% as of December 31, 2024, compared to 449.66% as of December 31, 2023. As of December 31, 2024, our non-performing assets increased to $142.4 million, or 0.63%, of total assets from $95.4 million, or 0.42%, of total assets as of December 31, 2023.

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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.

Revenue Recognition. Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC Topic 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of our revenue-generating transactions are not subject to ASC Topic 606, including revenue generated from financial instruments, such as our loans, letters of credit, investment securities and mortgage lending income, as these activities are subject to other GAAP discussed elsewhere within our disclosures. Descriptions of our revenue-generating activities that are within the scope of ASC Topic 606, which are presented in our income statements as components of non-interest income are as follows:

•Service charges on deposit accounts – These represent general service fees for monthly account maintenance and activity or transaction-based fees and consist of transaction-based revenue, time-based revenue (service period), item-based revenue or some other individual attribute-based revenue. Revenue is recognized when our performance obligation is completed, which is generally monthly for account maintenance services or when a transaction has been completed (such as a wire transfer). Payment for such performance obligations are generally received at the time the performance obligations are satisfied.

•Other service charges and fees – These represent credit card interchange fees and Centennial CFG loan fees. The interchange fees are recorded in the period the performance obligation is satisfied which is generally the cash basis based on agreed upon contracts. Centennial CFG loan fees are based on loan or other negotiated agreements with customers and are accounted for under ASC Topic 310. Interchange fees were $21.4 million and $21.8 million for the years ended December 31, 2025 and December 31, 2024, respectively. Centennial CFG loan fees were $13.8 million and $9.5 million for the years ended December 31, 2025 and December 31, 2024, respectively.

•Trust fees - The Company enters into contracts with its customers to manage assets for investment, and/or transact on their accounts. The Company generally satisfies its performance obligations as services are rendered. The management fees are percentage based, flat, percentage of income or a fixed percentage calculated upon the average balance of assets depending upon account type. Fees are collected on a monthly or annual basis.

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 credits, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with Topic 842 on leases.

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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 whether it 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 recovery 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 recovery 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. 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.

The Company uses the discount cash flow ("DCF") method to estimate expected losses for all of 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.

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.

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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, the Federal Housing Finance Agency ("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 residential construction loans

•Other construction loans and all land development and other land loans

•Loans secured by farmland (including farm residential and other improvements)

•Revolving, open-end loans secured by 1-4 family residential properties and extended under lines

•Secured by first liens

•Secured by junior liens

•Secured by multifamily (5 or more) residential properties

•Loans secured by owner-occupied, nonfarm nonresidential properties

•Loans secured by other nonfarm nonresidential properties

•Loans to finance agricultural production and other loans to farmers

•Commercial and industrial loans

•Other revolving credit plans

•Automobile loans

•Other consumer loans

•Other consumer loans - Shore Premier Finance

•Obligations (other than securities and leases) of states and political subdivisions in the US

•Loans to nondepository financial institutions

•Loans for purchasing or carrying securities

•All other loans

•Leases

Loans considered to be collateral dependent, according to ASC 326, are loans for which repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty based on the Company's assessment as of the reporting date. The aggregate amount of collateral shortfall on such loans is utilized in evaluating the adequacy of the allowance for credit losses and amount of provisions thereto. Losses on collateral dependent loans are charged against the allowance for credit losses when in the process of collection, it appears likely that such losses will be realized. The accrual of interest on collateral dependent loans is discontinued when, in management’s opinion the collection of interest is doubtful or generally when loans are 90 days or more past due. When accrual of interest is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

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.

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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.

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 the required payments for at least six months, and we reasonably expect to collect all principal and interest.

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.

Foreclosed Assets Held for Sale. Real estate and personal properties 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 properties are carried at fair value less costs to sell. Gains and losses from the sale of other real estate and personal properties 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.

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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.

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.

During the year ended December 31, 2025, we closed one branch in Jacksonville, Arkansas, and we opened a new branch in San Antonio, Texas.

As of December 31, 2025, we had 218 branch locations. There were 75 branches in Arkansas, 78 branches in Florida, 59 branches in Texas, five branches in Alabama and one branch in New York City.

Results of Operations for the Years Ended December 31, 2025, 2024 and 2023

Our net income increased $73.2 million, or 18.2%, to $475.4 million for the year ended December 31, 2025, from $402.2 million for the same period in 2024. On a diluted earnings per share basis, our earnings were $2.41 per share for the year ended December 31, 2025 and $2.01 per share for the year ended December 31, 2024. The Company recorded $20.9 million in credit loss expense for the year ended December 31, 2025. This consisted of a $24.1 million provision for credit losses on loans, which was partially offset by a $2.2 million recovery of credit losses on available-for-sale investments and a $1.0 million recovery of credit losses on unfunded commitments. For the year ended December 31, 2025, the Company recorded $7.4 million in special income from equity investments, a $2.4 million increase in the fair value of marketable securities, $2.0 million in recoveries on historic losses, a $1.9 million gain on the retirement of subordinated debentures, $1.5 million in income from an FDIC assessment reduction, $1.4 million in BOLI death benefits, a $983,000 gain on sale of a building from our Texas market and $885,000 in legal fee reimbursements, which were partially offset by $3.3 million in legal claims expense and $580,000 in merger expense.

Our net income increased $9.3 million, or 2.4%, to $402.2 million for the year ended December 31, 2024, from $392.9 million for the same period in 2023. On a diluted earnings per share basis, our earnings were $2.01 per share for the year ended December 31, 2024 and $1.94 per share for the year ended December 31, 2023. The Company recorded $48.1 million in credit loss expense for the year ended December 31, 2024. This consisted of a $48.4 million provision for credit losses on loans, which was partially offset by a $330,000 recovery of credit losses on available-for-sale investments due to an improvement in the unrealized loss position for one of our subordinated debt investments. Of the $48.4 million provision for credit losses on loans recorded, $33.4 million was used to establish a hurricane reserve for loans located in the FEMA disaster areas impacted by Hurricanes Helene and Milton, which made landfall during the third and fourth quarters of 2024. The hurricane related reserve had a $0.13 impact to diluted earnings per share. The remaining portion of the provision was related to loan growth. For the year ended December 31, 2024, the Company recorded a $3.0 million increase in the fair value of marketable securities, a $2.1 million gain on sale of a building from our Texas market, $257,000 in BOLI death benefits and $2.3 million in FDIC special assessment expense.

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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 and 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 (24.359% for the year ended December 31, 2025, 24.433% for the year ended December 31, 2024 and 24.989% for year ended December 31, 2023).

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 reduced the target rate three times during 2024. First, on September 18, 2024, the Federal Reserve reduced the target rate to 4.75% to 5.00%, second, on November 7, 2024, the target rate was reduced to 4.50% to 4.75% and third, on December 18, 2024, the target rate was reduced to 4.25% to 4.50%. The Federal Reserve reduced the target rate three times during 2025. First, on September 17, 2025, the Federal Reserve reduced the target rate to 4.00% to 4.25%, second, on October 29, 2025, the target rate was reduced to 3.75% to 4.00% and third, on December 10, 2025, the target rate was reduced to 3.50% to 3.75%.

Our net interest margin on a fully taxable equivalent basis increased from 4.27% for the year ended December 31, 2024 to 4.51% for the year ended December 31, 2025. The yield on interest earning assets was 6.45% and 6.51% for the year ended December 31, 2025 and 2024, respectively, as average interest earning assets decreased from $20.09 billion to $20.00 billion. The decrease in average interest earning assets is primarily due to a $379.3 million decrease in average investment securities and a $209.1 million decrease in average interest-bearing balances due from banks, which was partially offset by a $494.9 million increase in average loans receivable. For the years ended December 31, 2025 and 2024, we recognized $5.1 million and $8.1 million, respectively, in total net accretion for acquired loans and deposits. The reduction in accretion was dilutive to the net interest margin by approximately 2 basis points. We recognized $6.0 million in event income for the year ended December 31, 2025, compared to $4.9 million for the year ended December 31, 2024. The cost of interest-bearing liabilities decreased from 3.08% for the year ended December 31, 2024 to 2.68% for the year ended December 31, 2025, and average interest-bearing liabilities decreased from $14.63 billion to $14.44 billion. The decrease in average-interest bearing liabilities is primarily due to a $638.8 million decrease in FHLB & other borrowed funds, a $66.0 million decrease in subordinated debentures and a $17.4 million decrease in securities sold under agreement to repurchase, which was partially offset by a $531.3 million increase in average interest-bearing deposits. The reduction in FHLB & other borrowed funds was due to the Company paying off its BTFP advance in November 2024. Prior to paying off the advance, the Company held approximately $500 million in excess liquidity, which was dilutive to the net interest margin by approximately 8 basis points. The reduction in subordinated debentures was due to the Company completing the payoff of its $140.0 million 5.50% Fixed-to-Floating Rate Subordinated Notes due 2030 and the Company also repurchasing $20.0 million of its $300.0 million Fixed-to-Floating Rate Subordinated Notes due 2032 during the third quarter of 2025. The two payoff events were accretive to the net interest margin by approximately one basis point. The overall increase in the net interest margin was due to a decrease in interest expense resulting from a decrease in interest rates paid on interest-bearing liabilities, a decrease in interest expense resulting from a reduction in the average balance of interest-bearing liabilities and an increase in interest income resulting from the increase in the average balance of interest-earning assets which was partially offset by a decrease in interest income due to a reduction in asset yields.

Net interest income on a fully taxable equivalent basis increased $45.3 million, or 5.3%, to $902.6 million for the year ended December 31, 2025, from $857.3 million for the same period in 2024. This increase in net interest income was the result of a $64.5 million decrease in interest expense, partially offset by a $19.3 million decrease in interest income on a fully taxable equivalent basis. The $64.5 million decrease in interest expense is primarily the result of a lower interest rate environment. The lower rates on interest bearing liabilities resulted in a decrease in interest expense of approximately $51.8 million, and the change in interest bearing liabilities resulted in a decrease in interest expense of approximately $12.7 million. The $19.3 million decrease in interest income was also primarily the result of the lower interest rate environment. The lower yield on earning assets resulted in a decrease in interest income of approximately $32.8 million, while the change in earning assets resulted in an increase in interest income of approximately $13.5 million.

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Our net interest margin on a fully taxable equivalent basis increased from 4.25% for the year ended December 31, 2023 to 4.27% for the year ended December 31, 2024. The yield on interest earning assets was 6.51% and 6.03% for the year ended December 31, 2024 and 2023, respectively, as average interest earning assets increased from $19.57 billion to $20.09 billion. The increase in average interest earning assets is primarily due to a $499.7 million increase in average interest-bearing balances due from banks and a $360.3 million increase in average loans receivable, which were partially offset by a $341.8 million decrease in average investment securities. For the years ended December 31, 2024 and 2023, we recognized $8.1 million and $10.6 million, respectively, in total net accretion for acquired loans and deposits. The reduction in accretion was dilutive to the net interest margin by approximately 1 basis point. We recognized $4.9 million in event income for the year ended December 31, 2024, compared to $3.0 million for the year ended December 31, 2023. This increase was accretive to the net interest margin by 1 basis point. During the year ended December 31, 2024, the Company held approximately $500 million in excess liquidity, which was dilutive to the net interest margin by 8 basis points. The overall increase in the net interest margin was due to an increase in interest income from higher yields on average interest-earning assets and an increase in interest income due to changes in interest earning assets, partially offset by an increase in interest expense due to changes in interest-bearing liabilities and a change in interest rates paid on interest-bearing liabilities.

Net interest income on a fully taxable equivalent basis increased $24.9 million, or 3.0%, to $857.3 million for the year ended December 31, 2024, from $832.5 million for the same period in 2023. This increase in net interest income was the result of a $127.8 million increase in interest income, partially offset by a $102.9 million increase in interest expense on a fully taxable equivalent basis. The $127.8 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 $88.5 million, and the change in earning assets resulted in an increase in interest income of approximately $39.3 million. The $102.9 million increase in interest expense was 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 $68.9 million, and the change in interest bearing liabilities resulted in an increase in interest expense of approximately $34.0 million.

Tables 2 and 3 reflect an analysis of net interest income on a fully taxable equivalent basis for the years ended December 31, 2025, 2024 and 2023, as well as changes in fully taxable equivalent net interest margin for the years 2025 compared to 2024 and 2024 compared to 2023.

Table 2: Analysis of Net Interest Income

Table 3: Changes in Fully Taxable Equivalent Net Interest Margin

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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 years ended December 31, 2025, 2024 and 2023. 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

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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 year ended December 31, 2025 compared to 2024 and 2024 compared to 2023 on a fully taxable equivalent 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

Provision for Credit Losses

Credit Loss Expense: During the year ended December 31, 2025, the Company recorded $20.9 million in credit loss expense. This consisted of a $24.1 million provision for credit losses on loans, which was partially offset by a $2.2 million recovery of credit losses on available-for-sale investments and a $1.0 million recovery of credit losses on unfunded commitments. 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 held-to-maturity portfolio. During the year ended December 31, 2024, the Company recorded $48.1 million in credit loss expense. This consisted of a $48.4 million provision for credit losses on loans, which was partially offset by a $330,000 recovery of credit losses on available-for-sale investments due to an improvement in the unrealized loss position for one of our subordinated debt investments. Of the $48.4 million provision for credit losses on loans recorded, $33.4 million was used to establish a hurricane reserve for loans located in the FEMA disaster areas impacted by Hurricanes Helene and Milton, which made landfall during the third and fourth quarters of 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 held-to-maturity portfolio.

Net charge-offs to average total loans decreased to 0.02% for the year ended December 31, 2025 from 0.41% for the year ended December 31, 2024. Net charge-offs decreased by $58.4 million for the year ended December 31, 2025 compared to December 31, 2024. During the fourth quarter of 2024, the Company completed an asset quality cleanup project which drove the increase in the level of charge-offs during the year ended December 31, 2024. Non-performing loans to total loans decreased from 0.67% as of December 31, 2024 to 0.54% as of December 31, 2025.

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Non-Interest Income

Total non-interest income was $198.5 million in 2025, compared to $168.6 million in 2024 and $169.9 million in 2023. Our recurring non-interest income includes service charges on deposit accounts, other service charges and fees, trust fees, mortgage lending, 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 years ended December 31, 2025, 2024, and 2023, respectively, as well as changes for the years 2025 compared to 2024 and 2024 compared to 2023.

Table 6: Non-Interest Income

Non-interest income increased $29.9 million, or 17.8%, to $198.5 million for the year ended December 31, 2025 from $168.6 million for the same period in 2024. The primary factors that resulted in this increase were the increases in other income, other service charges and fees, gain on OREO, net, mortgage lending income and cash value of life insurance, partially offset by the decrease in gain on sale of branches, equipment and other assets, net. Other factors were changes related to service charges on deposit accounts, trust fees, dividends from FHLB, FRB, FNBB & other and fair value adjustment for marketable securities.

Additional details for the year ended December 31, 2025 on some of the more significant changes are as follows:

•The $945,000 increase in service charges on deposit accounts is primarily related to an increase in overdraft fees.

•The $3.6 million increase in other service charges and fees is primarily due to increases in Centennial CFG property finance loan fees.

•The $998,000 increase in trust fees is primarily related to an increase in personal trust and IRA fees.

•The $2.0 million increase in mortgage lending income is primarily related to an increase in volume of secondary market loans.

•The $1.2 million increase in cash value of life insurance is primarily related to gains recognized in connection with a tax-free exchange of BOLI policies under Section 1035 of the Internal Revenue Code.

•The $751,000 decrease in dividends from FHLB, FRB, Bankers' Bank and other was primarily due to a lower volume of dividends from the FHLB and equity investments.

•The $1.3 million decrease in the level of gain on sale of branches, equipment and other assets, net, is primarily due to the sale of a building from our Texas region during 2024.

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•The $2.1 million decrease in loss on OREO is primarily due to revaluation of two OREO properties during 2024, partially offset by a loss on the sale of a building from our Florida region during 2025.

•The $574,000 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 $21.7 million increase in other income is primarily due to a $7.8 million increase in income for equity method investments, which includes a $7.4 million in special income from equity investments, a $6.6 million increase in income from a lawsuit settlement, a $2.0 million increase in recoveries on historic losses, a $1.9 million gain on redemption of subordinated debt, a $1.9 million increase in investment brokerage fee income, a $1.2 million increase in BOLI death benefit income, an $828,000 increase in building rental income and a $670,000 increase in miscellaneous income.

Non-interest income decreased $1.4 million, or 0.8%, to $168.6 million for the year ended December 31, 2024 from $169.9 million for the same period in 2023. The primary factors that resulted in this decrease were the decreases in other income and gain on OREO, net partially offset by the increases in mortgage lending income and the fair value adjustment for marketable securities. Other factors were changes related to service charges on deposit accounts, trust fees, and gain on sale of branches, equipment and other assets.

Additional details for the year ended December 31, 2024 on some of the more significant changes are as follows:

•The $1.2 million decrease in other service charges and fees is primarily due to decreases in Centennial CFG property finance loan fees and Mastercard income.

•The $825,000 increase in trust fees is primarily related to an increase in personal trust fees, employee trust fees, IRA fees and retirement fees.

•The $5.1 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 $595,000 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 during 2024.

•The $2.6 million decrease in gain on OREO is primarily due to revaluation of two OREO properties during 2024.

•The $4.1 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 $8.5 million decrease in other income is primarily due to a $7.4 million reduction in income for equity method investments, a $2.9 million reduction in BOLI death benefit income and a $3.0 million decrease in recoveries on historic losses, partially offset by a $2.2 million increase in rental income from OREO and a $2.1 million increase in investment brokerage fee income.

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Non-Interest Expense

Non-interest expense consists of salaries and employee benefits, occupancy and equipment, data processing, and other expenses such as advertising, merger and acquisition expenses, amortization of intangibles, electronic banking expense, FDIC and state assessment, insurance, legal and accounting fees and other professional fees.

Table 7 below sets forth a summary of non-interest expense for the years ended December 31, 2025, 2024, and 2023, as well as changes for the years ended 2025 compared to 2024 and 2024 compared to 2023.

Table 7: Non-Interest Expense

Non-interest expense increased $11.2 million, or 2.5%, to $458.2 million for the year ended December 31, 2025, from $446.9 million for the same period in 2024. The primary factors that resulted in this increase was the increase in salaries and employee benefits expense, advertising expense and other expenses, partially offset by the decrease in FDIC and state assessment expense and data processing expense. Other factors were changes related to merger expense and electronic banking expense.

Additional details for the year ended December 31, 2025 on some of the more significant changes are as follows:

•The $11.8 million increase in salaries and employee benefits expense is primarily due to an increase in incentive compensation as a result of an increase in revenue for the Company combined with the additional costs of doing business.

•The $2.0 million decrease in data processing expense is primarily due relationship credits received as a result of a new contract.

•The $580,000 increase in merger expense is due to costs associated with the anticipated acquisition of Mountain Commerce Bancorp.

•The $1.1 million increase in advertising expense is primarily due to an increase in the volume of advertising.

•The $572,000 decrease in electronic banking expense is primarily due to a decrease in consulting expenses, partially offset by an increase in interchange network expenses.

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•The $4.2 million decrease in FDIC and state assessment expense is primarily due to a reversal adjustment from restating call report uninsured deposits from December 2022 through December 2024, which lowered assessment expense by $1.5 million, as well as the FDIC special assessment being incurred during the second quarter of 2024. The FDIC special assessment was levied in order to recover the losses to the Deposit Insurance Fund associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank.

•The $4.6 million increase in other expenses is primarily due to $3.3 million in legal claims expense being recorded during the second quarter of 2025 and a $1.6 million increase in loan fee expenses.

Non-interest expense decreased $25.9 million, or 5.5%, to $446.9 million for the year ended December 31, 2024, from $472.9 million for the same period in 2023. The primary factors that resulted in this decrease was the decrease in merger expense, partially offset by increases in salaries and employee benefits expense and FDIC and state assessment expense. Other factors were changes related to occupancy and equipment expenses, data processing expenses, advertising expenses, amortization of intangibles, legal and accounting expenses and other expense.

Additional details for the year ended December 31, 2024 on some of the more significant changes are as follows:

•The $15.9 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 $2.3 million decrease in occupancy and equipment expense is primarily due to decreases in lease, utility, maintenance and other occupancy expenses.

•The $1.8 million decrease in advertising expense is primarily due to a decrease in the volume of advertising.

•The $1.2 million decrease in amortization of intangibles is primarily due to the core deposit intangible from the Company's 2013 acquisition of Liberty Bank being fully amortized in 2023.

•The $869,000 decrease in electronic banking expense is primarily due to a decrease in debit card processing fees and interchange network expenses.

•The $10.1 million decrease in FDIC and state assessment expense is primarily due to the $13.0 million FDIC special assessment levied during the fourth quarter of 2023 in order to recover the losses to the Deposit Insurance Fund associated with protecting uninsured depositors following the closures of Silicon Valley Bank and Signature Bank, partially offset by the remaining portion of the FDIC special assessment being incurred during the second quarter of 2024.

•The $3.7 million increase in legal and accounting expense is primarily due to ongoing legal matters.

•The $673,000 decrease in other professional fees is primarily due to cost saving measures following the acquisition of Happy.

•The $4.0 million increase in other expenses is primarily related to an increase in OREO expense and miscellaneous costs, partially offset by decreases in travel expenses, reimbursable loan fees and other losses.

Income Taxes

During 2025, the Company lowered its marginal tax rate from 24.433% to 24.359%. In an effort to more accurately reflect legislative and current state income apportionment, the state tax rate was lowered to 4.252%. This lowered the blended rate to 24.359%. During 2024, the Company lowered its marginal tax rate from 24.989% to 24.433%. In an effort to more accurately reflect legislative and current state income apportionment, the state tax rate was lowered to 4.346%. This lowered the blended rate to 24.433%. During 2023, the Company increased its marginal tax rate from 24.6735% to 24.989%. In an effort to more accurately reflect legislative and current state income apportionment, the state tax rate was increased to 5.049%. This raised the blended rate to 24.989%.

Income tax expense increased $16.3 million, or 13.5%, to $136.4 million for the year ended December 31, 2025, from $120.1 million for 2024. Income tax expense increased $1.1 million, or 1.0%, to $120.1 million for the year ended December 31, 2024, from $119.0 million for 2023. The effective tax rates for the years ended December 31, 2025, 2024 and 2023 were 22.29%, 22.99% and 23.24%, respectively. The Company’s marginal tax rate was 24.359%, 24.433% and 24.989% for years ended December 31, 2025, 2024 and 2023, respectively.

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Financial Condition as of and for the Years Ended December 31, 2025 and 2024

Our total assets as of December 31, 2025 increased $391.1 million to $22.88 billion from the $22.49 billion reported as of December 31, 2024. The increase in total assets is primarily due to a $921.7 million increase in loans receivable, which was partially offset by a $243.0 million decrease in cash and cash equivalents and a $216.7 million decrease in investment securities resulting from paydowns and maturities. Our loan portfolio balance increased $921.7 million to $15.69 billion as of December 31, 2025, from $14.76 billion as of December 31, 2024. The increase in loans was due to $727.5 million in organic loan growth within our legacy footprint and $194.2 million of organic loan growth from our CFG franchise during 2025. Total deposits increased $333.7 million to $17.48 billion as of December 31, 2025 compared to $17.15 billion as of December 31, 2024. Subordinated debentures decreased by $160.0 million due to the Company completing the payoff of its $140.0 million 5.50% Fixed-to-Floating Rate Subordinated Notes due 2030 and the Company also repurchasing $20.0 million of its $300.0 million Fixed-to-Floating Rate Subordinated Notes due 2032 during the third quarter of 2025. FHLB and other borrowed funds decreased by $100.5 million, due to maturities of FHLB borrowings. Stockholders’ equity increased $335.8 million to $4.30 billion as of December 31, 2025, compared to $3.96 billion as of December 31, 2024. The increase in stockholders’ equity is primarily associated with the $475.4 million in net income and the $90.2 million in accumulated other comprehensive income, which were partially offset by the $158.9 million of shareholder dividends paid and the repurchase of $81.4 million of our common stock during 2025. The improvement in stockholders’ equity was 8.5% for the year ended December 31, 2025 compared to December 31, 2024.

Our total assets as of December 31, 2024 decreased $165.9 million to $22.49 billion from the $22.66 billion reported as of December 31, 2023. The decrease in total assets is primarily due to a $442.0 million decrease in investment securities resulting from paydowns and maturities and a $89.9 million decrease in cash and cash equivalents during the year. Our loan portfolio balance increased $339.8 million to $14.76 billion as of December 31, 2024, from $14.42 billion as of December 31, 2023. The increase in loans was due to $471.4 million in organic loan growth within our legacy footprint, which was partially offset by $131.7 million of organic loan decline from our CFG franchise during 2024. Total deposits increased $358.6 million to $17.15 billion as of December 31, 2024 compared to $16.79 billion as of December 31, 2023. Stockholders’ equity increased $170.0 million to $3.96 billion as of December 31, 2024, compared to $3.79 billion as of December 31, 2023. The increase in stockholders’ equity is primarily associated with the $402.2 million in net income, which was partially offset by the $150.0 million of shareholder dividends paid, the repurchase of $86.1 million of our common stock during 2024 and the $7.0 million decrease in accumulated other comprehensive income. The improvement in stockholders’ equity was 4.5% for the year ended December 31, 2024 compared to December 31, 2023.

Loan Portfolio

Our loan portfolio averaged $15.17 billion and $14.68 billion during the years ended December 31, 2025 and 2024, respectively. Loans receivable were $15.69 billion as of December 31, 2025 compared to $14.76 billion as of December 31, 2024, an increase of $921.7 million, or 6.2%.

During 2025, the Company experienced $921.7 million in organic loan growth. The $921.7 million in organic loan growth included $727.5 million in organic loan growth for our legacy footprint and $194.2 million of organic loan growth for Centennial CFG during 2025.

During 2024, the Company experienced $339.8 million in organic loan growth. The $339.8 million in organic loan growth included $471.4 million in organic loan growth for our legacy footprint, which was partially offset by $131.7 million of organic loan decline for Centennial CFG during 2024.

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, South 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 $3.70 billion, $4.55 billion, $3.94 billion, $105.9 million, $1.38 billion and $2.01 billion as of December 31, 2025 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 December 31, 2025 and 2024.

Table 8: Loans Receivable

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 December 31, 2025, commercial real estate loans totaled $8.35 billion, or 53.2% of loans receivable, as compared to $8.50 billion, or 57.6% of loans receivable, as of December 31, 2024. Commercial real estate loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $2.20 billion, $2.73 billion, $1.97 billion, $48.4 million, zero and $1.40 billion, respectively, at December 31, 2025.

As of December 31, 2025, we had $1.21 billion of construction/land development loans which were collateralized by land. This consisted of $41.8 million for raw land and $1.17 billion for land with commercial and/or residential lots.

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Table 9 presents the composition of the funded and unfunded balances of our CRE portfolio by loan type, as of December 31, 2025 and December 31, 2024, and their respective percentages of our total CRE portfolio.

Table 9: CRE Loan Concentrations

(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 $1.14 billion and $496.5 million as of December 31, 2025 and December 31, 2024, 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 December 31, 2025 and December 31, 2024.

Table 10: Geographical Locations of CRE Loans

(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 $1.14 billion and $496.5 million as of December 31, 2025 and December 31, 2024, 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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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 December 31, 2025, 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 Company’s CRE strategy and contingency plan, and subsequent reporting to management and the Bank’s board of directors, lies with the Chief Lending Officer and the Asset Quality Committee. 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 Bank’s Executive Risk Committee will determine which action or combination of actions to take based on the specific situation. The potential 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 depending upon the specific situation. Based on our evaluation of economic conditions as of December 31, 2025, the Company believes our current underwriting standards and capital position remain adequate for 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 57.7% and 34.9% 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 December 31, 2025, with the remaining 7.4% relating to condos 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 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.

As of December 31, 2025, residential real estate loans totaled $3.28 billion, or 20.9%, of loans receivable, compared to $2.45 billion, or 16.6% of loans receivable, as of December 31, 2024. Residential real estate loans originated in our franchises in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $743.5 million, $1.18 billion, $847.0 million, $47.7 million, zero and $462.6 million, respectively, at December 31, 2025.

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 USCG 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 December 31, 2025, consumer loans totaled $1.25 billion, or 8.0% of loans receivable, compared to $1.23 billion, or 8.4% of loans receivable, as of December 31, 2024. Consumer loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $18.0 million, $6.2 million, $7.4 million, $421,000, $1.22 billion and zero, respectively, at December 31, 2025.

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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 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 speaking, 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 December 31, 2025, commercial and industrial loans totaled $2.22 billion, or 14.2% of loans receivable, which compared to $2.02 billion, or 13.7% of loans receivable, as of December 31, 2024. Commercial and industrial loans originated in our Arkansas, Florida, Texas, Alabama, SPF and Centennial CFG markets were $507.9 million, $609.5 million, $805.1 million, $9.4 million, $163.2 million and $127.3 million, respectively, at December 31, 2025.

Agricultural Loans. Agricultural loans include loans for financing agricultural production, including loans to businesses or individuals engaged in the production of timber, poultry, livestock or crops and are not categorized as part of real estate loans. Our agricultural loans are generally secured by farm machinery, livestock, crops, vehicles or other agricultural-related collateral. A portion of our portfolio of agricultural loans is comprised of loans to individuals which would normally be characterized as consumer loans except for the fact that the individual borrowers are primarily engaged in the production of timber, poultry, livestock or crops.

As of December 31, 2025, agricultural loans totaled $359.9 million, or 2.3% of loans receivable, compared to the $367.3 million, or 2.5% of loans receivable as of December 31, 2024. Agricultural loans originated in our Arkansas, Florida and Texas markets were $59.5 million, $55,000 and $300.3 million, respectively, and zero in our Alabama, SPF and Centennial CFG markets at December 31, 2025.

Other Loans. Other loans include obligations (other than securities and leases) of states and political subdivisions in the United States; loans to nondepository financial institutions; loans for purchasing or carrying securities, including margin loans; leases and all other loans excluding consumer loans. The performance of other loans will be affected by the local, regional and national economies as well as the performance of the financial markets.

As of December 31, 2025, other loans totaled $225.4 million, or 1.4% of loans receivable, compared to the 187,153, or 1.2% of loans receivable as of December 31, 2024. Other loans originated in our Arkansas, Florida, Texas and Centennial CFG markets were $163.5 million, $31.7 million, $5.4 million and $24.8 million, respectively, and zero in our Alabama and SPF markets at December 31, 2025.

Table 11 presents the distribution of the maturity of our total loans as of December 31, 2025. The table also presents the portion of our loans that have fixed interest rates and interest rates that fluctuate over the life of the loans based on changes in the interest rate environment.

The loans acquired during our acquisitions accrete interest income through accretion of the difference between the carrying amount of the loans and the expected cash flows. Increases in the credit quality or cash flows of loans (reflected as an adjustment to yield and accreted into income over the weighted-average life of the loans).

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Table 11: Maturity Distribution of Loan Portfolio and Interest Rate Detail of Loans Due After One Year