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What changed in HOME BANCSHARES INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of HOME BANCSHARES INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+431 added−412 removedSource: 10-K (2026-02-27) vs 10-K (2025-02-27)

Top changes in HOME BANCSHARES INC's 2025 10-K

431 paragraphs added · 412 removed · 351 edited across 10 sections

Item 1. Business

Business — how the company describes what it does

56 edited+15 added−8 removed227 unchanged
Biggest changeDavis 59 Chief Financial Officer, Treasurer and Director Chief Financial Officer, Treasurer and Director Jennifer C. Floyd 50 Chief Accounting Officer Chief Accounting Officer Kevin D. Hester 61 President and Chief Lending Officer President, Chief Lending Officer and Director J. Stephen Tipton 43 Chief Operating Officer Chief Executive Officer Tracy M. French 63 Director Chairman of the Board Donna J.
Biggest changePositions Held with Centennial Bank John W. Allison 79 Chairman of the Board and Chief Executive Officer Chairman of the Board Brian S. Davis 60 Chief Financial Officer, Treasurer and Director Chief Financial Officer, Treasurer and Director Jennifer C. Floyd 51 Chief Accounting Officer Chief Accounting Officer Kevin D.
The board of directors of Centennial Bank establishes the authorization levels for individual loan officers on a case-by-case basis. Generally, the more experienced a loan officer, the higher the authorization level. The approval authority for individual loan officers ranges from $5,000 to $3.0 million for secured loans and from $1,000 to $3.0 million for unsecured loans. • Officers’ Loan Committees.
The board of directors of Centennial Bank establishes the authorization levels for individual loan officers on a case-by-case basis. Generally, the more experienced a loan officer, the higher the authorization level. The approval authority for individual loan officers ranges from $5,000 to $3.0 million for secured loans and from $1,000 to $500,000 for unsecured loans. • Officers’ Loan Committees.
As of December 31, 2024, we also operate loan production offices in Los Angeles, California; Miami, Florida and Dallas, Texas through our Centennial CFG division and in Chesapeake, Virginia and Baltimore, Maryland through our SPF division. Lending Activities We originate loans primarily secured by single and multi-family real estate, residential construction and commercial buildings.
As of December 31, 2025, we also operate loan production offices in Los Angeles, California; Miami, Florida and Dallas, Texas through our Centennial CFG division and in Chesapeake, Virginia and Baltimore, Maryland through our SPF division. Lending Activities We originate loans primarily secured by single and multi-family real estate, residential construction and commercial buildings.
To be well-capitalized, a banking organization is required to have at least a 10% total risk-based capital ratio, an 8% Tier 1 risk-based capital ratio, a 6.5% CET1 risk-based capital ratio and a 5% Tier 1 leverage ratio. As of December 31, 2024, we met all capital adequacy requirements and our bank subsidiary is considered well-capitalized for regulatory purposes.
To be well-capitalized, a banking organization is required to have at least a 10% total risk-based capital ratio, an 8% Tier 1 risk-based capital ratio, a 6.5% CET1 risk-based capital ratio and a 5% Tier 1 leverage ratio. As of December 31, 2025, we met all capital adequacy requirements and our bank subsidiary is considered well-capitalized for regulatory purposes.
Historically, our hiring and retaining experienced relationship bankers has been integral to our ability to grow quickly when entering new markets. 7 Table of Contents • Maintain a “fortress” balance sheet – We intend to maintain a strong balance sheet through a focus on four key governing principles: (1) maintain solid asset quality; (2) remain well-capitalized; (3) pursue high performance metrics including return on tangible equity (ROTE), return on assets (ROA), efficiency ratio and net interest margin; and (4) retain liquidity at the bank holding company level that can be utilized should attractive acquisition opportunities be identified or for internal capital needs.
Historically, our hiring and retaining experienced relationship bankers has been integral to our ability to grow quickly when entering new markets. • Maintain a “fortress” balance sheet – We intend to maintain a strong balance sheet through a focus on four key governing principles: (1) maintain solid asset quality; (2) remain well-capitalized; (3) pursue high performance metrics including return on tangible equity (ROTE), return on assets (ROA), efficiency ratio and net interest margin; and (4) retain liquidity at the bank holding company level that can be utilized should attractive acquisition opportunities be identified or for internal capital needs.
The required minimum capital and leverage ratios under the Basel III capital adequacy requirements in effect as of December 31, 2024, including the required capital conservation buffer, consist of CET1 capital of 7.0% (4.5% plus the required 2.5% capital conservation buffer), Tier 1 risk-based capital of 8.5% (6.0% plus the required 2.5% capital conservation buffer), total risk-based capital of 10.5% (8.0% plus the required 2.5% capital conservation buffer) and a leverage ratio of 4.0%.
The required minimum capital and leverage ratios under the Basel III capital adequacy requirements in effect as of December 31, 2025, including the required capital conservation buffer, consist of CET1 capital of 7.0% (4.5% plus the required 2.5% capital conservation buffer), Tier 1 risk-based capital of 8.5% (6.0% plus the required 2.5% capital conservation buffer), total risk-based capital of 10.5% (8.0% plus the required 2.5% capital conservation buffer) and a leverage ratio of 4.0%.
We cannot predict the nature or impact of future changes in monetary and fiscal policies. 22 Table of Contents AVAILABLE INFORMATION We are subject to the information requirements of the Securities Exchange Act of 1934. Accordingly, we file annual, quarterly and current reports, proxy statements and other information with the SEC. In addition, we maintain a website at http://www.homebancshares.com.
We cannot predict the nature or impact of future changes in monetary and fiscal policies. AVAILABLE INFORMATION We are subject to the information requirements of the Securities Exchange Act of 1934. Accordingly, we file annual, quarterly and current reports, proxy statements and other information with the SEC. In addition, we maintain a website at http://www.homebancshares.com.
When this is the case, it is generally our practice to obtain an independent appraisal of this collateral within the Interagency Appraisal and Evaluation Guidelines. 8 Table of Contents Real Estate – Construction/Land Development. This category of loans includes loans to residential and commercial developers to purchase raw land and to develop this land into residential and commercial land developments.
When this is the case, it is generally our practice to obtain an independent appraisal of this collateral within the Interagency Appraisal and Evaluation Guidelines. Real Estate – Construction/Land Development. This category of loans includes loans to residential and commercial developers to purchase raw land and to develop this land into residential and commercial land developments.
Beginning February 8, 2025, however, the Trump Administration has taken various actions to temporarily or permanently shut down the CFPB, including issuing a series of directives causing the CFPB to pause or suspend many of its operations, including its supervision, examination, rulemaking and enforcement activity.
Beginning February 8, 2025, however, the Trump Administration took various actions to temporarily or permanently shut down the CFPB, including issuing a series of directives causing the CFPB to pause or suspend many of its operations, including its supervision, examination, rulemaking and enforcement activity.
Our competitors often have greater resources, have broader geographic markets, have higher lending limits, offer various services that we may not currently offer and may better afford and make broader use of media advertising, support services and electronic technology than we do.
Our competitors often have greater 11 Table of Contents resources, have broader geographic markets, have higher lending limits, offer various services that we may not currently offer and may better afford and make broader use of media advertising, support services and electronic technology than we do.
Centennial CFG operates out of our New York City branch office and loan production offices in Los Angeles, California, Dallas, Texas and Miami, Florida.
Centennial CFG operates out of our New York City branch office and loan production offices in Los Angeles, California, and Dallas, Texas.
As of December 31, 2024, our bank subsidiary was in compliance with the loans-to-one-borrower limitations. Prohibitions Against Tying Arrangements.
As of December 31, 2025, our bank subsidiary was in compliance with the loans-to-one-borrower limitations. Prohibitions Against Tying Arrangements.
Trust and Investment Services Through Centennial Bank and its trust operating subsidiary, GoldStar Trust Company, we provide trust, wealth management and custodial services to customers throughout our footprint from offices in Arkansas and Texas. We had approximately $5.46 billion of assets under management and custody as of December 31, 2024.
Trust and Investment Services Through Centennial Bank and its trust operating subsidiary, GoldStar Trust Company, we provide trust, wealth management and custodial services to customers throughout our footprint from offices in Arkansas and Texas. We had approximately $7.46 billion of assets under management and custody as of December 31, 2025.
We are committed to maintaining high credit quality standards. • Continue to improve profitability – We will continue to strive to improve our profitability and achieve high performance ratios as we continue to utilize the available capacity of branches and employees.
We are committed to maintaining high credit quality standards. 7 Table of Contents • Continue to improve profitability – We will continue to strive to improve our profitability and achieve high performance ratios as we continue to utilize the available capacity of branches and employees.
Our goals in making these decisions are to maximize the return to our shareholders and to enhance our franchise. 6 Table of Contents • Organic growth – We believe our current branch network provides us with the capacity to grow within our existing market areas.
Our goals in making these decisions are to maximize the return to our shareholders and to enhance our franchise. • Organic growth – We believe our current branch network provides us with the capacity to grow within our existing market areas.
The offices of Cook Insurance Agency are located in Apalachicola and Crawfordville, Florida. 11 Table of Contents Competition As of December 31, 2024, we conducted business through 218 branch locations in our primary market areas of Pulaski, Faulkner, Craighead, Lonoke, Pope, Washington, White, Benton, Greene, Sebastian, Cleburne, Independence, Stone, Baxter, Clay, Conway, Crawford, Johnson, Saline, Sharp and Yell counties in Arkansas; Broward, Monroe, Hillsborough, Leon, Sarasota, Bay, Franklin, Palm Beach, Gulf, Charlotte, Collier, Escambia, Orange, Osceola, Pasco, Pinellas, Polk, Walton, Miami-Dade, Lee, Calhoun, Gadsden, Hernando, Liberty, Okaloosa, Santa Rosa, Seminole and Wakulla counties in Florida; Bailey, Carson; Castro, Collin, Comal, Dallam, Dallas, Deaf Smith, Garza, Gillespie, Gray, Hale, Hall, Hutchinson, Kendall, Kerr, Lamb, Lubbock, Lynn, Moore, Motley, Parmer, Potter, Randall, Sherman, Swisher, Tarrant, Taylor, Travis, Wheeler and Williamson counties in Texas; Baldwin County in Alabama; and New York County in New York.
Competition As of December 31, 2025, we conducted business through 218 branch locations in our primary market areas of Pulaski, Faulkner, Craighead, Lonoke, Pope, Washington, White, Benton, Greene, Sebastian, Cleburne, Independence, Stone, Baxter, Clay, Conway, Crawford, Johnson, Saline, Sharp and Yell counties in Arkansas; Broward, Monroe, Hillsborough, Leon, Sarasota, Bay, Franklin, Palm Beach, Gulf, Charlotte, Collier, Escambia, Orange, Osceola, Pasco, Pinellas, Polk, Walton, Miami-Dade, Lee, Calhoun, Gadsden, Hernando, Liberty, Okaloosa, Santa Rosa, Seminole and Wakulla counties in Florida; Bailey, Bexar, Carson, Castro, Collin, Comal, Dallam, Dallas, Deaf Smith, Garza, Gillespie, Gray, Hale, Hall, Hutchinson, Kendall, Kerr, Lamb, Lubbock, Lynn, Moore, Motley, Parmer, Potter, Randall, Sherman, Swisher, Tarrant, Taylor, Travis, Wheeler and Williamson counties in Texas; Baldwin County in Alabama; and New York County in New York.
In addition, we are not dependent upon any single lending relationship for an amount exceeding 10% of our revenues. As of December 31, 2024, the maximum amount outstanding to a single borrower was $263.0 million. As primarily a community lender, we believe from time to time it is in our best interest to agree to modifications or restructurings.
In addition, we are not dependent upon any single lending relationship for an amount exceeding 10% of our revenues. As of December 31, 2025, the maximum amount outstanding to a single borrower was $289.1 million. As primarily a community lender, we believe from time to time it is in our best interest to agree to modifications or restructurings.
Our principal acquisition focus in the near term will be to continue to expand our presence in Texas, Arkansas, Florida and Alabama and into other contiguous markets, although we may seek to expand into other areas if attractive financial opportunities in other market areas arise.
Following the completion of our acquisition of MCBI, our principal acquisition focus in the near term will be to continue to expand our presence in Tennessee, Texas, Arkansas, Florida and Alabama and into other contiguous markets, although we may seek to expand into other areas if attractive financial opportunities in other market areas arise.
Additionally, through our SPF division, we operate a lending platform focusing on commercial and consumer marine loans. As opportunities arise, we will evaluate new (commonly referred to as de novo ) branches in our current markets and in other attractive market areas. We did not open any de novo branch locations in 2024.
Additionally, through our SPF division, we operate a lending platform focusing on commercial and consumer marine loans. As opportunities arise, we will evaluate new (commonly referred to as de novo ) branches in our current markets and in other attractive market areas.
When secured, we may independently assess the value of the collateral using a third-party valuation source. Commercial and Industrial. Our commercial and industrial loan portfolio primarily consisted of 8.6% unsecured loans, 28.6% inventory/accounts receivable financing, 9.4% equipment/vehicle financing and 53.4% other, including letters of credit at less than 1%, as of December 31, 2024.
When secured, we may independently assess the value of the collateral using a third-party valuation source. Commercial and Industrial. Our commercial and industrial loan portfolio primarily consisted of 9.5% unsecured loans, 30.8% inventory/accounts receivable financing, 8.3% equipment/vehicle financing and 51.4% other, including letters of credit at less than 1%, as of December 31, 2025.
Residential mortgage loans to individuals retained in our loan portfolio primarily consisted of approximately 57.1% owner occupied 1-4 family properties and approximately 36.2% non-owner occupied 1-4 family properties (rental) as of December 31, 2024 with the remaining 6.7% relating to condos and mobile homes.
Residential mortgage loans to individuals retained in our loan portfolio primarily consisted of approximately 57.7% owner occupied 1-4 family properties and approximately 34.9% non-owner occupied 1-4 family properties (rental) as of December 31, 2025 with the remaining 7.4% relating to condos and mobile homes.
Consumer loan repayments depend upon the borrower’s financial stability and are more likely to be adversely affected by divorce, job loss, illness and other personal hardships. 9 Table of Contents Lending Policies. We have established common loan documentation procedures and policies, based on the type of loan, for our bank subsidiary.
Consumer loan repayments depend upon the borrower’s financial stability and are more likely to be adversely affected by divorce, job loss, illness and other personal hardships. Lending Policies. We have established common loan documentation procedures and policies, based on the type of loan, for our bank subsidiary. The board of directors periodically reviews these policies for validity.
Our Market Areas As of December 31, 2024, we conducted business principally through 76 branches in Arkansas, 78 branches in Florida, 58 branches in Texas, five branches in Alabama and one branch in New York City.
Our Market Areas As of December 31, 2025, we conducted business principally through 75 branches in Arkansas, 78 branches in Florida, 59 branches in Texas, five branches in Alabama and one branch in New York City.
Centennial Bank has branch locations in Arkansas, Florida, Texas, South Alabama and New York City. Although the Company has a diversified loan portfolio, at December 31, 2024 and 2023, commercial real estate loans represented 57.6% and 56.7% of gross loans and 214.6% and 215.5% of total stockholders’ equity, respectively.
Centennial Bank has branch locations in Arkansas, Florida, Texas, South Alabama and New York City. Although the Company has a diversified loan portfolio, at December 31, 2025 and 2024, commercial real estate loans represented 53.2% and 57.6% of gross loans and 194.3% and 214.6% of total stockholders’ equity, respectively.
This committee requires five voting members to establish a quorum, including at least two of the outside board members, and is chaired by the Chief Lending Officer of the bank.
The board of directors of Centennial Bank established the Executive Loan Committee consisting of outside board members and members of executive management. This committee requires five voting members to establish a quorum, including at least two of the outside board members, and is chaired by the Chief Lending Officer of the bank.
The board of directors periodically reviews these policies for validity. In addition, it has been and will continue to be our practice to attempt to independently verify information provided by our borrowers, including assets and income. We have not made loans similar to those commonly referred to as “no doc” or “stated income” loans.
In addition, it has been and will continue to be our practice to attempt to independently verify information provided by our borrowers, including assets and income. We have not made loans similar to those commonly referred to as “no doc” or “stated income” loans.
The Company’s total assets, total deposits, total revenue and net income for each of the past three years are as follows: December 31, 2024 2023 2022 (In thousands) Total assets $ 22,490,748 $ 22,656,658 $ 22,883,588 Total deposits 17,146,297 16,787,711 17,938,783 Total revenue (net interest income plus non-interest income) 1,017,348 996,879 933,787 Net income 402,241 392,929 305,262 Home BancShares acquires, organizes and invests in community banks that serve attractive markets.
The Company’s total assets, total deposits, total revenue and net income for each of the past three years are as follows: December 31, 2025 2024 2023 (In thousands) Total assets $ 22,881,879 $ 22,490,748 $ 22,656,658 Total deposits 17,479,957 17,146,297 16,787,711 Total revenue (net interest income plus non-interest income) 1,090,869 1,017,348 996,879 Net income 475,441 402,241 392,929 Home BancShares acquires, organizes and invests in community banks that serve attractive markets.
Our board of directors adopted such a policy on October 20, 2023. 21 Table of Contents The Federal Reserve Board reviews, as part of the regular, risk-focused examination process, the incentive compensation arrangements of banking organizations, such as the Company, that are not “large, complex banking organizations.” These reviews are tailored to each organization based on the scope and complexity of the organization’s activities and the prevalence of incentive compensation arrangements.
The Federal Reserve Board reviews, as part of the regular, risk-focused examination process, the incentive compensation arrangements of banking organizations, such as the Company, that are not “large, complex banking organizations.” These reviews are tailored to each organization based on the scope and complexity of the organization’s activities and the prevalence of incentive compensation arrangements.
However, we will continue to evaluate de novo opportunities during 2025 and make decisions on a case-by-case basis in the best interest of the shareholders.
We opened one de novo branch location in San Antonio, Texas in 2025, and we will continue to evaluate de novo opportunities during 2026 and make decisions on a case-by-case basis in the best interest of the shareholders.
The corresponding NYSE listing rule was approved by the SEC in June 2023 and required listed companies to adopt a compliant clawback policy by December 1, 2023.
The corresponding NYSE listing rule was approved by the SEC in June 2023 and required listed companies to adopt a compliant clawback policy by December 1, 2023. Our board of directors adopted such a policy on October 20, 2023.
Item 1. BUSINESS Company Overview Home BancShares, Inc. (“Home BancShares”) which may also be referred to in this document as “we,” “us,” “HBI” or the “Company”) is a Conway, Arkansas headquartered bank holding company registered under the federal Bank Holding Company Act of 1956.
Item 1. BUSINESS Company Overview Home BancShares, Inc. (“Home BancShares,” “we,” “us,” “HBI” or the “Company”) is a Conway, Arkansas headquartered bank holding company registered under the federal Bank Holding Company Act of 1956.
Although our offices have generally returned to a normal working environment following the pandemic, we continue to support working remotely for those employees who have a need to telework for health reasons and in certain other circumstances. 12 Table of Contents SUPERVISION AND REGULATION General We and our bank subsidiary are subject to extensive state and federal banking regulations that impose restrictions on and provide for general regulatory oversight of our company and its operations.
Additionally, we support remote work arrangements for employees who have a need to telework for health reasons and in certain other circumstances. 12 Table of Contents SUPERVISION AND REGULATION General We and our bank subsidiary are subject to extensive state and federal banking regulations that impose restrictions on and provide for general regulatory oversight of our company and its operations.
In October 2022, the SEC adopted a final rule directing national securities exchanges and associations, including the NYSE, to implement listing standards that require listed companies to adopt policies mandating the recovery or “clawback” of excess incentive-based compensation earned by a current or former executive officer during the three fiscal years preceding the date the listed company is required to prepare an accounting restatement, including to correct an error that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period.
Unless and until a final Section 956 rule is adopted, we cannot fully determine whether compliance with such a rule would adversely affect the Company's or its bank subsidiary's ability to hire, retain, and motivate key employees. 21 Table of Contents In October 2022, the SEC adopted a final rule directing national securities exchanges and associations, including the NYSE, to implement listing standards that require listed companies to adopt policies mandating the recovery or “clawback” of excess incentive-based compensation earned by a current or former executive officer during the three fiscal years preceding the date the listed company is required to prepare an accounting restatement, including to correct an error that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period.
They are funded primarily from proceeds derived from the sale of consolidated obligations of the FHLB system. They make loans (i.e., advances) to members in accordance with policies and procedures established by the FHLB and the boards of directors of each regional FHLB.
The FHLBs serve as reserve or credit facilities for member institutions within their assigned regions. They are funded primarily from proceeds derived from the sale of consolidated obligations of the FHLB system. They make loans (i.e., advances) to members in accordance with policies and procedures established by the FHLB and the boards of directors of each regional FHLB.
These alternatives include reducing compliance time, subjecting credit unions to the requirements, amending definitions, and reducing limits on options-based compensation, among other items. As of February 1, 2025, neither proposal has been finalized.
These alternatives include reducing compliance time, subjecting credit unions to the requirements, amending definitions, and reducing limits on options-based compensation, among other items.
As of December 31, 2024, our capital conservation buffer was 9.11%, and our CET1 capital, Tier 1 risk-based capital, total risk-based capital and leverage ratios were 15.11%, 15.11%, 18.74% and 13.05%, respectively. The federal banking agencies’ risk-based and leverage ratios are minimum supervisory ratios generally applicable to banking organizations that meet certain specified criteria.
As of December 31, 2025, our capital conservation buffer was 10.30%, and our CET1 capital, Tier 1 risk-based capital, total risk-based capital and leverage ratios were 16.30%, 16.30%, 19.06% and 14.09%, respectively. The federal banking agencies’ risk-based and leverage ratios are minimum supervisory ratios generally applicable to banking organizations that meet certain specified criteria.
We seek to recognize the unique contribution each individual brings to the Company, and we understand the associated value that comes with a diverse workforce. We strive to offer an inclusive environment where employees from all backgrounds can succeed. As of December 31, 2024, 69% of our employees were women and 28% of our employees identify as persons of color.
Diversity and Inclusion. We seek to recognize the unique contribution each individual brings to the Company, and we understand the associated value that comes with a diverse workforce. We strive to offer an inclusive environment where employees from all backgrounds can succeed.
Accordingly, we aim to attract, develop and retain employees who can drive financial and strategic growth objectives and build long-term shareholder value while executing our community banking philosophy. On December 31, 2024, we had 2,552 full-time equivalent employees. Except for any additional employees acquired in future acquisitions, we expect that our 2025 staffing levels will be consistent that of 2024.
Accordingly, we aim to attract, develop and retain employees who can drive financial and strategic growth objectives and build long-term shareholder value while executing our community banking philosophy. On December 31, 2025, we had 2,543 full-time equivalent employees.
The execution of our community banking strategy has allowed us to rapidly build our network of banking operations through acquisitions. The following summary provides additional details concerning our acquisitions during the previous five fiscal years.
The execution of our community banking strategy has allowed us to rapidly build our network of banking operations through acquisitions. The following summary provides additional details concerning our acquisitions during the previous five fiscal years. LendingClub Bank Marine Portfolio – On February 4, 2022, the Company completed the purchase of the performing marine loan portfolio of Utah-based LendingClub Bank (“LendingClub”).
Generally, each DLC requires a majority of outside directors be present to establish a quorum. Generally, this committee is chaired either by the Division Chief Lending Officer or the Regional President.
Our bank subsidiary has Directors’ Loan Committees (“DLCs”) throughout our market areas consisting of outside directors and senior lenders of the respective market areas. Generally, each DLC requires a majority of outside directors be present to establish a quorum. Generally, this committee is chaired either by the Division Chief Lending Officer or the Regional President.
For additional discussions regarding the acquisition of Happy, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 2 “Business Combinations” in the Notes to Consolidated Financial Statements included in this Annual Report on Form 10-K for the year ended December 31, 2024.
Happy formerly operated its banking business from 62 locations in Texas. For additional discussions regarding the acquisition of Happy, see Note 2 “Business Combinations” in the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.
We cannot predict whether or in what form any proposed regulation or statute will be adopted or the extent to which our business may be affected by any new regulation or statute. Additionally, we cannot predict the impact of potential judicial interpretations of regulations or the outcome of the upcoming election cycle on banking statutes and regulations.
We cannot predict whether or in what form any proposed regulation or statute will be adopted or the extent to which our business may be affected by any new regulation or statute.
Townsell 54 Senior Executive Vice President, Director of Investor Relations and Director Senior Executive Vice President and Director Russell D. Carter, III 49 Executive Officer Regional President Our Growth Strategy Our goals are to achieve growth in earnings per share and to create and build stockholder value.
Carter, III 50 Executive Officer Regional President 6 Table of Contents Our Growth Strategy Our goals are to achieve growth in earnings per share and to create and build stockholder value.
(“Happy”), and merged Happy State Bank into Centennial Bank. The Company issued approximately 42.4 million shares of its common stock valued at approximately $958.8 million as of April 1, 2022. In addition, the holders of certain Happy stock-based awards received approximately $3.7 million in cash in cancellation of such awards, for a total transaction value of approximately $962.5 million.
(“Happy”), and merged Happy State Bank into Centennial Bank. The Company issued approximately 42.4 million shares of its common stock valued at approximately $958.8 million as of April 1, 2022.
The Federal Home Loan Bank (“FHLB”) system, of which our bank subsidiary is a member, consists of regional FHLBs governed and regulated by the Federal Housing Finance Agency, or FHFA. The FHLBs serve as reserve or credit facilities for member institutions within their assigned regions.
The existing brokered deposit regulations, as amended in December 2020, remain in effect. Federal Home Loan Bank System. The Federal Home Loan Bank (“FHLB”) system, of which our bank subsidiary is a member, consists of regional FHLBs governed and regulated by the Federal Housing Finance Agency, or FHFA.
The regional Officers’ Loan Committees have approval authority of up to $2.0 million secured on all loans and $100,000 unsecured on loan renewals. • Directors’ Loan Committee. Our bank subsidiary has Directors’ Loan Committees (“DLCs”) throughout our market areas consisting of outside directors and senior lenders of the respective market areas.
The regional Officers’ Loan Committees have approval authority of up to $2.0 million aggregate debt on all new secured loans, $2.0 million individual loan amount on all secured renewals, $100,000 aggregate debt on all unsecured new loans and $100,000 individual loan amount on all unsecured renewals. • Directors’ Loan Committee.
These include competitive compensation and benefits, paid time off, an employee retirement plan, bonus and other incentive compensation plans, modern equipment and support, leadership development and professional development as well as those benefits described below. Diversity and Inclusion.
In managing the Company’s business, management focuses on various human capital measures and objectives designed to address the development, attraction and retention of personnel. These include competitive compensation and benefits, paid time off, an employee retirement plan, bonus and other incentive compensation plans, modern equipment and support, leadership development and professional development as well as those benefits described below.
Risks associated with real estate loans also include fluctuations in the value of real estate, new job creation trends, tenant vacancy rates, and in the case of commercial borrowers, the quality of the borrower’s management.
General factors affecting a commercial borrower’s ability to repay include interest rates, inflation and the demand for the commercial borrower’s products and services as well as other factors affecting a borrower’s customers, suppliers and employees. 9 Table of Contents Risks associated with real estate loans also include fluctuations in the value of real estate, new job creation trends, tenant vacancy rates, and in the case of commercial borrowers, the quality of the borrower’s management.
Further, as of December 31, 2024, 62% of the Company’s leadership positions were held by women. Employee Safety and Health. The health and well-being of our employees is a priority for our business. Our full-time officers and employees are provided hospitalization and major medical insurance. We pay a substantial part of the premiums for these coverages.
As of December 31, 2025, 68% of our employees were women and 28% of our employees identify as persons of color. Further, as of December 31, 2025, 62% of the Company’s leadership positions were held by women. Employee Safety and Health. The health and well-being of our employees is a priority for our business.
We also provide other basic insurance coverage including dental, life, and long-term disability insurance. We are committed to providing a healthy and safe environment that allows employees to thrive professionally and personally. To support the well-being of our employees and their families we also offer resources focused on physical, mental, and emotional health.
Our full-time officers and employees are provided hospitalization and major medical insurance. We pay a substantial part of the premiums for these coverages. We also provide other basic insurance coverage including dental, life, and long-term disability insurance. We are committed to providing a healthy and safe environment that allows employees to thrive professionally and personally.
Effect of Governmental Monetary Polices Our earnings are affected by domestic economic conditions and the monetary and fiscal policies of the United States government and its agencies.
Additionally, we cannot predict the impact of potential judicial interpretations of regulations or the outcome of the upcoming election cycle on banking statutes and regulations. 22 Table of Contents Effect of Governmental Monetary Polices Our earnings are affected by domestic economic conditions and the monetary and fiscal policies of the United States government and its agencies.
The regional DLCs have approval authority up to $6.0 million secured and $500,000 unsecured. • Executive Loan Committee – The board of directors of Centennial Bank established the Executive Loan Committee consisting of outside board members and members of executive management.
The regional DLCs have approval authority up to $6.0 million aggregate debt on new secured loans, $6.0 million individual loan amount on all secured renewals, $500,000 aggregate debt on all unsecured new loans and $500,000 individual loan amount on all unsecured renewals. • Executive Loan Committee.
Including the purchase accounting adjustments, as of the acquisition date, Happy had approximately $6.69 billion in total assets, $3.65 billion in loans and $5.86 billion in customer deposits. Happy formerly operated its banking business from 62 locations in Texas.
In addition, the holders of certain Happy stock-based awards received approximately $3.7 million in cash in cancellation of such awards, for a total transaction value of approximately $962.5 million. 5 Table of Contents Including the purchase accounting adjustments, as of the acquisition date, Happy had approximately $6.69 billion in total assets, $3.65 billion in loans and $5.86 billion in customer deposits.
Our Management Team The following table sets forth, as of December 31, 2024, information concerning the individuals who are our executive officers. Name Age Positions Held with Home BancShares, Inc. Positions Held with Centennial Bank John W. Allison 78 Chairman of the Board, Chief Executive Officer and President Director Brian S.
The Merger is expected to close in the second quarter of 2026 and is subject to regulatory approvals and other conditions set forth in the Agreement. Our Management Team The following table sets forth, as of December 31, 2025, information concerning the individuals who are our executive officers. Name Age Positions Held with Home BancShares, Inc.
Our loan portfolio as of December 31, 2024, was comprised as follows: Total Loans Receivable Percentage of portfolio (Dollars in thousands) Real estate: Commercial real estate loans Non-farm/non-residential $ 5,426,780 36.8 % Construction/land development 2,736,214 18.5 Agricultural 336,993 2.3 Residential real estate loans Residential 1-4 family 1,956,489 13.2 Multifamily residential 496,484 3.4 Total real estate 10,952,960 74.2 Consumer 1,234,361 8.4 Commercial and industrial 2,022,775 13.7 Agricultural 367,251 2.5 Other 187,153 1.2 Total $ 14,764,500 100.0 % Real Estate – Non-farm/Non-residential.
Our loan portfolio as of December 31, 2025, was comprised as follows: Total Loans Receivable Percentage of portfolio (Dollars in thousands) Real estate: Commercial real estate loans Non-farm/non-residential $ 5,290,112 33.7 % Construction/land development 2,726,993 17.4 Agricultural 332,412 2.1 Residential real estate loans Residential 1-4 family 2,134,334 13.6 Multifamily residential 1,140,911 7.3 Total real estate 11,624,762 74.1 Consumer 1,253,746 8.0 Commercial and industrial 2,222,401 14.2 Agricultural 359,879 2.3 Other 225,421 1.4 Total $ 15,686,209 100.0 % 8 Table of Contents Real Estate – Non-farm/Non-residential.
In July 2024, the FDIC proposed a rule to expand the definition of deposits that would be considered brokered, but the rule has not been finalized as of February 1, 2025. Federal Home Loan Bank System.
In July 2024, the FDIC proposed a rule to expand the definition of deposits that would be considered brokered. On March 3, 2025, the FDIC Board of Directors withdrew the August 2024 proposed rule. The FDIC stated that if it pursues regulatory action on brokered deposits in the future, it will do so by publishing a new proposed rule.
Removed
LH-Finance – On February 29, 2020, the Company completed the acquisition of LH-Finance, the marine lending division of People’s United Bank, N.A., for a cash purchase price of approximately $421.2 million.
Added
Mountain Commerce Bancorp, Inc. – On December 7, 2025, the Company and Centennial entered into an Agreement and Plan of Merger (the “Agreement”) with Mountain Commerce Bancorp, Inc., a Tennessee Corporation (“MCBI”), and its wholly-owned bank subsidiary, Mountain Commerce Bank, a Tennessee state banking corporation (“MCB”), under which the Company and Centennial will acquire MCBI and MCB.
Removed
Like SPF, LH-Finance provided direct consumer financing for United States Coast Guard ("USCG") registered high-end sail and power boats, as well as inventory floor plan lines of credit to marine dealers, primarily those selling USCG documented vessels.
Added
The Agreement provides that, in a series of transactions, an acquisition subsidiary of the Company will merge into MCBI and MCBI will merge into the Company, with the Company as the surviving entity (collectively, the “Merger”). As soon as reasonably practicable following the Merger, MCB will merge into Centennial, with Centennial as the surviving entity.
Removed
Including the purchase accounting adjustments, as of the acquisition date, LH-Finance had approximately $409.1 million in total assets, including $407.4 million in total loans, which resulted in goodwill of $14.6 million being recorded. The acquired portfolio of loans is housed in our SPF division. The SPF division is responsible for servicing the acquired loan portfolio and originating new loan production.
Added
Under the terms of the Agreement, the Company will issue approximately 5.4 million shares of its common stock to the shareholders of MCBI upon completion of the Merger.
Removed
In connection with this acquisition, we opened a new loan production office in Baltimore, Maryland. 5 Table of Contents LendingClub Bank Marine Portfolio – On February 4, 2022, the Company completed the purchase of the performing marine loan portfolio of Utah-based LendingClub Bank (“LendingClub”).
Added
No cash consideration will be paid in connection with the Merger, except that holders of outstanding shares of MCBI common stock at the time of the Merger will receive cash payments in lieu of any fractional shares of Company common stock to which they are otherwise entitled in connection with the Merger.
Removed
For an additional discussion regarding the acquisition of LendingClub's Marine Portfolio, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this Annual Report on Form 10-K for the year ended December 31, 2024.
Added
Subject to the terms and conditions set forth in the Agreement, at the effective time of the Merger (the “Effective Time”), each outstanding share of common stock of MCBI will be converted into the right to receive, without interest, 0.85 shares of the Company’s common stock (the “Merger Consideration”).
Removed
General factors affecting a commercial borrower’s ability to repay include interest rates, inflation and the demand for the commercial borrower’s products and services as well as other factors affecting a borrower’s customers, suppliers and employees.
Added
Each unvested restricted share of MCBI common stock outstanding at the Effective Time will fully vest and be converted into the right to receive Merger Consideration.
Removed
We consider our employee relations to be good, and we have no collective bargaining agreements with any employees. In managing the Company’s business, management focuses on various human capital measures and objectives designed to address the development, attraction and retention of personnel.
Added
The Merger Consideration value will be determined using a volume-weighted average closing price of the Company’s common stock as reported on the New York Stock Exchange over the 20 consecutive trading day period ending on the third business day prior to the closing of the Merger (“the Company’s Average Closing Price”), multiplied by 0.85.
Removed
Unless and until a final rule is adopted, we cannot fully determine whether compliance with such a rule will adversely affect the Company’s or our bank subsidiary’s ability to hire, retain and motivate our key employees.
Added
Hester 62 President and Chief Lending Officer President, Chief Lending Officer and Director J. Stephen Tipton 44 Chief Operating Officer Chief Executive Officer Donna J. Townsell 55 Senior Executive Vice President, Director of Investor Relations and Director Senior Executive Vice President and Director Russell D.
Added
We currently anticipate completing our proposed acquisition of MCBI, headquartered in Knoxville, Tennessee, during the second quarter of 2026.
Added
The offices of Cook Insurance Agency are located in Apalachicola and Crawfordville, Florida.
Added
Except for any additional employees acquired in future acquisitions, including our proposed acquisition of Mountain Commerce Bancorp, Inc., we expect that our 2026 staffing levels will be consistent with that of 2025. We consider our employee relations to be good, and we have no collective bargaining agreements with any employees.
Added
To support the well-being of our employees and their families we also offer resources focused on physical, mental, and emotional health.
Added
On March 3, 2025, the FDIC Board of Directors withdrew its authority to publish the May 2024 incentive compensation proposed rule, stating that the FDIC no longer intends to issue a final rule with respect to this proposal.
Added
The FDIC stated that if it pursues regulatory action on incentive compensation in the future, it will do so by publishing a new proposed rule.
Added
In the absence of a final Section 956 rule, the Company and its bank subsidiary remain subject to the Interagency Guidance on Sound Incentive Compensation Policies issued in June 2010, which provides principles-based guidance on incentive compensation practices. The Company believes its current compensation practices are consistent with this guidance.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

33 edited+21 added−6 removed138 unchanged
Biggest changeCommercial real estate and land development loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to residential loans. Consequently, an adverse development with respect to one commercial loan or one credit relationship exposes us to a significantly greater risk of loss compared to an adverse development with respect to one residential mortgage loan.
Biggest changeConsequently, an adverse development with respect to one commercial loan or one credit relationship exposes us to a significantly greater risk of loss compared to an adverse development with respect to one residential mortgage loan. 26 Table of Contents The repayment of loans secured by commercial real estate is typically dependent upon the successful operation of the related real estate or commercial project.
Our ability to pay dividends depends on the following factors, among others: • We may not have sufficient earnings since our primary source of income, the payment of dividends to us by our bank subsidiary, is subject to federal and state laws that limit the ability of that bank to pay dividends. • Federal Reserve Board policy requires bank holding companies to pay cash dividends on common stock only out of net income available over the past year and only if prospective earnings retention is consistent with the organization’s expected future needs and financial condition. • Before dividends may be paid on our common stock in any year, payments must be made on our subordinated debentures. 32 Table of Contents • Our board of directors may determine that, even though funds are available for dividend payments, retaining the funds for internal uses, such as expansion of our operations, is a better strategy.
Our ability to pay dividends depends on the following factors, among others: • We may not have sufficient earnings since our primary source of income, the payment of dividends to us by our bank subsidiary, is subject to federal and state laws that limit the ability of that bank to pay dividends. • Federal Reserve Board policy requires bank holding companies to pay cash dividends on common stock only out of net income available over the past year and only if prospective earnings retention is consistent with the organization’s expected future needs and financial condition. • Before dividends may be paid on our common stock in any year, payments must be made on our subordinated debentures. • Our board of directors may determine that, even though funds are available for dividend payments, retaining the funds for internal uses, such as expansion of our operations, is a better strategy.
Our annual goodwill impairment evaluation performed during the fourth quarter of 2024 indicated no impairment of goodwill for our reporting segments. We cannot provide assurance, however, that we will not be required to take an impairment charge in the future.
Our annual goodwill impairment evaluation performed during the fourth quarter of 2025 indicated no impairment of goodwill for our reporting segments. We cannot provide assurance, however, that we will not be required to take an impairment charge in the future.
Accordingly, our inability to receive dividends from our bank subsidiary could also have a material adverse effect on our business, financial condition and results of operations and the value of your investment in our common stock. Item 1B.
Accordingly, our inability to receive dividends from our bank subsidiary could also have a material adverse effect on our business, financial condition and results of operations and the value of your investment in our common stock.
If we need additional capital but cannot raise it on terms acceptable to us, our ability to expand our operations could be materially impaired, our business, financial condition, results of operations and prospects may be adversely affected, and our stock price may decline. Our growth and expansion strategy may not be successful, and our market value and profitability may suffer.
If we need additional capital but cannot raise it on terms acceptable to us, our ability to expand our operations could be materially impaired, our business, financial condition, results of operations and prospects may be adversely affected, and our stock price may decline. 28 Table of Contents Our growth and expansion strategy may not be successful, and our market value and profitability may suffer.
Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense.
Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as provision for (or recovery of) credit loss expense.
Further, our stock price may be negatively impacted by failures of other financial institutions and their effects on consumer and investor confidence, and we may experience increased deposit insurance premiums, increased regulatory scrutiny and other adverse effects on our business, profitability or financial condition as a result of these failures. 25 Table of Contents The impacts of national or international pandemics could materially and adversely affect our business, financial condition and results of operations.
Further, our stock price may be negatively impacted by failures of other financial institutions and their effects on consumer and investor confidence, and we may experience increased deposit insurance premiums, increased regulatory scrutiny and other adverse effects on our business, profitability or financial condition as a result of these failures. 25 Table of Contents The impacts of public health crises, including national or international pandemics, could materially and adversely affect our business, financial condition and results of operations.
Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of a security is confirmed.
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.
Because of changing economic and market conditions affecting issuers, we may be required to record provisions for credit losses in future periods, which could have a material adverse effect on our business, financial condition or results of operations. As of December 31, 2024, we owned $1.28 billion of held-to-maturity investment securities.
Because of changing economic and market conditions affecting issuers, we may be required to record provisions for credit losses in future periods, which could have a material adverse effect on our business, financial condition or results of operations. As of December 31, 2025, we owned $1.26 billion of held-to-maturity investment securities.
As of December 31, 2024, the legal lending limit of our bank subsidiary for secured loans was approximately $576.1 million. Our board of directors has established an in-house lending limit of $40.0 million to any one borrowing relationship without obtaining the approval of the Chairman, John W. Allison, and our Vice Chairman, Jack E. Engelkes.
As of December 31, 2025, the legal lending limit of our bank subsidiary for secured loans was approximately $606.1 million. Our board of directors has established an in-house lending limit of $40.0 million to any one borrowing relationship without obtaining the approval of the Chairman, John W. Allison, and our Vice Chairman, Jack E. Engelkes.
We could also face an increased risk of governmental and regulatory scrutiny as a result of the effects of a pandemic on market and economic conditions and actions governmental authorities take in response to those conditions. Any such occurrence could have a significant adverse impact on our business, financial condition, liquidity or results of operations.
We could also face an increased risk of governmental and regulatory scrutiny as a result of the effects of a public health crises on market and economic conditions and actions governmental authorities take in response to those conditions. Any such occurrence could have a significant adverse impact on our business, financial condition, liquidity or results of operations.
Our high concentration of real estate loans and especially commercial real estate loans exposes us to increased lending risk. As of December 31, 2024, approximately 74.2% of our total loan portfolio was comprised of loans with real estate as a primary or secondary component of collateral.
Our high concentration of real estate loans and especially commercial real estate loans exposes us to increased lending risk. As of December 31, 2025, approximately 74.1% of our total loan portfolio was comprised of loans with real estate as a primary or secondary component of collateral.
If the value of real estate were to deteriorate, a significant portion of our loans could become under-collateralized, which could have a material adverse effect on us. As of December 31, 2024, approximately 74.2% of our total loans were secured by real estate.
If the value of real estate were to deteriorate, a significant portion of our loans could become under-collateralized, which could have a material adverse effect on us. As of December 31, 2025, approximately 74.1% of our total loans were secured by real estate.
As of December 31, 2024, we had a total of $7.54 billion, or 51.1% of our total loans, committed to the aggregate group of borrowers whose total debt exceeds the established in-house lending limit of $40.0 million. Our cost of funds may increase as a result of general economic conditions, interest rates and competitive pressures.
As of December 31, 2025, we had a total of $8.1 billion, or 51.6% of our total loans, committed to the aggregate group of borrowers whose total debt exceeds the established in-house lending limit of $40.0 million. Our cost of funds may increase as a result of general economic conditions, interest rates and competitive pressures.
The amount of the purchase price that is allocated to goodwill and other intangible assets is determined by the excess of the purchase price over the net identifiable assets acquired. At December 31, 2024, our goodwill and other identifiable intangible assets were $1.44 billion.
The amount of the purchase price that is allocated to goodwill and other intangible assets is determined by the excess of the purchase price over the net identifiable assets acquired. At December 31, 2025, our goodwill and other identifiable intangible assets were $1.43 billion.
However, approximately 79.5% of our total loans and 83.7% of our real estate loans as of December 31, 2024, are to borrowers whose collateral is located in Arkansas, Florida, Texas, Alabama and New York, the states in which the Company has its branch locations.
However, approximately 79.3% of our total loans and 83.6% of our real estate loans as of December 31, 2025, are to borrowers whose collateral is located in Arkansas, Florida, Texas, Alabama and New York, the states in which the Company has its branch locations.
We currently have outstanding $300.0 million of 3.125% fixed-to-floating rate subordinated notes, which mature in 2032, and $140.0 million of subordinated notes, which mature in 2030 and carry a fixed rate of 5.500% for the first five years. Thereafter, the notes bear interest at 3-month Secured Overnight Funding Rate (SOFR) plus 5.345%, resetting quarterly.
We currently have outstanding $300.0 million of 3.125% fixed-to-floating rate subordinated notes, which mature in 2032 and carry a fixed rate for the first five years. Thereafter, the notes bear interest at 3-month Secured Overnight Funding Rate (SOFR) plus 182 basis points, resetting quarterly.
Our costs of funds and our profitability and liquidity are likely to be adversely affected if and to the extent we must rely upon higher cost borrowings from other institutional lenders or brokers to fund loan demand or liquidity needs, and changes in our deposit mix and growth could adversely affect our profitability and the ability to expand our loan portfolio. 27 Table of Contents The loss of key employees may materially and adversely affect us.
Our costs of funds and our profitability and liquidity are likely to be adversely affected if and to the extent we must rely upon higher cost borrowings from other institutional lenders or brokers to fund loan demand or liquidity needs, and changes in our deposit mix and growth could adversely affect our profitability and the ability to expand our loan portfolio.
In response to inflation and its affects on U.S. business and consumers, the Federal Reserve Board implemented a series of eleven interest rate increases beginning in March 2022. However, in response to recent slowing inflation, the Federal Reserve Board reduced interest rates three times in 2024.
In response to inflation and its effects on U.S. business and consumers, the Federal Reserve Board implemented a series of eleven interest rate increases beginning in March 2022. However, in response to recent slowing inflation, beginning in September 2024, the Federal Reserve Board reduced interest rates six times through December 2025.
We endeavor to maintain an allowance for credit losses that we consider adequate to absorb future losses that may occur in our loan portfolio. As of December 31, 2024, our allowance for credit losses was approximately $275.9 million, or 1.87% of our total loans.
We endeavor to maintain an allowance for credit losses that we consider adequate to absorb future losses that may occur in our loan portfolio. As of December 31, 2025, our allowance for credit losses was approximately $297.6 million, or 1.90% of our total loans.
As of December 31, 2024, we owned $3.07 billion of available-for-sale investment securities. The fair value of our available-for-sale investment securities may be adversely affected by market conditions, including changes in interest rates, and the occurrence of any events adversely affecting the issuer of particular securities in our investments portfolio.
The fair value of our available-for-sale investment securities may be adversely affected by market conditions, including changes in interest rates, and the occurrence of any events adversely affecting the issuer of particular securities in our investments portfolio.
While we believe that our existing capital (which well exceeds the federal and state capital requirements) will be sufficient to support our current operations, anticipated expansion and potential acquisitions, factors such as faster than anticipated growth, reduced earnings levels, operating losses, changes in economic conditions, revisions in regulatory requirements, or additional acquisition opportunities may lead us to seek additional capital. 28 Table of Contents Our ability to raise additional capital, if needed, will depend on our financial performance and on conditions in the capital markets at that time, which are outside our control.
While we believe that our existing capital (which well exceeds the federal and state capital requirements) will be sufficient to support our current operations, anticipated expansion and potential acquisitions, factors such as faster than anticipated growth, reduced earnings levels, operating losses, changes in economic conditions, revisions in regulatory requirements, or additional acquisition opportunities may lead us to seek additional capital.
Our success depends significantly on our Chairman, Chief Executive Officer and President, John W. Allison, and our executive officers, especially Brian S. Davis, J. Stephen Tipton and Kevin D. Hester plus Centennial Bank Chairman, Tracy M. French, as well as other key Centennial Bank personnel.
The loss of key employees may materially and adversely affect us. Our success depends significantly on our Chairman and Chief Executive Officer, John W. Allison, and our executive officers, especially Brian S. Davis, J. Stephen Tipton, Kevin D. Hester and Donna J. Townsell, as well as other key Centennial Bank personnel.
The banking business in our primary market areas is very competitive, and the level of competition facing us may increase further, which may limit our asset growth and financial results. 30 Table of Contents We continually encounter technological change, and we may have fewer resources than many of our competitors to continue to invest in technological improvements and innovations.
The banking business in our primary market areas is very competitive, and the level of competition facing us may increase further, which may limit our asset growth and financial results. 30 Table of Contents We continually encounter technological change, and we may not be able to keep pace with rapid technological change in the financial services industry.
We may incur losses as a result of unforeseen or catastrophic events, including extreme weather events or other natural disasters. As illustrated by the impacts of Hurricanes Helene and Milton this past year, our markets in Alabama and Florida, like other coastal areas, are susceptible to hurricanes and tropical storms.
We may incur losses as a result of unforeseen or catastrophic events, including extreme weather events or other natural disasters. Our markets in Alabama and Florida, like other coastal areas, are susceptible to hurricanes and tropical storms. Such weather events can disrupt our operations, result in damage to our properties and negatively affect the local economies in which we operate.
Also, in any such event, our ability to recover on defaulted loans by foreclosing and selling real estate collateral would be diminished, and we would be more likely to suffer losses on defaulted loans. 26 Table of Contents In addition to the risks associated with the high concentration of real estate-secured loans, the commercial real estate and construction/land development loans, which comprised 57.6% of our total loan portfolio as of December 31, 2024, expose us to a greater risk of loss than our residential real estate loans, which comprised 16.6% of our total loan portfolio as of December 31, 2024.
In addition to the risks associated with the high concentration of real estate-secured loans, the commercial real estate and construction/land development loans, which comprised 53.2% of our total loan portfolio as of December 31, 2025, expose us to a greater risk of loss than our residential real estate loans, which comprised 20.9% of our total loan portfolio as of December 31, 2025.
The repayment of loans secured by commercial real estate is typically dependent upon the successful operation of the related real estate or commercial project. If the cash flows from the project are reduced, a borrower’s ability to repay the loan may be impaired. This cash flow shortage may result in the failure to make loan payments.
If the cash flows from the project are reduced, a borrower’s ability to repay the loan may be impaired. This cash flow shortage may result in the failure to make loan payments. In such cases, we may be compelled to modify the terms of the loan, or in the most extreme cases, we may have to foreclose.
Centennial Bank, in particular, relies heavily on its management team’s relationships in its local communities to generate business. The loss of services from a member of our current management team may materially and adversely affect our business, financial condition, results of operations and future prospects. The value of securities in our investment portfolio may decline in the future.
The loss of services from a member of our current management team may materially and adversely affect our business, financial condition, results of operations and future prospects. 27 Table of Contents The value of securities in our investment portfolio may decline in the future. As of December 31, 2025, we owned $2.87 billion of available-for-sale investment securities.
The pandemic also caused us to recognize credit losses in our loan portfolios and increases in our allowance for credit losses. The extent to which any future outbreaks of the COVID-19 virus or other contagious diseases may impact general economic and business conditions is highly uncertain and unpredictable.
The extent to which any future outbreaks of contagious disease or other public health emergencies may impact general economic and business conditions is highly uncertain and unpredictable.
This includes commercial real estate loans (excluding construction/land development) of $5.76 billion, or 39.1% of total loans, construction/land development loans of $2.74 billion, or 18.5% of total loans, and residential real estate loans of $2.45 billion, or 16.6% of total loans.
This includes commercial real estate loans (excluding construction/land development) of $5.62 billion, or 35.8% of total loans, construction/land development loans of $2.73 billion, or 17.4% of total loans, and residential real estate loans of $3.28 billion, or 20.9% of total loans.
Our growth strategy includes strategic acquisitions of banks or bank assets. We have acquired 23 banks since we started our first subsidiary bank in 1999, including a total of 18 banks since 2010. We will continue to consider future strategic acquisitions, with a primary focus on Texas, Arkansas, Florida, Alabama and other nearby markets.
We will continue to consider future strategic acquisitions, with a primary focus on Tennessee, Texas, Arkansas, Florida, Alabama and other nearby markets.
Repeated incidences of fraud or compliance failures would adversely impact the performance of our loan portfolio.
Repeated incidences of fraud or compliance failures would adversely impact the performance of our loan portfolio. Risks Related to the Proposed Acquisition of Mountain Commerce Bancorp, Inc. We may fail to realize all of the anticipated benefits of the merger.
Our operations and those of our customers and third-party service providers may be adversely affected by the widespread outbreak of contagious disease, such as the COVID-19 virus. The COVID-19 pandemic disrupted U.S. and global supply chains and altered business and economic conditions throughout the U.S. and globally.
Our operations and those of our customers and third-party service providers may be adversely affected by the widespread outbreak of contagious disease and other public health emergencies. Such events can disrupt U.S. and global supply chains and alter business and economic conditions; lower equity market valuations; create significant volatility and disruption in financial markets; influence interest-rate and yields on U.S.
Removed
Its economic impacts lowered equity market valuations; created significant volatility and disruption in financial markets; contributed to a decrease in the rates and yields on U.S. Treasury securities; resulted in ratings downgrades, credit deterioration, and defaults in many industries; increased demands on capital and liquidity; increased unemployment levels and decreased consumer confidence.
Added
Treasury securities; result in ratings downgrades, credit deterioration, and defaults in many industries; increase demands on capital and liquidity; elevate unemployment levels; and weaken consumer confidence. Public health crises may also result in credit losses in our loan portfolios and require increases in our allowance for credit losses.
Removed
During the fourth quarter of 2024, we completed a company-wide asset quality cleanup project, which resulted in net charge-offs for the quarter of $53.4 million and a reduction in our allowance for credit losses of $36.7 million from $312.6 million, or 2.11% of total loans, at September 30, 2024.
Added
Also, in any such event, our ability to recover on defaulted loans by foreclosing and selling real estate collateral would be diminished, and we would be more likely to suffer losses on defaulted loans.
Removed
The reduction resulting from charge-offs was partially offset by a $16.7 million provision for credit losses during the fourth quarter related to Hurricanes Helene and Milton. However, no additional provision for credit losses on loans was recorded for the quarter ended December 31, 2024, as the current level of reserves was considered adequate for the loan portfolio.
Added
Commercial real estate and land development loans typically involve larger loan balances to single borrowers or groups of related borrowers compared to residential loans.
Removed
In such cases, we may be compelled to modify the terms of the loan, or in the most extreme cases, we may have to foreclose.
Added
Centennial Bank, in particular, relies heavily on its management team’s relationships in its local communities to generate business.
Removed
Such weather events can disrupt our operations, result in damage to our properties and negatively affect the local economies in which we operate.
Added
Our ability to raise additional capital, if needed, will depend on our financial performance and on conditions in the capital markets at that time, which are outside our control.
Removed
UNRESOLVED STAFF COMMENTS There are currently no unresolved Commission staff comments received by the Company more than 180 days prior to the end of the fiscal year covered by this annual report.
Added
Our growth strategy includes strategic acquisitions of banks or bank assets. We have acquired 23 banks since we started our first subsidiary bank in 1999, including a total of 18 banks since 2010. We currently anticipate completing our proposed acquisition of Mountain Commerce Bancorp, Inc., headquartered in Knoxville, Tennessee, during the second quarter of 2026.
Added
The success of the merger of MCBI with and into us will depend, in part, on our ability to successfully combine our and MCBI’s organizations. If we are not able to achieve this objective, the anticipated benefits of the merger may not be realized fully or at all or may take longer than expected to be realized.
Added
We and MCBI have operated and, until the completion of the merger, will continue to operate, independently. It is possible that the integration process or other factors could result in the loss or departure of key employees, the disruption of the ongoing business of MCBI or inconsistencies in standards, controls, procedures and policies.
Added
It is also possible that clients, customers, depositors and counterparties of MCBI could choose to discontinue their relationships with the combined company post-merger because they prefer doing business with MCBI or for any other reason, which would adversely affect the future performance of the combined company.
Added
These transition matters could have an adverse effect on each of us and MCBI during the pre-merger period and for an undetermined time after the completion of the merger.
Added
The completion of the merger is subject to the consent and approval of various governmental authorities, which may impose conditions that could have an adverse effect on the combined company following the merger.
Added
Before the merger may be completed, we and MCBI must obtain approval of the merger from the Federal Reserve Board, Arkansas State Bank Department, FDIC, and Tennessee Department of Financial Institutions. These governmental authorities may impose conditions on its granting of such approval.
Added
Although we and MCBI do not currently expect that any such material conditions or changes would be imposed, there can be no assurance that they will not be, and such conditions or changes could have the effect of delaying completion of the merger or imposing additional costs or limiting the revenues of the combined company following the merger, any of which might have an adverse effect on the combined company following the merger.
Added
In addition, if there is an adverse development in either company’s regulatory standing, we may be required to withdraw our application for approval of the proposed merger and, if possible, resubmit it after the applicable supervisory concerns have been resolved.
Added
Finally, we and MCBI have each agreed to use its commercially reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable law to consummate the merger.
Added
Such actions may entail costs and may adversely affect us, MCBI, or the combined company following the merger. 32 Table of Contents The combined company expects to incur substantial expenses related to the merger.
Added
The combined company expects to incur substantial expenses in connection with completing the merger and combining the business, operations, networks, systems, technologies, policies and procedures of the two companies.
Added
Although we and MCBI have assumed that a certain level of transaction and combination expenses would be incurred, there are a number of factors beyond their control that could affect the total amount or the timing of their combination expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time.
Added
Due to these factors, the transaction and combination expenses associated with the merger could, particularly in the near term, exceed the savings that the combined company expects to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings related to the combination of the businesses following the completion of the merger.
Added
In addition, many of these expenses will be incurred regardless of whether the merger is completed. As a result of these expenses, both we and MCBI expect to take charges against our respective earnings before and after the completion of the merger.
Added
The charges taken in connection with the merger are expected to be significant, although the aggregate amount and timing of such charges are uncertain at present.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+1 added−0 removed27 unchanged
Biggest changeThe Board maintains oversight of risks from cybersecurity related threats, primarily through the Audit and Risk Committee and the directors that serve on the bank's Executive Risk Committee. The CISO reports to the Executive Risk Committee.
Biggest changeThe Board and management define risk tolerances in the policies of the Company. The Board maintains oversight of risks from cybersecurity related threats primarily through the Executive Risk Committee, as well as directors that serve on the bank’s Audit and Risk Committee. Additionally, the Audit and Risk Committee review internal audit reports related to cybersecurity topics.
This includes performing due diligence and assessment of each provider’s cybersecurity posture as well as periodic re-assessments. • Security Training and Awareness . We provide ongoing education and training to employees regarding cybersecurity threats and the role they play in helping prevent and detect these threats.
This includes performing due diligence and assessment of each provider’s cybersecurity posture as well as periodic re-assessments. 34 Table of Contents • Security Training and Awareness . We provide ongoing education and training to employees regarding cybersecurity threats and the role they play in helping prevent and detect these threats.
Cybersecurity reports and issues are presented at least quarterly to the ERC. Information Technology/Security Committee . The Information Technology/Security Committee (“ITSC”) is a management level committee that serves at the direction of the Board and provides oversight of the Company’s information technology and information security programs.
Cybersecurity reports and issues are presented at least quarterly to the ERC. 35 Table of Contents Information Technology/Security Committee . The Information Technology/Security Committee (“ITSC”) is a management level committee that serves at the direction of the Board and provides oversight of the Company’s information technology and information security programs.
We also share and receive threat intelligence with government agencies, the Financial Services Information Sharing and Analysis Center ("FS-ISAC") and cybersecurity vendors and leaders in the cybersecurity industry. 33 Table of Contents • Infrastructure and Data Protection .
We also share and receive threat intelligence with government agencies, the Financial Services Information Sharing and Analysis Center ("FS-ISAC") and cybersecurity vendors and leaders in the cybersecurity industry. • Infrastructure and Data Protection .
Board Oversight and Governance Our Board of Directors (the “Board”), in conjunction with management, is responsible for assessing which risks are warranted and acceptable, based on management’s ability to: • identify and understand such risks; • measure the degree of exposure to such risks; • monitor the changing nature of the risk and related exposure; and • develop and implement processes and procedures to control such risks. 34 Table of Contents The Board and management define risk tolerances in the policies of the Company.
Board Oversight and Governance Our Board of Directors (the “Board”), in conjunction with management, is responsible for assessing which risks are warranted and acceptable, based on management’s ability to: • identify and understand such risks; • measure the degree of exposure to such risks; • monitor the changing nature of the risk and related exposure; and • develop and implement processes and procedures to control such risks.
The members of the ITSC include management and leaders with an expansive background in information technology and cybersecurity. The ITSC meets monthly to review information security and information technology reports and issues.
The members of the ITSC have extensive experience in banking, information technology, and cybersecurity, and include management, business leaders, CTO, and CISO. The ITSC meets monthly to review information security and information technology reports and issues.
Added
The CISO reports to the Executive Risk Committee.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed2 unchanged
Biggest changeAs of December 31, 2024, our bank subsidiary owned or leased a total of 76 branches in Arkansas, 78 branches in Florida, 53 branches in Texas, five branches in Alabama and one branch in New York City. The Company also owns or leases other buildings that provide space for operations, mortgage lending and other general purposes.
Biggest changeAs of December 31, 2025, our bank subsidiary owned or leased a total of 75 branches in Arkansas, 78 branches in Florida, 59 branches in Texas, five branches in Alabama and one branch in New York City. The Company also owns or leases other buildings that provide space for operations, mortgage lending and other general purposes.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed1 unchanged
Biggest changeItem 4. MINE SAFETY DISCLOSURE Not applicable. 35 Table of Contents PART II
Biggest changeItem 4. MINE SAFETY DISCLOSURE Not applicable. PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

2 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosure 35 PART II: Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 3 6 -37 Item 6. Selected Financial Data 38 -39 I tem 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation 40 -87 Item 7A.
Biggest changeItem 4. Mine Safety Disclosure 3 6 PART II: Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 3 6-37 Item 6. Selected Financial Data 3 8-39 I tem 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation 4 0 -8 6 Item 7A.
Quantitative and Qualitative Disclosures About Market Risk 88 -89 Item 8. Consolidated Financial Statements and Supplementary Data 89 -152
Quantitative and Qualitative Disclosures About Market Risk 8 7-88 Item 8. Consolidated Financial Statements and Supplementary Data 8 8-149

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+1 added−2 removed2 unchanged
Biggest changeAs of January 17, 2025, a total of approximately 13,244,493 shares remained available for repurchase under the existing repurchase authorization, resulting in an increase of 6,755,507 shares of common stock available for repurchase. 36 Table of Contents Performance Graph Below is a graph which summarizes the cumulative return earned by the Company’s stockholders since December 31, 2019, compared with the cumulative total return on the Russell 2000 Index and S&P U.S.
Biggest changePerformance Graph Below is a graph which summarizes the cumulative return earned by the Company’s stockholders since December 31, 2020, compared with the cumulative total return on the Russell 2000 Index and S&P U.S. BMI Banks Index.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed on the New York Stock Exchange under the symbol “HOMB.” As of February 7, 2025, there were approximately 1,506 stockholders of record of the Company’s common stock.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is listed on the New York Stock Exchange under the symbol “HOMB.” As of February 12, 2026, there were approximately 1,411 stockholders of record of the Company’s common stock.
Information regarding regulatory restrictions on our ability to pay dividends is discussed in “Supervision and Regulation – Payment of Dividends.” During the three months ended December 31, 2024, the Company utilized a portion of its stock repurchase program most recently amended and approved by the Board of Directors on January 22, 2021.
Information regarding regulatory restrictions on our ability to pay dividends is discussed in “Supervision and Regulation – Payment of Dividends.” 36 Table of Contents During the three months ended December 31, 2025, the Company utilized a portion of its stock repurchase program most recently amended and approved by the Board of Directors on January 17, 2025, which renewed the authorization to 20,000,000 shares.
The following table sets forth information with respect to purchases made by or on behalf of the Company of shares of the Company’s common stock during the periods indicated: Issuer Purchases of Equity Securities Period Number of Shares Purchased Average Price Paid Per Share Purchased Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs (1) October 1 through October 31, 2024 95,764 $ 26.38 95,764 13,244,493 November 1 through November 30, 2024 — — — 13,244,493 December 1 through December 31, 2024 — — — 13,244,493 Total 95,764 95,764 (1) The above described stock repurchase program has no expiration date .
The following table sets forth information with respect to purchases made by or on behalf of the Company of shares of the Company’s common stock during the periods indicated: Issuer Purchases of Equity Securities Period Number of Shares Purchased Average Price Paid Per Share Purchased Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs (1) October 1 through October 31, 2025 270,706 $ 27.31 270,706 17,379,294 November 1 through November 30, 2025 200,000 26.86 200,000 17,179,294 December 1 through December 31, 2025 70,000 28.36 70,000 17,109,294 Total 540,706 540,706 (1) The above described stock repurchase program has no expiration date .
BMI Banks Index. This presentation assumes that the fair value of the investment in the Company's common stock and each index was $100.00 on December 31, 2019 and that the subsequent dividends were reinvested.
This presentation assumes that the fair value of the investment in the Company's common stock and each index was $100.00 on December 31, 2020 and that the subsequent dividends were reinvested. Period Ending Index 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 Home BancShares, Inc. 100.00 127.89 123.11 141.36 162.52 164.02 Russell 2000 Index 100.00 114.82 91.35 106.82 119.14 134.40 S&P U.S.
Removed
On January 17, 2025, the Board of Directors (the “Board”) of the Company authorized an increase in the shares of the Company’s common stock available for repurchase under its stock repurchase program, which was originally approved by the Board in January 2008 and most recently amended in January 2021, to renew the authorization to 20,000,000 shares.
Added
BMI Banks Index 100.00 135.97 112.77 123.02 164.70 211.47 37 Table of Contents
Removed
Period Ending Index 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Home BancShares, Inc. 100.00 102.30 130.83 125.94 144.61 166.26 Russell 2000 Index 100.00 119.96 137.74 109.59 128.14 142.93 S&P U.S. BMI Banks Index 100.00 87.24 118.61 98.38 107.32 143.68 37 Table of Contents

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

4 edited+0 added−0 removed1 unchanged
Biggest changeSummary Consolidated Financial Data As of or for the Years Ended December 31, 2024 2023 2022 (Dollars and shares in thousands, except per share data) Income statement data: Total interest income $ 1,299,777 $ 1,175,053 $ 877,766 Total interest expense 451,003 348,108 119,090 Net interest income 848,774 826,945 758,676 Provision for (recovery of) credit losses 48,070 12,133 63,585 Net interest income after provision for credit losses 800,704 814,812 695,091 Non-interest income 168,574 169,934 175,111 Non-interest expense 446,936 472,863 475,627 Income before income taxes 522,342 511,883 394,575 Income tax expense 120,101 118,954 89,313 Net income $ 402,241 $ 392,929 $ 305,262 Per share data: Basic earnings per common share $ 2.01 $ 1.94 $ 1.57 Diluted earnings per common share 2.01 1.94 1.57 Book value per common share 19.92 18.81 17.33 Tangible book value per common share (non-GAAP) (1)(2) 12.68 11.63 10.17 Dividends – common 0.75 0.72 0.66 Average common shares outstanding 199,939 202,627 194,694 Average diluted shares outstanding 200,069 202,773 195,019 Performance ratios: Return on average assets 1.77 % 1.77 % 1.35 % Return on average assets excluding intangible Amortization (non-GAAP) (3) 1.92 1.93 1.47 Return on average common equity 10.43 10.82 9.17 Return on average tangible common equity excluding intangible amortization (non-GAAP) (1)(4) 16.92 18.36 15.63 Net interest margin (5) 4.27 4.25 3.81 Efficiency ratio 42.74 46.21 49.53 Efficiency ratio, as adjusted (non-GAAP) (6) 42.65 45.24 44.55 Asset quality: Non-performing assets to total assets 0.63 0.42 0.27 Non-performing loans to total loans 0.67 0.44 0.42 Allowance for credit losses to non-performing loans 278.99 449.66 475.99 Allowance for credit losses to total loans 1.87 2.00 2.01 Net charge-offs to average total loans 0.41 0.09 0.11 38 Table of Contents Summary Consolidated Financial Data – Continued As of the Years Ended December 31, 2024 2023 (Dollars and shares in thousands, except per share data) Balance sheet data (period end): Total assets $ 22,490,748 $ 22,656,658 Investment securities – available-for-sale 3,072,639 3,507,841 Investment securities – held-to-maturity 1,275,204 1,281,982 Loans receivable 14,764,500 14,424,728 Allowance for credit losses (275,880) (288,234) Intangible assets 1,438,580 1,447,023 Non-interest-bearing deposits 4,006,115 4,085,501 Total deposits 17,146,297 16,787,711 Subordinated debentures 439,246 439,834 Stockholders' equity 3,961,025 3,791,075 Capital ratios: Common equity to assets 17.61 % 16.73 % Tangible common equity to tangible assets (non-GAAP) (1)(7) 11.98 11.05 Common equity Tier 1 capital 15.11 14.15 Tier 1 leverage ratio (8) 13.05 12.44 Tier 1 risk-based capital ratio 15.11 14.15 Total risk-based capital ratio 18.74 17.79 Dividend payout - common 37.29 37.13 __________________________ (1) Tangible calculations eliminate the effect of goodwill and acquisition-related intangible assets and the corresponding amortization expense on a tax-effected basis.
Biggest changeSummary Consolidated Financial Data As of or for the Years Ended December 31, 2025 2024 2023 (Dollars and shares in thousands, except per share data) Income statement data: Total interest income $ 1,278,820 $ 1,299,777 $ 1,175,053 Total interest expense 386,460 451,003 348,108 Net interest income 892,360 848,774 826,945 Provision for credit losses 20,905 48,070 12,133 Net interest income after provision for credit losses 871,455 800,704 814,812 Non-interest income 198,509 168,574 169,934 Non-interest expense 458,169 446,936 472,863 Income before income taxes 611,795 522,342 511,883 Income tax expense 136,354 120,101 118,954 Net income $ 475,441 $ 402,241 $ 392,929 Per share data: Basic earnings per common share $ 2.41 $ 2.01 $ 1.94 Diluted earnings per common share 2.41 2.01 1.94 Book value per common share 21.88 19.92 18.81 Tangible book value per common share (non-GAAP) (1)(2) 14.60 12.68 11.63 Dividends – common 0.805 0.75 0.72 Average common shares outstanding 197,448 199,939 202,627 Average diluted shares outstanding 197,651 200,069 202,773 Performance ratios: Return on average assets 2.10 % 1.77 % 1.77 % Return on average assets excluding intangible amortization (non-GAAP) (3) 2.26 1.92 1.93 Return on average common equity 11.61 10.43 10.82 Return on average tangible common equity excluding intangible amortization (non-GAAP) (1)(4) 18.10 16.92 18.36 Net interest margin (5) 4.51 4.27 4.25 Efficiency ratio 40.88 42.74 46.21 Efficiency ratio, as adjusted (non-GAAP) (6) 41.29 42.65 45.24 Asset quality: Non-performing assets to total assets 0.55 0.63 0.42 Non-performing loans to total loans 0.54 0.67 0.44 Allowance for credit losses to non-performing loans 350.17 278.99 449.66 Allowance for credit losses to total loans 1.90 1.87 2.00 Net charge-offs to average total loans 0.02 0.41 0.09 38 Table of Contents Summary Consolidated Financial Data – Continued As of the Years Ended December 31, 2025 2024 (Dollars and shares in thousands, except per share data) Balance sheet data (period end): Total assets $ 22,881,879 $ 22,490,748 Investment securities – available-for-sale 2,871,931 3,072,639 Investment securities – held-to-maturity 1,259,262 1,275,204 Loans receivable 15,686,209 14,764,500 Allowance for credit losses (297,583) (275,880) Intangible assets 1,430,546 1,438,580 Non-interest-bearing deposits 3,868,405 4,006,115 Total deposits 17,479,957 17,146,297 Subordinated debentures 279,265 439,246 Stockholders' equity 4,296,871 3,961,025 Capital ratios: Common equity to assets 18.78 % 17.61 % Tangible common equity to tangible assets (non-GAAP) (1)(7) 13.36 11.98 Common equity Tier 1 capital 16.30 15.11 Tier 1 leverage ratio (8) 14.09 13.05 Tier 1 risk-based capital ratio 16.30 15.11 Total risk-based capital ratio 19.06 18.74 Dividend payout - common 33.43 37.29 __________________________ (1) Tangible calculations eliminate the effect of goodwill and acquisition-related intangible assets and the corresponding amortization expense on a tax-effected basis.
(4) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Table 29,” for the non-GAAP tabular reconciliation. (5) Fully taxable equivalent (assuming an income tax rate of 24.6735% for 2022, 24.989% for 2023 and 24.433% for 2024).
(4) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Table 33,” for the non-GAAP tabular reconciliation. (5) Fully taxable equivalent (assuming an income tax rate of 24.989% for 2023, 24.433% for 2024 and 24.359% for 2025).
(2) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Table 27,” for the non-GAAP tabular reconciliation. (3) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Table 28,” for the non-GAAP tabular reconciliation.
(2) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Table 31,” for the non-GAAP tabular reconciliation. (3) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Table 32,” for the non-GAAP tabular reconciliation.
(6) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Table 31,” for the non-GAAP tabular reconciliation. (7) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Table 30,” for the non-GAAP tabular reconciliation.
(6) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Table 35,” for the non-GAAP tabular reconciliation. (7) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Table 34,” for the non-GAAP tabular reconciliation.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

241 edited+42 added−45 removed157 unchanged
Biggest changeTable 10: Geographical Locations of CRE Loans Top 10 Geographical States for CRE Loan Collateral Concentrations Florida Texas Arkansas New York Georgia Utah Alabama California Pennsylvania Tennessee All Other Areas Total As of December 31, 2024 Non-Farm/Non-Residential: Single Purpose Building $ 275,440 $ 212,649 $ 168,691 $ 49,278 $ 17,506 $ — $ 6,494 $ 429 $ — $ 1,586 $ 97,624 $ 829,697 Office Building 333,230 355,794 64,062 50,091 91,723 — 18,934 — 25,616 — 131,009 1,070,459 Hotel 541,001 263,647 99,830 4,943 24,319 — 18,575 16,419 — — 112,386 1,081,120 Industrial 44,392 91,344 40,908 57,556 — — 59,745 20,041 — — 71,086 385,072 Retail 148,053 252,087 56,885 4,158 — — 12,166 (100) — 435 33,721 507,405 Owner-Occupied (1) 492,655 431,489 337,935 — 21,051 — 26,314 5,748 83,199 6,911 147,725 1,553,027 Construction/Land Development: Construction Residential - Spec 150,143 107,149 41,299 126,299 — — 82 — — — 8,992 433,964 Residential Land Development 148,897 102,369 51,865 — 304 165,643 2,329 — — 2,466 63,813 537,686 Construction Commercial 84,027 111,199 62,549 15,159 — 12,451 1,182 (213) 876 9,194 41,303 337,727 Construction Multi Family 240,255 72,676 32,812 139,130 — — — 19,326 228 37,881 13,860 556,168 Commercial Land Development 118,729 70,700 31,841 37,820 40,068 — 9,752 50,248 — 42,181 110,945 512,284 Construction Residential - Presold 93,517 61,538 29,937 — — — 1,022 — — — 311 186,325 Construction Hotel 6,693 9,796 22,036 — 13,555 — 5,152 — — — 7,007 64,239 Raw Land 9,036 8,537 31,649 — — — 1,311 34,388 — — 22,900 107,821 Agricultural (1) 32,589 176,084 106,684 — — — 3,736 — — — 17,900 336,993 Total Commercial Real Estate (2) $ 2,718,657 $ 2,327,058 $ 1,178,983 $ 484,434 $ 208,526 $ 178,094 $ 166,794 $ 146,286 $ 109,919 $ 100,654 $ 880,582 $ 8,499,987 Top 10 Geographical States for CRE Loan Collateral Concentrations Florida Texas Arkansas New York Utah Alabama Georgia California Pennsylvania Oklahoma All Other Areas Total As of December 31, 2023 Non-Farm/Non-Residential: Single Purpose Building $ 301,505 $ 330,203 $ 183,961 $ 52,945 $ — $ 11,810 $ 5,228 $ 1,396 $ 2,317 $ 5,200 $ 85,237 $ 979,802 Office Building 323,320 276,425 86,951 50,294 — 19,686 95,457 — 28,501 42,885 100,398 1,023,917 Hotel 518,592 223,750 106,975 59,910 — 19,374 23,760 — — 24,254 90,413 1,067,028 Industrial 41,138 64,060 39,517 93,323 — 71,465 — 24,796 — — 66,826 401,125 Retail 177,569 243,364 64,049 7,285 — 11,977 — 23,372 — 319 51,951 579,886 Owner-Occupied (1) 476,507 429,440 309,584 — 9,376 15,654 23,991 4,617 86,874 18,993 123,160 1,498,196 Construction/Land Development: Construction Residential - Spec 124,019 103,483 35,461 88,670 — 2,763 497 40,624 — — 12,506 408,023 Residential Land Development 93,644 123,284 47,952 — 189,435 2,868 226 — — — 18,206 475,615 Construction Commercial 115,757 226,684 31,964 — — 4,293 11,248 — — — 102,475 492,421 Construction Multi Family 44,179 26,082 48,485 53,711 — — — 8,376 189 — 8,689 189,711 Commercial Land Development 71,670 35,647 33,294 81,004 — 5,764 — 19,029 — — 80,786 327,194 Construction Residential - Presold 125,004 49,654 23,248 — — 1,184 — — — 125 899 200,114 Construction Hotel 70,781 50,346 3,208 — — (208) (130) — — — 3,787 127,784 Raw Land 8,283 15,334 23,649 — — 2,837 — 20,894 — — 1,188 72,185 Agricultural (1) 23,637 182,495 99,243 — — 3,104 360 — — 1,227 15,090 325,156 Total Commercial Real Estate (2) $ 2,515,605 $ 2,380,251 $ 1,137,541 $ 487,142 $ 198,811 $ 172,571 $ 160,637 $ 143,104 $ 117,881 $ 93,003 $ 761,611 $ 8,168,157 61 Table of Contents (1) Agriculture real estate loans and owner-occupied non-farm non-residential loans are not included within CRE for regulatory reporting purposes.
Biggest changeTable 10: Geographical Locations of CRE Loans Top 10 Geographical States for CRE Loan Collateral Concentrations Florida Texas Arkansas New York California Georgia Alabama Utah Pennsylvania Tennessee All Other Areas Total As of December 31, 2025 Non-Farm/Non-Residential: Single Purpose Building $ 221,682 $ 165,311 $ 227,874 $ — $ 600 $ 12,229 $ 7,554 $ — $ — $ 5,071 $ 65,856 $ 706,177 Office Building 256,836 404,755 64,001 622 17,562 130,687 9,086 — 19,229 — 105,851 1,008,629 Hotel 602,220 267,493 118,862 4,999 — 24,083 17,812 — — — 124,909 1,160,378 Industrial 60,891 148,448 35,640 — 20,751 — 42,875 — — — 1,771 310,376 Retail 140,082 241,732 41,756 — 35,936 1,022 11,760 — — 406 31,213 503,907 Owner-Occupied (1) 455,897 499,183 351,471 — 6,557 17,732 27,131 — 79,608 6,262 156,804 1,600,645 Construction/Land Development: Construction Residential - Spec 136,751 103,726 41,319 118,698 — — 91 — — — 2,473 403,058 Residential Land Development 140,163 89,286 46,114 — 27,315 171 1,583 76,741 — 3,615 29,554 414,542 Construction Commercial 48,964 40,140 71,385 22,775 31,017 — 16,701 14,637 — 13,011 9,089 267,719 Construction Multi Family 289,314 508 924 104,942 — — — — 267 32,923 117,729 546,607 Commercial Land Development 194,889 70,052 26,108 121,137 119,335 19,133 15,749 38,332 — 11,640 161,478 777,853 Construction Residential - Presold 62,595 96,170 19,626 — — — 2,330 — — — — 180,721 Construction Hotel 2,424 32,064 — — — — 13,549 — — 18,813 27,862 94,712 Raw Land 10,581 10,618 20,158 — — — 232 — — — 192 41,781 Agricultural (1) 47,080 149,162 116,396 — — — 2,297 — — — 17,477 332,412 Total Commercial Real Estate (2) $ 2,670,369 $ 2,318,648 $ 1,181,634 $ 373,173 $ 259,073 $ 205,057 $ 168,750 $ 129,710 $ 99,104 $ 91,741 $ 852,258 $ 8,349,517 Top 10 Geographical States for CRE Loan Collateral Concentrations Florida Texas Arkansas New York Georgia Utah Alabama California Pennsylvania Tennessee All Other Areas Total As of December 31, 2024 Non-Farm/Non-Residential: Single Purpose Building $ 275,440 $ 212,649 $ 168,691 $ 49,278 $ 17,506 $ — $ 6,494 $ 429 $ — $ 1,586 $ 97,624 $ 829,697 Office Building 333,230 355,794 64,062 50,091 91,723 — 18,934 — 25,616 — 131,009 1,070,459 Hotel 541,001 263,647 99,830 4,943 24,319 — 18,575 16,419 — — 112,386 1,081,120 Industrial 44,392 91,344 40,908 57,556 — — 59,745 19,941 — — 71,186 385,072 Retail 148,053 252,087 56,885 4,158 — — 12,166 — — 435 33,621 507,405 Owner-Occupied (1) 492,655 431,489 337,935 — 21,051 — 26,314 5,748 83,199 6,911 147,725 1,553,027 Construction/Land Development: Construction Residential - Spec 150,143 107,149 41,299 126,299 — — 82 — — — 8,992 433,964 Residential Land Development 148,897 102,369 51,865 — 304 165,643 2,329 — — 2,466 63,813 537,686 Construction Commercial 84,027 111,199 62,549 15,159 — 12,451 1,182 — 876 9,194 41,090 337,727 Construction Multi Family 240,255 72,676 32,812 139,130 — — — 19,326 228 37,881 13,860 556,168 Commercial Land Development 118,729 70,700 31,841 37,820 40,068 — 9,752 50,036 — 42,181 111,157 512,284 Construction Residential - Presold 93,517 61,538 29,937 — — — 1,022 — — — 311 186,325 Construction Hotel 6,693 9,796 22,036 — 13,555 — 5,152 — — — 7,007 64,239 Raw Land 9,036 8,537 31,649 — — — 1,311 34,388 — — 22,900 107,821 Agricultural (1) 32,589 176,084 106,684 — — — 3,736 — — — 17,900 336,993 Total Commercial Real Estate (2) $ 2,718,657 $ 2,327,058 $ 1,178,983 $ 484,434 $ 208,526 $ 178,094 $ 166,794 $ 146,287 $ 109,919 $ 100,654 $ 880,581 $ 8,499,987 (1) Agriculture real estate loans and owner-occupied non-farm non-residential loans are not included within CRE for regulatory reporting purposes.
The Company first assesses whether it intends to sell or is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income.
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.
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.
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.
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 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.
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.
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.
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.
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 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 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.
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.
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 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.
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 required actions are likely to focus on tightening/loosening of underwriting criteria, potential capital raises or loan distribution actions such as selling or participating loans.
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.
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 decreased 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. 56 Table of Contents • 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.
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.
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%.
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.
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%.
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.
Of the $48.4 million provision for credit losses on loans recorded, $33.4 million as 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.
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.
Therefore, the total commitment does not necessarily represent future requirements. 82 Table of Contents Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions.
Therefore, the total commitment does not necessarily represent future requirements. 81 Table of Contents Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions.
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. 45 Table of Contents Investments – Available-for-sale .
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. 44 Table of Contents Investments – Available-for-sale .
Of the $48.4 million provision for credit losses on loans recorded, $33.4 million as 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.
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 allowance for credit losses on off-balance sheet credit exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. Foreclosed Assets Held for Sale .
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 .
Government and other depository institutions. 75 Table of Contents Our policy also permits the acceptance of brokered deposits. From time to time, when appropriate in order to fund strong loan demand, we accept brokered time deposits, generally in denominations of less than $250,000, from a regional brokerage firm, and other national brokerage networks.
Government and other depository institutions. 74 Table of Contents Our policy also permits the acceptance of brokered deposits. From time to time, when appropriate in order to fund strong loan demand, we accept brokered time deposits, generally in denominations of less than $250,000, from a regional brokerage firm, and other national brokerage networks.
On December 21, 2018, the federal banking agencies issued a joint final rule to revise their regulatory capital rules to permit bank holding companies and banks to phase-in, for regulatory capital purposes, the day-one impact of the new CECL accounting rule on retained earnings over a period of three years.
On December 31, 2018, the federal banking agencies issued a joint final rule to revise their regulatory capital rules to permit bank holding companies and banks to phase-in, for regulatory capital purposes, the day-one impact of the new CECL accounting rule on retained earnings over a period of three years.
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. 48 Table of Contents Deferred income tax expense results from changes in deferred tax assets and liabilities between periods.
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. 47 Table of Contents Deferred income tax expense results from changes in deferred tax assets and liabilities between periods.
Of the $48.4 million provision for credit losses on loans recorded, $33.4 million as 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.
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.
Other internal and external indicators of economic forecasts are also considered by management when developing the forecast metrics. 46 Table of Contents 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.
Other internal and external indicators of economic forecasts are also considered by management when developing the forecast metrics. 45 Table of Contents 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.
Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of a security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Investments – Held-to-Maturity.
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.
(See Table 29 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 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.
Income Taxes 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 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%.
As of December 31, 2024, we have not met the threshold for the concentration limits. In addition, the Bank's board of directors monitors the CRE loan portfolio for concentrations related to geography, industry, and collateral type and determines applicable guidelines.
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 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, partially offset by a $13.4 million, or 7.9%, decrease in investment 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.
Tables 2 and 3 reflect an analysis of net interest income on a fully taxable equivalent basis for the years ended December 31, 2024, 2023 and 2022, as well as changes in fully taxable equivalent net interest margin for the years 2024 compared to 2023 and 2023 compared to 2022.
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.
Changes in the allowance for credit losses are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectability of a security is confirmed. Loans Receivable and Allowance for Credit Losses .
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 .
Table 7 below sets forth a summary of non-interest expense for the years ended December 31, 2024, 2023, and 2022, as well as changes for the years ended 2024 compared to 2023 and 2023 compared to 2022.
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.
From and including July 31, 2025 to, but excluding, the maturity date or earlier redemption, the 2030 Notes will bear interest at a floating rate equal to the Benchmark rate (which is expected to be 3-month Secured Overnight Funding Rate (SOFR)), each as defined in and subject to the provisions of the applicable supplemental indenture for the 2030 Notes, plus 5.345%, payable quarterly in arrears on January 31, April 30, July 31, and October 31 of each year, commencing on October 31, 2025. 77 Table of Contents The Company may, beginning with the interest payment date of July 31, 2025, and on any interest payment date thereafter, redeem the 2030 Notes, in whole or in part, subject to prior approval of the Federal Reserve if then required, at a redemption price equal to 100% of the principal amount of the 2030 Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption.
From and including July 31, 2025 to, but excluding, the maturity date or earlier redemption, the 2030 Notes were to bear interest at a floating rate equal to the Benchmark rate (which is expected to be 3-month Secured Overnight Funding Rate ("SOFR")), each as defined in and subject to the provisions of the applicable supplemental indenture for the 2030 Notes, plus 5.345%, payable quarterly in arrears on January 31, April 30, July 31, and October 31 of each year, commencing on October 31, 2025. 76 Table of Contents The Company was permitted, beginning with the interest payment date of July 31, 2025, and on any interest payment date thereafter, to redeem the 2030 Notes, in whole or in part, subject to prior approval of the Federal Reserve if then required, at a redemption price equal to 100% of the principal amount of the 2030 Notes to be redeemed plus accrued and unpaid interest to but excluding the date of redemption.
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, 2024, 2023 and 2022.
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.
Our management closely monitors all loans that are contractually 90 days past due, treated as “special mention” or otherwise classified or on non-accrual status. Purchased loans that have experienced more than insignificant credit deterioration since origination are PCD loans. An allowance for credit losses is determined using the same methodology as other loans.
Our management closely monitors all loans that are contractually 90 days past due, treated as “special mention” or otherwise classified or on non-accrual status. 63 Table of Contents Purchased loans that have experienced more than insignificant credit deterioration since origination are PCD loans. An allowance for credit losses is determined using the same methodology as other loans.
Non-accrual loans are generally returned to accrual status when principal and interest payments are less than 90 days past due, the customer has made required payments for at least six months, and we reasonably expect to collect all principal and interest. Acquisition Accounting and Acquired Loans .
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.
From and including the date of issuance to, but excluding July 31, 2025 or the date of earlier redemption, the 2030 Notes will bear interest at an initial rate of 5.50% per annum, payable in arrears on January 31 and July 31 of each year.
From and including the date of issuance to, but excluding July 31, 2025 or the date of earlier redemption, the 2030 Notes bore interest at an initial rate of 5.50% per annum, payable in arrears on January 31 and July 31 of each year.
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 Centennial Commercial Finance Group ("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.
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.
Centennial CFG loan fees were $9.5 million and $9.9 million for the years ended December 31, 2024 and December 31, 2023, 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.
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 Company may also redeem the 2030 Notes at any time, including prior to July 31, 2025, at the Company’s option, in whole but not in part, subject to prior approval of the Federal Reserve if then required, if certain events occur that could impact the Company’s ability to deduct interest payable on the 2030 Notes for U.S. federal income tax purposes or preclude the 2030 Notes from being recognized as Tier 2 capital for regulatory capital purposes, or if the Company is required to register as an investment company under the Investment Company Act of 1940, as amended.
The Company was also permitted to redeem the 2030 Notes at any time, including prior to July 31, 2025, at the Company’s option, in whole but not in part, subject to prior approval of the Federal Reserve if then required, if certain events occurred that could impact the Company’s ability to deduct interest payable on the 2030 Notes for U.S. federal income tax purposes or preclude the 2030 Notes from being recognized as Tier 2 capital for regulatory capital purposes, or if the Company was required to register as an investment company under the Investment Company Act of 1940, as amended.
Management believes that, as of December 31, 2024 and December 31, 2023, we met all regulatory capital adequacy requirements to which we were subject.
Management believes that, as of December 31, 2025 and December 31, 2024, we met all regulatory capital adequacy requirements to which we were subject.
These non-GAAP financial measures are also used by management to assess the performance of our business, because management does not consider these items to be relevant to ongoing financial performance. 83 Table of Contents In Table 26 below, we have provided a reconciliation of the non-GAAP calculation of the financial measure for the periods indicated.
These non-GAAP financial measures are also used by management to assess the performance of our business, because management does not consider these items to be relevant to ongoing financial performance. 82 Table of Contents In Table 30 below, we have provided a reconciliation of the non-GAAP calculation of the financial measure for the periods indicated.
In Table 31 below, we have provided a reconciliation of the non-GAAP calculation of the financial measure for the periods indicated.
In Table 35 below, we have provided a reconciliation of the non-GAAP calculation of the financial measure for the periods indicated.
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 (24.433% for the year ended December 31, 2024, 24.989% for the year ended December 31, 2023 and 24.6735% for year ended December 31, 2022).
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).
Multi-family residential loans are included in CRE for regulatory purposes. 60 Table of Contents Table 10 presents the composition of our CRE loan portfolio by the ten largest geographical locations of the collateral as of December 31, 2024 and December 31, 2023.
Multi-family residential loans are included in CRE for regulatory purposes. 59 Table of Contents 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.
For individually analyzed loans which are not considered to be collateral dependent, an allowance is recorded based on the loss rate for the respective pool within the collective evaluation. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate.
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. 46 Table of Contents Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments and curtailments when appropriate.
Table 21 reflects the classification of the average deposits and the average rate paid on each deposit category which is in excess of 10 percent of average total deposits, for the years ended December 31, 2024, 2023, and 2022.
Table 23 reflects the classification of the average deposits and the average rate paid on each deposit category which is in excess of 10 percent of average total deposits, for the years ended December 31, 2025, 2024, and 2023.
These calculations, which are similar to the GAAP calculation of diluted earnings per common share, book value, return on average assets, return on average equity, and equity to assets, are presented in Tables 27 through 30, respectively.
These calculations, which are similar to the GAAP calculation of diluted earnings per common share, book value, return on average assets, return on average equity, and equity to assets, are presented in Tables 31 through 34, respectively.
Fair values of securities are based on quoted market prices where available. If quoted market prices are not available, estimated fair values are based on quoted market prices of comparable securities. The estimated effective duration of our securities portfolio was 4.8 years as of December 31, 2024.
Fair values of securities are based on quoted market prices where available. If quoted market prices are not available, estimated fair values are based on quoted market prices of comparable securities. The estimated effective duration of our securities portfolio was 4.9 years as of December 31, 2025.
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 $21.8 million and $22.6 million for the years ended December 31, 2024 and December 31, 2023, respectively.
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.
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 increased to 0.41% for the year ended December 31, 2024 from 0.09% for the year ended December 31, 2023.
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.
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.
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.
This is usually established over a period of 6-12 months of timely payment performance. 69 Table of Contents Table 16 shows the allowance for credit losses, charge-offs and recoveries for loans as of and for the years ended December 31, 2024 and 2023.
This is usually established over a period of 6-12 months of timely payment performance. 68 Table of Contents Table 18 shows the allowance for credit losses, charge-offs and recoveries for loans as of and for the years ended December 31, 2025 and 2024.
FHLB and Other Borrowed Funds The Company’s FHLB borrowed funds, which are secured by our loan portfolio, were $600.0 million at both December 31, 2024 and 2023. At December 31, 2024, $100.0 million and $500.0 million of the outstanding balance was classified as short-term and long-term advances, respectively.
FHLB and Other Borrowed Funds The Company’s FHLB borrowed funds, which are secured by our loan portfolio, were $500.0 million and $600.0 million at December 31, 2025 and 2024, respectively. At December 31, 2025, $100.0 million and $400.0 million balance was classified as short-term and long-term advances, respectively.
We had $1.44 billion, $1.45 billion and $1.46 billion total goodwill, core deposit intangibles and other intangible assets as of December 31, 2024, 2023 and 2022, respectively.
We had $1.43 billion, $1.44 billion and $1.45 billion total goodwill, core deposit intangibles and other intangible assets as of December 31, 2025, 2024 and 2023, respectively.
Table 20: Brokered Deposits December 31, 2024 December 31, 2023 (In thousands) Insured Cash Sweep and Other Transaction Accounts $ 448,442 $ 401,004 Total Brokered Deposits $ 448,442 $ 401,004 The interest rates paid are competitively priced for each particular deposit product and structured to meet our funding requirements. We will continue to manage interest expense through deposit pricing.
Table 22: Brokered Deposits December 31, 2025 December 31, 2024 (In thousands) Insured Cash Sweep and Other Transaction Accounts $ 435,678 $ 448,442 Total Brokered Deposits $ 435,678 $ 448,442 The interest rates paid are competitively priced for each particular deposit product and structured to meet our funding requirements. We will continue to manage interest expense through deposit pricing.
Additionally, the Company had $1.22 billion and $1.33 billion at December 31, 2024 and 2023, respectively, in letters of credit under a FHLB blanket borrowing line of credit, which are used to collateralize public deposits at December 31, 2024 and 2023, respectively. Subordinated Debentures Subordinated debentures were $439.2 million and $439.8 million as of December 31, 2024 and 2023, respectively.
Additionally, the Company had $1.48 billion and $1.22 billion at December 31, 2025 and 2024, respectively, in letters of credit under a FHLB blanket borrowing line of credit, which are used to collateralize public deposits at December 31, 2025 and 2024, respectively. Subordinated Debentures Subordinated debentures were $279.3 million and $439.2 million as of December 31, 2025 and 2024, respectively.
Expected maturities could differ from contractual maturities because the FHLB has have the right to call or the Company has the right to prepay certain obligations. Other borrowed funds were $750,000 as of December 31, 2024 and were classified as short-term advances. Other borrowed funds were $701.3 million as of December 31, 2023 and were classified as short-term advances.
Expected maturities could differ from contractual maturities because the FHLB has the right to call or the Company has the right to prepay certain obligations. Other borrowed funds were $250,000 as of December 31, 2025 and were classified as short-term advances. Other borrowed funds were $750,000 as of December 31, 2024 and were classified as short-term advances.
(3) See Table 31 for the non-GAAP tabular reconciliation. 40 Table of Contents 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.
(3) See Table 35 for the non-GAAP tabular reconciliation. 40 Table of Contents 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.
The Federal Reserve Board sets various benchmark rates, including the Federal Funds rate, and thereby influences the general market rates of interest, including the deposit and loan rates offered by financial institutions. The Federal Reserve increased the target rate four times during 2023.
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.
As of December 31, 2024, consumer loans totaled $1.23 billion, or 8.4% of loans receivable, compared to $1.15 billion, or 8.0% of loans receivable, as of December 31, 2023.
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.
The Company held approximately $76.3 million and $130.7 million in PCD loans, as of December 31, 2024 and 2023, respectively. 64 Table of Contents Table 12 sets forth information with respect to our non-performing assets as of December 31, 2024 and 2023. As of these dates, all non-performing restructured loans are included in non-accrual loans.
The Company held approximately $52.2 million and $76.3 million in PCD loans, as of December 31, 2025 and 2024, respectively. Table 12 sets forth information with respect to our non-performing assets as of December 31, 2025 and 2024. As of these dates, all non-performing restructured loans are included in non-accrual loans.
The percentage of the allowance for credit losses allocated to loans receivable collectively evaluated for credit loss to the total loans collectively evaluated for impairment decreased from 1.98% at December 31, 2023 to 1.73% at December 31, 2024. Charge-offs and Recoveries.
The percentage of the allowance for credit losses allocated to loans receivable collectively evaluated for credit loss to the total loans collectively evaluated for impairment increased from 1.73% at December 31, 2024 to 1.81% at December 31, 2025. Charge-offs and Recoveries.
The Federal Reserve Board sets various benchmark rates, including the Federal Funds rate, and thereby influences the general market rates of interest, including the deposit and loan rates offered by financial institutions. The Federal Reserve increased the target rate four times during 2023.
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.
To reduce our income tax burden, $870.4 million, or 28.3%, of our available-for-sale securities portfolio as of December 31, 2024, were primarily invested in tax-exempt obligations of state and political subdivisions, compared to $916.3 million, or 26.1%, of our available-for-sale securities as of December 31, 2023. We had $284.8 million, or 9.3%, invested in obligations of U.S.
To reduce our income tax burden, $887.8 million, or 30.9%, of our available-for-sale securities portfolio as of December 31, 2025, were primarily invested in tax-exempt obligations of state and political subdivisions, compared to $870.4 million, or 28.3%, of our available-for-sale securities as of December 31, 2024. We had $240.8 million, or 8.4%, invested in obligations of U.S.
(2) Fully taxable equivalent (assuming an income tax rate of 24.6735% for 2022, 24.989% for 2023 and 24.433% for 2024).
(2) Fully taxable equivalent (assuming an income tax rate of 24.989% for 2023, 24.433% for 2024 and 24.359% for 2025).
We declared cash dividends on our common stock of $0.75, $0.72 and $0.66 per share for the years ended December 31, 2024, 2023 and 2022, respectively. The common stock dividend payout ratio for the year ended December 31, 2024, 2023 and 2022 was 37.29%, 37.13% and 42.07% respectively. Stock Repurchase Program.
We declared cash dividends on our common stock of $0.805, $0.75 and $0.72 per share for the years ended December 31, 2025, 2024 and 2023, respectively. The common stock dividend payout ratio for the year ended December 31, 2025, 2024 and 2023 was 33.43%, 37.29% and 37.13% respectively. Stock Repurchase Program.
Table 24 presents actual capital amounts and ratios as of December 31, 2024 and 2023, for our bank subsidiary and us.
Table 28 presents actual capital amounts and ratios as of December 31, 2025 and 2024, for our bank subsidiary and us.
Table 25 presents the anticipated funding requirements of our most significant financial commitments, excluding interest, as of December 31, 2024.
Table 29 presents the anticipated funding requirements of our most significant financial commitments, excluding interest, as of December 31, 2025.
Consistent with our practice of maintaining access to significant external liquidity, we had $3.42 billion in net available sources of borrowed funds, which we refer to as net available external liquidity, as of December 31, 2024.
Consistent with our practice of maintaining access to significant external liquidity, we had $4.02 billion in net available sources of borrowed funds, which we refer to as net available external liquidity, as of December 31, 2025.
This balance consisted of $1.61 billion in unpledged investment securities which could be used for additional secured borrowing capacity, $597.9 million in cash on deposit with the Federal Reserve Bank ("FRB") and $246.9 million in other liquid cash accounts.
This balance consisted of $1.40 billion in unpledged investment securities which could be used for additional secured borrowing capacity, $385.1 million in cash on deposit with the Federal Reserve Bank ("FRB") and $147.6 million in other liquid cash accounts.
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.
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.
If a loan is determined by management to be uncollectible, the portion of the loan determined to be uncollectible is then charged to the allowance for credit losses. 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.
If a loan is determined by management to be uncollectible, the portion of the loan determined to be uncollectible is then charged to the allowance for credit losses. 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 primary sources for payment of our operating expenses and dividends are current cash on hand ($550.3 million as of December 31, 2024), dividends received from our bank subsidiary and a $20.0 million unfunded line of credit with another financial institution. 78 Table of Contents Bank Liquidity .
The primary sources for payment of our operating expenses and dividends are current cash on hand ($415.4 million as of December 31, 2025), dividends received from our bank subsidiary and a $20.0 million unfunded line of credit with another financial institution. Bank Liquidity .
At December 31, 2024, we held $2.45 billion in assets that could be used for liquidity purposes, which we refer to as net available internal liquidity.
At December 31, 2025, we held $1.94 billion in assets that could be used for liquidity purposes, which we refer to as net available internal liquidity.
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 increases 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. 54 Table of Contents Non-interest income decreased $5.2 million, or 3.0%, to $169.9 million for the year ended December 31, 2023 from $175.1 million for the same period in 2022.
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. 54 Table of Contents 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 13: Total Foreclosed Assets Held for Sale December 31 2024 2023 (In thousands) Commercial real estate loans Non-farm/non-residential $ 28,392 $ 29,894 Construction/land development 13,391 47 Residential real estate loans Residential 1-4 family 1,624 545 Total foreclosed assets held for sale $ 43,407 $ 30,486 The Company had $268.0 million and $94.9 million in impaired loans (which includes loans individually analyzed for credit losses for which a specific reserve has been recorded, non-accrual loans, loans past due 90 days or more and restructured loans made to borrowers experiencing financial difficulty) as of December 31, 2024 and December 31, 2023, respectively.
Table 14: Total Foreclosed Assets Held for Sale December 31 2025 2024 (In thousands) Commercial real estate loans Non-farm/non-residential $ 23,433 $ 28,392 Construction/land development 15,230 13,391 Residential real estate loans Residential 1-4 family 1,168 1,624 Total foreclosed assets held for sale $ 39,831 $ 43,407 The Company had $219.4 million and $268.0 million in impaired loans (which includes loans individually analyzed for credit losses for which a specific reserve has been recorded, non-accrual loans, loans past due 90 days or more and restructured loans made to borrowers experiencing financial difficulty) as of December 31, 2025 and December 31, 2024, respectively.
The improvement in stockholders’ equity was 4.5% for the year ended December 31, 2024 compared to December 31, 2023. Our total assets as of December 31, 2023 decreased $226.9 million to $22.66 billion from the $22.88 billion reported as of December 31, 2022.
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.
Our capital amounts and classifications are also subject to qualitative judgments by the regulators as to components, risk weightings and other factors. 79 Table of Contents In July 2013, the Federal Reserve Board and the other federal bank regulatory agencies issued a final rule to revise their risk-based and leverage capital requirements and their method for calculating risk-weighted assets to make them consistent with the agreements that were reached by the Basel Committee on Banking Supervision in “Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems” and certain provisions of the Dodd-Frank Act (“Basel III”).
In July 2013, the Federal Reserve Board and the other federal bank regulatory agencies issued a final rule to revise their risk-based and leverage capital requirements and their method for calculating risk-weighted assets to make them consistent with the agreements that were reached by the Basel Committee on Banking Supervision in “Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems” and certain provisions of the Dodd-Frank Act (“Basel III”).

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeTable 33: Sensitivity of Net Interest Income Interest Rate Scenario Percentage Change from Base December 31, 2024 Percentage Change from Base December 31, 2023 December 30, 2024 vs. 2024 Up 200 basis points 10.07 % 9.61 % 0.46 % Up 100 basis points 5.08 4.93 0.15 % Down 100 basis points (5.71) (5.70) (0.01) % Down 200 basis points (11.20) (11.82) 0.62 %
Biggest changeTable 37: Sensitivity of Net Interest Income Interest Rate Scenario Percentage Change from Base December 31, 2025 Percentage Change from Base December 31, 2024 December 31, 2025 vs. 2024 Up 200 basis points 10.93 % 10.07 % 0.86 % Up 100 basis points 5.63 5.08 0.55 % Down 100 basis points (5.88) (5.71) (0.17) % Down 200 basis points (10.48) (11.20) 0.72 %
At December 31, 2024, our net interest margin exposure related to these hypothetical changes in market interest rates was within the current guidelines established by us. 88 Table of Contents Table 33 presents our sensitivity to net interest income as of December 31, 2024.
At December 31, 2025, our net interest margin exposure related to these hypothetical changes in market interest rates was within the current guidelines established by us. 87 Table of Contents Table 37 presents our sensitivity to net interest income as of December 31, 2025.

Other HOMB 10-K year-over-year comparisons