SIMMONS FIRST NATIONAL CORP [SFNC] Filings

10-Q 1 sfnc-20220331.htm 10-Q sfnc-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended March 31, 2022


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

For the transition period from _____ to _____

Commission File Number 000-06253

SIMMONS FIRST NATIONAL CORPORATION

(Exact name of registrant as specified in its charter)


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

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

(870) 541-1000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.01 per share

SFNC

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging Growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.). ☐ Yes ☒ No

The number of shares outstanding of the Registrant’s Common Stock as of May 4, 2022, was 130,654,183.

Simmons First National Corporation

Quarterly Report on Form 10-Q

March 31, 2022

Table of Contents


		Page
Part I:	Financial Information
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets	3
	Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income (Loss)	5
	Consolidated Statements of Cash Flows	6
	Consolidated Statements of Stockholders' Equity	7
	Condensed Notes to Consolidated Financial Statements	8
	Report of Independent Registered Public Accounting Firm	48
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	49
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	75
Item 4.	Controls and Procedures	77

Part II:	Other Information
Item 1.	Legal Proceedings	77
Item 1A.	Risk Factors	77
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	77
Item 3.	Defaults Upon Senior Securities	*
Item 4.	Mine Safety Disclosures	*
Item 5.	Other Information	*
Item 6.	Exhibits	79

Signatures		81

___________________

* No reportable information under this item.

Part I: Financial Information

Item 1. Financial Statements (Unaudited)

Simmons First National Corporation

Consolidated Balance Sheets

March 31, 2022 and December 31, 2021


	March 31,		December 31,
(In thousands, except share data)	2022		2021
	(Unaudited)
ASSETS
Cash and non-interest bearing balances due from banks	$	195,510	$	209,190
Interest bearing balances due from banks and federal funds sold	1,491,507		1,441,463
Cash and cash equivalents	1,687,017		1,650,653
Interest bearing balances due from banks - time	1,857		1,882
Investment securities:
Held-to-maturity, net of allowance for credit losses of $1,377 and $1,279 at March 31, 2022 and December 31, 2021, respectively	1,556,825		1,529,221
Available-for-sale, at estimated fair value (amortized cost of $7,070,582 and $7,130,861 at March 31, 2022 and December 31, 2021, respectively)	6,640,069		7,113,545
Total investments	8,196,894		8,642,766
Mortgage loans held for sale	18,206		36,356
Other assets held for sale	—		100
Loans	12,028,593		12,012,503
Allowance for credit losses on loans	(178,924)		(205,332)
Net loans	11,849,669		11,807,171
Premises and equipment	486,531		483,469
Foreclosed assets and other real estate owned	5,118		6,032
Interest receivable	69,357		72,990
Bank owned life insurance	448,011		445,305
Goodwill	1,147,007		1,146,007
Other intangible assets	102,748		106,235
Other assets	469,853		325,793
Total assets	$	24,482,268	$	24,724,759

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Non-interest bearing transaction accounts	$	5,223,862	$	5,325,318
Interest bearing transaction accounts and savings deposits	12,105,948		11,588,770
Time deposits	2,062,612		2,452,460
Total deposits	19,392,422		19,366,548
Federal funds purchased and securities sold under agreements to repurchase	196,828		185,403
Other borrowings	1,337,243		1,337,973
Subordinated notes and debentures	384,242		384,131
Accrued interest and other liabilities	209,926		201,863
Total liabilities	21,520,661		21,475,918

Stockholders’ equity:
Common stock, Class A, $0.01 par value; 175,000,000 shares authorized at March 31, 2022 and December 31, 2021; 112,505,555 and 112,715,444 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	1,125		1,127
Surplus	2,150,453		2,164,989
Undivided profits	1,136,990		1,093,270
Accumulated other comprehensive loss	(326,961)		(10,545)
Total stockholders’ equity	2,961,607		3,248,841
Total liabilities and stockholders’ equity	$	24,482,268	$	24,724,759

See Condensed Notes to Consolidated Financial Statements.

Simmons First National Corporation

Consolidated Statements of Income

Three Months Ended March 31, 2022 and 2021


	Three Months Ended March 31,
(In thousands, except per share data)	2022		2021
	(Unaudited)
INTEREST INCOME
Loans, including fees	$	127,176	$	146,424
Interest bearing balances due from banks and federal funds sold	649		798
Investment securities	33,712		21,573
Mortgage loans held for sale	190		639
TOTAL INTEREST INCOME	161,727		169,434

INTEREST EXPENSE
Deposits	6,817		13,179
Federal funds purchased and securities sold under agreements to repurchase	68		245
Other borrowings	4,779		4,802
Subordinated notes and debentures	4,457		4,527
TOTAL INTEREST EXPENSE	16,121		22,753

NET INTEREST INCOME	145,606		146,681
Provision for credit losses	(19,914)		1,445

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	165,520		145,236

NON-INTEREST INCOME
Wealth management fees	7,968		7,361
Service charges on deposit accounts	10,696		9,715
Other service charges and fees	1,637		1,922
Mortgage lending income	4,550		6,447
Debit and credit card fees	7,449		6,610
Bank owned life insurance income	2,706		1,523
Gain (loss) on sale of securities, net	(54)		5,471
Other income	7,266		10,500
TOTAL NON-INTEREST INCOME	42,218		49,549

NON-INTEREST EXPENSE
Salaries and employee benefits	67,906		60,340
Occupancy expense, net	10,023		9,300
Furniture and equipment expense	4,775		5,415
Other real estate and foreclosure expense	343		343
Deposit insurance	1,838		1,308
Merger related costs	1,886		233
Other operating expenses	41,646		36,063
TOTAL NON-INTEREST EXPENSE	128,417		113,002

INCOME BEFORE INCOME TAXES	79,321		81,783
Provision for income taxes	14,226		14,363

NET INCOME	65,095		67,420
Preferred stock dividends	—		13
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	65,095	$	67,407
BASIC EARNINGS PER SHARE	$	0.58	$	0.62
DILUTED EARNINGS PER SHARE	$	0.58	$	0.62

See Condensed Notes to Consolidated Financial Statements.

Simmons First National Corporation

Consolidated Statements of Comprehensive Income (Loss)

Three Months Ended March 31, 2022 and 2021


	Three Months Ended March 31,
(In thousands)	2022		2021
	(Unaudited)
NET INCOME	$	65,095	$	67,420

OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized holding losses arising during the period on available-for-sale securities	(465,708)		(125,717)
Less: Reclassification adjustment for realized (loss) gains included in net income	(54)		5,471
Less: Realized loss on available-for-sale securities interest rate hedges	(37,199)		—

Less: Amortization of net unrealized gains on securities transferred from available-for-sale to held-to-maturity	(84)		—
Other comprehensive income (loss), before tax effect	(428,371)		(131,188)

Less: Tax effect of other comprehensive loss	(111,955)		(34,286)

TOTAL OTHER COMPREHENSIVE INCOME (LOSS)	(316,416)		(96,902)

COMPREHENSIVE INCOME (LOSS)	$	(251,321)	$	(29,482)

See Condensed Notes to Consolidated Financial Statements.

Simmons First National Corporation

Consolidated Statements of Cash Flows

Three Months Ended March 31, 2022 and 2021


(In thousands)	March 31, 2022		March 31, 2021
	(Unaudited)
OPERATING ACTIVITIES
Net income	$	65,095	$	67,420
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	11,637		12,323
Provision for credit losses	(19,914)		1,445
(Gain) loss on sale of investments	54		(5,471)
Net accretion of investment securities and assets	(13,176)		(12,018)
Net amortization on borrowings	111		134
Stock-based compensation expense	3,941		3,852
Gain on sale of premises and equipment, net of impairment	—		(177)
Gain on sale of foreclosed assets and other real estate owned	(235)		(134)
Gain on sale of mortgage loans held for sale	(2,931)		(11,409)
Gain on sale of branches	—		(5,300)
Deferred income taxes	9,107		3,227
Income from bank owned life insurance	(2,706)		(1,534)
Originations of mortgage loans held for sale	(189,361)		(298,914)
Proceeds from sale of mortgage loans held for sale	210,442		384,046
Changes in assets and liabilities:
Interest receivable	3,633		1,237
Other assets	(19,178)		(30,187)
Accrued interest and other liabilities	(5,045)		(20,733)
Income taxes payable	9,051		(12,055)
Net cash provided by operating activities	60,525		75,752

INVESTING ACTIVITIES
Net change in loans	(22,060)		705,540
Proceeds from sale of loans	1,237		1,847
Net change in due from banks - time	25		245
Purchases of premises and equipment, net	(7,156)		(2,514)
Proceeds from sale of premises held for sale	—		1,572
Proceeds from sale of foreclosed assets held for sale	1,623		8,338
Proceeds from sale of available-for-sale securities	—		135,651
Proceeds from maturities of available-for-sale securities	194,961		185,636
Purchases of available-for-sale securities	(162,359)		(1,464,377)
Proceeds from maturities of held-to-maturity securities	17,491		4,426
Purchases of held-to-maturity securities	(44,638)		(280,043)
Proceeds from bank owned life insurance death benefits	—		573
Disposition of assets and liabilities held for sale	—		(134,166)
Net cash used in investing activities	(20,876)		(837,272)

FINANCING ACTIVITIES
Net change in deposits	25,874		1,192,740
Dividends paid on preferred stock	—		(13)
Dividends paid on common stock	(21,375)		(19,500)
Net change in other borrowed funds	(730)		(1,600)
Net change in federal funds purchased and securities sold under agreements to repurchase	11,425		23,942
Net shares (cancelled) issued under stock compensation plans	(3,575)		1,172
Shares issued under employee stock purchase plan	1,151		1,170
Repurchases of common stock	(16,055)		(3,080)
Net cash (used in) provided by financing activities	(3,285)		1,194,831

INCREASE IN CASH AND CASH EQUIVALENTS	36,364		433,311
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	1,650,653		3,472,152

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	1,687,017	$	3,905,463

See Condensed Notes to Consolidated Financial Statements.

Simmons First National Corporation

Consolidated Statements of Stockholders’ Equity

Three Months Ended March 31, 2022 and 2021


(In thousands, except share data)	Preferred Stock		Common Stock		Surplus		Accumulated Other Comprehensive (Loss) Income		Undivided Profits		Total
Three Months Ended March 31, 2022
Balance, December 31, 2021	$	—	$	1,127	$	2,164,989	$	(10,545)	$	1,093,270	$	3,248,841

Comprehensive (loss) income	—		—		—		(316,416)		65,095		(251,321)
Stock issued for employee stock purchase plan – 59,475 shares	—		1		1,150		—		—		1,151
Stock-based compensation plans, net – 244,361 shares	—		2		364		—		—		366
Stock repurchases – 513,725 shares	—		(5)		(16,050)		—		—		(16,055)
Dividends on common stock – $0.19 per share	—		—		—		—		(21,375)		(21,375)

Balance, March 31, 2022 (Unaudited)	$	—	$	1,125	$	2,150,453	$	(326,961)	$	1,136,990	$	2,961,607

Three Months Ended March 31, 2021
Balance, December 31, 2020	$	767	$	1,081	$	2,014,076	$	59,726	$	901,006	$	2,976,656

Comprehensive income	—		—		—		(96,902)		67,420		(29,482)
Stock issued for employee stock purchase plan – 60,697 shares	—		1		1,169		—		—		1,170
Stock-based compensation plans, net – 338,289 shares	—		2		5,022		—		—		5,024
Stock repurchases – 130,916 shares	—		(1)		(3,079)		—		—		(3,080)
Dividends on preferred stock	—		—		—		—		(13)		(13)
Dividends on common stock – $0.18 per share	—		—		—		—		(19,500)		(19,500)

Balance, March 31, 2021 (Unaudited)	$	767	$	1,083	$	2,017,188	$	(37,176)	$	948,913	$	2,930,775

See Condensed Notes to Consolidated Financial Statements.

SIMMONS FIRST NATIONAL CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1: PREPARATION OF INTERIM FINANCIAL STATEMENTS

Description of Business and Organizational Structure

Simmons First National Corporation (“Company”) is a Mid-South financial holding company headquartered in Pine Bluff, Arkansas, and the parent company of Simmons Bank, an Arkansas state-chartered bank that has been in operation since 1903 (“Simmons Bank” or the “Bank”). Simmons First Insurance Services, Inc. and Simmons First Insurance Services of TN, LLC are wholly-owned subsidiaries of Simmons Bank and are insurance agencies that offer various lines of personal and corporate insurance coverage to individual and commercial customers. The Company, through its subsidiaries, offers, among other things, consumer, real estate and commercial loans; checking, savings and time deposits; and specialized products and services (such as credit cards, trust and fiduciary services, investments, agricultural finance lending, equipment lending, insurance and Small Business Administration (“SBA”) lending) from 197 financial centers as of March 31, 2022, located throughout market areas in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared based upon Securities and Exchange Commission (“SEC”) rules that permit reduced disclosures for interim periods. Certain information and footnote disclosures have been condensed or omitted in accordance with those rules and regulations. The accompanying consolidated balance sheet as of December 31, 2021, was derived from audited financial statements. In the opinion of management, these financial statements reflect all adjustments that are necessary for a fair presentation of interim results of operations, including normal recurring accruals. Significant intercompany accounts and transactions have been eliminated in consolidation. The results for the interim periods are not necessarily indicative of results for the full year. For a more complete discussion of significant accounting policies and certain other information, this report should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC on February 25, 2022.

The preparation of financial statements in accordance with accounting principles generally accepted in the United States (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income items and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying consolidated financial statements are based upon management’s evaluation of the relevant facts and circumstances as of the date of the consolidated financial statements, and actual results may differ from these estimates. Such estimates include, but are not limited to, the Company’s allowance for credit losses.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans and the valuation of acquired loans. Management obtains independent appraisals for significant properties in connection with the determination of the allowance for credit losses and the valuation of foreclosed assets.

During the second and third quarters of 2021, certain debit and credit card transaction fees were reclassified from non-interest expense to non-interest income. These transaction fees, as well as additional certain prior year amounts, have been reclassified to conform to the current year financial statement presentation. These changes and reclassifications did not impact previously reported net income or comprehensive income and were not material to the consolidated financial statements.

Recently Adopted Accounting Standards

Reference Rate Reform – In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides relief for companies preparing for discontinuation of interest rates such as the London Interbank Offered Rate (“LIBOR”). LIBOR is a benchmark interest rate referenced in a variety of agreements that are used by numerous entities. On March 5, 2021, the U.K. Financial Conduct Authority (“FCA”) announced that the majority of

LIBOR rates will no longer be published after December 31, 2021, although a number of key settings will continue until June 2023, to support the rundown of legacy contracts only. As a result, LIBOR should be discontinued as a reference rate.

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

In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope (“ASU 2021-01”), which clarifies that certain optional expedients and exceptions in Accounting Standard Codification (“ASC”) 848 for contract modifications and hedge accounting apply to derivatives that are affected by the changes in the interest rates used for margining, discounting, or contract price alignment for derivative instruments that are being implemented as part of the market-wide transition to new reference rates (commonly referred to as the “discounting transition”). ASU 2021-01 also amends the expedients and exceptions in ASC 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. ASU 2021-01 was effective upon issuance and generally can be applied through December 31, 2022. ASU 2021-01 did not have a material impact on the Company’s financial position or results of operations.

Leases - In July 2021, the FASB issued ASU No. 2021-05, Leases (Topic 842): Lessors-Certain Leases with Variable Lease Payments (“ASU 2021-05”), that amends lease classification requirements for lessors. In accordance with ASU 2021-05, lessors should classify and account for a lease that have variable lease payments that do not depend on a reference index rate as an operating lease if both of the following criteria are met: i) the lease would have been classified as a sales-type lease or a direct financing lease under the previous lease classification criteria and ii) sales-type or direct financing lease classification would result in a Day 1 loss. ASU 2021-05 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021, with early adoption permitted. The adoption of ASU No. 2021-05 did not have a material impact on the Company’s results of operations, financial position or disclosures.

Recently Issued Accounting Standards

Fair Value Hedging - In March 2022, the FASB issued ASU No. 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method (“ASU 2022-01”), which clarifies the guidance on fair value hedge accounting of interest rate risk for portfolios of financial assets. This ASU amends the guidance in ASU 2017-12 that, among other things, established the “last-of-layer” method for making the fair value hedge accounting for these portfolios more accessible. ASU 2022-01 renames that method the “portfolio layer” method and expands the scope of this guidance to allow entities to apply the portfolio layer method to portfolios of all financial assets, including both prepayable and nonprepayable financial assets. This scope expansion is consistent with the FASB’s efforts to simplify hedge accounting and allows entities to apply the same method to similar hedging strategies. ASU 2022-01 is effective for public business entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact this standard will have on the Company’s results of operations, financial position and disclosures.

Credit Losses on Financial Instruments - In March 2022, the FASB issued ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”), which eliminates the accounting guidance on troubled debt restructurings (TDRs) for creditors in ASC 310-40 and amends the guidance on “vintage disclosures” to require disclosure of current-period gross write-offs by year of origination. The ASU also updates the requirements related to accounting for credit losses under ASC 326 and adds enhanced disclosures for creditors with respect to loan refinancings and restructurings made to borrowers experiencing financial difficulty. ASU 2022-02 is effective for public business entities for fiscal years, and

interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted. The Company is currently evaluating the impact this standard will have on the Company’s results of operations, financial position and disclosures.

There have been no other significant changes to the Company’s accounting policies as previously reported (disclosed) in the 2021 Form 10-K. Presently, the Company is not aware of any other changes to the Accounting Standards Codification that will have a material impact on its present or future financial position or results of operations.

NOTE 2: ACQUISITIONS

Landmark Community Bank

On October 8, 2021, the Company completed its acquisition of Landmark Community Bank (“Landmark”) pursuant to the terms of the Agreement and Plan of Merger dated as of June 4, 2021 (“Landmark Agreement”), at which time Landmark merged with and into Simmons Bank, with Simmons Bank continuing as the surviving entity. The Company issued 4,499,872 shares of its common stock valued at approximately $138.2 million as of October 8, 2021, plus $6,451,727.43 in cash, in exchange for all outstanding shares of Landmark capital stock (and common stock equivalents) to effect the merger.

Prior to the acquisition, Landmark, headquartered in Collierville, Tennessee, conducted banking business from 8 branches located in the Memphis and Nashville, Tennessee, metropolitan areas. Including the effects of the acquisition method accounting adjustments, the Company acquired approximately $968.8 million in assets, including approximately $789.5 million in loans (inclusive of loan discounts), and approximately $802.7 million in deposits.

Goodwill of $31.5 million was recorded as a result of the transaction. The merger strengthened the Company’s market share and brought forth additional opportunities in the Company’s current footprint, which gave rise to the goodwill recorded. The goodwill will not be deductible for tax purposes.

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


(In thousands)	Acquired from Landmark		Fair Value Adjustments		Fair Value
Assets Acquired
Cash and due from banks	$	27,591	$	—	$	27,591
Due from banks - time	100		—		100
Investment securities	114,793		(125)		114,668
Loans acquired	785,551		3,953		789,504
Allowance for credit losses on loans	(5,980)		3,621		(2,359)
Premises and equipment	9,540		(4,099)		5,441
Bank owned life insurance	21,287		—		21,287
Core deposit intangible	88		4,071		4,159
Other assets	13,036		(4,655)		8,381
Total assets acquired	$	966,006	$	2,766	$	968,772


(In thousands)	Acquired from Landmark		Fair Value Adjustments		Fair Value
Liabilities Assumed
Deposits:
Non-interest bearing transaction accounts	$	110,393	$	—	$	110,393
Interest bearing transaction accounts and savings deposits	425,777		—		425,777
Time deposits	266,835		(334)		266,501
Total deposits	803,005		(334)		802,671
Other borrowings	47,023		—		47,023
Accrued interest and other liabilities	8,459		(3,122)		5,337
Total liabilities assumed	858,487		(3,456)		855,031
Equity	107,519		(107,519)		—
Total equity assumed	107,519		(107,519)		—
Total liabilities and equity assumed	$	966,006	$	(110,975)	$	855,031
Net assets acquired					113,741
Purchase price					145,195
Goodwill					$	31,454

The purchase price allocation and certain fair value measurements remain preliminary due to the timing of the merger. Management will continue to review the estimated fair values and evaluate the assumed tax positions. The Company expects to finalize its analysis of the acquired assets and assumed liabilities in this transaction within one year of the completion of the merger. Therefore, adjustments to the estimated amounts and carrying values may occur.

The Company’s operating results include the operating results of the acquired assets and assumed liabilities of Landmark subsequent to the acquisition date.

Triumph Bancshares, Inc.

On October 8, 2021, the Company completed its merger with Triumph Bancshares, Inc. (“Triumph”) pursuant to the terms of the Agreement and Plan of Merger dated as of June 4, 2021 (“Triumph Agreement”), at which time Triumph merged with and into the Company, with the Company continuing as the surviving corporation. The Company issued 4,164,712 shares of its common stock valued at approximately $127.9 million as of October 8, 2021, plus $1,693,402.93 in cash, in exchange for all outstanding shares of Triumph capital stock (and common stock equivalents) to effect the merger.

Prior to the acquisition, Triumph, headquartered in Memphis, Tennessee, conducted banking business through its subsidiary bank, Triumph Bank, from 6 branches located in the Memphis and Nashville, Tennessee, metropolitan areas. Including the effects of the acquisition method accounting adjustments, the Company acquired approximately $846.9 million in assets, including approximately $698.8 million in loans (inclusive of loan discounts), and approximately $719.7 million in deposits.

Goodwill of $40.2 million was recorded as a result of the transaction. The merger strengthened the Company’s market share and brought forth additional opportunities in the Company’s current footprint, which gave rise to the goodwill recorded. The goodwill will not be deductible for tax purposes.

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


(In thousands)	Acquired from Triumph		Fair Value Adjustments		Fair Value
Assets Acquired
Cash and due from banks	$	7,484	$	—	$	7,484
Due from banks - time	495		—		495
Investment securities	130,571		(1,116)		129,455
Loans acquired	702,460