Company: SFNC
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001628280-25-008639
Chunk: 97

Company: SIMMONS FIRST NATIONAL CORP
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7
Chunk 97
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 primarily made up of commercial construction loans, which receive a higher reserve allocation than other loans. These expenses were partially offset by a release of $16.0 million, which was driven by a reduction to certain industry specific qualitative factors for the restaurant, hospitality, student housing and office space industries due to the improvement from pandemic related stresses. Further recapture during 2022 was driven by the planned exit of several large oil and gas relationships during the year, along with our improved asset credit quality metrics and improved Moody’s economic modeling scenarios.

Noninterest Income

Noninterest income is principally derived from recurring fee income, which includes service charges, wealth management fees and debit and credit card fees. Noninterest income also includes income on the sale of mortgage loans, income from the increase in cash surrender values of bank owned life insurance and gains (losses) from sales of securities.

Total noninterest income was $147.2 million in 2024, compared to $155.6 million in 2023 and $170.1 million in 2022. Noninterest income for 2024 decreased $8.4 million, or 5.4%, from 2023. Included in both 2024 and 2023 results were $28.4 million and $20.6 million, respectively, of certain items related to the loss on the sale of securities during the period. Adjusting for these certain items, adjusted noninterest income for the year ended December 31, 2024 decreased $611,000, or 0.3%, from the prior year. See the GAAP Reconciliation of Non-GAAP Financial Measures section for additional discussion and reconciliations of non-GAAP measures.

During 2024, we sold approximately $251.5 million of investment securities resulting in a net loss of $28.4 million, while we realized a net loss of $20.6 million related to the sale of $247.9 million of investment securities during 2023. The sale of securities during both 2024 and 2023 was primarily related to strategic decisions to sell low yield securities and use the proceeds to pay off higher rate wholesale fundings.

The larger loss on sale of securities recognized during 2024, coupled with a $4.0 million legal reserve recapture associated with litigation recognized in 2023, were partially offset with increases in bank owned life insurance income and several fee-based businesses during 2024. These incremental increases as compared to the prior period were primarily made up of a $3.