Company: SFNC
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001628280-25-037719
Chunk: 267

Company: SIMMONS FIRST NATIONAL CORP
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 8
Chunk 267
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i) not fully secured or (ii) not in the process of collection. 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.

When credit card loans reach 90 days past due and there are attachable assets, the accounts are considered for litigation. Credit card loans are generally charged off when payment of interest or principal exceeds 150 days past due. The credit card recovery group pursues account holders until it is determined, on a case-by-case basis, to be uncollectible.

Total nonperforming assets increased $45.5 million from December 31, 2024 to June 30, 2025. Nonaccrual loans increased by $46.3 million from December 31, 2024 and foreclosed assets held for sale and other real estate owned decreased $476,000 as compared to December 31, 2024. The increase in nonaccrual loans was primarily due to two specific credit relationships being placed on nonaccrual status during the period. One relationship totaling $26.7 million relates to a downtown St. Louis hotel that was originated pre-pandemic and has been on our classified list since April of 2021. This is the only credit relationship within our portfolio located in downtown St. Louis. The other relationship totaling $22.9 million relates to a fast-food operator and has been on our classified list since June of 2024 due to sector-related headwinds and global cash flow concerns with the borrower.

From time to time, certain borrowers experience declines in income and cash flow. As a result, these borrowers seek to reduce contractual cash outlays, the most prominent being debt payments. In an effort to preserve our net interest margin and earning assets, we are open to working with existing customers in order to maximize the collectability of the debt.

We have internal loan modification programs for borrowers experiencing financial difficulties. Modifications to borrowers experiencing financial difficulties (“FDMs”) may include interest rate reductions, principal or interest forgiveness and/or term extensions. We primarily use interest rate reduction and/or payment modifications or extensions, with an occasional forgiveness of principal. 

There were five loan modifications granted to borrowers experiencing financial difficulty during the six month period ended June 30, 2025. Such modifications included interest rate reductions and had a total period-end amortized cost basis of $528,000 at June 30, 2025.

The allowance for credit losses