Company: SFNC
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001628280-25-050112
Chunk: 27

Company: SIMMONS FIRST NATIONAL CORP
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 2
Chunk 27
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2,610 Total nonperforming assets$160,717 $121,229 $104,305 Allowance for credit losses to nonperforming loans168 %212 %229 %Nonperforming loans to total loans0.90 %0.65 %0.59 %Nonperforming assets to total assets0.66 %0.45 %0.38 %

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(1)Includes nonaccrual FDMs of approximately $28.2 million and $597,000 at September 30, 2025 and December 31, 2024, respectively.

The interest income on nonaccrual loans is not considered material for the three and nine month periods ended September 30, 2025 and 2024. 

ALLOWANCE FOR CREDIT LOSSES

The allowance for credit losses is a reserve established through a provision for credit losses charged to expense which represents management’s best estimate of lifetime expected losses based on reasonable and supportable forecasts, quantitative factors, and other qualitative considerations.

Loans with similar risk characteristics such as loan type, collateral type, and internal risk ratings are aggregated for collective assessment. We use statistically-based models that leverage assumptions about current and future economic conditions throughout the contractual life of the loan. Expected credit losses are estimated by either lifetime loss rates or expected loss cash flows based on three key parameters: probability-of-default (“PD”), exposure-at-default (“EAD”), and loss-given-default (“LGD”). Future economic conditions are incorporated to the extent that they are reasonable and supportable. Beyond the reasonable and supportable periods, the economic variables revert to a historical equilibrium at a pace dependent on the state of the economy reflected within the economic scenarios. We also include qualitative adjustments to the allowance based on factors and considerations that have not otherwise been fully accounted for. 

Loans that have unique risk characteristics are evaluated on an individual basis. These evaluations are typically performed on loans with a deteriorated internal risk rating. For a collateral-dependent loan, our evaluation process includes a valuation by appraisal or other collateral analysis adjusted for selling costs, when appropriate. This valuation is compared to the remaining outstanding principal balance of the loan. If a loss is determined to be probable, the loss is included in the allowance for credit losses as a specific allocation.

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An analysis of the allowance for credit losses on loans is shown in Table 10.

Table 10: Allowance for Credit Losses 

(In thousands)20252024Balance,