Company: SFNC
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001628280-25-008639
Chunk: 109

Company: SIMMONS FIRST NATIONAL CORP
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7
Chunk 109
---
 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. 

50

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.

Additional information related to net charge-offs is shown in Table 10. 

Table 10: Ratio of Net Charge-offs to Average Loans

(Dollars in thousands)Net Charge-offsAverage LoansRatio of Net Charge-offs to Average Loans2024Credit cards$(5,346)$182,334 (2.93)%Other consumer(915)124,697 (0.73)%Real estate(5,464)13,467,999 (0.04)%Commercial(25,272)2,739,110 (0.92)%Other— 592,053 — %Total$(36,997)$17,106,193 (0.22)%2023Credit cards$(4,295)$195,545 (2.20)%Other consumer(984)136,865 (0.72)%Real estate(9,999)13,050,414 (0.08)%Commercial(3,870)2,815,006 (0.14)%Other— 449,740 — %Total$(19,148)$16,647,570 (0.12)%

Allowance for Credit Losses Allocation

As of December 31, 2024, the allowance for credit losses reflected an increase of approximately $9.8 million from December 31, 2023, while loans increased $160.3 million over the same period. The allocation in each category within the allowance generally reflects the overall changes in the loan portfolio mix. 

The increase in the allowance for credit losses during 2024 was predominantly due to the loan growth experienced during the year, as well as refreshed economic forecasts. Our allowance for credit losses at December 31, 2024