Good morning, and welcome to Simmons First National Corporation's Third Quarter 2026 Earnings Call. Joining me today are several members of our executive management team, including President and CEO, Jay Brogdon; and CFO, Daniel Hobbs.

Today's call will be in a Q&A format. Before we begin, I would like to remind you that our third quarter earnings materials, including the earnings release and presentation deck, are available on our website at simmonsbank.com under the Investor Relations tab.

During today's call, we will make forward-looking statements about our future plans, goals, expectations, estimates, projections, and outlook, including, among others, our outlook regarding future economic conditions, interest rates, lending and deposit activity, credit quality, liquidity, and net interest margin. These statements involve risks and uncertainties, and you should therefore not place undue reliance on any forward-looking statement, as actual results could differ materially from those expressed in or implied by the forward-looking statements due to a variety of factors.

Additional information concerning some of these factors is contained in our earnings release and investor presentation furnished with our Form 8-K yesterday, as well as our Form 10-K for the year ended December 31st, 2025, and our Form 10-Q for the quarter ended June 30th, 2026, including the risk factors contained in those filings. These forward-looking statements speak only as of the date they are made, and Simmons assumes no obligation to update or revise any forward-looking statements or other information.

Finally, in this presentation, we will discuss certain non-GAAP financial metrics we believe provide useful information to investors. Additional disclosures regarding non-GAAP metrics, including the reconciliations of these non-GAAP metrics to GAAP, are contained in our earnings release and investor presentation, which are furnished as exhibits to the Form 8-K we filed yesterday with the SEC and are also available on the Investor Relations page of our website, simmonsbank.com.

Operator, we are ready to begin the Q&A session.

Morning.

Good morning. Pretty significant decline on end-of-period basis.

Could you just talk about how much of this was sort of selective on your side in terms of not chasing after certain deals and just kind of what the kind of go-forward looks like from here?

Yeah. Thanks, Gary.

This is Jay. Let me start, and what I'd really like to do is maybe just sort of step back as part of answering that question, remind you sort of where we've been, what we're committed to, and then we'll talk about sort of growth and fundamentals and dynamics as we move forward.

I think if you look back over the past year even or a year-plus, you've seen a lot of expressions of our commitment to a few strategic objectives in the business. If I were to really even just try to, in their most essential way, describe those strategic objectives, I think the first thing I'd say is that we're narrowing our focus on the type of growth that we pursue.

Within that focus, again in its simplest form, it is around driving very high-value, high-margin business into the bank. We have a good amount of that business in our bank, we know what that looks like, and we want to be consistently in pursuit of that.

What that ultimately means is there are going to be periods of time where the front-book origination and mix is going to look somewhat different than the back-book. That doesn't even necessarily mean new products or new types of loans in the front-book.

It just means that the quality of the relationship, the quality of the profitability, and the level of the profitability look very, very different. That would be kind of strategic objective number one that we have been very resolute and committed to.

The second thing is really just what I would kind of call, what we often refer to as continuous improvement. What I would put into that category is every single day when we come into the bank, we're thinking about how can we do things more efficiently, how can we deliver the growth of high-quality, high-margin business in a very efficient and scalable way.

Again, I think if you looked over the past year, you'd see a lot of evidence of that commitment and of those types of outcomes. When I get into the third quarter and look back at the results that we're talking about today and even look forward to sort of where we're headed, there's a couple of dynamics coming to play.

One is that continued expression of that commitment. The second thing is really alongside of that commitment, as you sort of indicated I think in your question, Gary, there are a number of environmental factors that don't make me all that optimistic about quality and profitable growth in the immediate-term outlook.

What I mean by that is we see risk spreads compressing very meaningfully in a number of instances. We don't think in those instances we have the opportunity to be paid for the risk that we see in some of those situations.

We see risk spreads being competed away, and then at the same time, what we see in our own business and what we see just again in the market, is significant demand for wholesale funding of any kind. Brokered deposit costs, as an example, are meaningfully higher given the demand for that type of funding.

If we think about the commitment of high-quality, high-margin business in that type of an environment, I think what you saw in the third quarter is just an expression of that commitment. The other thing that you saw in the third quarter that I want to acknowledge is, I think our level of paydowns, and this is just a factor of timing, sort of timing of cash flows, maturity walls, etc., we had extremely outsized maturities and paydowns in the third quarter.

Good news is, and you see it in our return metrics, those were a lot of the lower-rate, fixed-rate loans that had been originated some five years ago that are maturing, and so, we're not going to have that level of paydown every quarter. I think kind of the confluence of all of those factors comes together to really express all of that.

I'll maybe wrap this part of the question, Gary, with just a couple other thoughts. Here's what I'd say.

I'd say that we fully understand that the formula for revenue in this business is both P times V. We are competing for volume all day, every day.

Where there's strong relationship and profitable, quality business, we're going to exception price, and we do that and compete and win in those areas every single day. What I'd also say is we're just not going to dilute our standards along the way in doing that just to solve for the V side of the equation, the volume side of the equation.

As we continue to do that, I think what you'll see us be able to accomplish is you'll see quality of the balance sheet continue to improve, the profitability of the business to continue to improve, and really the capital flexibility of our business to continue to improve, and we are very optimistic in our ability to do that.

Thanks, Jay, for the very comprehensive overall look on that side of things. Appreciate it.

Then just to move over real quick to the expense side. Obviously, a lot of moving parts, some noise in the third quarter related to savings that you expect to start to show up in the fourth quarter.

Could you talk about kind of where maybe just a normalized expense run rate might look like, kind of with all the savings embedded, and then where you see some of the potential investment offsets focused on?

Let me jump in with a couple of comments. I know Daniel's going to want to talk about that more specifically.

What I'd just remind everyone is we put out an 8-K, I think it was in early September. There are a number of initiatives underway in our business that fall into that category of continuous improvement, designing an efficient and scalable model, etc.

that I talked about earlier. I believe we noted in that 8-K that the one-time charges this quarter would range in that area of $40 million, plus or minus, which came to fruition in the quarter.

We also commented that we would have in that area of $40 million of pre-provision net revenue improvement as a result of those initiatives. I think that's really clear evidence again of some of the things that we're committed to in the business.

I want to remind everyone, we commented in that 8-K that a portion of those savings would be earmarked for reinvestment in the business. That reinvestment, again, is designed for the growth that we're pursuing and the growth that we're confident in being able to generate over time in the business.

The pace and timing of that investment is going to be opportunistic. We're going to be just as disciplined in that investment as we are in the investments of our capital into a new loan or new relationship in the business.

Those things are all very fluid. There are environmental factors that will impact the timing and extent of those things.

In any scenario, I expect to see significant improvement in the run rate of our business and returns as a result of these initiatives that we've been working through and announced. Daniel, I'll let you kind of click into that anyway you want to.

Gary. I'd maybe just add to that.

I'll remind you back to our guidance that we gave for the year, which was 2% to 3% expense growth in '26 over '25. As I think about where we are today and what's left in the fourth quarter, we have a real shot to kind of be flat to maybe even slightly down, depending on how the fourth quarter shapes up.

A lot of the things that Jay talked about, he talked about continuous improvement even before the specific initiatives that we commented on in the 8-K, we've had the continuous improvement, self-funding mindset for years here. If you go back and think about what the run rate would have been with a 2% to 3% guide, compare that to where we are for this year, we've already started to recognize some of those savings throughout the year.

Then a number of these things that we talked about in the 8-K haven't even made it in the run rate yet. I don't want to give you a number yet.

We're going to talk about that at our Investor Day on December the 10th. We do expect improvement from here.

Then on the investment side, a lot of that, we know what some of that investment is today, but some of that is going to be opportunistic as things come our way. Buckets of those reinvestments, the number one thing that we've talked about here is deposit growth.

That's an area that would probably get the highest reinvestment. The second thing would just be hiring good quality bankers, especially in that C&I space, and so we expect to have some meaningful investments here over time, somewhat to be opportunistic.

We'll come back to you on December 10th to give you a hard number of what that could look like for '27 and beyond.

Thank you.

Thank you.

Hi. Good morning, everybody.

Morning, David.

I wanted to follow up maybe on some of your comments, Jay, with Gary's first question. Just kind of given the different focus in production, and some of the macro headwinds in competition, would you expect the balance sheet to continue to contract?

Just talk about maybe demand for a second. Production came down slightly, pipelines are down slightly, both still really good.

Obviously we're coming off a really strong quarter last quarter. I'm just curious how demand's trending, where you're seeing opportunity, and then maybe just how you think about the size of the balance sheet as you focus on profitability and maybe a smaller, more profitable bank?

The thing I'd say is, David, we're wide open for business. When I think about top of funnel, ability to generate production, I don't have concerns in that regard right now in terms of our posture.

I do think there's a couple of dynamics. As I mentioned, one, Q3 was a very high level of maturities and paydowns.

Q4 is going to be a reasonably high level. I don't expect it to be as high as Q3, but both those quarters would be above sort of normal paydown quarters for us, maturity and paydown quarters.

Again, that's just kind of a function of timing. You do have that factor in there in Q3 that impacted us and could impact us to some degree in Q4.

The bigger thing is just my confidence interval in top-of-funnel activity making its way into sort of committed and funding production is a bit lower right now, back to really just discipline and standards that we're not going to flex around. We're being reasonable.

We're not being unreasonable about that. At the same time, we just see risk spreads that don't make sense in a lot of production that's happening away from us.

I think we're just going to have a thick skin about that for whatever period of time that lasts so that we are confident that again we're doing those high-value, high-margin things that are going to produce consistently strong outcomes over time.

Okay. Again, that book that you're talking about that you've been deleveraging, the lower-yielding, low-relationship credits, could you size that portfolio?

What's that low-rate, fixed-rate loan book down to? I think we have that metric in here.

I think it's probably It's $2.1 billion, David, with a weighted average rate less than 4%, and that expands as you make that weighted average rate go up. It's still pretty sizeable.

Q3 was probably one of the bigger paydowns of that portion. Q4 will be another one as Jay mentioned.

We do expect that to continue to be a favorable tailwind for us. I'll just give you one metric here.

The production that we put on in the third quarter versus that low-rate stuff had a meaningfully higher return on capital of over 300 basis points from what ran off versus what we put on. You couple that along with the ability to grow deposits and to fund that loan growth, all those things come together to kind of create this narrative of where we feel like it's appropriate to focus on profitability.

The important thing to note there, David, is out of the loans that we're talking about that would be lower-profitability loans, not all of that is going away. We're working hard to deepen those relationships, to reprice those relationships.

We have success doing that. That success kind of can vary quarter-to-quarter based on a variety of factors.

We are very committed to deepening those relationships, but at the same time, we're very committed to allowing sort of single-threaded loan relationships that don't chin a very high bar from a profitability perspective to find a home elsewhere.

Dave. Maybe one other just data point there that might help you contextualize this.

When you look at the volume of paydowns that we had, we took a look at the paydowns that were $5 million or greater, and there was over $1 billion of that in terms of paydowns, and it only had a relationship of deposits of around less than $50 million. To Jay's point around single-threaded, non-relationship stuff, that's the piece that we're either trying to deepen or figure out other places for it to go.

All of that gives us significant opportunity to recycle capital, right? Recycle it back into higher-margin growth, or provide capital flexibility.

In either scenario, we think those things are going to point to an ability to even if we're sort of deleveraging, or your original question was really around shrinking the balance sheet, if that's the environment we find ourselves in, an environment where the application of standards allows for further deleveraging, we're confident in our ability to not only expand returns, but to also grow earnings. That's going to free up significant growth in capital, the ability to maybe be more aggressive from a share buyback point of view than we've been historically, etc.

We're going to let the environment kind of drive that optionality for us, and we'll be opportunistic on either side.

That's great. Then maybe just following up kind of from the 8-K and the question on the expense front, obviously, we're improving profitability.

You're going to be accreting capital like you talked about, positive operating on leverage on the horizon. There's a lot of back-book repricing.

There's a lot of tailwinds. Then you've got these savings, right?

A portion of which are going to be reinvested, and I don't want to steal too much of your thunder from the analyst day. I'm curious, how do you think about reinvestment of some of those savings?

What are you focused on? You talked about C&I hiring, is there technologies or systems that maybe help improve efficiency further?

I'm just kind of curious, what kind of things are you looking at for reinvesting some of those savings?

I'd say some of it is equipping and enabling. Daniel mentioned earlier just activities that we maybe haven't done historically in the category of driving deposits and deposit outcomes.

That investment could be in the form, and will be in the form, of technology enablement. It could be in the form of direct marketing spend and campaigns that we would do.

All of this will include spend in the category of continuing to invest in people and talent, both the strong talent we have here in the bank as well as opportunities in the marketplace to grow talent. Then some of the efficiencies embedded in what we put in the 8-K back in September include the benefits of some technology and automation that we're continuing to insert into the business.

I think we're barely scratching the surface, as we sit here today, of what those continued opportunities will be. I think that gives you some good flavor, David, around the main themes within the reinvestment buckets.

That's great. Thanks, everybody.

Thank you.

Hey, thanks. Good morning.

Can you talk more about your recent investments that you've made and any early progress from these recent executive and new producer investments? Jay, you mentioned that the bank will be opportunistic on additional producer hires from here.

It seems like your footprint has a unique opportunity given all the market disruption kind of throughout your entire footprint, frankly. It feels like the window's open today to capitalize on that.

Just appreciate any more thoughts you have on that dislocation and what that means for the bank being opportunistic.

Yeah. I'd say in terms of, again, I'll be more categorical and we may further reveal some of these things in December at Investor Day.

I think, with the first part of your question, Matt, what I would describe is a lot of our more recent kind of measurable return on investment looks like faster turn times, speed, generation of capacity, elimination of kind of redundancies and duplications in the business. When you think about an ability to sustainably grow organically high-margin, high-value business, you've got to have really really strong standards in terms of efficiency, turn times, etc.

That's where some of the investments around some of the automation and tooling that we're doing are enabling our bankers and our back-office teams. Kind of think front, middle, and back office really really making the job much more consistent, easier, and freeing up time for sort of higher-value productivity.

There's a number of measures that we can look at and kind of see that return on investment: number of days to close and fund a loan, etc. A number of ways we can look at those things.

Those are big areas of investment. Your point around talent is something that we get really, really excited about.

Candidly, it was one of our big motivators for going in and identifying capacity in the system. A great example would be, while we've not exited any markets, we've announced that we're going to close 26 branches.

In a number of those instances, a number of those markets are markets where, over the past several years, we've actually built branches but didn't close any branches. We are taking that, we've observed customer behaviors, we've been patient.

Now we're pulling the lever in terms of optimizing the footprint, and that capacity allows us to reinvest back into what we think is an incredibly, incredibly robust environment from a talent acquisition point of view. We see tremendous dislocation already in our footprint.

We expect more of that type of dislocation. Honestly, we're even benefiting in the instances where there's not existing dislocation, there's either just threat of dislocation, or dissatisfaction, etc.

We're beginning to develop a bit of a reputation for ourselves in the marketplace in terms of willingness to do the things to improve and grow the business, and that's attractive to strong talent out there in the market. We are, the spigot is wide open in terms of our hiring.

Again, we want to be disciplined in hiring the same way we want to be disciplined in underwriting or other things in the business. We're going to be thoughtful and measured as we move forward in that.

We think the field is very, very ripe for harvest in that category.

Matt, I would maybe just give you two investments that would be visible to you in the numbers. The first was being, if you recall, we did a lift-out of the St.

Louis wealth team that has been very, very positive for us and has exceeded all expectations that we've had. We've also made investments within the core wealth business, and you can see the non-interest revenue growing faster.

That's very visible. The other would be, we've talked about the investments that we will be making in our deposit growth outlook, but we've made investments over the last year within that.

How we've reallocated some marketing dollars, we self-funded some marketing dollars, we've funded incentives to grow deposits. You can see that, when you look at the deposit numbers, you look at what we've focused on, which has been that core customer transaction-type account growth, whether it be NIB, or whether it be money market.

You can see that in the numbers. You can see it this quarter.

When I look at consumer in the consumer book and I go back and look at every month this year, we have grown our core customer transaction account balances year-over-year, every single quarter. All those things that we're focused on has shown some good early returns, and we will do more of that, and at a bigger scale over the coming quarters and years.

Okay. That's great commentary.

Appreciate the color there. Then maybe as a follow-up, Daniel, maybe more on your side, as far as the margin this quarter, good to see the 8 bps of expansion in the third quarter.

It feels like that margin has nice momentum as you get more impact from kind of deleveraging the balance sheet. Any more color on the NIM as it progressed throughout the quarter, or maybe an exit NIM for the quarter?

Yeah. Matt, Let me back up just a second.

I'll and I'll get into that specific question. One, I just want to comment on every quarter that goes by, the quality and durability of our balance sheet continues to improve with all the focus on profitability, the focus on, some of the deleveraging that we've done.

Our margin as it sits today is 3.92%, which is a very strong margin. We feel like that margin has meaningful upside as we continue to execute our strategy of growing core funding.

You also got a rates-up environment that's in front of us. I think the outlook when we did our modeling was that a rate increase in December, one in March, and one in June.

We've got that ability to grow. We've also feel like, from a durability standpoint, we continue to try to protect on the downside, and you will see that in the deck, where we put on additional $550 million of swaps to do that.

It was a cheap, opportunistic time to do that. While we still have asset sensitivity as rates go up, we want to be able to protect on the downside, given the strong NIM that we have.

Then the other thing to think about that in conjunction is every quarter that goes by, we're adding asset sensitivity through the variable-rate loan production mix increasing, we need to do some of that hedging on the back side to keep our sensitivity tamped down a little bit. That's kind of the strategy behind that.

As we look at the 8-basis-point growth linked-quarter, about half of that was from deleveraging and about half of that was from kind of core, strategy around profitability, all the back-book repricing and all of those things. I would expect us to be able to continue to do that.

The pace at which we do that will depend on the deleveraging that could potentially happen in the fourth quarter. Some of that will be opportunistic, but we still believe there's strong upside from the core things that are embedded in our strategy to grow NIM from here.

I'd just say, Matt, I look back at the quarter and just sort of think about what happened in third quarter, right? NII grew linked-quarter compared to Q2.

NIM expanded 8 bips. EPS grew by $0.04.

ROA increased 12 basis points linked-quarter. Candidly, ROA is above our long-range target that we had previously published.

ROTCE improved 113 basis points. I kind of look at all of the mechanics of what we're talking about in our strategy and what we're focused on, and sort of the benefits of discipline here beginning to pay off.

You asked about margin, but I guess I'm expanding the conversation beyond just net interest margin. I'm confident we can continue to see expansion in all of these returns as we execute forward from here.

Guys. Great color.

Thanks again.

Thank you.

Hey. Good morning, guys.

Morning, Woody.

Wanted to follow up on the margin and maybe focus on deposit costs. It was great to see costs down about 8 basis points quarter-over-quarter.

I know there's some moving pieces with the deleveraging, and then you had the rate hike in September. I was curious if y'all had a spot rate for the cost of deposits, just trying to kind of figure out the starting point for the fourth quarter?

Yeah. Hey, Woody.

There's a couple things that went on within the quarter. Down 8 basis points, a function of that was the deleveraging, a function of that was transitioning some of the remaining broker deposits into FHLB.

The story behind that, we've talked about that, but broker deposit costs has outrun FHLB, in large part, due to the demand of across the industry to fund volume, back to Jay's P times V conversation. That has caused the cost of broker deposits to get about a 30-basis-point ahead of what FHLB for us is.

That's a piece that went in there. Then, the other part is just we continue to optimize the existing customer interest-bearing deposit book.

I'll give you a real quick example, then I'll answer your question. An example, in the third quarter, we did a pretty sizeable test-and-control of consumer money market accounts, really looking at where the elasticity, or the price sensitivity, or rate sensitivity of customers are, kind of trying to get to a terminal value, and we took a large portion of our money market book and reduced those by, call it 15, 20 basis points across a bunch of different markets, held out a control group, and looked at that over time.

What we found is, in large part, almost all of that decline was non-sensitive to time. What that did, was that generated about a $2 million interest expense savings that we then put that back into money market promos to bring in new customers.

We self-funded some of that. There'll probably be a little bit of timing differences as you think about that relative to Q3 to Q4.

Specific to your question on cost of deposits, our exit rate for September was 1.83%, and I will tell you that's probably going to be the bottom. We will go up from here primarily because we got the rate increase in September.

We expect to get another one in December. Having said that, the betas that we've modeled for loan beta and deposit beta, we will significantly drive value through the margin because of our asset sensitivity.

If you look through the entire cycle of the additional three rate

hikes,

the loan beta's going to be around 85%, and the total deposit beta's going to be, 30% to 35%. That'll give you a sense of how we're thinking about that.

Great. That's really helpful color.

Maybe to circle back to deposits and that those core customer growth that you did see this past quarter, sounds like this is a reflection of some investments you made, some focus that you've been on. Was just curious, is this mostly coming from current customers and you're taking more of their wallet, is it new customers to the bank, in any specific segments or markets where you're seeing the success in?

Chris, you can jump into here in just a second. Go ahead.

You can

I'll say, yeah, great question. I think we're seeing a fair mix of both deepening with existing relationships, which is where we started out when we started on this journey last year and have continued to expand that, but where we've really seen some positive returns is on the acquisition side.

Stepping into markets where we have both a long legacy, as well as some of the markets we acquired into over the last decade, we're seeing really good response rates, seeing good, sticky relationships showing up as a result of that. It's a nice mix of deepening with existing, which is always valuable, but the harder thing to do, and we're demonstrating that to our own satisfaction, is the ability to acquire in markets where we don't necessarily have the same brand depth and tenure that we have in some of our legacy markets.

Woody, I'd give you one more data point on that on the example that I gave you around our campaign. The campaign was designed around new money to the bank, and that new money comes from deepening existing and new customers.

What we've seen so far is about 75% of that campaign is new money to the bank.

Got it. All right.

I appreciate all the detail. Thanks for taking my questions.

Thank you.

Thanks. Good morning.

Hey, I wanted to kind of circle back on the kind of strategic mindset kind of through the quarter. If we go back to last quarter's call, thinking about maybe still, mid-single digit growth, was there at some point during the quarter, a decision change or a shift change that said, "Hey, let's actually remix some of this loan book more aggressively," or was it just pricing and spreads kind of as you spoke to, Jay, maybe a reduction in risk-adjusted spreads that said, "Hey, these 4% loans, let's not rebook these loans if they're still kind of very price-conscious?"

Just walk me through maybe the ideology of what maybe changed from last quarter's call to what progressed in the quarter.

I think the first thing I'd say is I don't think really anything has structurally changed in terms of a reasonable expectation for terminal growth for our business. Nothing's really changed there, and nothing changed in the quarter from that point of view in my mind.

The couple of things that did maybe happen to a greater degree than I would have anticipated even 90 days ago, one is I knew there was a good-sized maturity wall in the third quarter. The level of early paydowns again, was as great as it was at any point in two-plus years, maybe even longer than that.

The early paydown environment was underappreciated. That I think that's just one aspect of it.

Again, a lot of the paydowns that we saw in the quarter, whether they were maturities or paydowns, were low-rate in nature. There's nothing that changed from Q2 to Q3 in terms of our focus around either converting that business to more profitable business, deepening those relationships, or allowing those relationships to walk out the door.

That's one part of it. The second part is as I mentioned earlier, Stephen, we just saw risk spreads continue to compress all throughout the quarter.

I would say there was a shift, at least in my mindset, in the third quarter around appetite. That was purely rates moved a lot this quarter.

Rates have been volatile, and the beta, if you will, on pricing for loans has not reflected that environment because spreads have compressed so much. That would be the only part of that I would look to as kind of a mindset shift throughout the quarter.

I again, overall, I just look at it as we understand P times V. We just think that sort of consistent, premium valuation in any industry, and in this industry, comes from doing high-quality things repeatably, and that's what we're focused on right now.

Yeah. Clearly it's the right decision based on profitability and earnings trajectory, congratulations on making what was probably a hard decision.

Would it be fair to say that this $2.1 billion with a rate less than 4%, given this compression in risk spreads that you're seeing, could be more at risk to leave the balance sheet than maybe see that kind of fixed asset repricing tailwind as we sit here today?

I think our, again, our commitment to the discipline and overlaid against the environment, as I said earlier, I'm less optimistic about growth in the immediate term, like Q4 or Q1, and just the whole environmental piece, we don't control nor influence, but it's real right now. I would say, yeah, there's some risk to that outlook from an immediate-term kind of loan growth outlook in my mind as a result of those things.

Again, none of that gives me concern about our ability to continue to expand returns meaningfully and to drive, in that scenario, if that's the scenario we're in, to drive significant capital flexibility beyond what we would otherwise kind of model or expect in a more normal environment.

Yep, makes sense. Then maybe just last thing for me, kind of thinking about the share repurchase, I know you've kind of stack-ranked priorities of growth, dividend, and then the repurchase, but obviously, the loan book did shrink this quarter, CET1 was higher.

Kind of maybe talk about why no share repurchases this quarter? Is that more a function of TCE and the rate move, and how we should think about the potential aggressiveness on that repurchase moving forward?

Really, the patience from a share repurchase point of view in the third quarter was a function of a couple of things. The primary one is, you can accuse us of being conservative here, but we were really earmarking capital around the one-time investments we made in the quarter.

There were significant one-time charges, we sort of think of that as an investment in the business with a return associated with it, and we thought the returns associated with that investment were much stronger than any share repurchase we could have done would have been. That'd kind of be the primary factor.

Candidly, the secondary factor, but it's an important factor, is we had important information to share with the market in the form of that 8-K that came out in early September. We just felt like, again, it was the right thing to do for a number of reasons to sort of not be active in the third quarter.

Our appetite to repurchase in the sort of environment that we see evolving right now is increasing. I think what you saw as patience in the third quarter is not how I would extrapolate from here.

Got it. Great.

Congrats on all the continued progress. Appreciate the time.

Thanks, Stephen.

Hi, good morning. Thank you for taking my questions.

I wanted to ask about fee income. You saw some nice growth this quarter in both wealth management and also service charges.

Can you talk a little bit more about the progress you're making in those areas and any updated thoughts on the outlook for total fees over the next few quarters?

Yeah. Hey, Brian.

I've kind of referred to this a little bit earlier, wealth management was an area of strength for us, and that's a reflection of some of the investments that we've made early in the year and investments in the overall business. We're just seeing a lot of good momentum there, a lot of good customer acquisition, we're seeing some deposit growth there.

We would expect that to continue to inflect from here, and we will likely continue to make investments in that business. We feel like that business has an opportunity to be much bigger than it is today.

Then on service charges, that's really a function of just higher level of transaction volume that has service fees associated with that. That's kind of what drove that.

We'll talk a bit more about how we're thinking about a go-forward run rate for us at Investor Day. A good quarter for us, and it's an area that we continue to focus on and invest in.

Great. Appreciate that color.

Then as a follow-up, I wanted to ask about the net interest income outlook. You talked about the upside drivers to NIM.

You're clearly focused on the profitability of the loan book, which does include some loan run-off. Can you just give us an update on the net interest income outlook?

I think last quarter, you had talked about maybe being near the high end of the up 9% to 11% for the year. Is that still a good expectation as we look ahead?

Thanks.

It is. It is, Brian.

We still feel really confident about the high end of that range. Yeah.

I would just say, that was an annual outlook. We feel very confident in that outlook.

We had an annual outlook for operating leverage, and we're going to blow that one out of the park, I think, for this year. I think, again, back to NII and discipline and commitment, we were able, through really good discipline and commitment, in the third quarter to grow NII linked-quarter while significantly expanding margin and returns.

Look, if the environment doesn't change, that gets harder to do in the fourth quarter in my mind. I'm not saying that's not doable, but that gets more challenging in the immediate term if we don't see sort of risk spreads coming back into the business.

Again, I don't think that's a long-term concern from a terminal growth rate point of view for our business, but I want to be realistic about what we're seeing in the marketplace and very expressive around our commitment to the standards and discipline that we've talked about on the call today.

Great. Really appreciate all the color, and thank you for taking my questions.

Thanks, Brian.

Yeah. Just a few closing remarks today.

First, what I'd really like to do, in light of everything we've talked about on this call, is just acknowledge things like instilling new discipline, setting higher standards, evolving an operating model, these things don't happen easily, and they don't happen overnight. I couldn't be more proud of how we've been tackling some very difficult decisions head-on in our business.

We're producing results that indicate real progress toward our goals. With that acknowledgement, what I really want to do is just thank every single associate at Simmons Bank for the dedication and for the loyalty to our customers, to our teammates, and of course, to our shareholders.

Then just one final reminder as we wrap up here: Again, we're going to be in New York on December 10th for Investor Day. We really look forward to sharing more about our strategy, more about our outlook, and we hope to see you there.

Thanks for your time today, and have a great day.