8-K: Simmons First Boosts Exec Life Insurance Benefits

Simmons First National Corporation announced increased life insurance benefits for its President and General Counsel under its executive split-dollar life insurance plan.

Summary

• Simmons First National Corporation's bank subsidiary, Simmons Bank, increased life insurance benefits for two key officers under its Endorsement Split-Dollar Life Insurance Plan.
• James Jay Brogdon, President, saw his lump sum life insurance benefit increase from $890,000 to $1,400,000.
• George Makris III, General Counsel, had his lump sum life insurance benefit increased from $610,000 to $800,000.
• These increases were effective August 1, 2025.
• The plan, originally effective April 26, 2021, is designed for a select group of management and highly compensated employees.
• Simmons Bank is the sole owner of the life insurance policies and retains all cash surrender values.
• Upon a participant's death, the beneficiary receives a defined Participant Death Benefit, while Simmons Bank receives the remainder of the Death Benefit Proceeds.

Sentiment

Score: 5

Explanation: The filing is neutral, primarily an administrative update regarding executive compensation benefits. It does not contain information that would significantly alter the company's financial outlook or operational performance.

Positives

• Enhanced executive compensation package may aid in the retention of key personnel.
• The plan is structured to provide benefits to a select group of management and highly compensated employees, potentially aligning executive interests with the company's long-term stability.
• Simmons Bank retains ownership of the policies and their cash surrender values, providing a corporate asset and a mechanism to offset benefit costs.

Negatives

• Increased future payout obligations for executive death benefits, although these are partially offset by the bank's share of the proceeds and its ownership of the policies' cash surrender values.
• The specific financial impact of increased premiums on the company's bottom line is not detailed in the filing.

Risks

• Potential material adverse changes in the tax treatment of benefits for participants or beneficiaries could impact the plan's effectiveness.
• Potential material adverse changes in the regulatory or tax treatment for Simmons Bank regarding the benefits or bank-owned life insurance (BOLI) could affect the plan's financial viability for the company.
• Risk of forfeiture of continued participation if an executive terminates employment before age 59.5 or engages in competitive business within two years of termination (if between 59.5 and 65).

Future Outlook

The plan is designed to continue providing benefits to eligible employees, with provisions for continuation post-employment under specific conditions (attainment of age 59.5, disability, or termination after a Change in Control not for Cause). The plan can be amended or terminated by Simmons Bank, with stricter conditions applying after a Change in Control, particularly concerning adverse tax or regulatory changes.

Management Comments

• Simmons Bank maintains life insurance on the lives of certain officers and provides, subject to certain terms and conditions set forth in the Split-Dollar Plan, a defined, lump sum life insurance benefit upon the death of the officer to such officers designated beneficiary, surviving spouse or estate.

Industry Context

Split-dollar life insurance plans are a common form of executive compensation and retention strategy, particularly within the financial services industry. Bank-owned life insurance (BOLI) is a widely used tool by banks to fund employee benefits and generate tax-advantaged income. This filing indicates Simmons Bank is utilizing a standard industry practice to provide benefits to its key executives, aligning with broader trends in executive compensation and benefit funding within the banking sector.

Comparison to Industry Standards

• The use of an Endorsement Split-Dollar Life Insurance Plan is a common practice among financial institutions, including regional and national banks, to provide non-qualified executive benefits.
• Many banks, such as Truist Financial Corporation, PNC Financial Services Group, and U.S. Bancorp, utilize BOLI to offset employee benefit costs and enhance returns, similar to Simmons Bank's approach of owning the policies and retaining cash surrender values.
• The specific benefit amounts for executives vary widely across the industry based on company size, executive role, and overall compensation philosophy, making direct numerical comparisons difficult without more detailed compensation data from comparable institutions. However, the structure of the plan aligns with typical industry offerings for highly compensated employees.

Corporate Governance

Related Party Transactions

• The Split-Dollar Life Insurance Plan provides benefits to executive officers, who are considered related parties to Simmons Bank and Simmons First National Corporation.

Stakeholder Impact

• Shareholders: Minor impact; represents a component of executive compensation, which is a standard operating cost. The bank retains ownership of the policies and cash surrender value, mitigating direct financial outflow.
• Employees: Positive for the select group of management and highly compensated employees participating in the plan, as it provides a significant death benefit.
• Management: Directly benefits the President and General Counsel with increased life insurance coverage, enhancing their overall compensation and security.

Next Steps

• Simmons Bank will continue to pay premiums to maintain the policies in force.
• Simmons Bank will annually furnish participants with a statement of the amount reportable for federal and state income tax purposes.

Key Dates

Keywords

Simmons First National Corporation, SFNC, Simmons Bank, Executive Compensation, Split-Dollar Life Insurance, Bank Owned Life Insurance, BOLI, Employee Benefits, Corporate Governance, SEC Filing, 8-K