Simmons First National Corporation · NASDAQ:SFNC
Simmons First National — Investor Presentation (February 2018)
33 slides from Simmons First National's investor presentation, Feb 7, 2018
Slide 1: Investor Presentation
NASDAQ - GS: SFNC Investor Presentation
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward - Looking Statements and Non - GAAP Financial Measures 2 Certain statements contained in this presentation may not be based on historical facts and are "forward - looking statements" within the meaning of Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securi
Slide 3: Company Profile
(1) As of December 31, 2017. Company Profile 3 SOUTHEAST DIVISION SOUTHWEST DIVISION NORTH TEXAS DIVISION Arkansas SW Missouri (Springfield) Tennessee South Texas St. Louis Kansas City Colorado Kansas Oklahoma Dallas / Fort Worth Metroplex Loans $2.9 billion Deposits $1.9 billion Loans $4.9 billion
Slide 4: Non-Banking Business Units
(1) For fiscal year 2017. (2) Includes Southwest Bank trust assets. Non - Banking Business Units (1) 4 ▪ $185 million nationwide credit card portfolio ▪ Loan yield (including fees) over 13.6% ▪ History of excellent credit quality (1.63% net charge - off ratio in 2017) TRUST (2) ▪ $4.9 billion in tru
Slide 5: Note: Per share information has been prospectively adjusted to reflect the effects of the
Note: Per share information has been prospectively adjusted to reflect the effects of the Company’s two - for - one stock split, wh ich will be payable February 8, 2018. Note: Core excludes non - core income and expense items (e.g. merger related cost and branch rightsizing cost). Core NIM exclude s
Slide 6: Financial Highlights – Q4 2017
(1) Per share information has been prospectively adjusted to reflect the effects of the Company’s two - for - one stock split, which wil l be payable February 8, 2018. Financial Highlights – Q4 2017 6 NON - RECURRING ITEMS SELECTED HIGHLIGHTS (1) ▪ Merger - related & branch right - sizing costs: $14
Slide 7: Tax Cuts and Jobs Act Initiatives
Tax Cuts and Jobs Act Initiatives 7 ASSOCIATES ▪ Increase in the profit - sharing component of our 401(k) plan ▪ Increased consideration for our high - performing associates ▪ Other initiatives ▪ Contribution of $5 million to Simmons First Foundation to support CRA qualified community development gr
Slide 8: Performance Trends
23.70% 26.70% 25.40% 33.30% 28.10% 23.79% 22.77% 26.50% 33.20% 27.50% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 2013 2014 2015 2016 2017 GAAP Core 71.3% 67.2% 59.0% 56.3% 55.3% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 2013 2014 2015 2016 2017 $4.4 $4.6 $7.6 $8.4 $15.1 $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $
Slide 9: Performance Trends – Capital Ratios
13.0% 13.4% 16.0% 14.5% 10.1% 3.0% 6.0% 9.0% 12.0% 15.0% 18.0% 2013 2014 2015 2016 2017 12.3% 12.8% 14.2% 13.5% 10.1% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 2013 2014 2015 2016 2017 14.1% 14.5% 16.7% 15.1% 11.6% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% 2013 2014 2015 2016 2017 9.2%
Slide 10: Performance Trends
$23.2 $35.7 $74.1 $96.8 $92.9 $27.6 $38.7 $89.6 $101.4 $119.0 $- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 2013 2014 2015 2016 2017 GAAP Core 0.64% 0.80% 1.03% 1.25% 0.92% 0.77% 0.86% 1.25% 1.31% 1.18% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 2013 2014 2015 2016 2017 GAAP Core (1) Per shar
Slide 11: Loan Portfolio
(1) As of December 31, 2017. (2) Includes credit card, indirect, and equipment finance (nationwide). Loan Portfolio (1) 11 TOTAL LOAN PORTFOLIO $10.8 billion Agriculture 1.4% Credit Card 1.7% Consumer 3.1% Construction 12.0% Commercial 16.8% Single Family Residential 17.9% Commercial Real Estate 45.
Slide 12: Loan Growth
Loan Growth 12 Linked Quarter Growth On a linked - quarter basis (December 31, 2017 compared to September 30, 2017), total loans increased $4.5 billion, or 71.0%. The increase was due to: ▪ $4.2 billion increase in loans acquired on October 19 th ▪ $193 million net increase in loans at Southwest Ban
Slide 13: Credit Quality: Legacy Loan Portfolio
(1) Source: SNL Financial, all US Banks as of December 31, 2017. (2) Excluding credit card net charge - offs. Credit Quality: Legacy Loan Portfolio (Excluding Acquired Loans) 13 "Great Recession" 2017Non-Performing Loans 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1 Q2 Q3 Q4 SFNC 0.81% 1.35% 1.98%
Slide 14: Credit Quality: Credit Card Portfolio
1991 Recession 4.55% 2001 Recession 6.41% 2008 "Great Recession" 9.42% 1.42% 2.10% * 2.61% * 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% 11.00% Net Charge - off % History of Strong Asset Quality (Net Charge - offs) * Federal bankruptcy reform impacted charge - offs in 2005 Sou
Slide 15: Credit Quality: Loan & Credit Coverage
Credit Quality: Loan & Credit Coverage 15 Upon acquisition of a portfolio, all loans are considered acquired and have a credit mark (loan discount) in place to cover potential exposure . When an acquired, non - impaired loan is renewed or otherwise is re - underwritten for a formal modification or c
Slide 16: Projected Purchase Accounting Accretion & Loan Discount
($ in Millions) Projected Purchase Accounting Accretion & Loan Discount 16 HISTORICAL LOAN DISCOUNT BALANCE & ACCRETION INCOME 2018 ESTIMATED SCHEDULED ACCRETION $112.0 $114.1 $77.2 $55.7 $35.5 $89.3 $17.3 $39.6 $37.5 $46.1 $24.3 $27.8 $- $10.0 $20.0 $30.0 $40.0 $50.0 $- $20.0 $40.0 $60.0 $80.0 $100
Slide 17: Acquisitions Since 2013
(1) Deal ratios as of closed date. Source: SNL Financial. (2) Metropolitan was acquired from Section 363 Bankruptcy. (3) Estimated system conversion dates. Acquisitions Since 2013 17 $ in millions System Total Trust Purchase Price / Estimated Bank Announced Closed Conversion Assets AUM Price⁽¹⁾ Earn
Slide 18: Complementary Lines of Business & Future Expansion
Complementary Lines of Business & Future Expansion 18 MORTGAGE BANKING WEALTH MANAGEMENT & TRUST TREASURY SERVICES SBA LENDING TEAM INSURANCE CREDIT CARDS EQUIPMENT FINANCE MORTGAGE WAREHOUSE HEALTHCARE ENERGY LENDING
Slide 19: $10 Billion Threshold & Dodd-Frank Impact
(1) Per share information has been prospectively adjusted to reflect the effects of the Company’s two - for - one stock split, which wi ll be payable February 8, 2018. $10 Billion Threshold & Dodd - Frank Impact 19 DFAST (Dodd - Frank Stress Test Act) As part of the Dodd - Frank financial reform leg
Slide 20: 108 Years of Consistent Dividend History
$0.14 $0.16 $0.18 $0.20 $0.22 $0.24 $0.27 $0.29 $0.31 $0.34 $0.37 $0.38 $0.38 $0.38 $0.38 $0.40 $0.42 $0.44 $0.46 $0.48 $0.50 $0.60 $- $0.15 $0.30 $0.45 $0.60 $0.75 Note: Per share information has been prospectively adjusted to reflect the effects of the Company’s two - for - one stock split, wh ich
Slide 21: 1 Year Total Shareholder Return
(20.0%) (15.0%) (10.0%) (5.0%) 0.0% 5.0% 10.0% 15.0% 20.0% Dividend + Stock Appreciation (12/31/16 – 12/31/17) Note: Stock Price $28.55 as of December 31, 2017. Per share information has been prospectively adjusted to reflect the effects of t he Company’s two - for - one stock split, which will be p
Slide 22: 3 Year Total Shareholder Return
Dividend + Stock Appreciation (12/31/14 – 12/31/17) Note: Stock Price $28.55 as of December 31, 2017. Per share information has been prospectively adjusted to reflect the effects of t he Company’s two - for - one stock split, which will be payable February 8, 2018. Source: SNL Financial 3 Year Total
Slide 23: Long-term Shareholder Return
(75.0%) (50.0%) (25.0%) 0.0% 25.0% 50.0% 75.0% 100.0% 125.0% 150.0% 175.0% 200.0% 225.0% Dividend + Stock Appreciation (12/31/07 – 12/31/17) Note: Stock Price $28.55 as of December 31, 2017. Per share information has been prospectively adjusted to reflect the effects of t he Company’s two - for - on
Slide 24: Investment Profile
Note: Per share information has been prospectively adjusted to reflect the effects of the Company’s two - for - one stock split, wh ich will be payable February 8, 2018. (1) LTM Core EPS excludes non - core income and expense items and is a non - GAAP measurement. See Appendix for non - GAAP reconci
Slide 25: Strategic Focus
Strategic Focus 25 ▪ "Table Stakes" – Asset Quality – Regulatory Compliance ▪ Internal revenue opportunities ▪ Efficiency initiatives ▪ Branding in new markets and product enhancement ▪ Acquisitions – Traditional banking – enhance current footprint and consider expanding into adjoining states (insid
Slide 26: Why Simmons First?
Why Simmons First? 26 ▪ Multiple paths to potential above - average earnings growth – M&A accretion, cost savings and revenue enhancements – Continued efficiency initiatives – Organic legacy loan growth ▪ Experienced and deep management ▪ Exceptional balance sheet ▪ Consistent historical earnings pe
Slide 27: Appendix
Appendix 27
Slide 28: Non-GAAP Reconciliations
Non - GAAP Reconciliations 28 Reconciliation Of Non-GAAP Financial Measures Q4 Q4 $ in thounsands 2015 2016 2017 2016 2017 Calculation of Core Return on Average Assets Net income available to common stockholders 74,107$ 96,790$ 92,940$ 26,971$ 18,903$ Net non-core items, net of taxes, adjustment 15,
Slide 29: Non-GAAP Reconciliations
(1) Effective tax rate of 39.225% (adjusted for deferred tax items on P&C insurance sale). (2) Tax adjustment to revalue deferred tax assets and liabilities to account for the future impact of lower corporate tax of 26.1 35% . Non - GAAP Reconciliations 29 Reconciliation of Non-GAAP Financial Measur
Slide 30: Non-GAAP Reconciliations
Note: Per share information has been prospectively adjusted to reflect the effects of the Company’s two - for - one stock split, wh ich will be payable February 8, 2018. (1) Effective tax rate of 39.225% (adjusted for deferred tax items on P&C insurance sale). (2) Tax adjustment to revalue deferred
Slide 31: Non-GAAP Reconciliations
(1) Efficiency ratio is noninterest expense before foreclosed property expense and amortization of intangibles as a percent of ne t i nterest income (fully taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and non - core items. Non - GAAP Reconcili
Slide 32: Non-GAAP Reconciliations
Note: Per share information has been prospectively adjusted to reflect the effects of the Company’s two - for - one stock split, wh ich will be payable February 8, 2018. Non - GAAP Reconciliations 32 Reconciliation Of Non-GAAP Financial Measures Q4 Q4 $ in thounsands 2015 2016 2017 2016 2017 Calcula
Slide 33: Simmons First National Corporation
Simmons First National Corporation 33
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