Simmons First National Corporation · NASDAQ:SFNC
Simmons First National — Q2 2022 Earnings Presentation
34 slides from Simmons First National's earnings presentation, Jul 21, 2022
Slide 1: 2nd Quarter 2022 Earnings Presentation
Nasdaq: SFNC 2 nd Quarter 2022 Earnings Presentation Contents 3 Q2 Highlights 4 Q2 Results Overview 11 Loans 14 Deposits, Liquidity, Securities, Interest Rate Sensitivity & Capital 20 Credit Quality 23 Key Takeaways 25 Appendix
Slide 2: Forward-Looking Statements
2 Forward - Looking Statements . Certain statements by Simmons First National Corporation (the “Company”, which where appropriate includes the Company’s wholly - owned banking subsidiary, Simmons Bank) contained in this presentation may not be based on historical facts and should be considered "forw
Slide 3: Q2 22 Highlights
3 Q2 22 Highlights Total revenue in Q 2 $225.4M +20% linked quarter 1 Net interest income in Q 2 $185.1M +27% linked quarter 1 Q 2 results include significant increase in revenue . Reported EPS was $ 0 . 21 , including Day 2 CECL provision and merger related costs . Adjusted EPS ( 1 ) totaled $ 0 .
Slide 4: Q2 Results Overview
FAY Simmons First National Corporation Q2 22 Results Overview
Slide 5: Spirit: Completed acquisition of Spirit of Texas Bancshares
5 Spirit: Completed acquisition of Spirit of Texas Bancshares, Inc. on April 8 and immediately converted systems Acquired Spirit Balances (4) Total Securities: (1) Estimates provided at announcement on November 19, 2021 (2) Actual information following closing of transaction on April 8, 2022 (3) TBV
Slide 6: Q2 Financial Highlights
6 Q2 22 Financial Highlights Note: Numbers may not add due to rounding NM – not meaningful Total revenue, as presented above, excludes gain (loss) on sale of securities (1) During 2021, certain debit and credit card transaction fees were reclassified from noninterest expense to noninterest i nco me
Slide 7: Net Interest Income and Margin
7 Net Interest Income and Margin PPP – Paycheck Protection Program FTE – Fully taxable equivalent $151.1 $150.2 $158.7 $151.2 $191.2 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Net Interest Income $ in millions; FTE +27% Δ in Interest Income (FTE) ex PPP & Accretion Δ in Interest Expense Δ in Accretion & PPP Cont
Slide 8: Noninterest Income
24.3% 25.1% 23.3% 22.5% 17.8% 22.1% 23.1% 23.5% 22.5% 17.9% Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Noninterest Income/Total Revenue Adjusted Noninterest Income /Total Revenue(2) Noninterest Income to Total Revenue $16.9 $17.7 $16.2 $14.6 $12.4 $14.9 $15.9 $16.3 $14.6 $12.5 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Nonin
Slide 9: Noninterest Expense
2,783 2,740 2,877 2,893 3,233 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Employees (FTE) 56.75% 58.10% 59.48% 62.95% 57.49% Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Efficiency Ratio (2) 1.97% 1.97% 2.29% 2.07% 2.34% 1.95% 2.00% 2.05% 2.02% 2.05% Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Noninterest Expense Adjusted Noninterest Expense
Slide 10: Digital: An opportunity to attract the largest generation of the population
Digital: An opportunity to attract the largest generation of the population Zelle and Zelle related marks are wholly owned by Early Warning Services, LLC and are used herein under license * Adjusted to addressable portion of the Gen Z population (Age 18+) Source: Internal company research Q1 22 Q2 2
Slide 11: Loan Portfolio
‘Simm 7 Poe Loan Portfolio
Slide 12: Loan portfolio: Loan growth driven by increased activity and Spirit
$2,130 $2,254 $2,943 $3,428 $4,473 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Unfunded Commitments $ in millions Mortgage Warehouse and PPP Agricultural 12 Loan portfolio: Loan growth driven by increased activity throughout our footprint and Spirit (1) Represents loans acquired from Spirit upon closing, net of f
Slide 13: Loan pipelines: 7th consecutive quarter of increased activity
+102 bps Q2 Highlights – Commercial Loan Pipeline • Commercial loan pipeline reflects continued growth across the footprint, as well as the positive impact from the acquisition of Spirit • Total commercial pipeline up 28 % vs Q 1 22 • Loans ready to close up + 44 % vs Q 1 22 • Rate ready to close at
Slide 14: Deposits, Liquidity, Securities, Interest Rate Sensitivity and Capital
Deposits, Liquidity, Securities, Interest Rate Sensitivity and Capital
Slide 15: Deposits: 14% increase in total deposits
0.44% 0.39% 0.34% 0.30% 0.24% 0.20% 0.17% 0.14% 0.18% 0.00% 0.05% 0.10% 0.15% 0.20% 0.25% 0.30% 0.35% 0.40% 0.45% 0.50% $0.0 $2.5 $5.0 $7.5 $10.0 $12.5 $15.0 $17.5 $20.0 $22.5 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Noninterest Bearing Interest Bearing Transactions Time Deposits Cost o
Slide 16: Liquidity: Loan to deposit ratio up to 69%
16 Liquidity: Loan to deposit ratio up to 69% while maintaining solid liquidity position Cash and Cash Equivalents + Variable Rate Securities $ in millions Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Cash & Cash Equivalents Variable Rate Securities $1,052 $1,792 $2,600 $2,577 $
Slide 17: Interest Rate Sensitivity
17 Interest Rate Sensitivity Balance Sheet Interest Rate Sensitivity Over the next 12 months (estimated) 2.88% 5.33% 7.74% +100 bps +200 bps +300 bps Net interest income sensitivity given immediate, parallel shift in interest rates across the yield curve with a static balance sheet Immediate increas
Slide 18: Strong Regulatory Capital Position
18 Strong Regulatory Capital Position: significantly above “well capitalized” guidelines (1) As of December 31, for each respective year shown above; Q2 22 data as of June 30, 2022 9.8% 10.2% 10.9% 13.4% 13.8% 12.1% 2017 2018 2019 2020 2021 Q2 22 W ELL C APITALIZED 8.0% 9.8% 10.2% 10.9% 13.4% 13.8%
Slide 19: Creating long-term shareholder value while returning excess capital
$10.1 $93.3 $0.0 $0.0 $20.0 $3.1 $0.0 $51.4 $77.9 $16.1 $50.0 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Suspended Plan Precluded due to acquisitions Creating long - term shareholder value while returning excess capital to shareholders (1) Based on July 12, 2022, closing stock
Slide 20: Credit Quality
‘Simm 7 Poe Credit Quality
Slide 21: Credit Quality: Key credit quality metrics show improvement
21 Credit Quality: Key credit quality metrics show improvement and reflect… Source: S&P Global Market Intelligence 2017 – 2021 (1) As of December 31, for each respective year shown above; Q2 22 data as of June 30, 2022 (2) ALLL for 2017 – 2019 and ACL 2020 - 2022 (3) Net charge - offs to average loa
Slide 22: Allowance for Credit Losses (ACL)
22 Allowance for Credit Losses (ACL): reflects geographic diversification and risk profile ACL – Allowance for Credit Losses on Loans (1) Non - GAAP measure that management believes aids in the discussion of results. See Appendix for Non - GAAP reconciliation $ in millions ACL ACL / Loans ACL/ Loans
Slide 23: Key Takeaways
FAY Simmons First National Corporation Key Takeaways
Slide 24: Key Takeaways
24 Key Takeaways 1 Significant revenue growth in the quarter driven by solid legacy SFNC net interest income growth, net interest margin expansion and the acquisition of Spirit 2 Positive operating leverage fueled by revenue growth and well contained operating expense growth . Spirit provides additi
Slide 25: Appendix
‘Simm 7 Poe Appendix
Slide 26: Tangible Book Value per Share and Tangible Common Equity Ratio Evolution
26 Impact of Spirit includes Day 2 accounting provision and merger related costs 1) Non - GAAP measures that management believes aids in the discussion of results. See appendix for Non - GAAP reconciliation Evolution: Tangible Book Value per Share (1) and Tangible Common Equity Ratio (1) Tangible Bo
Slide 27: Breakout: Loan portfolio by Category
27 Breakout: Loan portfolio by Category as of March 31, 2022 as of June 30, 2022 $ in millions Balance $ % of Total Loans Balance $ % of Total Loans Classified $ Nonperforming $ ACL % Unfunded Commitment $ Unfunded Commitment Reserve Total Loan Portfolio Consumer - Credit Card 184 2% 190 1% 1 1 3.5%
Slide 28: Non-GAAP Reconciliations
28 Non - GAAP Reconciliations Q2 Q3 Q4 Q1 Q2 $ in thousands, except per share data 2021 2021 2021 2022 2022 Calculation of Adjusted Earnings Net Income $ 74,924 $ 80,574 $ 48,238 $ 65,095 $ 27,454 Certain items Gain on sale of branches (16) - - - - Merger related costs 686 1,401 13,591 1,886 19,133
Slide 29: Non-GAAP Reconciliations
29 Non - GAAP Reconciliations $ in thousands, except per share data and share count 2017 2018 2019 2020 Calculation of Book Value and Tangible Book Value per Share Total common stockholders' equity $ 2,084,564 $ 2,246,434 $ 2,988,157 $ 2,975,889 Intangible assets: Goodwill (842,651) (845,687) (1,055
Slide 30: Non-GAAP Reconciliations
30 Non - GAAP Reconciliations Q2 Q3 Q4 Q1 Q2 $ in thousands 2021 2021 2021 2022 2022 Calculation of Adjusted Noninterest Income Noninterest Income (GAAP) $ 47,115 $ 48,550 $ 46,601 $ 42,218 $ 40,178 Less: Gain (loss) on sales of securities 5,127 5,248 (348) (54) (150) Less: Certain Items (non - GAAP
Slide 31: Non-GAAP Reconciliations
31 Non - GAAP Reconciliations FTE – full time equivalent Q2 Q3 Q4 Q1 Q2 $ in thousands 2021 2021 2021 2022 2022 Calculation of Noninterest Income to Total Revenue Total Noninterest Income $ 47,115 $ 48,550 $ 46,601 $ 42,218 $ 40,178 Less: Gain (loss) on sales of securities 5,127 5,248 (348) (54) (15
Slide 32: Non-GAAP Reconciliations
32 Non - GAAP Reconciliations Q2 Q3 Q4 Q1 Q2 $ in thousands 2021 2021 2021 2022 2022 Calculation of Pre - Provision Net Revenue (PPNR) Net interest income $ 146,533 $ 145,237 $ 153,081 $ 145,606 $ 185,099 Noninterest income 47,115 48,550 46,601 42,218 40,178 Less: Gain (loss) on sale of securities 5
Slide 33: Non-GAAP Reconciliations
33 Non - GAAP Reconciliations Q1 Q2 $ in thousands 2022 2022 Calculation of Tangible Common Equity Ratio Total common stockholders’ equity $ 2,961,607 $ 3,259,895 Less: Intangible assets 1,249,755 1,447,813 Tangible common stockholders’ equity (non - GAAP) $ 1,711,852 $ 1,812,082 Total assets $ 24,4
Slide 34: 2nd Quarter 2022 Contents
Nasdaq: SFNC 2 nd Quarter 2022 Earnings Presentation Contents 3 Q2 Highlights 4 Q2 Results Overview 11 Loans 14 Deposits, Liquidity, Securities, Interest Rate Sensitivity & Capital 20 Credit Quality 23 Key Takeaways 25 Appendix
Simmons First National — Q2 2022 Earnings Presentation on 6ix