Simmons First National Corporation · NASDAQ:SFNC
Simmons First National — Investor Presentation (February 2020)
34 slides from Simmons First National's investor presentation, Feb 11, 2020
Slide 1: Investor Presentation
NASDAQ: 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 should be considered "forward - looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 . These forward -
Slide 3: Company Profile
(1) As of January 17, 2020. (2) Based on January 17, 2020 closing stock price of $26.11 and number of shares outstanding as of that date. (3) As of December 31, 2019. Company Profile BRANCHES BY STATE (1) TICKER: SFNC Founded Footprint Total Assets (3) Market Cap (2) 1903 $3.0 billion $21.3 billion
Slide 4: Selected Business Units
As of and for the year ended December 31, 2019 Selected Business Units 4 ▪ $205 million nationwide credit card portfolio ▪ Loan yield (including fees): 14.5% ▪ History of excellent credit quality (1.86% YTD net charge - off ratio) TRUST ▪ Total Assets: $5.6 billion – Managed Assets: $3.2 billion – N
Slide 5: Financial Highlights
Note: Core figures (excluding Core NIM) exclude non - core income and expense items (e.g., early retirement program costs, merger related costs and branch right - sizing costs). Core NIM excludes purchase accounting interest accretion. Core figures, as well as figures based on tangible common equity
Slide 6: 2019 Financial Highlights
(1) Core figures (excluding Core NIM) exclude non - core income and expense items (e.g., merger related costs, early retirement progra m costs and branch right - sizing costs). Core NIM excludes purchase accounting interest accretion. Core figures, as well as figures based on tangible common equity
Slide 7: Performance Trends
(1) As of December 31, unless otherwise noted. (2) Efficiency ratio is core non - interest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and non - interest revenues, excluding gains and losses from securities
Slide 8: Performance Trends
(1) Per share information has been adjusted to reflect the effects of the Company’s two - for - one stock split, which occurred on Febr uary 8, 2018. Note: Core figures exclude non - core income and expense items (e.g., early retirement program costs, gain on early retirement of trust preferred secu
Slide 9: Regulatory Capital Ratios
14.2% 13.5% 9.8% 10.2% 10.8% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 2015 2016 2017 2018 2019 16.0% 14.5% 9.8% 10.2% 10.8% 3.0% 5.0% 7.0% 9.0% 11.0% 13.0% 15.0% 17.0% 2015 2016 2017 2018 2019 16.7% 15.1% 11.4% 13.3% 13.6% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% 17.0%
Slide 10: Book Value & Tangible Book Value
(1) As of December 31, unless otherwise noted. (2) Figures based on tangible book value (which excludes goodwill and other intangible assets) are non - GAAP measurements. See Append ix for non - GAAP reconciliations. Book Value & Tangible Book Value 10 BOOK VALUE (1) TANGIBLE BOOK VALUE PER SHARE (1
Slide 11: Loan Portfolio
(1) As of December 31, 2019. (2) Includes credit card, indirect lending, and equipment finance (nationwide). (3) 47% tied to Prime; 33% tied to LIBOR; 21% tied to other indices. Loan Portfolio (1) 11 TOTAL LOAN PORTFOLIO $14.4 billion Agriculture 1.3% Credit Card 1.4% Consumer 1.7% Construction 15.6
Slide 12: Loan Growth
Loan Growth 12 Linked Quarter Growth On a linked - quarter basis (December 31, 2019 compared to September 30, 2019), total loans increased $1.4 billion, or 10.9%, from the fourth quarter merger with The Landrum Company. The increase was partially offset by the reclassification of $260 million in loa
Slide 13: Credit Quality: Legacy Loan Portfolio
(1) As of December 31, unless otherwise noted. (2) Source: S&P Global Market Intelligence, SNL US Bank Index. Data for FY19 unavailable as of January 22, 2020. (3) Excluding credit card net charge - offs. Credit Quality: Legacy Loan Portfolio (Excluding Acquired Loans) 13 "Great Recession" Non-Perfo
Slide 14: Credit Quality: Loan & Credit Coverage
Credit Quality: Loan & Credit Coverage 14 Upon acquisition of a portfolio, all loans are considered acquired and have a credit mark (loan discount) in place to cover potential exposure . When an acquired, non - impaired loan is renewed or otherwise is re - underwritten for a formal modification or c
Slide 15: Net Interest Income
(1) Fully tax equivalent using an effective tax rate of 26.135%. (2) Core loan yield and core net interest margin exclude accretion and are non - GAAP measurements. See Appendix for non - GAAP reconcil iations. Net Interest Income 15 2018 2019 Q4 Q1 Q2 Q3 Q4 Loan Yield (1) 5.39% 5.53% 5.58% 5.47% 5.
Slide 16: Purchase Accounting Accretion & Loan Discount
($ in Millions) Purchase Accounting Accretion & Loan Discount 16 HISTORICAL LOAN DISCOUNT BALANCE & ACCRETION INCOME 2020 SCHEDULED ACCRETION $7.3 $10.1 $5.9 $8.8 Q1 (Estimated) Q2 (Estimated) Q4 (Estimated) Q3 (Estimated) FY20 (Estimated) $32.1 $112.0 $114.1 $77.2 $55.7 $35.5 $89.3 $49.3 $87.3 $17.
Slide 17: Acquisitions Since 2013
(1) Purchase price and ratios as of closed date. Source: S&P Global Market Intelligence. (2) Metropolitan was acquired from Section 363 Bankruptcy. (3) Expected conversion date. Acquisitions Since 2013 17 2013 – 2014 Consolidated eight charters to one National to State Charter Conversion (Fed Member
Slide 18: Subordinated Debt Offering & Kroll Rating
(1) The ratings provided by KBRA are subject to revision or withdrawal by KBRA at any time and are not recommendations to buy, se ll or hold these securities. Each rating should be evaluated independently of any other rating. Subordinated Debt Offering & Kroll Rating 18 SENIOR UNSECURED DEBT SHORT -
Slide 19: 110 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 $0.64 $- $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 (1) Based on January 17, 2020 closing stock price of $26.11 and number of shares outstanding as of that date. (2) FY1
Slide 20: 5 Year Total Shareholder Return
(15.0%) (10.0%) (5.0%) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 50.0% 55.0% 60.0% 65.0% 70.0% 75.0% 80.0% Dividend + Stock Appreciation (12/31/14 – 12/31/19) Note: Based on December 31, 2019 closing stock price of $26.79. Source: S&P Global Market Intelligence 5 Year Total Sharehold
Slide 21: Long-term Shareholder Return
(100.0%) (80.0%) (60.0%) (40.0%) (20.0%) 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0% 160.0% 180.0% 200.0% 220.0% 240.0% 260.0% Dividend + Stock Appreciation (12/31/07 – 12/31/19) Note: Based on December 31, 2019 closing stock price of $26.79. Source: S&P Global Market Intelligence Long - term
Slide 22: Investment Profile
(1) LTM Core EPS excludes non - core income and expense items and is a non - GAAP measurement. See Appendix for non - GAAP reconciliations . (2) Based upon the Company’s average six analyst consensus EPS of $2.34 for 2019 and $2.39 for 2020. (3) Tangible book value (which excludes goodwill and other
Slide 23: Next Generation Bank Program
Next Generation Bank Program 23 WHY WHAT ▪ Allows better identification of opportunities for our customers and offer them proactively vs. waiting for our customer to ask for help ▪ Enhanced customer engagement and interaction across all channels, including digital ▪ Data will be more efficiently ent
Slide 24: 2020 Strategy
2020 Strategy Great Place to Work Exceptional Associate Experience Powerful Culture Inclusive Workplace Strong Leadership 2020 Strategy Operational Excellence Modern/Digital Systems Top-Tier Efficiency Sustainable Growth Expand Profitable Lines of Business ‘Across Geographies Increase Deposit Market
Slide 25: Appendix
Appendix 25
Slide 26: Non-GAAP Reconciliations
Non - GAAP Reconciliations 26 Q4 Q4 $ in thousands 2015 2016 2017 2018 2019 2018 2019 Calculation of Core Return on Average Assets Net income available to common stockholders 74,107$ 96,790$ 92,940$ 215,713$ 237,828$ 55,646$ 52,709$ Net non-core items, net of taxes, adjustment 15,515 4,619 26,109 4,
Slide 27: Non-GAAP Reconciliations
(1) Effective tax rate of 26.135% for 2018/2019 and 39.225% for prior periods, adjusted for non - deductible merger - related costs and 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.
Slide 28: Non-GAAP Reconciliations
(1) Effective tax rate of 26.135% for 2018/2019 and 39.225% for prior periods, adjusted for non - deductible merger - related costs and 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.
Slide 29: Non-GAAP Reconciliations
(1) Efficiency ratio is core non - interest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and non - core items. Non - GAAP Rec
Slide 30: Non-GAAP Reconciliations
Non - GAAP Reconciliations 30 Q4 Q4 $ in thousands 2015 2016 2017 2018 2019 2018 2019 Calculation of Core Net Interest Margin Net interest income 278,595$ 279,206$ 354,930$ 552,552$ 605,275$ 137,781$ 167,729$ Fully tax-equivalent adjustment 8,517 7,722 7,723 5,297 7,322 1,466 2,172 Fully tax-equival
Slide 31: Non-GAAP Reconciliations
Non - GAAP Reconciliations 31 $ in thousands, except per share and share count 2015 2016 2017 2018 2019 Calculation of Book Value and Tangible Book Value per Share Total common stockholders' equity 1,046,003$ 1,151,111$ 2,084,564$ 2,246,434$ 2,988,157$ Intangible assets: Goodwill (327,686) (348,505)
Slide 32: Non-GAAP Reconciliations
Non - GAAP Reconciliations 32 $ in thousands 2015 2016 2017 2018 2019 Calculation of Non-interest Income to Revenue Net Interest Income 278,595 279,206 354,930 552,552 605,275 Non-interest income 94,661 139,382 138,765 143,896 201,509 Total Revenue (GAAP) 373,256 418,588 493,695 696,448 806,784 Non-
Slide 33: Non-GAAP Reconciliations
Non - GAAP Reconciliations 33 Q4 Q1 Q2 Q3 Q4 $ in thousands 2018 2019 2019 2019 2019 Calculation of Core Loan Yield Loan Interest Income 159,996$ 159,440$ 178,122$ 179,971$ 193,402$ Total Accretable Yield (3,850) (6,660) (10,162) (9,322) (15,100) Core Loan Interest Income 156,146 152,780 167,960 170
Slide 34: Simmons First National Corporation
7 Simmons First _ National Corporation
Simmons First National — Investor Presentation (February 2020) on 6ix