Simmons First National Corporation · NASDAQ:SFNC
Simmons First National — Q3 2022 Earnings Presentation
32 slides from Simmons First National's earnings presentation, Oct 25, 2022
Slide 1: 3rd Quarter 2022 Earnings Presentation
Nasdaq: SFNC 3 rd Quarter 2022 Earnings Presentation Contents 3 Q3 Highlights 4 Q3 Results Overview 10 Loans 13 Deposits, Liquidity, Securities, Interest Rate Sensitivity & Capital 19 Credit Quality 22 Key Takeaways 24 Appendix
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
2 Forward - Looking Statements and Non - GAAP Financial Measures 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
Slide 3: Q3 22 Highlights
3 Q3 22 Highlights Q 3 net income $80.6M Adjusted earnings (1) of $82.3M 1 Earnings per share $0.63 Adjusted EPS (1) of $0.64 1 Q 3 financial performance further demonstrates our ability to produce organic growth and the geographic diversity of our franchise Total revenue was $236.6M +5% vs Q2 2 Rev
Slide 4: Q3 Results Overview
PAL simmons First National Corporation Q3 22 Results Overview
Slide 5: Q3 Financial Highlights
5 Q3 22 Financial Highlights Note: Numbers may not add due to rounding NM – not meaningful (1) Non - GAAP measures that management believes aids in the discussion of results. See appendix for Non - GAAP reconciliation (2) Effective tax rate of 26.135% Increase in revenue Q3 Highlights (Q322 vs Q222)
Slide 6: Net Interest Income and Margin (FTE)
6 Net Interest Income and Margin (FTE) FTE – Fully taxable equivalent using an effective tax rate of 26.135% PPP – Paycheck Protection Program (1) Non - GAAP measures that management believes aids in the discussion of results. See appendix for Non - GAAP reconciliation (2) Adjusted loan yield exclud
Slide 7: Noninterest Income
25.1% 23.3% 22.5% 17.8% 18.2% 23.1% 23.5% 22.5% 17.9% 18.1% Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Noninterest Income/Total Revenue Adjusted Noninterest Income/Adjusted Total Revenue(1) Noninterest Income to Total Revenue $17.7 $16.2 $14.6 $12.4 $13.4 $15.9 $16.3 $14.6 $12.5 $13.3 Q3 21 Q4 21 Q1 22 Q2 22 Q3
Slide 8: Noninterest Expense
2,740 2,877 2,893 3,233 3,206 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Employees (FTE) 58.10% 59.48% 62.95% 57.49% 54.41% Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Efficiency Ratio (1) 1.97% 2.29% 2.07% 2.34% 2.07% 2.00% 2.05% 2.02% 2.05% 2.03% Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Noninterest Expense Adjusted Noninterest Expense
Slide 9: Digital: Investments in digital to attract Gen Z and Millennial customers
Baby Boomer Gen X Gen Z Millennial Digital: Investments in digital designed to attract more Gen Z and Millennial customers Zelle and Zelle related marks are wholly owned by Early Warning Services, LLC and are used herein under license (1) Certain terms and conditions apply and can be found on our we
Slide 10: Loan Portfolio
PAL simmons First National Corporation Loan Portfolio
Slide 11: Loan portfolio: Solid growth that was geographically widespread
$2,254 $2,943 $3,428 $4,473 $5,138 Q3 21 Q4 21 Q1 22 Q2 22 Q2 22 Unfunded Commitments $ in millions Mortgage Warehouse and PPP Agricultural 11 Loan portfolio: Solid growth that was geographically widespread PPP – Paycheck Protection Program Corporate Banking includes the following units: Corporate C
Slide 12: Loan pipelines: Focused on targeted growth that optimizes capital
+139 bps Q3 Highlights – Commercial Loan Pipeline • As expected, commercial loan pipeline declined on a linked quarter basis given rising interest rate environment, but is up 5 % versus a year ago • Focus is on targeted loan growth that optimizes capital, while maintaining disciplined pricing strate
Slide 13: Deposits, Liquidity, Securities, Interest Rate Sensitivity and Capital
Deposits, Liquidity, Securities, Interest Rate Sensitivity and Capital
Slide 14: Deposits: Maintaining a disciplined funding strategy while navigating rising rates
Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Noninterest Bearing Interest Bearing Transactions Time Deposits 14 Deposits: Maintaining a disciplined funding strategy while navigating rising rates Source: Average Fed Funds rate based on data from www.macrotrends.net $18.1 $19.4 $19.4 Evolution of Funding Rates Q3 Hi
Slide 15: Liquidity: Significant sources of liquidity to fund targeted growth
15 Liquidity: Significant sources of liquidity to fund targeted growth Cash and Cash Equivalents + Variable Rate Securities $ in millions Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Cash & Cash Equivalents Variable Rate Securities $1,792 $2,600 $2,577 $3,527 $4,103 $3,606 $3,28
Slide 16: Interest Rate Sensitivity
16 Interest Rate Sensitivity Balance Sheet Interest Rate Sensitivity Over the next 12 months (estimated) 1.14% 2.25% 3.22% +100 bps +200 bps +300 bps Estimated net interest income sensitivity given immediate, parallel shift in interest rates across the yield curve with a static balance sheet Immedia
Slide 17: Regulatory Capital Position
17 Regulatory Capital Position: significantly above “well capitalized” guidelines (1) As of December 31, for each respective year shown above; Q3 22 data as of September 30, 2022 9.8% 10.2% 10.9% 13.4% 13.8% 11.7% 2017 2018 2019 2020 2021 Q3 22 W ELL C APITALIZED 8.0% 9.8% 10.2% 10.9% 13.4% 13.8% 11
Slide 18: 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 $45.0 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Suspended Plan Precluded due to acquisitions Creating long - term shareholder value while returning excess capital to shareholders (1) Based on October 11, 2022
Slide 19: Credit Quality
PAL simmons First National Corporation Credit Quality
Slide 20: Credit Quality: Key metrics remain at historically low levels
1.61% 1.64% 1.86% 1.60% 1.40% 1.39% 1.55% 1.30% 2017 2018 2019 2020 2021 Q1 22 Q2 22 Q2 22 20 Credit Quality: Key credit quality metrics remain at historically low - levels and reflect… Source: S&P Global Market Intelligence 2017 – 2021 (1) As of December 31, for each respective year shown above; qu
Slide 21: ACL: Reflects improved asset quality metrics and Moody's economic forecast
21 ACL: Reflects improved asset quality metrics and Moody’s economic forecast ACL – Allowance for Credit Losses on Loans (1) ALLL for 2017 – 2019 and ACL 2020 – 2022 (2) As of December 31, for each respective year shown above; quarterly data as of the end of the quarter for each respectiv e p eriod
Slide 22: Key Takeaways
PAL simmons First National Corporation Key Takeaways
Slide 23: Key Takeaways
23 Key Takeaways 1 Positive operating leverage in the quarter fueled by organic, balanced revenue growth while operating expenses were well contained, resulting in a significant improvement in the efficiency ratio 2 Capital position provides a strong foundation to support future growth and enhance s
Slide 24: Appendix
PAL simmons First National Corporation Appendix
Slide 25: Breakout: Loan portfolio by Category
25 Breakout: Loan portfolio by Category as of June 30, 2022 as of September 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 190 1% 193 1% 1 1
Slide 26: Non-GAAP Reconciliations
26 Non - GAAP Reconciliations Q3 Q4 Q1 Q2 Q3 $ in thousands, except per share data 2021 2021 2022 2022 2022 Calculation of Adjusted Earnings Net Income $ 80,574 $ 48,238 $ 65,095 $ 27,454 $ 80,603 Certain items Merger related costs 1,401 13,591 1,886 19,133 1,422 Branch right sizing (3,041) 1,648 90
Slide 27: Non-GAAP Reconciliations
27 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 28: Non-GAAP Reconciliations
28 Non - GAAP Reconciliations Q3 Q4 Q1 Q2 Q3 $ in thousands 2021 2021 2022 2022 2022 Calculation of Adjusted Noninterest Income Noninterest Income (GAAP) $ 48,550 $ 46,601 $ 42,218 $ 40,178 $ 43,023 Less: Gain (loss) on sales of securities 5,248 (348) (54) (150) (22) Less: Certain Items (non - GAAP)
Slide 29: Non-GAAP Reconciliations
29 Non - GAAP Reconciliations FTE – full time equivalent Fully taxable equivalent adjustment using an effective tax rate of 26.135% Q3 Q4 Q1 Q2 Q3 $ in thousands 2021 2021 2022 2022 2022 Calculation of Noninterest Income to Total Revenue Total Noninterest Income $ 48,550 $ 46,601 $ 42,218 $ 40,178 $
Slide 30: Non-GAAP Reconciliations
30 Non - GAAP Reconciliations Q3 Q4 Q1 Q2 Q3 $ in thousands 2021 2021 2022 2022 2022 Calculation of Pre - Provision Net Revenue (PPNR) Net interest income $ 145,237 $ 153,081 $ 145,606 $ 185,099 $ 193,585 Noninterest income 48,550 46,601 42,218 40,178 43,023 Less: Gain (loss) on sale of securities 5
Slide 31: Non-GAAP Reconciliations
31 Non - GAAP Reconciliations Q2 Q3 $ in thousands 2022 2022 Calculation of Net Interest Margin Net Interest Income $ 185,099 $ 193,585 Plus: taxable equivalent adjustment _ 6,096 ________6,203 Net Interest Income – fully taxable equivalent 191,195 199,788 Less: Accretion (9,898) (5,834) Less: PPP i
Slide 32: 3rd Quarter 2022 Contents
Nasdaq: SFNC 3 rd Quarter 2022 Earnings Presentation Contents 3 Q3 Highlights 4 Q3 Results Overview 10 Loans 13 Deposits, Liquidity, Securities, Interest Rate Sensitivity & Capital 19 Credit Quality 22 Key Takeaways 24 Appendix
Simmons First National — Q3 2022 Earnings Presentation on 6ix