Simmons First National Corporation · NASDAQ:SFNC
Simmons First National — Investor Presentation (November 2019)
35 slides from Simmons First National's investor presentation, Nov 15, 2019
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 November 6, 2019 (2) Based on November 6, 2019 closing stock price of $25.61 and number of shares outstanding as of that date. (3) As of September 30, 2019. Company Profile BRANCHES BY STATE (1) TICKER: SFNC Founded Footprint Total Assets (3) Market Cap (2) 1903 $2.9 billion $17.8 billion
Slide 4: Q3 2019 Selected Business Units
Q3 2019 Selected Business Units 4 ▪ $194 million nationwide credit card portfolio ▪ Loan yield (including fees): 14.6% ▪ History of excellent credit quality (1.79% net charge - off ratio) TRUST ▪ Total Assets: $5.3 billion – Managed Assets: $3.0 billion – Non - managed / Custodial Assets: $2.3 billi
Slide 5: Financial Highlights
Note: Core results exclude non - core income and expense items (e.g., early retirement program costs, merger related costs and bra nch right - sizing costs). Core NIM excludes purchase accounting interest accretion. Core results, as well as figures based on tangible common equity, are non - GAAP mea
Slide 6: Q3 2019 Financial Highlights
(1) Core results exclude non - core income and expense items (e.g., early retirement program costs, merger related costs and branch ri ght - sizing costs). Core NIM excludes purchase accounting interest accretion. Core results, as well as figures based on tangible common equity, are non - GAAP measu
Slide 7: Performance Trends
(1) As of December 31 st , 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 securi
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 results exclude non - core income and expense items (e.g., early retirement program costs, gain on sale of insurance lines of business, don
Slide 9: Regulatory Capital Ratios
16.7% 15.1% 11.4% 13.3% 13.2% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% 2015 2016 2017 2018 FY19 Q3 16.0% 14.5% 9.8% 10.2% 10.3% 3.0% 6.0% 9.0% 12.0% 15.0% 18.0% 2015 2016 2017 2018 FY19 Q3 14.2% 13.5% 9.8% 10.2% 10.3% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 2015 2016 2017 2018 FY19
Slide 10: Book Value & Tangible Book Value
(1) As of December 31 6 , unless otherwise noted. (2) Figures based on tangible book value are non - GAAP measurements. See Appendix for non - GAAP reconciliations. Book Value & Tangible Book Value 10 BOOK VALUE (1) TANGIBLE BOOK VALUE PER SHARE (1)(2) BOOK VALUE PER SHARE (1) TANGIBLE BOOK VALUE (1
Slide 11: Loan Portfolio
(1) As of September 30, 2019. (2) Includes credit card, indirect lending, and equipment finance (nationwide). (3) 65% tied to Prime; 35% tied to LIBOR Loan Portfolio (1) 11 TOTAL LOAN PORTFOLIO $13.0 billion Agriculture 1.7% Credit Card 1.5% Consumer 1.7% Construction 16.0% Single Family Residential
Slide 12: Loan Growth
Loan Growth 12 Linked Quarter Growth On a linked - quarter basis (September 30, 2019 compared to June 30, 2019), total loans decreased $124.6 million, or 1.0%, primarily due to a reduction in the CRE portfolio. During the third quarter, the Company reduced its real estate portfolio by $165 million a
Slide 13: Credit Quality: Legacy Loan Portfolio
(1) As of December 31, 20XX, unless otherwise noted. (2) Source: S&P Global Market Intelligence, all US Banks. (3) Excluding credit card net charge - offs. Credit Quality: Legacy Loan Portfolio (Excluding Acquired Loans) 13 "Great Recession" Non-Performing Loans⁽¹⁾ 2008 2009 2010 2011 2012 2013 2014
Slide 14: Credit Quality: Loan & Credit Coverage
Credit Quality: Loan & Credit Coverage 14 Upon acquisition of a portfolio, all loans are considered acquired and have a credit mark (loan discount) in place to cover potential exposure . When an acquired, non - impaired loan is renewed or otherwise is re - underwritten for a formal modification or c
Slide 15: Net Interest Income
(1) Fully tax equivalent. (2) Core loan yield and core net interest margin exclude accretion and are non - GAAP measurements. See Appendix for non - GAAP reconcil iations. Net Interest Income 15 2018 2019 Q3 Q4 Q1 Q2 Q3 Loan Yield (1) 5.54% 5.39% 5.53% 5.58% 5.47% Core Loan Yield (1)(2) 5.19% 5.25%
Slide 16: Purchase Accounting Accretion & Loan Discount
($ in Millions) Purchase Accounting Accretion & Loan Discount 16 HISTORICAL LOAN DISCOUNT BALANCE & ACCRETION INCOME 2019 ACCRETION (1) Includes estimated accretion of $3.7 million associated with the Company’s acquisition of The Landrum Company. $9.3 $6.7 $8.4 $10.2 Q1 (Actual) Q2 (Actual) Q4 (Esti
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: $10 Billion Threshold
(1) Estimated. $10 Billion Threshold 18 AUDIT & COMPLIANCE REGULATORY COST To strengthen the Audit and Regulatory Compliance groups, as well as address the increased regulatory requirements associated wi th exceeding $10 billion in assets, the Company has incurred the following costs: DURBIN AMENDME
Slide 19: 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 19 SENIOR UNSECURED DEBT SHORT -
Slide 20: 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 November 6, 2019 closing stock price of $25.61 and number of shares outstanding as of that date. (2) FY1
Slide 21: 6 Year Total Shareholder Return
(5.0%) 5.0% 15.0% 25.0% 35.0% 45.0% 55.0% 65.0% 75.0% 85.0% 95.0% 105.0% 115.0% 125.0% 135.0% 145.0% Dividend + Stock Appreciation (09/30/13 – 09/30/19) Note: Based on September 30, 2019 closing stock price of $25.61. Source: S&P Global Market Intelligence 6 Year Total Shareholder Return 21 SFNC 81.
Slide 22: Long-term Shareholder Return
(75.0%) (55.0%) (35.0%) (15.0%) 5.0% 25.0% 45.0% 65.0% 85.0% 105.0% 125.0% 145.0% 165.0% 185.0% 205.0% 225.0% Dividend + Stock Appreciation (12/31/07 – 11/06/19) Based on November 6, 2019 closing stock price of $25.61. Source: S&P Global Market Intelligence Long - term Shareholder Return 22 SFNC 159
Slide 23: 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 seven analyst consensus EPS of $2.39 for 2019 and $2.38 for 2020. (3) Tangible Book Value is a non - GAAP measurement. See
Slide 24: Next Generation Bank Program
Next Generation Bank Program 24 WHY WHAT ▪ Allows us to better identify 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 entere
Slide 25: 2019 Strategy
2019 Strategy 2019 Strategy Great Place to Work 0; Growth Exceptional Associate Modern Systems Gporaeieite boeren ston teen once Powerful Culture High-Performing Teams Increase Deposit Inclusive Workplace Market Share Exceptional Customer Experience Asset Quality & Legal, Regulatory and Corporate Co
Slide 26: Appendix
Appendix 26
Slide 27: Non-GAAP Reconciliations
Non - GAAP Reconciliations 27 Q3 Q3 YTD YTD $ in thousands 2015 2016 2017 2018 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$ 55,193$ 81,826$ 160,067$ 185,119$ Net non-core items, net of taxes, adjustment
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) 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 30: 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 31: Non-GAAP Reconciliations
Non - GAAP Reconciliations 31 Q3 Q3 YTD YTD $ in thousands, except per share and share count 2015 2016 2017 2018 2018 2019 2018 2019 Calculation of Core Net Interest Margin Net interest income 278,595$ 279,206$ 354,930$ 552,552$ 142,968$ 150,164$ 414,771$ 437,546$ Fully tax-equivalent adjustment 8,5
Slide 32: Non-GAAP Reconciliations
Non - GAAP Reconciliations 32 September 30, $ 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$ 2,547,071$ Intangible assets: Goodwill (327,
Slide 33: Non-GAAP Reconciliations
Non - GAAP Reconciliations 33 YTD YTD $ in thousands 2015 2016 2017 2018 2018 2019 Calculation of Non-interest Income to Revenue Net Interest Income 278,595 279,206 354,930 552,552 414,771 437,546 Non-interest income 94,661 139,382 138,765 143,896 109,308 156,542 Total Revenue (GAAP) 373,256 418,588
Slide 34: Non-GAAP Reconciliations
Non - GAAP Reconciliations 34 Q1 Q2 Q3 Q4 Q2 Q3 $ in thousands 2018 2018 2018 2018 2019 2019 Calculation of Core Loan Yield Loan Interest Income 143,350$ 150,253$ 162,438$ 159,996$ 178,122$ 179,971$ Total Accretable Yield (11,294) (10,113) (10,006) (3,850) (10,162) (9,322) Core Loan Interest Income
Slide 35: Simmons First
Simmons First. National Co
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