Simmons First National Corporation · NASDAQ:SFNC
Simmons First National — Merger or Acquisition (May 2017)
43 slides from Simmons First National's merger presentation, May 8, 2017
Slide 1: Simmons First National Corporation (NASDAQ-GS: SFNC)
NASDAQ - GS: SFNC Pine Bluff – Corporate Headquarters Little Rock Corporate Office
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward - Looking Statements and Non - GAAP Financial Measures Page 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 S
Slide 3: Important Additional Information and Where to Find It
Important Additional Information and Where to Find It Page 3 Merger with First Texas BHC, Inc . In connection with the proposed merger with First Texas BHC, Inc . ("First Texas"), Simmons First National Corporation ("SFNC") will file with the SEC a Registration Statement on Form S - 4 that will incl
Slide 4: Company Profile
(1) Source: American Bankers Association's list of the Top 100 Farm Lender Ranked by Dollar Volume (as of 12/31/16) (2) Source: U.S. Small Business Administration's list of the Top 100 SBA Lenders Ranked by Number of Loans (as of 12/31/16) Company Profile • Ticker: SFNC • $8.6 billion Total Assets •
Slide 5: Company Footprint and Regional Structure
Company Footprint and Regional Structure o Loans o Deposits $1 . 3 B $1 . 6 B o Loans o Deposits $1 . 4 B $1 . 1 B o Loans o Deposits $2 . 5 B $4 . 1 B 1 Arkansas Region 2 Missouri / Kansas Region 3 Tennessee Region 2 3 1 Page 5
Slide 6: Non-Banking Business Units
Non - Banking Business Units Simmons First Credit Cards o $172 million nationwide credit card portfolio o Loanyield (including fees) over 13.3%. o Historyof excellent credit quality o ~$111 million mortgage originations (1) o ~69% purchase vs. 31% refinance TRUST o $4.3 billion in trust assets ($2.6
Slide 7: Financial Highlights
EPS = Diluted Earnings per Share Financial Highlights Page 7 (1) The efficiency ratio is non - interest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and non - interest revenues, excluding gains and losses fr
Slide 8: SFNC: Performance Trends
SFNC: Performance Trends 0.83 0.64 0.80 1.03 1.25 1.07 0.81 0.77 0.86 1.25 1.31 1.09 0.40 0.60 0.80 1.00 1.20 1.40 2012 2013 2014 2015 2016 Q1 FY17 G A A P C o re ROA (%) Diluted EPS ($) Efficiency Ratio (%) (1) 8.05 6.36 10 . 99 12 . 53 13 . 92 12 . 22 7.81 7.54 11 . 89 15 . 05 14 . 56 12 . 44 4.00
Slide 9: Loan Portfolio
S i n g l e - F am il y Residential 23% Co mme r c i a l Real Estate 45% Co mme r c i a l 13% Agricultural 2% Credit Card 3% Consu mer 7% Construction 7% Loan Portfolio Total Loan Portfolio $5.8 billion March 31, 2017 Page 9 State Total Loans % of Total AR $2.5B 43% TN $1.3B 22% MO / KS $1.4B 24% Ot
Slide 10: Loan Growth
Loan Growth Quarter - over - Quarter Growth Linked Quarter Growth $ in millions Q1 2016 Q1 2017 $ C h a n ge % Change Q4 2016 Q1 2017 $ C h a n ge % Change Legacy Loans (includes acquired migrated) $3,473 $4,633 $1,160 33 . 4% $4,327 $4,633 $306 7 . 1% Acquired Loans, net of discounts 1,458 1,145 (3
Slide 11: Credit Quality: Legacy Loan Portfolio
Data in % 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1 FY17 NPL – SFNC 0.81 1.35 1.98 1.74 1.42 1.07 0.74 0.68 1.16 1.38 NPL – All US Banks (1)(2) 2.19 4.41 4.15 4.11 3.36 2.67 2.07 1.71 1.64 NA NPA – SFNC 0.64 1.12 1.71 1.52 1.61 1.91 1.30 0.89 0.93 1.05 NPA – All US Banks (1) (2) 1.96 3.81 3.69
Slide 12: Credit Quality: Credit Card Portfolio
6.6% 1.3% 2.1% 2.6% 1.8% 3.1% 0 . 0 % 1 . 5 % 3 . 0 % 4 . 5 % 6 . 0 % 7 . 5 % 9 . 0 % 1 0 . 5% 1 2 . 0% N e t Cha r g e - Of f % SFN C Industry History of Strong Asset Quality (Net Charge - offs ) 1991 Recession 4.9% 2001 Recession 2008 "The Great Recession" 10.5% * Federal bankruptcy reform impacte
Slide 13: Credit Quality: Loan and Credit Coverage
$ in millions Actual 3 / 31 / 17 Coverage Legacy Loan Portfolio 4,633 Allowance for Loan Loss (38 . 0) 0.82% Loans acquired 1,174 Loan discount / acquired ALLL (29 . 4) 2.50% Total Loans, before discounts 5,807 Total allowance for loan loss and loan discount (67 . 2) 1.16% Credit Quality: Loan and C
Slide 14: Acquisitions since 2013
Acquisitions since 2013 Page 14 Bank Announced Closed System C on v ers i o n Total Asse t s Trust Assets Under Mgm t . P ur c has e Price (1) Price / Earnings (1) Price / Book Value ( 1 ) Price / T an gi b le Book Value (1) E s t im a t e d Cost Savings Metropolitan National Bank Sep - 13 Nov - 13
Slide 15: Pro Forma Franchise Footprint
Pro Forma Franchise Footprint Source: SNL Financial Note: Pro Forma branch count includes Simmons Bank, First South Bank, Bank SNB and Southwest Bank Pro Forma Branches Arkansas 83 Tennessee 50 Missouri 28 Texas 21 Oklahoma 19 Kansas 7 Colorado 3 Total 211 SFNC (154) OKSB (31) SWB (16) FSB (10) Page
Slide 16: Attractive & Diverse Regional Footprint
Attractive & Diverse Regional Footprint Source: SNL Financial Note: FDIC deposit data as of 6/30/16 T enness e e Southwest Missouri and Arkansas – Deposit market share rank of #10 in OK – Deposit market share rank of #19 in DFW • 50 branches with ~$3.4 billion total deposits • Ongoing consolidation
Slide 17: Complementary Lines of Business and Future Expansion
Complementary Lines of Business and Future Expansion Lines of Business Mortgage Banking x x x Wealth Management & Trust x x Treasury Services x x x SBA Lending Team x x Insurance x Credit Cards x x x Equipment Finance x x x Mortgage Warehouse x Healthcare Lending x Page 17
Slide 18: Proven Acquirer and Integrator
Proven Acquirer and Integrator Recent Acquisitions 2013 2014 2015 2016 2017 (1) $0.9B Metropolitan Central AR (363 Bankruptcy) $0.4B Delta Arkansas $1.1B Liberty Springfield, MO $0.6B Citizens National East Tennessee $0.5B First South West Tennessee $1.9B First State Tennessee $2.5B OKSB OK, TX, KS
Slide 19: Acquisition Summary
Acquisition Summary Page 19 • Pro forma assets of $13.5 billion (1) • $4.6 billion asset franchise in high growth Southwest markets throughout Texas, Oklahoma and Colorado • Significantly enhances organic growth profile and expands future M&A opportunities • Expected to be accretive to earnings per
Slide 20: DFAST and Durbin Amendment
DFAST (Dodd - Frank Stress Test Act) As part of the Dodd - Frank financial reform legislation in 2010 , financial institution's with total consolidated assets of more than $ 10 billion are required to conduct an annual stress test . SFNC is well underway in the preparation for the DFAST requirements
Slide 21: Consistent Dividend History
$0.32 $0.28 $0.36 $0.40 $0.53 $0.48 $0.44 $0.57 $0.73 $0.68 $0.61 $0.76 $0.76 $0.76 $0.76 $0.80 $0.84 $0.88 $0.92 $0.96 $1.00 $ 0 . 40 $ 0 . 60 $ 0 . 80 $ 1 . 00 $0.20 ' 9 7 ' 9 8 ' 9 9 ' 0 0 ' 0 1 ' 0 2 ' 0 3 ' 0 4 ' 0 5 ' 0 6 ' 0 7 ' 0 8 ' 0 9 ' 1 0 ' 1 1 ' 1 2 ' 1 3 ' 1 4 ' 1 5 ' 1 6 ' 1 7 Di v i
Slide 22: 1 Year Total Shareholder Return
- 25 - 10 5 20 35 50 Mar - 2016 Jun - 2016 Sep - 2016 T o t al R e turn (% ) Dec - 2016 SFN C Mar - 2017 SNL Mid Cap Bank 1 Year Total Shareholder Return (Dividends + Stock Appreciation) S F N C Note: Stock Price $55.15 as of 3/31/17 Source: SNL Financial Page 22 25% SNL Mid Cap U.S. Bank Index 40%
Slide 23: 3 Year Total Shareholder Return
60 40 20 0 - 20 80 100 M a r - 14 J u n - 14 Se p - 14 D e c - 14 M a r - 15 J u n - 15 Se p - 15 D e c - 15 M a r - 16 J u n - 1 6 Se p - 16 D e c - 16 M a r - 17 T o t al R e turn (% ) SFN C SNL Mid Cap Bank 3 Year Total Shareholder Return (Dividends + Stock Appreciation) S F N C Note: Stock Price
Slide 24: Long-term Shareholder Return
150 100 50 0 - 50 - 100 200 250 D e c - 20 0 7 D e c - 20 0 8 D e c - 20 0 9 D e c - 20 1 0 D e c - 20 1 1 D e c - 20 1 2 D e c - 20 1 3 T o t al R e turn (% ) Dec - 2014 SFN C Dec - 2015 Dec - 2016 SNL Mid Cap Bank Long - term Shareholder Return (Dividends + Stock Appreciation) S F N C Note: Stock
Slide 25: Investment Profile
Market Data as of 3/31/17 SFNC Stock Price $55.15 52 week price range $42.20 - $66.40 Common Shares Outstanding 31.4 million Market Capitalization $1.7 billion % Institutional Ownership 51% Valuation & Per Share Data Price/LTM EPS (as of 3/31/17) 18.0x Price/LTM Core EPS (as of 3/31/17) (1) 17.1x Pr
Slide 26: Strategic Focus
▪ "Table Stakes" □ Asset Quality □ Regulatory Compliance ▪ Internal revenue opportunities ▪ Efficiency initiatives ▪ Branding in new markets and product enhancement ▪ $10 billion threshold ▪ Acquisitions ▪ Traditional banking – enhance current footprint and consider expanding into adjoining states (
Slide 27: Why Simmons First?
▪ 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 performance ▪ Attractive
Slide 28: Supplemental Information
SUPP L E M E N T AL INFORMATION Page 28
Slide 29: Overview of SWB
Overview of SWB SWB Footprint Headquarters Year Established Branches CEO Overview ▪ Founded in 1963 ▪ Headquartered in Fort Worth, Texas ▪ Operates 16 branches in the Dallas/Fort Worth Metroplex ▪ Offers personal and business banking, wealth management and mortgage services Financial Highlights Fort
Slide 30: Overview of OKSB
Overview of OKSB OKSB Footprint Financial Highlights Overview ▪ Founded in 1894 (Bank SNB) ▪ Headquartered in Stillwater, OK ▪ Operates 31 branches throughout Colorado, Kansas, Oklahoma and Texas ▪ Offers commercial and consumer lending, deposit services, specialized cash management and other financ
Slide 31: Overview of Hardeman County Investment Company, Inc.
Page 31 Overview of Hardeman County Investment Company, Inc. Hardeman Footprint Overview • Founded in 1903 • Headquartered in Jackson, TN • Operates 10 branches in West Tennessee • Insurance, investments and commercial and agricultural lending lines of business Dollars in thousands Source: SNL Finan
Slide 32: SFNC Pro Forma Expansion into Attractive Markets
11.0% 9.6% 9.4% 7.8% 7.4% 6.1% 5.9% 7.3% 4.5% 5.8% Oklahoma Stillwater Denver City San A n t oni o D / F W Wichita Austin U S A S F N C SFNC Pro Forma Expansion into Attractive Markets Page 32 '17 – '22 Projected Population Growth (%) '17 – '22 Projected Median HHI Growth (%) Source: SNL Financial D
Slide 33: Pro Forma Loan Composition
Yield on Total Loans 4.77% 9 % 17 % 2 % 4% 15 % 19 % 19 % 3 % Pro Forma Loan Composition Pro Forma Yield on Total Loans: 4.86% 7 % 3 % 5% 15 % 5 % 14 % Yield on Total Loans: 4.48% 11 % 9 % 2% 4 % 17 % 29 % 0% 2% Loans ($000) Loans ($000) Loans ($000) Loans ($000) Construction & Land $383 , 874 7% Co
Slide 34: Pro Forma Deposit Composition
Pro Forma Deposit Composition Pro Forma S W B O K S B SFNC (1) Cost of Total Deposits: 0.24% 7 % 3 % 11 % 10 % Cost of Total Deposits: 0.32% 5% 1% 62 % 18 % Cost of Total Deposits: 0.54% 1 % 59 % 1 % 10 % Deposits ($000) Deposits ($000) Deposits ($000) Deposits ($000) Demand Deposits $506 , 969 7% D
Slide 35: Pro Forma Deposit Composition by State
Pro Forma Deposit Composition by State Pro Forma S W B O K S B SFNC (1) 32 % 14 % 1 % 80 % 10 % 3 % 7 % Arkansas $3 , 697 , 83 7 53% Oklahoma $1 , 540 , 30 4 80% Texas $1,416,303 100% Arkansas $3,697,837 36% Tennessee 2 , 251 , 40 7 32% Texas 190 , 47 4 10% Texas $1,416,303 100% Tennessee 2,251,407
Slide 36: Stock Price Performance – 10/25/16 through 3/31/17
Stock Price Performance – 10/25/16 through 3/31/17 Source: SNL Financial U.S. Election 11/8/16 85 . 0 % 90 . 0 % 95 . 0 % 10 0 . 0 % 10 5 . 0 % 11 0 . 0 % 11 5 . 0 % 12 0 . 0 % 12 5 . 0 % 13 0 . 0 % 13 5 . 0 % 14 0 . 0 % 14 5 . 0 % 15 0 . 0 % 15 5 . 0 % 16 0 . 0 % 10 / 25 / 1 6 11 / 19 / 1 6 12 / 14
Slide 37: Appendix
APPENDIX Page 37
Slide 38: Appendix: Non-GAAP Reconciliations
Appendix: Non - GAAP Reconciliations Page 38 Reconciliation Of Non - GAAP Financial Measures ($ in thousands) Calculation of ROA 2012 201 3 201 4 201 5 201 6 Q1 2016 Q1 2017 Net income available to common stockholders $ 27,684 $ 23 , 231 $ 35 , 688 $ 74 , 107 $ 96 , 790 $ 23,481 $ 22 , 120 Net non -
Slide 39: Appendix: Non-GAAP Reconciliations
Appendix: Non - GAAP Reconciliations Reconciliation Of Non - GAAP Financial Measures ($ in thousands) Q1 Q1 Calculation of Core Earnings 2012 201 3 2014 2015 2016 2016 2017 Net Income $ 27,684 $ 23 , 231 $ 35,688 $ 74,107 $ 96,790 $ 23,481 $ 22,120 Non - core items Accelerated vesting on retirement
Slide 40: Appendix: Non-GAAP Reconciliations
Appendix: Non - GAAP Reconciliations Page 40 Reconciliation Of Non - GAAP Financial Measures ($ in thousands) Q1 - 17 Q1 Q1 Calculation of Diluted EPS 201 2 2013 2014 2015 2016 LTM 2016 2017 Diluted earnings per share $ 1 . 64 $ 1.42 $ 2.11 $ 2.63 $ 3.13 $ 3.06 $ 0.77 $ 0.70 Non - core items Acceler
Slide 41: Appendix: Non-GAAP Reconciliations
Appendix: Non - GAAP Reconciliations Page 41 Reconciliation Of Non - GAAP Financial Measures ($ in thousands) Calculation of Efficiency Ratio 201 2 201 3 2014 201 5 2016 Q1 2016 Q1 2017 Non - interest expense $ 117 , 733 $ 134 , 812 $ 175,721 $ 256 , 970 $ 255,085 $ 61 , 789 $ 66 , 322 Non - core no
Slide 42: Appendix: Non-GAAP Reconciliations
Appendix: Non - GAAP Reconciliations Page 42 Reconciliation Of Non - GAAP Financial Measures ($ in thousands) Calculation of Core Net Interest Margin 2015 YTD 2016 YTD Q1 2016 Q1 2017 Net interest income $ 278,595 $ 279,206 $ 70 , 232 $ 72 , 380 FTE adjustment 8,517 7,722 2 , 084 1 , 965 Fully tax e
Slide 43: NASDAQ-GS: SFNC
NASDAQ - GS: SFNC Pine Bluff – Corporate Headquarters Little Rock Corporate Office
Simmons First National — Merger or Acquisition (May 2017) on 6ix