Simmons First National Corporation · NASDAQ:SFNC
Simmons First National — Investor Presentation (June 2019)
34 slides from Simmons First National's investor presentation, Jun 5, 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 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 Securi
Slide 3: Company Profile
(1) Based on April 17, 2019 closing stock price of $25.94 and number of shares outstanding as of that date. (2) As of March 31, 2019. Pro forma including Reliance Bancshares, Inc. Company Profile 3 SOUTHEAST DIVISION SOUTHWEST DIVISION NORTH TEXAS DIVISION Arkansas SW Missouri (Springfield) Tennesse
Slide 4: Q1 2019 Non-Banking Business Units
Q1 2019 Non - Banking Business Units 4 ▪ $187.8 million nationwide credit card portfolio ▪ Loan yield (including fees): 14.5% ▪ History of excellent credit quality (1.95% net charge - off ratio) TRUST ▪ Total Assets: $5.3 billion – Managed Assets: $3.0 billion – Non - managed / Custodial Assets: $2.
Slide 5: Note: Per share information has been adjusted to reflect the effects of the Company’s
Note: Per share information has been adjusted to reflect the effects of the Company’s two - for - one stock split, which occurred o n February 8, 2018. Note: Core excludes non - core income and expense items (e.g., early retirement program costs, gain on sale of insurance lines of business, donation
Slide 6: Q1 2019 Financial Highlights
(1) Core excludes non - core income and expense items (e.g., early retirement program costs, merger related costs and branch right - siz ing costs). Core results are non - GAAP measurements. See Appendix for non - GAAP reconciliations. Q1 2019 Financial Highlights 6 NON - CORE ITEMS SELECTED HIGHLIG
Slide 7: 25% 33% 28% 21% 20% 26% 33% 28% 21% 20% 10.0% 15.0% 20.0% .0%
25% 33% 28% 21% 20% 26% 33% 28% 21% 20% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 2015 2016 2017 2018 FY19 Q1 GAAP Core $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 2015 2016 2017 2018 FY19 Q1 Loans Deposits $7.6 $8.4 $15.1 $16.5 $16.1 $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0 2015 2016 2017 2018 F
Slide 8: Performance Trends
1.03% 1.25% 0.92% 1.37% 1.19% 1.25% 1.31% 1.18% 1.40% 1.22% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 2015 2016 2017 2018 FY19 Q1 GAAP Core (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
Slide 9: Regulatory Capital Ratios
11.2% 11.0% 9.2% 8.8% 9.1% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 2015 2016 2017 2018 FY19 Q1 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% 18.0% 2015 2016 2017 2018 FY19 Q1 14.2% 13.5% 9.8% 10.2% 10.5% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 2015
Slide 10: Loan Portfolio
Total % of $ in billions Loans Total Southeast Division 4.9$ 41.8% Southwest Division 2.6 22.5% North Texas Division 3.2 26.9% Other⁽²⁾ 1.0 8.8% % of Re-Pricing Total Variable, Adj. or Fixed < 1 Yr. Maturity 54% Fixed Rate 46% % of CRE-Loans Total Owner Occupied 24% Non-Owner Occupied 76% % of Loan
Slide 11: Loan Growth
Loan Growth 11 Linked Quarter Growth On a linked - quarter basis (March 31, 2019 compared to December 31, 2018), total loans remained relatively flat with the following changes: ▪ $40 million seasonal decrease in credit card and agricultural portfolios ▪ $473 million in loans approved and ready to c
Slide 12: Non-Performing Loans, Assets and Net Charge-Offs
Non-Performing Loans 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 FY19 Q1 SFNC 0.81% 1.35% 1.98% 1.74% 1.42% 1.07% 0.74% 0.68% 1.16% 0.93% 0.48% 0.78% All US Banks⁽¹⁾ 2.38% 4.78% 4.68% 4.13% 3.56% 2.90% 2.28% 1.83% 1.64% 1.38% 1.21% NA Non-Performing Assets 2008 2009 2010 2011 2012 2013 20
Slide 13: Credit Quality: Credit Card Portfolio
1991 Recession 4.55% 2002 Recession 6.41% 2009 "Great Recession" 9.42% 1.42% 2.10% * 2.61% * 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% Net Charge - off % * Federal bankruptcy reform impacted charge - offs in 2005 Source: Federal Reserve Board Note: Industry data as of December 31
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 2017 2018 2019 Q4 Q1 Q2 Q3 Q4 Q1 Loan Yield (1) 5.39% 5.38% 5.40% 5.54% 5.39% 5.53% Core Loan Yield (1)(2
Slide 16: Purchase Accounting Accretion & Loan Discount
$112.0 $114.1 $77.2 $55.7 $35.5 $89.3 $49.3 $17.3 $39.6 $37.5 $46.1 $24.3 $27.8 $35.3 $- $10.0 $20.0 $30.0 $40.0 $50.0 $- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 2012 2013 2014 2015 2016 2017 2018 Loan Discount Balance Accretion Income ($ in Millions) Purchase Accounting Accretion & Loan Discount 16 H
Slide 17: Acquisition History
$ in millions System Total Trust Purchase Price / Estimated Bank Announced Closed Conversion Assets AUM Price⁽¹⁾ Earnings⁽¹⁾ Book Value⁽¹⁾ TBV⁽¹⁾ Cost Savings Metropolitan National Bank⁽²⁾ Sep-13 Nov-13 Mar-14 920$ 370$ 54$ 12.5 x 88% 89% 40% Delta Trust & Bank Mar-14 Aug-14 Oct-14 420 815 67 14.9 x
Slide 18: $10 Billion Threshold
$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 AMENDMENT The Durbin a
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: 111 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 Note: Per share information has been adjusted to reflect the effects of the Company’s two - for - one stock split, wh
Slide 21: 1 Year Total Shareholder Return
(25.0%) (20.0%) (15.0%) (10.0%) (5.0%) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Dividend + Stock Appreciation (04/17/18 – 04/17/19) Note: Stock Price $25.94 as of April 17, 2019. Per share information has been adjusted to reflect the effects of the Company’s two - for - one stock split, which occurred on F
Slide 22: 5 Year Total Shareholder Return
(20.0%) (10.0%) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% Dividend + Stock Appreciation (04/17/14 – 04/17/19) Note: Stock Price $25.94 as of April 17, 2019. Per share information has been adjusted to reflect the effects of the Company’s two - for - one stock split, which occu
Slide 23: Long-term Shareholder Return
(75.0%) (50.0%) (25.0%) 0.0% 25.0% 50.0% 75.0% 100.0% 125.0% 150.0% 175.0% 200.0% 225.0% Dividend + Stock Appreciation (12/31/07 – 04/17/19) Note: Stock Price $25.94 as of April 17, 2019. Per share information has been adjusted to reflect the effects of the Company’s two - for - one stock split, whi
Slide 24: Investment Profile
Note: Per share information has been adjusted to reflect the effects of the Company’s two - for - one stock split, which occurred o n February 8, 2018. (1) LTM Core EPS excludes non - core income and expense items and is a non - GAAP measurement. See Appendix for non - GAAP reconciliations . (2) Bas
Slide 25: Next Generation Bank Program
Next Generation Bank Program 25 WHY WHAT ▪ Allows us to identify opportunities for our customers and offer them proactively vs. waiting for our customer to ask for help ▪ Customers can better engage with us seamlessly across all channels, including digital ▪ Data will be more efficiently entered, ac
Slide 26: 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 27: Appendix
Appendix 27
Slide 28: Non-GAAP Reconciliations
Non - GAAP Reconciliations 28 Q1 Q1 $ in thousands 2015 2016 2017 2018 2018 2019 Calculation of Core Return on Average Assets Net income available to common stockholders 74,107$ 96,790$ 92,940$ 215,713$ 51,312$ 47,695$ Net non-core items, net of taxes, adjustment 15,515 4,619 26,109 4,520 1,306 1,38
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
Note: Per share information has been adjusted to reflect the effects of the Company’s two - for - one stock split, which occurred on February 8, 2018. (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
Slide 31: Non-GAAP Reconciliations
(1) Efficiency ratio is noninterest expense before foreclosed property expense and amortization of intangibles as a percent of ne t i nterest income (fully taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and non - core items. Non - GAAP Reconcili
Slide 32: Non-GAAP Reconciliations
Note: Per share information has been adjusted to reflect the effects of the Company’s two - for - one stock split, which occurred on February 8, 2018. Non - GAAP Reconciliations 32 Q1 Q1 $ in thousands, except per share and share count 2015 2016 2017 2018 2018 2019 Calculation of Core Net Interest M
Slide 33: Non-GAAP Reconciliations
Non - GAAP Reconciliations 33 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 $ in thousands 2017 2017 2017 2017 2018 2018 2018 2018 2019 Calculation of Core Loan Yield Loan Interest Income 68,728$ 73,549$ 77,457$ 132,617$ 143,350$ 150,253$ 162,438$ 159,996$ 159,440$ Total Accretable Yield (4,427) (4,792) (2,890) (15,68
Slide 34: Simmons First National Corporation
Simmons First. National Co
Simmons First National — Investor Presentation (June 2019) on 6ix