Simmons First National Corporation · NASDAQ:SFNC
Simmons First National — Investor Presentation (May 2018)
34 slides from Simmons First National's investor presentation, May 14, 2018
Slide 1: NASDAQ-GS: SFNC Investor Presentation
NASDAQ-GS: SFNC Investor Presentation
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures 2 Certainstatementscontainedinthispresentationmaynotbebasedonhistoricalfactsandare"forward-lookingstatements"withinthemeaningofSection27Aof theSecuritiesActof1933,asamended,andSection21EoftheSecuritiesExchangeActof1934,asamended.Theseforward
Slide 3: Company Profile
(1) Based on April 25, 2018 closing price of $30.50. (2) As of March 31, 2018. Company Profile 3 SOUTHEAST DIVISION SOUTHWEST DIVISION NORTH TEXAS DIVISION Arkansas SW Missouri (Springfield) Tennessee South TexasSt. Louis Kansas CityColorado KansasOklahoma Dallas / Fort Worth Metroplex Loans $2.8 bi
Slide 4: Non-Banking Business Units
(1) Includes Southwest Bank trust assets. Non-Banking Business Units 4 ▪ $174 million nationwide credit card portfolio ▪ Loan yield (including fees) over 13.9% ▪ History of excellent credit quality (1.63% net charge-off ratio in Q1 2018) TRUST (1) ▪ Q1 2018: $5.3 billion in trust assets ($3.1 billio
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 on February 8, 2018. Note: Core excludes non-core income and expense items (e.g. merger related cost and branch rightsizing cost). Core NIM excludes interest purchase account
Slide 6: Financial Highlights – Q1 2018
(1) Per share information has been adjusted to reflect the effects of the Company’s two-for-one stock split, which occurred on February8,2018. Note:Core excludes non-core income and expense items (e.g. merger related cost and branch rightsizing cost). Core results are non-GAAP measurements. See Appe
Slide 7: Tax Cuts & Jobs Act Initiatives
Tax Cuts & Jobs Act Initiatives 7 ASSOCIATES ▪ Increase in the profit-sharing component of our 401(k) plan ▪ Increased consideration for our high-performing associates ▪ Other initiatives ▪ Contribution of $5 million to Simmons First Foundation to support CRA qualified community development grants t
Slide 8: Performance Trends
$- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 2014 2015 2016 2017 FY18 Q1 Loans Deposits $4.6 $7.6 $8.4 $15.1 $15.6 $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 $18.0 2014 2015 2016 2017 FY18 Q1 (1) Efficiency ratio is non-interest expense before foreclosed property expense and amortization of intangib
Slide 9: Performance Trends
12.8% 14.2% 13.5% 9.8% 9.6% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 2014 2015 2016 2017 FY18 Q1 14.5% 16.7% 15.1% 11.4% 13.8% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% 2014 2015 2016 2017 FY18 Q1 13.4% 16.0% 14.5% 9.8% 9.6% 3.0% 6.0% 9.0% 12.0% 15.0% 18.0% 2014 2015 2016 2017 FY18 Q1
Slide 10: Performance Trends
0.80% 1.03% 1.25% 0.92% 1.38% 0.86% 1.25% 1.31% 1.18% 1.41% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 2014 2015 2016 2017 FY18 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 February 8, 2018. Not
Slide 11: Loan Portfolio
(1) As of March 31, 2018. (2) Includes credit card, indirect, and equipment finance (nationwide). Loan Portfolio (1) 11 TOTAL LOAN PORTFOLIO $10.9 billion Agriculture 1.2% Credit Card 1.6% Consumer 3.0% Construction 12.5% Single Family Residential 17.7% Commercial Real Estate 45.8% Commercial 17.0%
Slide 12: Loan Growth
Loan Growth 12 Linked Quarter Growth On a linked-quarter basis (March 31, 2018 compared to December 31, 2017), total loans increased $207.6 million, or 1.9%. The increase was due to: ▪ $126 million net increase in loans at Simmons Bank which includes: ▪ Southwest Bank loans that merged into Simmons
Slide 13: Non-Performing Loans, Assets and Net Charge-Offs
2018 Non-Performing Loans 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1 SFNC 0.81% 1.35% 1.98% 1.74% 1.42% 1.07% 0.74% 0.68% 1.16% 0.93% 0.86% All US Banks?¹? 2.38% 4.77% 4.68% 4.13% 3.56% 2.89% 2.28% 1.82% 1.64% 0.97% NA 2018 Non-Performing Assets 2008 2009 2010 2011 2012 2013 2014 2015 2016
Slide 14: Credit Quality: Credit Card Portfolio
History of Strong Asset Quality (Net Charge-offs) *Federal bankruptcy reform impacted charge-offs in 2005 Source:Federal Reserve Board Note:Industry data as of December 31, 2017. Data as of March 31, 2018 not yet published by the Federal Reserve Board. Credit Quality: Credit Card Portfolio 14 SFNC 1
Slide 15: Credit Quality: Loan & Credit Coverage
Credit Quality: Loan & Credit Coverage 15 Uponacquisitionofaportfolio,allloansareconsideredacquiredandhaveacreditmark(loandiscount)inplacetocoverpotential exposure. Whenanacquired,non-impairedloanisrenewedorotherwiseisre-underwrittenforaformalmodificationorchangeinterms,theloan isthenconsideredasale
Slide 16: Projected Purchase Accounting Accretion & Loan Discount
($ in Millions) Projected Purchase Accounting Accretion & Loan Discount 16 HISTORICAL LOAN DISCOUNT BALANCE & ACCRETION INCOME 2018 ESTIMATED SCHEDULED ACCRETION $112.0 $114.1 $77.2 $55.7 $35.5 $89.3 $17.3 $39.6 $37.5 $46.1 $24.3 $27.8 $- $10.0 $20.0 $30.0 $40.0 $50.0 $- $20.0 $40.0 $60.0 $80.0 $100
Slide 17: Acquisitions Since 2013
(1) Deal ratios as of closed date. Source: SNL Financial. (2) Metropolitan was acquired from Section 363 Bankruptcy. (3) Estimated system conversion dates. Acquisitions Since 2013 17 2013 –2014 Consolidated eight charters to one National to State Charter Conversion (Fed Member Bank) 2015 2016 2017 $
Slide 18: Complementary Lines of Business & Future Expansion
Complementary Lines of Business & Future Expansion 18 MORTGAGE BANKING WEALTH MANAGEMENT & TRUST TREASURY SERVICES SBA LENDING TEAM INSURANCE CREDIT CARDS EQUIPMENT FINANCE MORTGAGE WAREHOUSE HEALTHCARE ENERGY LENDING
Slide 19: $10 Billion Threshold & Dodd-Frank Impact
$10 Billion Threshold & Dodd-Frank Impact 19 DFAST (DODD-FRANK STRESS TEST ACT) As part of the Dodd-Frank financial reform legislation in 2010, financial institutions with total consolidated assets of more than $10 billion are required to conduct an annual stress test. SFNC is well underway in the p
Slide 20: Subordinated Debt Offering & Kroll Rating
Subordinated Debt Offering & Kroll Rating 20 SENIOR UNSECURED DEBT SHORT-TERM DEBTSUBORDINATED DEBT SENIOR UNSECURED DEBT SHORT-TERM DEBTSUBORDINATED DEBT SHORT-TERM DEPOSITDEPOSIT BBB+ BBB K2 SIMMONS FIRST NATIONAL CORPORATION SIMMONS BANK A- A- BBB+ K2 K2 SUBORDINATED DEBT OFFERING ▪ On March 21,
Slide 21: 108 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 $- $0.20 $0.40 $0.60 Note: Per share information has been adjusted to reflect the effects of the Company’s two-for-one stock split, which occurred onFebruary 8, 2018. N
Slide 22: 1 Year Total Shareholder Return
Dividend + Stock Appreciation (04/25/17 –04/25/18) Note: Stock Price $30.50 as of April 25, 2018. 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. Source: SNL Financial 1 Year Total Shareholder Return 22 (20.
Slide 23: 3 Year Total Shareholder Return
(20.0%) (10.0%) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Dividend + Stock Appreciation (04/25/15 –04/25/18) Note: Stock Price $30.50 as of April 25, 2018. 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. Sour
Slide 24: 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 –04/25/18) Note: Stock Price $30.50 as of April 25, 2018. Per share information has been adjusted to reflect the effects of the Company’s two-for-one stock split, which oc
Slide 25: Investment Profile
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) 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
Slide 26: Strategic Focus
Strategic Focus 26 ▪"Table Stakes" –Asset Quality –Regulatory Compliance ▪Internal revenue opportunities ▪Efficiency initiatives ▪Branding in new markets and product enhancements ▪Acquisitions – Traditional banking –enhance current footprint and consider expanding into adjoining states (inside-out s
Slide 27: Why Simmons First?
Why Simmons First? 27 ▪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
Slide 28: Appendix
Appendix 28
Slide 29: Non-GAAP Reconciliations
Non-GAAP Reconciliations 29 Q1 Q1 $ in thousands 2015 2016 2017 2017 2018 Calculation of Core Return on Average Assets Net income available to common stockholders 74,107$ 96,790$ 92,940$ 22,120$ 51,312$ Net non-core items, net of taxes, adjustment 15,515 4,619 26,109 412 1,306 Core earnings 89,622$
Slide 30: Non-GAAP Reconciliations
(1) Effective tax rate of 26.135% for 2018 and 39.225% for prior periods, adjusted for non-deductible merger-related and branch right sizing costs and deferred tax items. (2) Tax adjustment to revalue deferred tax assets and liabilities to account for the future impact of lower corporate tax. Non-GA
Slide 31: 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 and 39.225% for prior periods, adjusted for non-deductible merger-related and branch right sizing costs and de
Slide 32: Non-GAAP Reconciliations
(1) Efficiency ratio is noninterest 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 Reconciliations
Slide 33: 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 33 Q1 Q1 $ in thousands, except per share and share count 2015 2016 2017 2017 2018 Calculation of Core Net Interest Margin Net i
Slide 34: Simmons First National Corporation
7 Simmons First National ‘Corporation
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