Simmons First National Corporation · NASDAQ:SFNC
Simmons First National — Q4 2023 Earnings Presentation
34 slides from Simmons First National's earnings presentation, Jan 24, 2024
Slide 1: 4th Quarter 2023 Earnings Presentation
Nasdaq: SFNC 4th Quarter 2023 Earnings Presentation Contents 3 Company Profile 4 4Q23 Financial Highlights 12 Deposits, Securities, Liquidity, Interest Rate Sensitivity and Capital 18 Loan Portfolio 22 Credit Quality 26 Appendix
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
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 not be base
Slide 3: Simmons First National Corporation Company Overview
Simmons First National Corporation Company Overview A Mid-South based financial holding company serving our customers and the communities where we work and live since 1903 $27.3 $22.2 BILLION BILLION TOTAL ASSETS TOTAL DEPOSITS CONSECUTIVE YEARS $8.1 $16.8 114 PAYING DIVIDENDS3 BILLION ASSETS UNDER
Slide 4: 4Q23 Financial Highlights
7 Simmons First __ National Corporation 4Q23 Financial Highlights
Slide 5: 4Q23 Highlights
4Q23 Highlights ▪ Solid fourth quarter results Reported Adjusted1 ─ Credit quality remains at historically strong levels Net income $23.9M $50.2M • ACL ratio increased to 1.34% • Provision for credit losses on loans exceeded net charge-offs by $6.7 million EPS (diluted) $0.19 $0.40 ─ Deposit growth
Slide 6: Balance Sheet Highlights
Balance Sheet Highlights 4Q23 vs 3Q23 4Q23 vs 4Q22 $ in millions, except per share data 4Q23 3Q23 4Q22 $ Change % Change $ Change % Change Period End Balances Total loans $16,845.7 $16,771.9 $16,142.1 $73.8 - % $703.5 4 % Investment securities 6,878.4 7,100.7 7,612.6 (222.3) (3) (734.1) (10) Total a
Slide 7: Income Summary
Income Summary 4Q23 Adjusted 4Q23 vs Adjusted Highlights $ in millions, except per share data Reported Adjusted1 3Q23 4Q22 Net interest income $155.6 $155.6 1 % (19) % ❑ Key performance metrics for 4Q23: Noninterest income 22.0 42.2 (1) 4 ▪ Adjusted revenue1 of $197.8 million ▪ Adjusted PPNR1 of $65
Slide 8: Net Interest Income and Margin (FTE)
Net Interest Income and Margin (FTE) Net Interest Income and Margin Net Interest Income Evolution NII/NIM Highlights $ in millions; FTE $ in millions; FTE ❑ Net interest income (FTE) for 4Q23 was $162.1 million, up +1.4% $199.8 $2.2 million, or 1%, on a linked quarter basis $184.1 $169.3 $159.9 $162
Slide 9: Noninterest Income
Noninterest Income 4Q23 Adjusted 4Q23 vs Adjusted 1 $ in millions Reported Adjusted 3Q23 4Q22 Noninterest Income Highlights Service charges on deposit accounts $ 12.8 $ 12.8 3 % 7 % Wealth management fees 7.7 7.7 (1) (6) ❑ Adjusted noninterest income1 was down less than 1 percent on a linked quarter
Slide 10: Noninterest Expense
Noninterest Expense 4Q23 Adjusted 4Q23 vs Adjusted Noninterest Expense Highlights $ in millions Reported Adjusted1 3Q23 4Q22 ❑ Adjusted noninterest expense1 in 4Q23 was up 2 percent on a linked quarter basis and down 6 percent vs 4Q22 Salaries and employee benefits $ 67.0 $ 66.0 - % (10) % ❑ Year-ov
Slide 11: Better Bank Initiative
Better Bank Initiative Given our steadfast focus on managing expenses, our outlook projects 2024 expenses below the 4Q22 annualized expense base by approximately 1-2% despite inflationary headwinds Better Bank Initiative ❑ Completed program ahead of schedule ❑ $18M in annualized cost saves exceeded
Slide 12: Deposits, Securities, Liquidity, Interest Rate Sensitivity and Capital
Deposits, Securities, Liquidity, Interest Rate Sensitivity and Capital
Slide 13: Deposits: Linked quarter increase driven by growth in interest bearing transaction accounts
Deposits: Linked quarter increase driven by growth in interest bearing transaction accounts1 Deposit Mix Conservative Deposit Base2 $ in billions $ in billions as of December 31, 2023 $22.5 $22.5 $22.5 $22.2 $22.2 $22.2 Uninsured, Non- $4.8 Collateralized Deposits $2.8 Collateralized Deposits Approx
Slide 14: Securities Portfolio: Utilize cash flows to fund loan growth and/or reduce wholesale funding
Securities Portfolio: Utilize cash flows to fund loan growth and/or reduce wholesale funding 4Q23 Targeted Securities Sale Securities Portfolio Highlights Size of targeted sale $241 million ❑ Capitalized on market conditions through a targeted securities sale in Weighted average yield ~1.81% 4Q23 re
Slide 15: Liquidity: Significant sources of liquidity and reduced reliance on borrowed funds
Liquidity: Significant sources of liquidity and reduced reliance on borrowed funds Cash and Cash Equivalents + Variable Rate Securities Borrowed Funds as a Percent of Total Liabilities $ in millions Period End Balances $3,150 12.7% 12.6% $3,132 10.0% 10.4% $2,321 8.9% $1,910 7.5% 7.4% $1,824 6.9% $1
Slide 16: Interest Rate Sensitivity
Interest Rate Sensitivity Loan Portfolio – Repricing and Maturity Balance Sheet Interest Rate Sensitivity At December 31, 2023 Over the next 12 months (estimated) In millions Repricing Term Rate Structure 3 mo 3-12 1-3 3-5 Over 5 Immediate change in interest rates Total Variable Fixed or less mo yea
Slide 17: Capital: Maintained strong capital position while growing tangible book value per share
Capital: Maintained strong capital position while growing tangible book value per share Tier 1 Leverage Ratio1 CET 1 Capital Ratio1 Tier 1 Risk-Based Capital Ratio1 Total Risk-Based Capital Ratio1 9.34% 9.31% 9.39% 12.02% 12.11% 11.90% 12.02% 12.11% 14.39% 11.90% 14.22% 14.27% 4Q22 3Q23 4Q23 4Q22 3Q
Slide 18: Loan Portfolio
7 Simmons First __ National Corporation Loan Portfolio
Slide 19: Loans: Risk profile reflects well-diversified, granular portfolio and conservative culture
Loans: Risk profile reflects well-diversified, granular portfolio and conservative culture Loan Portfolio Waterfall Linked Quarter Loan Growth $ in millions $ in millions Total Loans $74 RE - Commercial $(13) RE - Construction $122 Funded loans Paydowns/ /advances payoffs Commercial $13 RE – Single
Slide 20: Loans: In focus sectors continue to perform extremely well with conservative LTV levels
Loans: In focus sectors continue to perform extremely well with conservative LTV levels Loan Portfolio – Geographic diversification Office Portfolio (non-owner occupied) Key Statistics At 12/31/23 By State By State NPL Ratio 0.00% 17% Past Due 30+ Days 0.00% 2% 18% 43% 3% Average Loan Size $2.3M 2%
Slide 21: Loans: Pipelines represent opportunities that meet pricing and disciplined credit appetite
Loans: Pipelines represent opportunities that meet pricing and disciplined credit appetite Commercial Loan Pipeline by Category $ in millions Opportunity Proposal Ready to Close $3,015 Pipeline Highlights $1,114 ❑ Focused on maintaining prudent underwriting standards $1,549 and pricing discipline gi
Slide 22: Credit Quality
7 Simmons First __ National Corporation Credit Quality
Slide 23: Credit Quality: Key credit quality metrics remain near historical lows
Credit Quality: Key credit quality metrics remain near historical lows Nonperforming loans / loans1 Nonperforming assets / total assets1 Net charge-offs to average loans2 Strategic decision to de-risk certain elements of the loan portfolio through planned run-off of particular NCO Ratio (as reported
Slide 24: ACL: Reflects current economic forecast and composition of loan portfolio
ACL: Reflects current economic forecast and composition of loan portfolio ACL / Loans (%) and ACL ($)1 $ in millions Allowance for Credit Losses on Loans and Loan Coverage 1.85% $250 2.00% $225 1.52% 1.71% 1.80% ACL / 1.49% 1.41% ACL $200 1.60% Loans 1.30% 1.34% $ in millions $175 1.27% 1.22% 1.25%
Slide 25: Breakout: Loan portfolio by category
Breakout: Loan portfolio by category as of September 30, 2023 as of December 31, 2023 % of % of Unfunded Unfunded Balance Total Balance Total Nonperforming Past Due 30+ Days Classified Commitment ACL Commitment $ in millions $ Loans $ Loans $ $ $ $ % Reserve Total Loan Portfolio Consumer - Credit Ca
Slide 26: Appendix
7 Simmons First __ National Corporation Appendix
Slide 27: Non-GAAP Reconciliations
Non-GAAP Reconciliations Q4 Q1 Q2 Q3 Q4 $ in thousands, except per share data 2022 2023 2023 2023 2023 Calculation of Adjusted Earnings Net Income $ 83,260 $ 45,589 $ 58,314 $ 47,247 $ 23,907 Certain items Merger related costs 35 1,396 19 5 - Branch right sizing, net 1,104 979 95 547 3,846 Loss (gai
Slide 28: Non-GAAP Reconciliations
Non-GAAP Reconciliations Q4 Q1 Q2 Q3 Q4 $ in thousands 2022 2023 2023 2023 2023 Calculation of Pre-Provision Net Revenue (PPNR) Net interest income $ 193,026 $ 177,835 $ 163,230 $ 153,433 $ 155,628 Noninterest income 44,647 45,835 44,980 42,777 21,974 Less: Noninterest expense 142,575 143,228 139,69
Slide 29: Non-GAAP Reconciliations
Non-GAAP Reconciliations Q4 Q1 Q2 Q3 Q4 $ in thousands, except number of employees (FTE) 2022 2023 2023 2023 2023 Calculation of Total Revenue and Adjusted Total Revenue Net Interest Income (GAAP) $ 193,026 $ 177,835 $ 163,230 $ 153,433 $ 155,628 Noninterest Income (GAAP) 44,647 45,835 44,980 42,777
Slide 30: Non-GAAP Reconciliations
Non-GAAP Reconciliations Q4 Q1 Q2 Q3 Q4 $ in thousands 2022 2023 2023 2023 2023 Calculation of Adjusted Noninterest Expense Noninterest Expense (GAAP) $ 142,575 $ 143,228 $ 139,696 $ 131,998 $ 148,139 Less: Merger related costs 35 1,396 19 5 - Less: Branch right sizing expense 1,104 979 95 547 3,846
Slide 31: Non-GAAP Reconciliations
Non-GAAP Reconciliations Q4 Q3 Q4 $ in thousands 2022 2023 2023 Calculation of Adjusted Salaries and Employee Benefits Salaries and employee benefits (GAAP) $ 73,018 $ 67,374 $ 66,982 Less: Early retirement program - 1,557 1,032 Less: Other ____ _ - ____ _ - (2) Total Adjusted Salaries and Employee
Slide 32: Non-GAAP Reconciliations
Non-GAAP Reconciliations Q4 Q3 Q4 $ in thousands 2022 2023 2023 Calculation of Tangible Common Equity (TCE) Total common stockholders’ equity $ 3,269,362 $ 3,285,555 $ 3,426,488 Total assets $ 27,461,061 $ 27,564,325 $ 27,345,674 Less: Intangible assets (1,448,549) (1,437,459) (1,433,444) Total tang
Slide 33: Non-GAAP Reconciliations
Non-GAAP Reconciliations Q4 Q3 Q4 $ in thousands 2022 2023 2023 Calculation of Uninsured, Non-Collateralized Deposit Coverage Ratio Uninsured deposits at Simmons Bank $ 8,913,990 $ 8,143,200 $ 8,328,444 Less: Collateralized deposits (excluding portion that is FDIC insured) 2,759,248 2,835,405 2,846,
Slide 34: 4th Quarter 2023 Earnings Presentation
Nasdaq: SFNC 4th Quarter 2023 Earnings Presentation Contents 3 Company Profile 4 4Q23 Financial Highlights 12 Deposits, Securities, Liquidity, Interest Rate Sensitivity and Capital 18 Loan Portfolio 22 Credit Quality 26 Appendix
Simmons First National — Q4 2023 Earnings Presentation on 6ix