Simmons First National Corporation · NASDAQ:SFNC
Simmons First National — Q1 2024 Earnings Presentation
36 slides from Simmons First National's earnings presentation, Apr 24, 2024
Slide 1: 1st Quarter 2024 Earnings Presentation
Nasdaq: SFNC 1st Quarter 2024 Earnings Presentation Contents 3 Company Profile 4 1Q24 Financial Highlights 11 Deposits, Securities, Liquidity, Interest Rate Sensitivity and Capital 17 Loan Portfolio 22 Credit Quality 28 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 $27.4 $22.4 BILLION BILLION TOTAL ASSETS TOTAL DEPOSITS CONSECUTIVE YEARS $8.4 $17.0 115 PAYING DIVIDENDS3 BILLION ASSETS UNDER
Slide 4: 1Q24 Financial Highlights
7 Simmons First __ National Corporation 1Q24 Financial Highlights
Slide 5: 1Q24 Highlights
1Q24 Highlights Reported Adjusted1 ▪ First quarter results ─ Total loans up 4% on a linked quarter annualized basis Net income $38.9M $40.4M ─ Total deposits up 2% on a linked quarter annualized basis ─ 21% decrease in average other borrowings vs 4Q23 EPS (diluted) $0.31 $0.32 ─ NIM relatively stabl
Slide 6: Balance Sheet Highlights
Balance Sheet Highlights 1Q24 vs 4Q23 1Q24 vs 1Q23 $ in millions, except per share data 1Q24 4Q23 1Q23 $ Change % Change $ Change % Change Period End Balances Total loans $17,001.8 $16,845.7 $16,555.1 $156.1 1 % $446.7 3 % Investment securities 6,734.8 6,878.4 7,521.4 (143.6) (2) (786.6) (10) Total
Slide 7: Income Summary
Income Summary 1Q24 Adjusted 1Q24 vs Adjusted $ in millions, except per share data Reported Adjusted1 4Q23 1Q23 Net interest income $151.9 $151.9 $ (3.7) (2) % $ (25.9) (15) % Noninterest income 43.2 43.2 1.0 2 (2.7) (6) Total revenue 195.1 195.1 (2.7) (1) (28.6) (13) Noninterest expense 139.9 137.9
Slide 8: Net Interest Income and Margin (FTE)
Net Interest Income and Margin (FTE) Net Interest Income and Margin Net Interest Income Evolution $ in millions; FTE $ in millions; FTE $184.1 Highlights $169.3 $162.1 ❑ Net interest income (FTE) declined $3.8 million, or 2 $159.9 $158.3 percent, from 4Q23. ❑ NIM relatively stable at 2.66 percent, d
Slide 9: Noninterest Income
Noninterest Income 1Q24 Adjusted 1Q24 vs Adjusted $ in millions Reported Adjusted1 4Q23 1Q23 Service charges on deposit accounts $ 12.0 $ 12.0 $(0.8) (6) % $(0.5) (4) % Wealth management fees 7.5 7.5 (0.2) (3) 0.1 2 Highlights Debit and credit card fees 8.2 8.2 0.4 5 0.3 4 ❑ Adjusted noninterest inc
Slide 10: Noninterest Expense
Noninterest Expense 1Q24 Adjusted 1Q24 vs Adjusted Highlights 1 4Q23 1Q23 $ in millions Reported Adjusted ❑ Adjusted noninterest expense1 in 1Q24 was up 4 percent on a linked quarter Salaries and employee benefits $ 72.7 $ 72.4 $ 6.5 10 % $(4.6) (6) % basis reflecting normal seasonality in salaries
Slide 11: Deposits, Securities, Liquidity, Interest Rate Sensitivity and Capital
Deposits, Securities, Liquidity, Interest Rate Sensitivity and Capital
Slide 12: 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 Base $ in billions $ in billions as of March 31, 2024 $22.5 $22.5 $22.2 $22.2 $22.4 $22.4 $3.0 $3.2 $3.3 $2.9 $3.0 Uninsured, Non- $4.7 Collateralized Deposits2 $3.4 $3.8 $4.
Slide 13: 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 Securities Portfolio by Type At March 31, 2024 Highlights 7% 8% ❑ ~$130 million of projected securities principal maturities per quarter3 ❑ Average securities to total earning assets of 28% at 3/31/24 compar
Slide 14: 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 $3,132 12.7% 12.6% 10.0% 10.4% $2,321 8.9% $1,910 $1,824 6.9% $1,572 $1,578 6.2%
Slide 15: Interest Rate Sensitivity
Interest Rate Sensitivity Loan Portfolio – Repricing and Maturity Balance Sheet Interest Rate Sensitivity At March 31, 2024 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 years
Slide 16: 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 9.24% 9.39% 9.44% 12.11% 11.95% 12.11% 11.95% 14.47% 14.39% 14.43% 11.87% 11.87% 1Q23 4Q23 1Q24 1Q23 4Q
Slide 17: Loan Portfolio
7 Simmons First __ National Corporation Loan Portfolio
Slide 18: 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 $156 RE - Commercial $(44) RE - Construction $188 Funded loans Paydowns/ /advances payoffs Commercial $9 RE – Single
Slide 19: 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 $1,549 $1,122 $552 $1,048 $1,013 Highlights $948 $877 $270 ❑ Continued focus on maintaining prudent $381 underwriting stan
Slide 20: Loans: Conservative LTVs underpin prudent underwriting standards in key sectors
Loans: Conservative LTVs underpin prudent underwriting standards in key sectors Loan Portfolio – Geographic diversification Office (non-owner occupied permanent) Key Statistics At 3/31/24 By State By State NPL Ratio2 0.81% 10% 2% 2% Past Due 30+ Days 0.00% 17% 11% Average Loan Size $2.2M 33% 47% 2%
Slide 21: Loans: Construction and Land Development
Loans: Construction and Land Development Construction and Land Development (CLD) By State % of Total % of Total Key Statistics At 3/31/24 27% Top 6 MSAs Loans Commitments NPL Ratio 0.08% 43% Houston-Sugarland-Baytown 15.2% 14.3% Past Due 30+ Days 0.13% Dallas-Plano-Irving 13.3% 13.6% Average Loan Si
Slide 22: Credit Quality
7 Simmons First __ National Corporation Credit Quality
Slide 23: Credit Quality: Nonperforming and past due loans
Credit Quality: Nonperforming and past due loans Nonperforming Loans Evolution $ in millions; FTE Highlights ❑ “Run-off portfolio” consists of small ticket equipment finance and acquired asset based lending portfolios. Run-off portfolio totaled ~$126 million at end of 1Q24 ❑ Increase in NPLs during
Slide 24: Credit Quality: Net charge-offs
Credit Quality: Net charge-offs Loan Loss Provision and Net Charge-Offs $ in millions Net Charge-Offs to Average Loans2 $20.2 Annual Quarterly 0.45% $11.6 0.31% 11 bps of NCO $10.9 $11.2 0.28% $10.2 0.24% ratio associated 0.21% 0.19% $8.1 0.11% with run-off 0.12% $4.5 million of 0.09% portfolio and
Slide 25: Credit Quality: Historical net charge-off performance vs industry
Credit Quality: Historical net charge-off performance vs industry… Total Net Charge-Offs Construction & Development Loans - NCO 3.00% 5.50% 2.50% 4.50% 2.00% 3.50% 1.50% 2.50% 1.00% 1.50% 0.50% 0.50% 0.00% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2008 2009 2010
Slide 26: ACL: Reflects current economic forecast and composition of loan portfolio
ACL: Reflects current economic forecast and composition of loan portfolio ACL / Loans (%) and ACL ($)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 / ACL $200 1.60% Loans 1.25% 1.30% 1.34% 1.34% $ in millions $175 1.22% 1.25% 1.40%
Slide 27: Breakout: Loan portfolio by category
Breakout: Loan portfolio by category as of December 31, 2023 as of March 31, 2024 % 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 Credit Card 191 1% 183 1
Slide 28: Appendix
7 Simmons First __ National Corporation Appendix
Slide 29: Non-GAAP Reconciliations
Non-GAAP Reconciliations 1Q 2Q 3Q 4Q 1Q $ in thousands, except per share data 2023 2023 2023 2023 2024 Calculation of Adjusted Earnings Net Income $ 45,589 $ 58,314 $ 47,247 $ 23,907 $ 38,871 Certain items Merger related costs 1,396 19 5 - - Branch right sizing, net 979 95 547 3,846 236 Loss (gain)
Slide 30: Non-GAAP Reconciliations
Non-GAAP Reconciliations 1Q 2Q 3Q 4Q 1Q $ in thousands 2023 2023 2023 2023 2024 Calculation of Pre-Provision Net Revenue (PPNR) Net interest income $ 177,835 $ 163,230 $ 153,433 $ 155,628 $ 151,906 Noninterest income 45,835 44,980 42,777 21,974 43,184 Less: Noninterest expense 143,228 139,696 131,99
Slide 31: Non-GAAP Reconciliations
Non-GAAP Reconciliations 1Q 2Q 3Q 4Q 1Q $ in thousands, except number of employees (FTE) 2023 2023 2023 2023 2024 Calculation of Total Revenue and Adjusted Total Revenue Net Interest Income (GAAP) $ 177,835 $ 163,230 $ 153,433 $ 155,628 $ 151,906 Noninterest Income (GAAP) 45,835 44,980 42,777 21,974
Slide 32: Non-GAAP Reconciliations
Non-GAAP Reconciliations 1Q 2Q 3Q 4Q 1Q $ in thousands 2023 2023 2023 2023 2024 Calculation of Adjusted Noninterest Expense Noninterest Expense (GAAP) $ 143,228 $ 139,696 $ 131,998 $ 148,139 $ 139,879 Less: Merger related costs 1,396 19 5 - - Less: Branch right sizing expense 979 95 547 3,846 236 Le
Slide 33: Non-GAAP Reconciliations
Non-GAAP Reconciliations 1Q Q4 1Q $ in thousands 2023 2023 2024 Calculation of Adjusted Salaries and Employee Benefits Salaries and employee benefits (GAAP) $ 77,038 $ 66,982 $ 72,653 Less: Early retirement program - 1,032 219 Less: Other ____ _ - (2) - Total Adjusted Salaries and Employee Benefits
Slide 34: Non-GAAP Reconciliations
Non-GAAP Reconciliations 1Q 4Q 1Q $ in thousands 2023 2023 2024 Calculation of Tangible Common Equity (TCE) Total common stockholders’ equity $ 3,339,901 $ 3,426,488 $ 3,439,126 Total assets $ 27,583,446 $ 27,345,674 $ 27,372,175 Less: Intangible assets (1,445,653) (1,433,444) (1,429,594) Total tang
Slide 35: Non-GAAP Reconciliations
Non-GAAP Reconciliations 1Q 4Q 1Q $ in thousands 2023 2023 2024 Calculation of Uninsured, Non-Collateralized Deposit Coverage Ratio Uninsured deposits at Simmons Bank $ 8,978,581 $ 8,328,444 $ 8,413,514 Less: Collateralized deposits (excluding portion that is FDIC insured) 3,081,829 2,846,716 2,995,
Slide 36: 1st Quarter 2024 Earnings Presentation
Nasdaq: SFNC 1st Quarter 2024 Earnings Presentation Contents 3 Company Profile 4 1Q24 Financial Highlights 11 Deposits, Securities, Liquidity, Interest Rate Sensitivity and Capital 17 Loan Portfolio 22 Credit Quality 28 Appendix
Simmons First National — Q1 2024 Earnings Presentation on 6ix