Simmons First National Corporation · NASDAQ:SFNC
Simmons First National — Investor Presentation (September 2018)
34 slides from Simmons First National's investor presentation, Sep 24, 2018
Slide 1: 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 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 July 17, 2018 closing stock price of $30.20. (2) As of June 30, 2018. Company Profile 3 SOUTHEAST DIVISION SOUTHWEST DIVISION NORTH TEXAS DIVISION Arkansas SW Missouri (Springfield) Tennessee South Texas St. Louis Kansas City Colorado Kansas Oklahoma Dallas / Fort Worth Metroplex Loans
Slide 4: Non-Banking Business Units
Q2 2018 (YTD) (1) Includes Southwest Bank trust assets. Non - Banking Business Units 4 ▪ $178 million nationwide credit card portfolio ▪ Loan yield (including fees): 14.0% ▪ History of excellent credit quality (1.61% net charge - off ratio) TRUST (1) ▪ $5.5 billion in trust assets ($3.1 billion AUM)
Slide 5: Financial Highlights
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., merger related cost and branch rightsizing cost). Core NIM exclud es purchase account
Slide 6: Financial Highlights – Q2 2018
(1) Core excludes non - core income and expense items (e.g., merger related cost and branch rightsizing cost). Core results are non - GA AP measurements. See Appendix for non - GAAP reconciliations. Financial Highlights – Q2 2018 6 NON - RECURRING ITEMS SELECTED HIGHLIGHTS (1) ▪ Merger - related and
Slide 7: Performance Trends
$- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 2014 2015 2016 2017 FY18 Q2 Loans Deposits 26.66% 25.36% 33.30% 28.11% 21.76% 23.79% 26.49% 33.16% 27.52% 21.76% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 2014 2015 2016 2017 FY18 Q2 (YTD) GAAP Core 67.2% 59.0% 56.3% 55.3% 53.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0%
Slide 8: Performance Trends (earnings, returns, EPS)
$35.7 $74.1 $96.8 $92.9 $104.9 $38.7 $89.6 $101.4 $119.0 $107.3 $- $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 $140.0 2014 2015 2016 2017 FY18 Q2 (YTD) GAAP Core 10.99% 12.53% 13.92% 11.26% 18.73% 11.89% 15.05% 14.56% 14.28% 19.14% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 2014 2015 2016 2017 FY18 Q2 (YTD)
Slide 9: Regulatory Capital Ratios
14.5% 16.7% 15.1% 11.4% 13.7% 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 Q2 13.4% 16.0% 14.5% 9.8% 10.0% 3.0% 6.0% 9.0% 12.0% 15.0% 18.0% 2014 2015 2016 2017 FY18 Q2 12.8% 14.2% 13.5% 9.8% 10.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 2014 2015 2016 2017 FY18
Slide 10: Loan Portfolio
(1) As of June 30, 2018. (2) Includes credit card, indirect, and equipment finance (nationwide). Loan Portfolio (1) 10 TOTAL LOAN PORTFOLIO $11.4 billion Agriculture 1.7% Credit Card 1.6% Consumer 2.7% Construction 13.1% Single Family Residential 17.5% Commercial Real Estate 44.5% Commercial 17.6% O
Slide 11: Loan Growth
Loan Growth 11 Linked Quarter Growth On a linked - quarter basis (June 30, 2018 compared to March 31, 2018), total loans increased $379 million, or 3.45%. The increase was due to: ▪ $201 million increase in real estate loans ▪ $131 million increase in commercial loans ▪ $58 million increase in seaso
Slide 12: Credit Quality: Legacy Loan Portfolio
(1) Source: SNL Financial, all US Banks as of December 31, 20XX. June 30, 2018 unavailable. (2) Excluding credit card net charge - offs. Credit Quality: Legacy Loan Portfolio (Excluding Acquired Loans) 12 "Great Recession" 2018Non-Performing Loans 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q2
Slide 13: Credit Quality: Credit Card Portfolio
1991 Recession 4.55% 2002 Recession 6.41% 2009 "Great Recession" 9.42% 1.42% 2.10% * 2.61% * 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% 11.00% Net Charge - off % History of Strong Asset Quality (Net Charge - offs) * Federal bankruptcy reform impacted charge - offs in 2005 Sou
Slide 14: Credit Quality: Loan & Credit Coverage
Credit Quality: Loan & Credit Coverage 14 Upon acquisition of a portfolio, all loans are considered acquired and have a credit mark (loan discount) in place to cover potential exposure . When an acquired, non - impaired loan is renewed or otherwise is re - underwritten for a formal modification or c
Slide 15: Net Interest Income
(1) Fully tax equivalent (2) Core loan yield and core net interest margin exclude accretion and are non - GAAP measurements. Net Interest Income 15 2017 2018 Q2 Q3 Q4 Q1 Q2 Loan Yield (1) 4.96% 4.91% 5.39% 5.38% 5.40% Core Loan Yield (1)(2) 4.63% 4.72% 4.75% 4.95% 5.04% Security Yield (1) 2.81% 2.64
Slide 16: Projected Purchase Accounting Accretion & Loan Discount
($ 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. Acquisitions Since 2013 17 2013 – 2014 Consolidated eight charters to one National to State Charter Conversion (Fed Member Bank) 2015 2016 2017 $ in millions System Total Trust Purcha
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
$10 Billion Threshold 19 AUDIT & COMPLIANCE REGULATORY COST To strengthen the Audit and Regulatory Compliance groups, as well as to prepare for the increased regulatory requirements ass oci ated with exceeding $10 billion in assets, the Company has incurred the following costs: DURBIN AMENDMENT The
Slide 20: Subordinated Debt Offering & Kroll Rating
Subordinated Debt Offering & Kroll Rating 20 SENIOR UNSECURED DEBT SHORT - TERM DEBT SUBORDINATED DEBT SENIOR UNSECURED DEBT SHORT - TERM DEBT SUBORDINATED DEBT SHORT - TERM DEPOSIT DEPOSIT BBB+ BBB K2 SIMMONS FIRST NATIONAL CORPORATION SIMMONS BANK A - A - BBB+ K2 K2 SUBORDINATED DEBT OFFERING ▪ On
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 $- $0.10 $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, which oc
Slide 22: 1 Year Total Shareholder Return
(15.0%) (10.0%) (5.0%) 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% Dividend + Stock Appreciation (07/17/17 – 07/17/18) Note: Stock Price $30.20 as of July 17, 2018. Per share information has been adjusted to reflect the effects of the Company’s two - for - one stock split, which occurred on Februa
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 (07/17/15 – 07/17/18) Note: Stock Price $30.20 as of July 17, 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.
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 – 07/17/18) Note: Stock Price $30.20 as of July 17, 2018. Per share information has been adjusted to reflect the effects of the Company’s two - for - one stock split, whic
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 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 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 (insi
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 pe
Slide 28: Appendix
Appendix 28
Slide 29: Non-GAAP Reconciliations
Non - GAAP Reconciliations 29 Q2 Q2 YTD YTD $ in thousands 2015 2016 2017 2017 2018 2017 2018 Calculation of Core Return on Average Assets Net income available to common stockholders 74,107$ 96,790$ 92,940$ 23,065$ 53,562$ 45,185$ 104,874$ Net non-core items, net of taxes, adjustment 15,515 4,619 26
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 costs and defe rred 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. Non
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 o n February 8, 2018. (1) Effective tax rate of 26.135% for 2018 and 39.225% for prior periods, adjusted for non - deductible merger - related costs and defe rred tax ite
Slide 32: 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 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 o n February 8, 2018. Non - GAAP Reconciliations 33 Q2 Q2 YTD YTD $ in thousands, except per share and share count 2015 2016 2017 2017 2018 2017 2018 Calculation of Core
Slide 34: Simmons First National Corporation
7 Simmons First __ National Corporation
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