Simmons First National Corporation · NASDAQ:SFNC
Simmons First National — Merger or Acquisition (September 2017)
41 slides from Simmons First National's merger presentation, Sep 5, 2017
Slide 1: Simmons First National Corporation
NASDAQ - GS: SFNC Pine Bluff Corporate Headquarters Little Rock Corporate Office
Slide 2: Forward-Looking Statements and Non-GAAP Financial Measures
Page 2 Forward - Looking Statements and Non - GAAP Financial Measures 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 S
Slide 3: Important Additional Information and Where to Find It
Page 3 Important Additional Information and Where to Find It Merger with First Texas BHC, Inc . In connection with the proposed merger with First Texas BHC, Inc . ("First Texas"), Simmons First National Corporation ("SFNC") will file with the SEC a Registration Statement on Form S - 4 that will incl
Slide 4: Important Additional Information (Continued)
Page 4 Important Additional Information (Continued) Merger with Southwest Bancorp, Inc . In connection with the proposed merger with Southwest Bancorp, Inc . ("Southwest"), SFNC will file with the SEC a Registration Statement on Form S - 4 that will include a joint proxy statement of Southwest and S
Slide 5: Company Profile
(1) Source: American Bankers Association's list of the Top 100 Farm Lender Ranked by Dollar Volume ( as of 03 /31/17 ) (2) Source: U.S. Small Business Administration's list of the Top 100 SBA Lenders Ranked by Number of Loans ( as of 12/31/16 ) Company Profile Page 5 • Ticker: SFNC • Founded: 1903 •
Slide 6: Company Footprint and Regional Structure
Page 6 Company Footprint and Regional Structure o Loans $1.3B o Deposits $2.0B o Loans $1.4B o Deposits $1.1B o Loans $2.6B o Deposits $3.7B Arkansas Region 1 Missouri / Kansas Region 2 Tennessee Region 3 2 1 3
Slide 7: Non-Banking Business Units
Non - Banking Business Units Page 7 o $177 million nationwide credit card portfolio o Loan yield (including fees) over 13.6% o History of excellent credit quality Simmons First Credit Cards TRUST o $4.0 billion in trust assets ($2.6 billion AUM) o Profit margin ~ 35% o Growing investment management
Slide 8: Financial Highlights
(1) Diluted Earnings per Share (2) Efficiency ratio is non - interest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and non - interest revenues, excluding gains and losses from securities transactions and non
Slide 9: SFNC: Performance Trends
SFNC: Performance Trends Page 9 ROA Diluted EPS Efficiency Ratio (1) ROTCE (1) Efficiency ratio is non - interest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and non - interest revenues, excluding gains and
Slide 10: Loan Portfolio
Agriculture 3.1% Credit Card 2.8% Consumer 7.0% Construction 8.1% Commercial 13.2% Single Family Residential 21.6% Commercial Real Estate 43.9% Other 0.3% Page 10 Loan Portfolio Total Loan Portfolio $6.2 billion June 30, 2017 (1) Includes credit card, indirect, & equipment finance (nationwide). Tota
Slide 11: Loan Growth
Page 11 Loan Growth Quarter-over-Quarter Growth Linked Quarter GrowthChange Change Q1 Q2 Change Change US$ in millions Q2 2016 Q2 2017 $ % 2017 2017 $ % Legacy Loans, including acquired migrated 3,725$ 5,001$ 1,275$ 34.23% 4,633$ 5,001$ 368$ 7.94% Acquired Loans, net of discounts 1,288 1,225 (63) (4
Slide 12: Credit Quality: Legacy Loan Portfolio
Credit Quality: Legacy Loan Portfolio ( Excludes acquired loans ) Page 12 "Great Recession" (1) Excluding Credit Card net charge - offs. Source: SNL Financial – all U.S. Banks as of 06/30/17. 2017Non-Performing Loans 2008 2009 2010 2011 2012 2013 2014 2015 2016 Q1 Q2 SFNC 0.81% 1.35% 1.98% 1.74% 1.4
Slide 13: Credit Quality: Credit Card Portfolio
1991 Recession 4.55% 2001 Recession 6.41% 2008 "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 % Page 13 * Federal bankruptcy reform impacted charge - offs in 2005 Source: Federal Reserve Board Note: Industry da
Slide 14: Credit Quality: Loan and Credit Coverage
Credit Quality: Loan and Credit Coverage Page 14 Acquired Loan Migration Note : 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 - under
Slide 15: Acquisitions since 2013
Acquisitions since 2013 Page 15 (1) Deal ratios as of announcement date. Source: SNL Financial (2) Metropolitan was acquired from Section 363 Bankruptcy. (3) September 2017 system conversion represents the expected date. (4) OKSB’s earnings multiple of 28.9x is being calculated using the company’s L
Slide 16: Pro Forma Franchise Footprint
Pro Forma Franchise Footprint Page 16 Source: SNL Financial Note: Pro forma branch count includes Simmons Bank, Bank SNB and Southwest Bank Pro Forma Branches Arkansas 83 Tennessee 50 Missouri 28 Texas 21 Oklahoma 19 Kansas 7 Colorado 3 Total 211 SFNC (164) OKSB (31) SWB (16)
Slide 17: Attractive & Diverse Regional Footprint
Attractive & Diverse Regional Footprint Page 17 Source: SNL Financial Note: FDIC deposit data as of 6/30/16 Tennessee Missouri and Arkansas Southwest ▪ Footprint concentrated in high growth metropolitan areas – Deposit market share rank of #10 in OK – Deposit market share rank of #19 in DFW ▪ 50 bra
Slide 18: Complementary Lines of Business and Future Expansion
Complementary Lines of Business and Future Expansion Mortgage Banking Wealth Management & Trust Treasury Services SBA Lending Team Insurance Credit Cards Equipment Finance Mortgage Warehouse Healthcare Lending Lines of Business x x x x x x x x Page 18 x x x x x x x x
Slide 19: Proven Acquirer and Integrator
Page 19 Proven Acquirer and Integrator (1) Metropolitan acquired from Section 363 bankruptcy. (2) Expect closing of OKSB and SWB in 2017. Acquisitions since 1990 Q4 2017 Expected Recent Acquisitions 2013 2014 2015 2016 2017⁽²⁾ $1.1B $0.5B Liberty First South Springfield, MO West Tennessee $0.9B $0.4
Slide 20: Acquisition Summary
Page 20 Acquisition Summary ▪ Pro forma assets of $14.0 billion (1) ▪ $4.6 billion asset franchise in high growth Southwest markets throughout Texas, Oklahoma and Colorado ▪ Significantly enhances organic growth profile and expands future M&A opportunities ▪ Expected to be accretive to earnings per
Slide 21: DFAST and Durbin Amendment
DFAST (Dodd - Frank Stress Test Act) As part of the Dodd - Frank financial reform legislation in 2010 , financial institution's with total consolidated assets of more than $ 10 billion are required to conduct an annual stress test . SFNC is well underway in the preparation for the DFAST requirements
Slide 22: 108 Years of Consistent Dividend History
$0.28 $0.32 $0.36 $0.40 $0.44 $0.48 $0.53 $0.57 $0.61 $0.68 $0.73 $0.76 $0.76 $0.76 $0.76 $0.80 $0.84 $0.88 $0.92 $0.96 $1.00 $- $0.20 $0.40 $0.60 $0.80 $1.00 Page 22 (1) Based on 06/30/17 closing stock price of $52.90. (2) LTM EPS of $3.03 as of 06/30/17. (3) LTM Core EPS of $3.25 as of 06/30/17, e
Slide 23: Total Shareholder Return, One Year
(15.0%) (5.0%) 5.0% 15.0% 25.0% 35.0% 45.0% 55.0% 1 Year Total Shareholder Return (Dividends + Stock Appreciation) Page 23 06/30/16 – 06/30/17 SFNC 16.6% SNL Mid Cap Bank 36.2% Note: Stock Price $52.90 as of 06/30/17 Source: SNL Financial
Slide 24: Total Shareholder Return, Three Year
(15.0%) (5.0%) 5.0% 15.0% 25.0% 35.0% 45.0% 55.0% 65.0% 75.0% 85.0% 3 Year Total Shareholder Return (Dividends + Stock Appreciation) Page 24 06/30/14 – 06/30/17 SFNC 42.4% SNL Mid Cap Bank 47.9% Note: Stock Price $52.90 as of 06/30/17 Source: SNL Financial
Slide 25: 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% Long - term Shareholder Return (Dividends + Stock Appreciation) Page 25 Pre - economic downturn 12/31/07 – 06/30/17 Note: Stock Price $52.90 as of 06/30/17 Source: SNL Financial SNL Mid Cap Bank 10.3% SFNC 155.2
Slide 26: Investment Profile
(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 Company's five analyst consensus EPS of $3.29 for 2017 and $4.14 for 2018, as of 07/17/17. Source: SNL Financial Page 26 Investment Profile
Slide 27: Strategic Focus
▪ "Table Stakes" ▪ Asset Quality ▪ Regulatory Compliance ▪ Internal revenue opportunities ▪ Efficiency initiatives ▪ Branding in new markets and product enhancement ▪ $10 billion threshold ▪ Acquisitions ▪ Traditional banking – enhance current footprint and consider expanding into adjoining states (
Slide 28: Why Simmons First?
▪ 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 ▪ Attractive
Slide 29: Supplemental Information
SUPPLEMENTAL INFORMATION Page 29
Slide 30: Overview of SWB
Page 30 Overview of SWB Dollars in thousands Source: SNL Financial Data as of or for the three months ended 09/30/16, 12/31/16 and 03/31/17 Note: Core deposits defined as total deposits less jumbo time deposits greater than $250,000 SWB Footprint Financial Highlights Overview ▪ Founded in 1963 ▪ Hea
Slide 31: Overview of OKSB
Page 31 Overview of OKSB OKSB Footprint Dollars in thousands Source: SNL Financial Data as of or for the three months ended 09/30/16, 12/31/16 and 03/31/17 Note: Core deposits defined as total deposits less jumbo time deposits greater than $250,000 Financial Highlights Overview ▪ Founded in 1894 (Ba
Slide 32: Expansion into Attractive Markets
11.0% 9.6% 9.4% 7.8% 7.4% 6.1% 5.9% 7.3% 4.5% 5.8% Oklahoma City Stillwater Denver San Antonio D/FW Wichita Austin USA SFNC SFNC Pro Forma Expansion into Attractive Markets Page 32 Source: SNL Financial Deposit data as of 06/30/16 SFNC demographic data deposit weighted by county '17 – ' 22 Projected
Slide 33: Pro Forma Deposit Composition by State
Pro Forma Deposit Composition by State (1) SFNC pro forma for acquisition of Hardeman County Investment Company. Note: FDIC deposit data as of 06/30/16 Source: SNL Financial Dollars in thousands Page 33 Pro Forma SWB OKSB SFNC (1) Deposits ($000) Arkansas $3,697,837 53% Tennessee 2,251,407 32% Misso
Slide 34: Stock Price Performance
Stock Price Performance – 10/25/16 through 06/30/17 Page 34 Source: SNL Financial US Election Nov 18, '16 (10.0%) 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% SFNC 7.2% NASDAQ Bank 23.6% OKSB 31.7%
Slide 35: Appendix
APPENDIX Page 35
Slide 36: Appendix: Non-GAAP Reconciliations
Page 36 Appendix: Non - GAAP Reconciliations Reconciliation Of Non-GAAP Financial Measures Q2 Q2 US$ in thousands 2012 2013 2014 2015 2016 2016 2017 Calculation of ROAA Net income available to common stockholders 27,684$ 23,231$ 35,688$ 74,107$ 96,790$ 22,909$ 23,065$ Net non-core items, net of taxe
Slide 37: Appendix: Non-GAAP Reconciliations
Page 37 Appendix: Non - GAAP Reconciliations (1) Effective tax rate of 39.225%, adjusted for non - deductible merger - related costs. Reconciliation Of Non-GAAP Financial Measures Q2 Q2 US$ in thousands 2012 2013 2014 2015 2016 2016 2017 Calculation of Core Earnings Net Income 27,684$ 23,231$ 35,688
Slide 38: Appendix: Non-GAAP Reconciliations
Page 38 Appendix: Non - GAAP Reconciliations (1) Effective tax rate of 39.225%, adjusted for non - deductible merger - related costs. Reconciliation Of Non-GAAP Financial Measures Q1 - 17 Q2 Q2 US$ in thousands 2012 2013 2014 2015 2016 LTM 2016 2017 Calculation of Diluted EPS Diluted earnings per sh
Slide 39: Appendix: Non-GAAP Reconciliations
Page 39 Appendix: Non - GAAP Reconciliations Reconciliation Of Non-GAAP Financial Measures Q2 Q2 US$ in thousands 2012 2013 2014 2015 2016 2016 2017 Calculation of Efficiency Ratio Non-interest expense 117,733$ 134,812$ 175,721$ 256,970$ 255,085$ 64,137$ 71,408$ Non-core non-interest expense adjustm
Slide 40: Appendix: Non-GAAP Reconciliations
Page 40 Appendix: Non - GAAP Reconciliations Reconciliation Of Non-GAAP Financial Measures 2015 2016 Q2 Q2 US$ in thousands YTD YTD 2016 2017 Calculation of Core Net Interest Margin Net interest income 278,595$ 279,206$ 66,583$ 76,812$ FTE adjustment 8,517 7,722 1,675 2,082 Fully tax equivalent net
Slide 41: Simmons First National Corporation
NASDAQ - GS: SFNC Pine Bluff – Corporate Headquarters Little Rock Corporate Office
Simmons First National — Merger or Acquisition (September 2017) on 6ix