Simmons First National Corporation · NASDAQ:SFNC
Simmons First National — Q2 2024 Earnings Presentation
35 slides from Simmons First National's earnings presentation, Jul 24, 2024
Slide 1: 2nd Quarter 2024 Earnings Presentation
Nasdaq: SFNC 2nd Quarter 2024 Earnings Presentation Contents 3 Company Profile 4 2Q24 Financial Highlights 11 Deposits, Securities, Liquidity, Interest Rate Sensitivity and Capital 17 Loan Portfolio 23 Credit Quality 27 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 $21.8 BILLION BILLION TOTAL ASSETS TOTAL DEPOSITS CONSECUTIVE YEARS $8.4 $17.2 115 PAYING DIVIDENDS3 BILLION ASSETS UNDER
Slide 4: 2Q24 Financial Highlights
7 Simmons First __ National Corporation 2Q24 Financial Highlights
Slide 5: 2Q24 Highlights
2Q24 Highlights Reported Adjusted1 ▪ Second quarter results ─ Average loans up 4% on a linked quarter annualized basis Net income $40.8M $41.9M ─ NIM at 2.69%, up 3 bps vs 1Q24 ─ Pace of increase in deposit costs slowed as noninterest EPS (diluted) $0.32 $0.33 bearing deposit migration eased ─ Credi
Slide 6: Balance Sheet Highlights
Balance Sheet Highlights 2Q24 vs 1Q24 2Q24 vs 2Q23 $ in millions, except per share data 2Q24 1Q24 2Q23 $ Change % Change $ Change % Change Period End Balances Total loans $17,192.4 $17,001.8 $16,833.7 $190.7 1 % $358.8 2 % Investment securities 6,571.4 6,734.8 7,336.5 (163.5) (2) (765.2) (10) Total
Slide 7: Income Summary
Income Summary 2Q24 Adjusted 2Q24 vs Adjusted $ in millions, except per share data Reported Adjusted1 1Q24 2Q23 Net interest income $153.9 $153.9 $2.0 1 % $ (9.3) (6) % Noninterest income 43.3 43.3 0.1 - (2.1) (5) Total revenue 197.2 197.2 2.1 1 (11.4) (5) Noninterest expense 139.4 137.8 (0.1) - 1.8
Slide 8: Net Interest Income and Margin (FTE)
Net Interest Income and Margin (FTE) Net Interest Income and Margin Net Interest Margin Evolution $ in millions; FTE FTE 2 bps 8 bps $169.3 (1) bp (4) bps 2.69% $162.1 $159.9 $160.5 1 bp 2.66% (3) bps $158.3 Highlights ❑ Net interest income (FTE) up $2.2 million, or 5 percent 2Q23 3Q23 4Q23 1Q24 2Q2
Slide 9: Noninterest Income
Noninterest Income 2Q24 Adjusted 2Q24 vs Adjusted $ in millions Reported Adjusted1 1Q24 2Q23 Highlights Service charges on deposit accounts $ 12.3 $ 12.3 $ 0.3 2 % $(0.6) (5) % ❑ Adjusted noninterest income1 in 2Q24 up 1 Wealth management fees 8.3 8.3 0.8 11 0.8 11 percent annualized on a linked qua
Slide 10: Noninterest Expense
Noninterest Expense 2Q24 Adjusted 2Q24 vs Adjusted $ in millions Reported Adjusted1 1Q24 2Q23 Salaries and employee benefits $ 70.7 $ 70.6 ($1.8) (3) % $(0.5) (1) % Highlights Occupancy expense, net 11.9 11.7 (0.4) (3) 0.5 4 ❑ Adjusted noninterest expense1 decreased from 1Q24 levels Furniture and eq
Slide 11: Deposits, Securities, Liquidity, Interest Rate Sensitivity and Capital
Deposits, Securities, Liquidity, Interest Rate Sensitivity and Capital
Slide 12: Deposits
Deposits Deposit Mix $ in billions (period end balances) $22.5 $22.2 $22.4 Highlights $22.2 $21.8 $3.2 $3.3 $2.9 $3.0 ❑ Average deposits of $22.0 billion, down $189 million, or less than 1 percent $2.9 $3.8 $4.3 $4.3 ❑ Modest 4 bps increase in costs of deposits vs 17 bps increase in 1Q24 $4.1 $4.2 ❑
Slide 13: Securities Portfolio
Securities Portfolio Securities Portfolio by Type At June 30, 2024 7% 8% Highlights Treasury/Agency ❑ Average securities to total earning assets of 27% at 6/30/24 compared to 39% at 12/31/21. Continued focus on balance sheet optimization States and Political Subdivisions ❑ Continuing to utilize cash
Slide 14: Liquidity: Solid liquidity position and access to additional sources
Liquidity: Solid liquidity position and access to additional sources Cash and Cash Equivalents + Variable Rate Securities Borrowed Funds as a Percent of Total Liabilities $ in millions Period End Balances $2,321 12.7% 12.6% $1,910 10.0% 10.4% $1,824 $1,572 $1,578 8.9% $1,406 7.4% $1,301 $1,245 6.9%
Slide 15: Interest Rate Sensitivity: Attractively positioned for a lower interest rate environment
Interest Rate Sensitivity: Attractively positioned for a lower interest rate environment Loan Portfolio – Repricing and Maturity Balance Sheet Interest Rate Sensitivity At June 30, 2024 Over the next 12 months (estimated) In millions Repricing Term Rate Structure 3 mo 3-12 1-3 3-5 Over 5 Immediate c
Slide 16: Capital: Focused on maintaining a strong capital position and tangible book value per share
Capital: Focused on maintaining a strong capital position and tangible book value per share Tier 1 Leverage Ratio1 CET 1 Capital Ratio1 Tier 1 Risk-Based Capital Ratio1 Total Risk-Based Capital Ratio1 9.23% 9.44% 9.49% 11.92% 11.95% 12.00% 11.92% 11.95% 12.00% 14.43% 14.17% 14.17% 2Q23 1Q24 2Q24 2Q2
Slide 17: Loan Portfolio
7 Simmons First __ National Corporation Loan Portfolio
Slide 18: Loans: Well-diversified, granular portfolio and conservative credit culture
Loans: Well-diversified, granular portfolio and conservative credit culture Loan Portfolio Waterfall Linked Quarter Loan Growth $ in millions $ in millions Total Loans $190 RE – Commercial $252 RE – Construction $(275) Funded loans Paydowns/ Commercial1 $9 /advances payoffs RE – Single Family $41 Co
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 $1,122 Opportunity Proposal Ready to Close $1,048 $1,013 $1,002 $270 $948 $877 Highlights $381 $330 $504 ❑ Continued focus on maintaining prudent underwriting
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 6/30/24 By State By State NPL Ratio2 0.78% 12% 2% Past Due 30+ Days 0.00% 2% 18% Average Loan Size $2.3M 33% 11% 46% 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 6/30/24 MSAs Loans Commitments NPL Ratio 0.07% Dallas-Plano-Irving 16.0% 14.6% 25% Past Due 30+ Days 0.01% Houston-Sugarland-Baytown 13.2% 12.1% 43% Average Loan Size $1.
Slide 22: Loans: Loan portfolio by type and key credit metrics
Loans: Loan portfolio by type and key credit metrics as of March 31, 2024 as of June 30, 2024 % of % of Unfunded Unfunded Balance Total Balance Total Past Due 30+ Days Classified Nonperforming Commitment ACL Commitment $ in millions $ Loans $ Loans $ $ $ $ % Reserve Total Loan Portfolio Credit Card
Slide 23: Credit Quality
7 Simmons First __ National Corporation Credit Quality
Slide 24: Credit Quality: Nonperforming and past due loans
Credit Quality: Nonperforming and past due loans Nonperforming Loans Evolution $ in millions; FTE Highlights ❑ Decrease in nonperforming loans primarily driven by a $6 million decrease in run-off portfolio that included a $5 million charge-off related to a single, previously identified nonperforming
Slide 25: Credit Quality: Loan loss provision and net charge-offs
Credit Quality: Loan loss provision and net charge-offs Net Charge-Offs to Average Loans1 Highlights Annual Quarterly ❑ Provision for credit losses on loans exceeded net charge-offs by $3.0 million during 2Q24 0.45% ❑ NCO ratio of 19 bps in 2Q24; 16 bps associated with run-off portfolio 0.31% 0.28%
Slide 26: ACL: Reflects current economic forecast and composition of loan portfolio
ACL: Reflects current economic forecast and composition of loan portfolio ACL / Loans (%) and ACL ($)1 $ in millions Allowance for Credit Losses on Loans and Loan Coverage $250 1.85% 2.00% $225 1.52% 1.71% 1.80% ACL / ACL $200 1.60% Loans 1.34% 1.34% 1.34% $ in millions $175 1.22% 1.40% $150 1.20% A
Slide 27: Appendix
7 Simmons First __ National Corporation Appendix
Slide 28: Non-GAAP Reconciliations
Non-GAAP Reconciliations 2Q 3Q 4Q 1Q 2Q $ in thousands, except per share data 2023 2023 2023 2024 2024 Calculation of Adjusted Earnings Net Income $ 58,314 $ 47,247 $ 23,907 $ 38,871 $ 40,763 Certain items Merger related costs 19 5 - - - Branch right sizing, net 95 547 3,846 236 519 Loss (gain) on s
Slide 29: Non-GAAP Reconciliations
Non-GAAP Reconciliations 2Q 3Q 4Q 1Q 2Q $ in thousands 2023 2023 2023 2024 2024 Calculation of Pre-Provision Net Revenue (PPNR) Net interest income $ 163,230 $ 153,433 $ 155,628 $ 151,906 $ 153,905 Noninterest income 44,980 42,777 21,974 43,184 43,299 Less: Noninterest expense 139,696 131,998 148,13
Slide 30: Non-GAAP Reconciliations
Non-GAAP Reconciliations 2Q 3Q 4Q 1Q 2Q $ in thousands, except number of employees (FTE) 2023 2023 2023 2024 2024 Calculation of Total Revenue and Adjusted Total Revenue Net Interest Income (GAAP) $ 163,230 $ 153,433 $ 155,628 $ 151,906 $ 153,905 Noninterest Income (GAAP) 44,980 42,777 21,974 43,184
Slide 31: Non-GAAP Reconciliations
Non-GAAP Reconciliations 2Q 3Q 4Q 1Q 2Q $ in thousands 2023 2023 2023 2024 2024 Calculation of Adjusted Noninterest Expense Noninterest Expense (GAAP) $ 139,696 $ 131,998 $ 148,139 $ 139,879 $ 139,354 Less: Merger related costs 19 5 - - - Less: Branch right sizing expense 95 547 3,846 236 519 Less:
Slide 32: Non-GAAP Reconciliations
Non-GAAP Reconciliations 2Q 1Q 2Q $ in thousands 2023 2024 2024 Calculation of Adjusted Salaries and Employee Benefits Salaries and employee benefits (GAAP) $ 74,723 $ 72,653 $ 70,716 Less: Early retirement program 3,609 219 118 Plus: Other ____ _ - - 1 Total Adjusted Salaries and Employee Benefits
Slide 33: Non-GAAP Reconciliations
Non-GAAP Reconciliations 2Q 1Q 2Q $ in thousands 2023 2024 2024 Calculation of Tangible Common Equity (TCE) Total common stockholders’ equity $ 3,356,326 $ 3,439,126 $ 3,458,869 Total assets $ 27,959,123 $ 27,372,175 $ 27,369,072 Less: Intangible assets (1,441,557) (1,429,594) (1,425,742) Total tang
Slide 34: Non-GAAP Reconciliations
Non-GAAP Reconciliations 2Q 1Q 2Q $ in thousands 2023 2024 2024 Calculation of Uninsured, Non-Collateralized Deposit Coverage Ratio Uninsured deposits at Simmons Bank $ 8,507,395 $ 8,413,514 $ 8,186,903 Less: Collateralized deposits (excluding portion that is FDIC insured) 3,030,550 2,995,241 2,835,
Slide 35: 2nd Quarter 2024 Earnings Presentation
Nasdaq: SFNC 2nd Quarter 2024 Earnings Presentation Contents 3 Company Profile 4 2Q24 Financial Highlights 11 Deposits, Securities, Liquidity, Interest Rate Sensitivity and Capital 17 Loan Portfolio 23 Credit Quality 27 Appendix
Simmons First National — Q2 2024 Earnings Presentation on 6ix