Simmons First National Corporation · NASDAQ:SFNC
Simmons First National — Q3 2024 Earnings Presentation
38 slides from Simmons First National's earnings presentation, Oct 18, 2024
Slide 1: 3rd Quarter 2024 Earnings Presentation
Nasdaq: SFNC 3rd Quarter 2024 Earnings Presentation Contents 3 Company Profile 4 3Q24 Financial Highlights 11 Deposits, Securities, Liquidity, Interest Rate Sensitivity and Capital 18 Loan Portfolio 24 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 $27.3 $21.9 BILLION BILLION TOTAL ASSETS TOTAL DEPOSITS CONSECUTIVE YEARS $8.7 $17.3 115 PAYING DIVIDENDS3 BILLION ASSETS UNDER
Slide 4: 3Q24 Financial Highlights
7 Simmons First __ National Corporation 3Q24 Financial Highlights
Slide 5: 3Q24 Highlights
3Q24 Highlights ▪ Third quarter results Reported Adjusted1 ─ Average loans up 2% on a linked quarter annualized basis ─ NIM at 2.74%, up 5 bps vs 2Q24; 3 bps benefit from sale of bonds Net income $24.7M $46.0M ─ Cost of deposits flat vs 2Q24; deposit costs peaked in June ─ Credit quality remains sou
Slide 6: Balance Sheet Highlights
Balance Sheet Highlights Average Loans Average Investment Securities Average Deposits $ in billions $ in billions $ in billions $6.8 $22.2 $17.2 $6.6 $22.0 $17.1 $16.9 $6.4 (2)% $21.7 1% (1)% 1% (3)% (1)% 1Q24 2Q24 3Q24 1Q24 2Q24 3Q24 1Q24 2Q24 3Q24 +5 bps Flat Yield1 6.24% 6.39% 6.44% Yield1 3.76%
Slide 7: Income Statement Highlights
Income Statement Highlights Net Interest Income Total Revenue and Adjusted Revenue2 PPNR2 and Adjusted PPNR2 $ in millions $ in millions $ in millions 4% 4% 16% $203.2 $66.4 $157.7 $197.2 $197.2 $55.2 $57.2 $57.9 $59.4 $195.1 $195.1 12% 3% $153.9 $151.9 2% $37.6 $174.8 1Q24 2Q24 3Q24 1Q24 2Q24 3Q24
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 $164.1 2.74% $162.1 3 bps (3) bps $160.5 (2) bps $159.9 2.69% 4 bps $158.3 3 bps Highlights ❑ Net interest income (FTE) up $3.6 million, or 2 percent on a linked quarter basis 3Q2
Slide 9: Noninterest Income
Noninterest Income 3Q24 Adjusted 3Q24 vs Adjusted $ in millions Reported Adjusted1 2Q24 3Q23 Highlights Service charges on deposit accounts $ 12.7 $ 12.7 $ 0.5 4 % $ 0.3 2 % ❑ Adjusted noninterest income1 in 3Q24 up 5 percent Wealth management fees 8.2 8.2 - (1) 0.5 7 compared to 2Q24 Debit and cred
Slide 10: Noninterest Expense
Noninterest Expense 3Q24 Adjusted 3Q24 vs Adjusted $ in millions Reported Adjusted1 2Q24 3Q23 Highlights ❑ Adjusted noninterest expense1 down 1% Salaries and employee benefits $ 69.2 $ 69.2 ($1.4) (2) % $ 3.4 5 % from 2Q24 levels primarily as a result of incentive compensation accrual adjustments Oc
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 Highlights $22.2 $22.2 $22.4 $21.8 $21.9 ❑ Total deposits of $21.9 billion, up $95 million from 2Q24 levels $3.3 $2.9 $3.0 $2.9 $3.4 $3.3 $3.5 ❑ Cost of deposits flat on a linked quarter basis $3.2 $3.3 $3.2 $3.5 ❑ Cost of deposits peaked in Ju
Slide 13: Securities: Targeted goal of securities to earnings assets in mid-teens
Securities: Targeted goal of securities to earnings assets in mid-teens 10-Year Treasury Yield 3Q24 Targeted Securities Sale 4.50% Size of targeted sale $252 million Weighted average yield ~1.29% 4.35% 3Q24 earnings impact $21.0 million after-tax loss 4.20% EPS impact $0.17 4.05% Estimated annual im
Slide 14: Liquidity: Solid liquidity position and access to additional sources
Liquidity: Solid liquidity position and access to additional sources Cash and Cash Equivalents + Investment Securities – Amortized Cost3 Additional Liquidity Sources Variable Rate Securities $ in millions $ in millions $ in millions (23)% FHLB borrowing availability $ 4,955 $1,824 $8,660 $8,091 Unpl
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 (contractual) Balance Sheet Interest Rate Sensitivity At September 30, 2024 Over the next 12 months (estimated) In millions Repricing Term Rate Structure 3 mo 3-12 1-3 3-5
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 12.02% 12.00% 12.06% 12.02% 12.00% 12.06% 14.27% 14.17% 14.25% 9.31% 9.49% 9.57% 3Q23 2Q24 3Q24 3Q2
Slide 17: AOCI: Recapture would have a significant positive impact on TCE and TBVPS
AOCI: Recapture would have a significant positive impact on TCE and TBVPS AOCI Evolution and Projections $ in millions Projected AOCI “Burn” Down AOCI Flat Rates AOCI Position YE YE YE 9/30/23 12/31/23 3/31/24 6/30/24 9/30/24 9/30/24 2024 2025 2026 $(336) $(404) $(408) $(405) $(266) $(294) 17% $(336
Slide 18: Loan Portfolio
7 Simmons First __ National Corporation Loan Portfolio
Slide 19: 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 $144 RE – Commercial $233 RE – Construction $(261) Funded loans Paydowns/ Commercial1 $(2) /advances payoffs RE – Single Family $59
Slide 20: 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 $1,244 $1,048 Highlights $1,013 $1,002 $948 $877 $549 ❑ Continued focus on maintaining prudent underwriting standards and
Slide 21: 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 9/30/24 By State By State NPL Ratio2 0.81% 13% 2% Past Due 30+ Days 0.03% 2% 19% 44% Average Loan Size $2.2M 33% 11% 2%
Slide 22: Loans: Construction and Land Development
Loans: Construction and Land Development Construction and Land Development (CLD) By State % of Total % of Total Key Statistics At 9/30/24 MSAs Loans Commitments NPL Ratio 0.19% Dallas-Plano-Irving 16.3% 15.4% 27% Past Due 30+ Days 0.01% Houston-Sugarland-Baytown 13.8% 11.6% 43% Average Loan Size $1.
Slide 23: Loans: Loan portfolio by type and key credit metrics
Loans: Loan portfolio by type and key credit metrics as of June 30, 2024 as of September 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 C
Slide 24: Credit Quality
7 Simmons First __ National Corporation Credit Quality
Slide 25: Credit Quality: Nonperforming and past due loans
Credit Quality: Nonperforming and past due loans Nonperforming Loans Evolution Highlights $ in millions; FTE ❑ Decrease in nonperforming loans driven by a $9 million decrease in run-off portfolio that included $3.5 million charge-off primarily related to a single, previously identified nonperforming
Slide 26: 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 $2.8 million during 3Q24 0.45% ❑ NCO ratio of 22 bps in 3Q24; 9 bps associated with run-off portfolio and 3 bps ass
Slide 27: ACL: Reflects current economic forecast and composition of loan portfolio
ACL: Reflects current economic forecast and composition of loan portfolio ACL / Loans (%) and ACL ($)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% 1.35% $ in millions $175 1.22% 1.40% $150 1
Slide 28: Appendix
7 Simmons First __ National Corporation Appendix
Slide 29: Select Balance Sheet and Other Data
Select Balance Sheet and Other Data 3Q24 vs 2Q24 3Q24 vs 3Q23 $ in millions, except per share data 3Q24 2Q24 3Q23 $ Change % Change $ Change % Change Period End Balances Total loans $17,336.0 $17,192.4 $16,771.9 $143.6 1 % $564.2 3 % Investment securities 6,349.8 6,571.4 7,100.7 (221.6) (3) (750.9)
Slide 30: Income Summary
Income Summary 3Q24 Adjusted 3Q24 vs Adjusted $ in millions, except per share data Reported Adjusted1 2Q24 3Q23 Net interest income $157.7 $157.7 $3.8 2 % $4.3 3 % Noninterest income 17.1 45.5 2.2 5 2.7 6 Total revenue 174.8 203.2 6.0 3 7.0 4 Noninterest expense 137.2 136.8 (1.0) (1) 6.9 5 Pre-provi
Slide 31: Non-GAAP Reconciliations
Non-GAAP Reconciliations 3Q 4Q 1Q 2Q 3Q $ in thousands, except per share data 2023 2023 2024 2024 2024 Calculation of Adjusted Earnings Net Income $ 47,247 $ 23,907 $ 38,871 $ 40,763 $ 24,740 Certain items Merger related costs 5 - - - - Branch right sizing, net 547 3,846 236 519 410 Loss (gain) on s
Slide 32: Non-GAAP Reconciliations
Non-GAAP Reconciliations 3Q 4Q 1Q 2Q 3Q $ in thousands 2023 2023 2024 2024 2024 Calculation of Pre-Provision Net Revenue (PPNR) Net interest income $ 153,433 $ 155,628 $ 151,906 $ 153,905 $ 157,712 Noninterest income 42,777 21,974 43,184 43,299 17,130 Less: Noninterest expense 131,998 148,139 139,87
Slide 33: Non-GAAP Reconciliations
Non-GAAP Reconciliations 3Q 4Q 1Q 2Q 3Q $ in thousands, except number of employees (FTE) 2023 2023 2024 2024 2024 Calculation of Total Revenue and Adjusted Total Revenue Net Interest Income (GAAP) $ 153,433 $ 155,628 $ 151,906 $ 153,905 $ 157,712 Noninterest Income (GAAP) 42,777 21,974 43,184 43,299
Slide 34: Non-GAAP Reconciliations
Non-GAAP Reconciliations 3Q 4Q 1Q 2Q 3Q $ in thousands 2023 2023 2024 2024 2024 Calculation of Adjusted Noninterest Expense Noninterest Expense (GAAP) $ 131,998 $ 148,139 $ 139,879 $ 139,354 $ 137,193 Less: Merger related costs 5 - - - - Less: Branch right sizing expense 547 3,846 236 519 410 Less:
Slide 35: Non-GAAP Reconciliations
Non-GAAP Reconciliations 3Q 2Q 3Q $ in thousands 2023 2024 2024 Calculation of Adjusted Salaries and Employee Benefits Salaries and employee benefits (GAAP) $ 67,374 $ 70,716 $ 69,167 Less: Early retirement program 1,557 118 (1) Plus: Other - 1 (1) Total Adjusted Salaries and Employee Benefits (non-
Slide 36: Non-GAAP Reconciliations
Non-GAAP Reconciliations 3Q 2Q 3Q $ in thousands 2023 2024 2024 Calculation of Tangible Common Equity (TCE) Total common stockholders’ equity $ 3,285,555 $ 3,458,869 $ 3,528,833 Total assets $ 27,564,325 $ 27,369,072 $ 27,269,404 Less: Intangible assets (1,437,459) (1,425,742) (1,421,892) Total tang
Slide 37: Non-GAAP Reconciliations
Non-GAAP Reconciliations 3Q 2Q 3Q $ in thousands 2023 2024 2024 Calculation of Uninsured, Non-Collateralized Deposit Coverage Ratio Uninsured deposits at Simmons Bank $ 8,143,200 $ 8,186,903 $ 8,355,496 Less: Collateralized deposits (excluding portion that is FDIC insured) 2,835,405 2,835,424 2,710,
Slide 38: 3rd Quarter 2024 Earnings Presentation
Nasdaq: SFNC 3rd Quarter 2024 Earnings Presentation Contents 3 Company Profile 4 3Q24 Financial Highlights 11 Deposits, Securities, Liquidity, Interest Rate Sensitivity and Capital 18 Loan Portfolio 24 Credit Quality 28 Appendix
Simmons First National — Q3 2024 Earnings Presentation on 6ix