Simmons First National Corporation · NASDAQ:SFNC
Simmons First National — Q4 2024 Earnings Presentation
40 slides from Simmons First National's earnings presentation, Jan 22, 2025
Slide 1: 4th Quarter 2024 Earnings Presentation
Nasdaq: SFNC 4th Quarter 2024 Earnings Presentation Contents 2 Company Profile 3 4Q24 Financial Highlights 11 Deposits, Securities, Liquidity, Interest Rate Sensitivity and Capital 17 Loan Portfolio 23 Credit Quality 27 2025 Outlook 30 Appendix
Slide 2: 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 $26.9 $21.9 BILLION BILLION TOTAL ASSETS TOTAL DEPOSITS CONSECUTIVE YEARS $8.5 $17.0 115 PAYING DIVIDENDS3 BILLION ASSETS UNDER
Slide 3: 4Q24 Financial Highlights
7 Simmons First __ National Corporation 4Q24 Financial Highlights
Slide 4: 4Q24 Highlights
4Q24 Highlights ▪ Positive Operating Leverage Reported Adjusted1 ─ Positive operating leverage driven by 5% increase in net interest income ─ Net interest margin of 2.87%, up 13 bps vs 3Q24 Net income $48.3M $49.6M ─ Focused on proactively managing funding costs • Cost of deposits 2.60%, down 19 bps
Slide 5: Balance Sheet Highlights
Balance Sheet Highlights Average Loans Average Investment Securities Average Deposits $ in billions $ in billions $ in billions Up Slightly $6.8 $22.2 $17.2 $17.2 $6.6 $17.1 $22.0 $16.9 $6.4 $21.9 (2)% $6.3 $21.7 (3)% 1% (3)% 1Q24 2Q24 3Q24 4Q24 1Q24 2Q24 3Q24 4Q24 1Q24 2Q24 3Q24 4Q24 Yield1 6.24% 6
Slide 6: Income Statement Highlights
Income Statement Highlights Net Interest Income Total Revenue and Adjusted Revenue2 PPNR2 and Adjusted PPNR2 $ in millions $ in millions $ in millions 9% 7% 21% $164.9 $208.5 $208.5 $69.2 $66.4 $67.4 $203.2 3% 4% $157.7 $195.1 $195.1 $197.2 $197.2 $57.2 $57.9 $59.4 5% $55.2 $153.9 $151.9 $174.8 $37.
Slide 7: 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 22 bps 2.87% $171.4 $162.1 $164.1 2.74% (10) bps Highlights $160.5 (4Q24 vs 3Q24) $158.3 ❑ Net interest income (FTE) up $7.3 million 4 bps (3) bps ❑ NIM at 2.87 percent, up 13 bps
Slide 8: Noninterest Income
Noninterest Income 4Q24 Adjusted 4Q24 vs Adjusted $ in millions Reported Adjusted1 3Q24 4Q23 Highlights Service charges on deposit accounts $ 13.0 $ 13.0 $ 0.3 2 % $ 0.2 2 % ❑ Adjusted noninterest income1 in 4Q24 reflects Wealth management fees 8.8 8.8 0.6 7 1.1 15 growth in most fee-based businesse
Slide 9: Noninterest Expense
Noninterest Expense 4Q24 Adjusted 4Q24 vs Adjusted Highlights 1 3Q24 4Q23 $ in millions Reported Adjusted ❑ Full-year adjusted noninterest expense1 2.5% below 4Q22 annualized run rate Salaries and employee benefits $ 71.6 $ 71.4 $ 2.2 3 % $ 5.4 8 % ❑ Adjusted noninterest expense1 up 2% on a Occupanc
Slide 10: 2025 expense outlook relatively flat vs 4Q22 run rate while cumulative inflation up ~10%
2025 expense outlook relatively flat vs 4Q22 run rate while cumulative inflation up ~10% Estimated Annual Cost Savings Annual Cost Savings Annual Cost Savings from Better Bank Initiative (2022) Achieved in 2023 Achieved Over 2 Building Years brand awareness $15 3M more than $18 6M additional $24 ann
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 $22.2 $22.4 $21.8 $21.9 $21.9 $2.9 $3.0 $2.9 $3.4 $3.3 Highlights $3.3 $3.5 $3.3 $3.2 $3.2 ❑ Average deposits of $21.9 billion, up $139 million from 3Q24 levels $3.5 $3.5 $3.4 $3.3 $3.1 ❑ Cost of deposits down 19 bps on a linked quarter basis ❑
Slide 13: Securities: Targeted goal of securities to earnings assets in mid-teens
Securities: Targeted goal of securities to earnings assets in mid-teens Securities Portfolio by Type Securities Portfolio Summary Securities Portfolio Bond Ratings2 $ in millions 8% 8% Yield (FTE)1 Effective Duration At December 31, 2024 At December 31, 2024 HTM AFS HTM AFS HTM AFS Fixed Rate U.S. G
Slide 14: Liquidity: Solid liquidity position and reduced use of wholesale funding
Liquidity: Solid liquidity position and reduced use of wholesale funding Cash and Cash Equivalents + Wholesale Funding Additional Liquidity Sources Variable Rate Securities $ in millions $ in millions $ in millions December 31, Change vs FHLB borrowing availability $ 4,716 $1,824 2024 3Q24 Unpledged
Slide 15: Interest Rate Sensitivity
Interest Rate Sensitivity Loan Portfolio – Repricing and Maturity (contractual) CD Maturities (over the next 12 months) At December 31, 2024 $ in millions In millions Repricing Term Rate Structure Weighted Average Rates 3 mo 3-12 1-3 3-5 Over 5 4.20% 4.83% 3.93% 4.66% 3.71% 4.56% 3.37% 4.39% Total V
Slide 16: Capital: Focused on maintaining a strong capital position
Capital: Focused on maintaining a strong capital position Tier 1 Leverage Ratio1 CET 1 Capital Ratio1 Tier 1 Risk-Based Capital Ratio1 Total Risk-Based Capital Ratio1 12.11% 12.06% 12.38% 12.11% 12.06% 12.38% 14.39% 14.61% 14.25% 9.39% 9.57% 9.74% 4Q23 3Q24 4Q24 4Q23 3Q24 4Q24 4Q23 3Q24 4Q24 4Q23 3Q
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 Change by Loan Type $ in millions $ in millions Total Loans $(330) RE – Commercial $(81) RE – Construction $(7) Funded loans Paydowns/ Other1 Commercial2 $(14) /advances payoffs RE – S
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 $1,244 $1,265 Highlights $1,013 $1,002 $948 $877 $549 $552 ❑ Continued focus on maintaining prudent underwriting standards
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 12/31/24 By State By State NPL Ratio 0.00% 16% Past Due 30+ Days 0.00% 2% 18% 2% 43% Average Loan Size $2.2M 34% 2% 11%
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 12/31/24 Top 10 MSAs Loans Commitments NPL Ratio 0.38% Dallas-Plano-Irving 15.0% 14.3% 24% Past Due 30+ Days 0.01% Houston-Sugarland-Baytown 13.6% 11.2% 44% Average Loan
Slide 22: Loans: Loan portfolio by type and key credit metrics
Loans: Loan portfolio by type and key credit metrics as of September 30, 2024 as of December 31, 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 Cred
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 Highlights ❑ Increase in nonperforming loans reflects continued credit normalization ❑ “Run-off portfolio” consists of small ticket equipment finance and acquired asset based lending portfolios. Run-off port
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 Loans2 Highlights Annual Quarterly ❑ Provision for credit losses on loans exceeded net charge-offs by $1.8 million during 4Q24 0.45% ❑ NCO ratio of 27 bps in 4Q24; 6 bps associated with run-off portfolio1 and 3 bps as
Slide 26: ACL: Reflects current economic forecast and composition of loan portfolio
ACL: Reflects current economic forecast and composition of loan portfolio ACL / Loans (%) and ACL ($)1 $ in millions Allowance for Credit Losses on Loans and Loan Coverage $250 1.85% 2.00% 1.52% 1.71% $225 1.80% ACL / ACL $200 1.60% Loans 1.34% 1.34% 1.34% 1.35% 1.38% $ in millions $175 1.22% 1.40%
Slide 27: 2025 Outlook
7 Simmons First __ National Corporation 2025 Outlook
Slide 28: 2025 Outlook: Driving positive operating leverage of 3%+
2025 Outlook $ in millions Full Year 2025 2024 Outlook2 Outlook Commentary Up Low • Cautious optimism in underlying economy and growth opportunities Total Loans (period end) $17,006 • Moderated by relationship pricing and profitability discipline Single Digits Relatively • Focused on growing custome
Slide 29: 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 30: Appendix
7 Simmons First __ National Corporation Appendix
Slide 31: Select Balance Sheet and Other Data
Select Balance Sheet and Other Data 4Q24 vs 3Q24 4Q24 vs 4Q23 $ in millions, except per share data 4Q24 3Q24 4Q23 $ Change % Change $ Change % Change Period End Balances Total loans $17,005.9 $17,336.0 $16,845.7 $(330.1) (2) % $160.3 1 % Investment securities 6,166.1 6,349.8 6,878.4 (183.7) (3) (712
Slide 32: Income Summary
Income Summary 4Q24 Adjusted 4Q24 vs Adjusted $ in millions, except per share data Reported Adjusted1 3Q24 4Q23 Net interest income $164.9 $164.9 $7.2 5 % $9.3 6 % Noninterest income 43.6 43.6 (2.0) (4) 1.4 3 Total revenue 208.5 208.5 5.3 3 10.7 5 Noninterest expense 141.1 139.3 2.5 2 6.6 5 Pre-prov
Slide 33: Non-GAAP Reconciliations
Non-GAAP Reconciliations 4Q 1Q 2Q 3Q 4Q $ in thousands, except per share data 2023 2024 2024 2024 2024 Calculation of Adjusted Earnings Net Income $ 23,907 $ 38,871 $ 40,763 $ 24,740 $ 48,319 Certain items Branch right sizing, net 3,846 236 519 410 1,581 Loss (gain) on sale of securities 20,218 - -
Slide 34: Non-GAAP Reconciliations
Non-GAAP Reconciliations 4Q 1Q 2Q 3Q 4Q $ in thousands 2023 2024 2024 2024 2024 Calculation of Pre-Provision Net Revenue (PPNR) Net interest income $ 155,628 $ 151,906 $ 153,905 $ 157,712 $ 164,942 Noninterest income 21,974 43,184 43,299 17,130 43,558 Less: Noninterest expense 148,139 139,879 139,35
Slide 35: Non-GAAP Reconciliations
Non-GAAP Reconciliations 4Q 1Q 2Q 3Q 4Q $ in thousands, except number of employees (FTE) 2023 2024 2024 2024 2024 Calculation of Total Revenue and Adjusted Total Revenue Net Interest Income (GAAP) $ 155,628 $ 151,906 $ 153,905 $ 157,712 $ 164,942 Noninterest Income (GAAP) 21,974 43,184 43,299 17,130
Slide 36: Non-GAAP Reconciliations
Non-GAAP Reconciliations 4Q 1Q 2Q 3Q 4Q Full-Year Full-Year 4Q $ in thousands 2023 2024 2024 2024 2024 2023 2024 2022 Calculation of Adjusted Noninterest Expense Noninterest Expense (GAAP) $ 148,139 $ 139,879 $ 139,354 $ 137,193 $ 141,117 $ 563,061 $ 557,543 $ 142,575 Less: Branch right sizing expen
Slide 37: Non-GAAP Reconciliations
Non-GAAP Reconciliations 4Q 3Q 4Q $ in thousands 2023 2024 2024 Calculation of Adjusted Salaries and Employee Benefits Salaries and employee benefits (GAAP) $ 66,982 $ 69,167 $ 71,588 Less: Early retirement program 1,032 (1) 200 Plus: Other 2 (1) - Total Adjusted Salaries and Employee Benefits (non-
Slide 38: Non-GAAP Reconciliations
Non-GAAP Reconciliations 4Q 3Q 4Q $ in thousands 2023 2024 2024 Calculation of Tangible Common Equity (TCE) Total common stockholders’ equity $ 3,426,488 $ 3,528,833 $ 3,528,872 Less: Intangible assets (1,433,444) (1,421,892) (1,418,041) Total tangible common stockholders’ equity $ 1,993,044 $ 2,106
Slide 39: Non-GAAP Reconciliations
Non-GAAP Reconciliations 4Q 3Q 4Q $ in thousands 2023 2024 2024 Calculation of Uninsured, Non-Collateralized Deposit Coverage Ratio Uninsured deposits at Simmons Bank $ 8,328,444 $ 8,355,496 $ 8,467,291 Less: Collateralized deposits (excluding portion that is FDIC insured) 2,846,716 2,710,167 2,790,
Slide 40: 4th Quarter 2024 Earnings Presentation
Nasdaq: SFNC 4th Quarter 2024 Earnings Presentation Contents 2 Company Profile 4 4Q24 Financial Highlights 11 Deposits, Securities, Liquidity, Interest Rate Sensitivity and Capital 17 Loan Portfolio 23 Credit Quality 27 2025 Outlook 30 Appendix
Simmons First National — Q4 2024 Earnings Presentation on 6ix