UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 24, 2023
SIMMONS FIRST NATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Arkansas | 0-6253 | 71-0407808 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
501 Main Street, Pine Bluff, Arkansas | 71601 | |
(Address of principal executive offices) | (Zip Code) |
(870) 541-1000
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common stock, par value $0.01 per share | SFNC | The Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 | Results of Operations and Financial Condition. |
On October 24, 2023, the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information provided pursuant to this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (“Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933 (“Securities Act”) or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 7.01 | Regulation FD Disclosure. |
On October 24, 2023, the Registrant issued an investor presentation, a copy of which is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
The information provided pursuant to this Item 7.01, including Exhibit 99.2, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Registrant under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 | Financial Statements and Exhibits. |
Exhibit 99.1 | Press Release dated October 24, 2023 | |
Exhibit 99.2 | Investor Presentation issued on October 24, 2023 | |
Exhibit 104 | Cover Page Interactive Data File (embedded within the Inline XBRL Document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SIMMONS FIRST NATIONAL CORPORATION | |
/s/ James M. Brogdon | |
Date: October 24, 2023 | James M. Brogdon, President and Chief |
Financial Officer |
Exhibit 99.1
October 24, 2023
Simmons First National Corporation Reports Third Quarter 2023 Results
Bob Fehlman, Simmons’ Chief Executive Officer, commented on third quarter 2023 results: |
Simmons reported net income of $47.2 million and diluted earnings per share of $0.37 for the third quarter of 2023. Adjusted earnings1 were $48.8 million and adjusted earnings per share1 were $0.39. While the current economic and interest rate environment continues to pose challenges to the financial services industry, we remain resolute on serving our customers’ financial needs while diligently focusing on maintaining strong asset quality, capital and liquidity positions.
Our results also reflect our efforts aimed at optimizing our balance sheet and our Better Bank Initiative. On a year-over-year basis, average loans were up 9 percent and average deposits were up 3 percent as we continued to reinvest cash flows from our securities portfolio to fund loan growth and reduce wholesale borrowings. With respect to our Better Bank Initiative, we were able to achieve all of the original $15 million of annual cost savings we previously estimated one quarter sooner than anticipated.
Financial Highlights | 3Q23 | 2Q23 | 3Q22 | Q3 23 Highlights | |
Balance Sheet (in millions) |
Comparisons reflect Q3 23 vs Q3 22
· Net income of $47.2 million and diluted EPS of $0.37
· Adjusted earnings1 of $48.8 million and adjusted diluted EPS1 of $0.39
· Execution of Better Bank Initiative and focus on expense management leads to 5 percent decline in noninterest expense
· Total revenue of $196.2 million; PPNR1 of $64.2 million; Adjusted PPNR1 of $66.3 million
· Decline in average total assets reflects strategic decision to reduce higher rate wholesale funding
· ACL ratio ends the quarter at 1.30%; NCO ratio includes a single credit that accounted for 23 bps of total 28 bps
· Book value per share up 6% and tangible book value per share1 up 9%
· Repurchased 1.1 million shares in the quarter |
||||
Total assets | $27,564 | $27,959 | $27,076 | ||
Total deposits | 22,231 | 22,489 | 22,149 | ||
Total loans | 16,772 | 16,834 | 15,607 | ||
Total investment securities | 7,101 | 7,337 | 7,725 | ||
Total shareholders’ equity | 3,286 | 3,356 | 3,157 | ||
Asset Quality | |||||
Net charge-off ratio | 0.28% | 0.04% | -% | ||
Nonperforming loan ratio | 0.49 | 0.43 | 0.37 | ||
Nonperforming assets to total assets | 0.32 | 0.28 | 0.23 | ||
Allowance for credit losses to total loans | 1.30 | 1.25 | 1.27 | ||
Nonperforming loan coverage ratio | 267 | 292 | 342 | ||
Capital Ratios | |||||
Equity to assets | 11.92% | 12.00% | 11.66% | ||
Tangible common equity (TCE) ratio1 | 7.07 | 7.22 | 6.69 | ||
Common equity tier 1 (CET1) ratio | 12.02 | 11.92 | 11.73 | ||
Total risk-based capital ratio | 14.27 | 14.17 | 14.08 | ||
Liquidity ($ in millions) | |||||
Loan to deposit ratio | 75.44% | 74.85% | 70.47% | ||
Borrowed funds to total liabilities | 7.37 | 7.49 | 6.27 | ||
Uninsured, non-collateralized deposits (UCD) | $ 4,631 | $ 4,802 | $5,782 | ||
Additional liquidity sources | 11,447 | 11,096 | 8,709 | ||
Coverage ratio of UCD | 2.5x | 2.3x | 1.5x | ||
Performance Measures (in millions) | |||||
Total revenue | $196.2 | $208.2 | $236.6 | ||
Pre-provision net revenue1 (PPNR) | 64.2 | 68.9 | 97.7 | ||
Adjusted pre-provision net revenue1 | 66.3 | 72.6 | 100.0 | ||
Provision for credit losses | 7.7 | 0.1 | 0.1 | ||
Noninterest income | 42.8 | 45.0 | 43.0 | ||
Noninterest expense | 132.0 | 139.7 | 138.9 |
Simmons First National Corporation (NASDAQ: SFNC) (Simmons or Company) today reported net income of $47.2 million for the third quarter of 2023, compared to $58.3 million for the second quarter of 2023 and $80.6 million for the third quarter of 2022. Diluted earnings per share were $0.37 for the third quarter of 2023, compared to $0.46 in the second quarter of 2023 and $0.63 in the third quarter of 2022. Adjusted earnings1 for the third quarter of 2023 were $48.8 million, compared to $61.1 million for the second quarter of 2023 and $82.3 million in the third quarter of 2022. A summary of certain items, consisting primarily of merger related costs, branch right-sizing costs and early retirement program costs, are described in the “Reconciliation of Non-GAAP Financial Measures” tables below.
Net Interest Income
Net interest income for the third quarter of 2023 totaled $153.4 million, compared to $163.2 million in the second quarter of 2023 and $193.6 million for the third quarter of 2022. Included in net interest income is accretion recognized on assets acquired, which totaled $2.1 million in the third quarter of 2023, $2.3 million in the second quarter of 2023 and $5.8 million in the third quarter of 2022. On a linked quarter basis, interest income increased $13.1 million and interest expense increased $22.9 million. While the higher interest rate environment positively impacted interest income, the corresponding increase in interest expense was driven by an increase in deposit costs, continued customer migration to higher rate deposit products and pricing measures instituted to defend market share, offset in part by a decrease in other wholesale borrowings costs, primarily Federal Home Loan Bank advances.
The yield on loans on a fully taxable equivalent (FTE) basis for the third quarter of 2023 was 6.08 percent, compared to 5.89 percent in the second quarter of 2023 and 4.86 percent in the third quarter of 2022. The yield on investment securities on an FTE basis for the third quarter of 2023 was 3.08 percent, compared to 2.91 percent in the second quarter of 2023 and 2.29 percent in the third quarter of 2022. Cost of deposits for the third quarter of 2023 was 2.37 percent, compared to 1.96 percent in the second quarter of 2023 and 0.47 percent in the third quarter of 2022. The net interest margin on an FTE basis for the third quarter of 2023 was 2.61 percent, compared to 2.76 percent in the second quarter of 2023 and 3.34 percent in the third quarter of 2022.
Select Yield/Rates | Q3 23 | Q2 23 | Q1 23 | Q4 22 | Q3 22 | |||||||||||||||
Loan yield (FTE)2 | 6.08 | % | 5.89 | % | 5.67 | % | 5.40 | % | 4.86 | % | ||||||||||
Investment securities yield (FTE)2 | 3.08 | 2.91 | 2.92 | 2.68 | 2.29 | |||||||||||||||
Cost of interest bearing deposits | 3.06 | 2.57 | 2.10 | 1.41 | 0.65 | |||||||||||||||
Cost of deposits | 2.37 | 1.96 | 1.58 | 1.02 | 0.47 | |||||||||||||||
Cost of borrowed funds | 5.60 | 5.31 | 4.29 | 3.92 | 2.66 | |||||||||||||||
Net interest spread (FTE)2 | 1.87 | 2.10 | 2.52 | 2.87 | 3.11 | |||||||||||||||
Net interest margin (FTE)2 | 2.61 | 2.76 | 3.09 | 3.31 | 3.34 |
Noninterest Income
Noninterest income for the third quarter of 2023 was $42.8 million, compared to $45.0 million in the second quarter of 2023 and $43.0 million in the third quarter of 2022. The decline in service charges on deposits accounts, both on a linked quarter and a year-over-year basis, was primarily due to certain insufficient funds fee structure changes for consumer deposit accounts that were implemented during the third quarter of 2023. The decrease in other income on a linked quarter basis was primarily due to the positive impact of fair value adjustments associated with certain equity investments recorded in the second quarter of 2023.
Noninterest Income $ in millions |
Q3 23 | Q2 23 | Q1 23 | Q4 22 | Q3 22 | |||||||||||||||
Service charges on deposit accounts | $ | 12.4 | $ | 12.9 | $ | 12.4 | $ | 11.9 | $ | 12.6 | ||||||||||
Wealth management fees | 7.7 | 7.4 | 7.4 | 8.2 | 8.6 | |||||||||||||||
Debit and credit card fees | 7.7 | 8.0 | 8.0 | 7.8 | 7.7 | |||||||||||||||
Mortgage lending income | 2.2 | 2.4 | 1.6 | 1.1 | 2.6 | |||||||||||||||
Other service charges and fees | 2.2 | 2.3 | 2.3 | 2.0 | 2.1 | |||||||||||||||
Bank owned life insurance | 3.1 | 2.6 | 3.0 | 3.0 | 2.9 | |||||||||||||||
Gain (loss) on sale of securities | - | (0.4 | ) | - | (0.1 | ) | - | |||||||||||||
Gain on insurance settlement | - | - | - | 4.1 | - | |||||||||||||||
Other income | 7.4 | 9.8 | 11.3 | 6.6 | 6.7 | |||||||||||||||
Total noninterest income | $ | 42.8 | $ | 45.0 | $ | 45.8 | $ | 44.6 | $ | 43.0 | ||||||||||
Adjusted noninterest income1 | $ | 42.8 | $ | 45.0 | $ | 45.8 | $ | 40.6 | $ | 42.7 |
Noninterest Expense
Noninterest expense for the third quarter of 2023 was $132.0 million, compared to $139.7 million in the second quarter of 2023 and $138.9 million in the third quarter of 2022. Included in noninterest expense are certain items consisting primarily of early retirement program, branch right sizing and merger related costs, totaling $2.1 million in the third quarter of 2023, $3.7 million in the second quarter of 2023 and $2.6 million in the third quarter of 2022. Excluding these items (which are described in the “Reconciliation of Non-GAAP Financial Measures” tables below), adjusted noninterest expense1 was $129.9 million in the third quarter of 2023, $136.0 million in the second quarter of 2023 and $136.4 million in the third quarter of 2022. The decrease in noninterest expense was primarily due to a decrease in salaries and employee benefits. The decrease in adjusted noninterest expense on a linked quarter basis was primarily attributable to a $5.3 million decrease in salaries and employee benefits, reflecting the successful execution of programs as part of our Better Bank Initiative, as well as a $4.0 million accrual adjustment recorded in the third quarter of 2023 related to incentive plans.
Noninterest Expense $ in millions |
Q3 23 | Q2 23 | Q1 23 | Q4 22 | Q3 22 | |||||||||||||||
Salaries and employee benefits | $ | 67.4 | $ | 74.7 | $ | 77.0 | $ | 73.0 | $ | 71.9 | ||||||||||
Occupancy expense, net | 12.0 | 11.4 | 11.6 | 11.6 | 11.7 | |||||||||||||||
Furniture and equipment | 5.1 | 5.1 | 5.1 | 5.4 | 5.4 | |||||||||||||||
Deposit insurance | 4.7 | 5.2 | 4.9 | 3.7 | 3.3 | |||||||||||||||
Other real estate and foreclosure expense | 0.2 | 0.3 | 0.2 | 0.4 | 0.2 | |||||||||||||||
Merger related costs | - | - | 1.4 | - | 1.4 | |||||||||||||||
Other operating expenses | 42.6 | 42.9 | 43.1 | 48.5 | 45.1 | |||||||||||||||
Total noninterest expense | $ | 132.0 | $ | 139.7 | $ | 143.2 | $ | 142.6 | $ | 138.9 | ||||||||||
Adjusted salaries and employee benefits1 | $ | 65.8 | $ | 71.1 | $ | 77.0 | $ | 73.0 | $ | 71.9 | ||||||||||
Adjusted other operating expenses1 | 42.1 | 43.0 | 42.3 | 47.5 | 44.1 | |||||||||||||||
Adjusted noninterest expense1 | 129.9 | 136.0 | 140.9 | 141.4 | 136.4 | |||||||||||||||
Efficiency ratio | 65.11 | % | 65.18 | % | 62.28 | % | 58.33 | % | 57.22 | % | ||||||||||
Adjusted efficiency ratio1 | 61.94 | 61.29 | 59.38 | 56.97 | 54.41 | |||||||||||||||
Full-time equivalent employees | 3,005 | 3,066 | 3,189 | 3,236 | 3,206 |
Loans and Unfunded Loan Commitments
Total loans at the end of the third quarter of 2023 were $16.8 billion, up $1.2 billion, or 7 percent, compared to $15.6 billion at the end of the third quarter of 2022. Total loans on a linked quarter basis were relatively unchanged, reflecting moderating demand and increased payoff activity in the quarter, as well as our focus on maintaining disciplined pricing and conservative underwriting standards given the current economic environment. Unfunded commitments at the end of the third quarter of 2023 were $4.0 billion, compared to $4.4 billion at the end of the second quarter of 2023 and $5.1 billion at the end of the third quarter of 2022. Conversely, during the third quarter of 2023 our commercial loan pipeline saw increased activity compared to the second quarter of 2023. Commercial loans approved and ready to close at the end of the third quarter of 2023 were $433 million compared to $274 million at the end of the second quarter of 2023, and the rate on ready to close commercial loans was 8.43 percent, up 49 basis points on a linked quarter basis.
Loans and Unfunded Commitments $ in millions |
Q3 23 | Q2 23 | Q1 23 | Q4 22 | Q3 22 | |||||||||||||||
Total loans | $ | 16,772 | $ | 16,834 | $ | 16,555 | $ | 16,142 | $ | 15,607 | ||||||||||
Unfunded loan commitments | 4,049 | 4,443 | 4,725 | 5,000 | 5,138 |
Deposits
Total deposits at the end of the third quarter of 2023 were $22.2 billion, compared to $22.5 billion at the end of the second quarter of 2023 and $22.1 billion at the end of the third quarter of 2022. While the overall level of deposits has been relatively stable, the change in mix of deposits, both on a linked quarter and year-over-year basis, reflected continued customer migration into higher rate deposits, principally certificates of deposit, given the rapid rise in interest rates, as well as increased market competition. Noninterest bearing deposits totaled $5.0 billion, compared to $5.3 billion at the end of the second quarter of 2023 and $6.2 billion at the end of the third quarter of 2022. Interest bearing transaction accounts (including savings accounts) totaled $10.6 billion at the end of the third quarter of 2023, compared to $10.9 billion at the end of the second quarter of 2023 and $12.1 billion at the end of the third quarter of 2022. Time deposits totaled $6.7 billion at the end of the third quarter of 2023, compared to $6.4 billion at the end of the second quarter of 2023 and $3.8 billion at the end of the third quarter of 2022.
Deposits $ in millions |
Q3 23 | Q2 23 | Q1 23 | Q4 22 | Q3 22 | |||||||||||||||
Noninterest bearing deposits | $ | 4,991 | $ | 5,265 | $ | 5,489 | $ | 6,017 | $ | 6,218 | ||||||||||
Interest bearing transaction accounts | 10,572 | 10,866 | 11,284 | 11,763 | 12,104 | |||||||||||||||
Time deposits | 6,668 | 6,358 | 5,679 | 4,768 | 3,827 | |||||||||||||||
Total deposits | $ | 22,231 | $ | 22,489 | $ | 22,452 | $ | 22,548 | $ | 22,149 | ||||||||||
Noninterest bearing deposits to total deposits | 22 | % | 23 | % | 24 | % | 27 | % | 28 | % | ||||||||||
Total loans to total deposits | 75 | 75 | 74 | 72 | 70 |
Asset Quality
Total nonperforming loans at the end of the third quarter of 2023 were $81.9 million, compared to $72.0 million at the end of the second quarter of 2023 and $57.8 million at the end of the third quarter of 2022. Total nonperforming assets as a percentage of total assets were 0.32 percent at the end of the third quarter of 2023, compared to 0.28 percent at the end of the second quarter of 2023 and 0.23 percent at the end of the third quarter of 2022. The increase in nonperforming assets on a linked quarter basis reflected a commercial credit totaling approximately $8.0 million that was classified as nonperforming during the third quarter, offset in part by payoffs received on previously identified nonaccrual commercial and agricultural loans. Net charge-offs as a percentage of average loans for the third quarter of 2023 were 28 basis points, compared to 4 basis points for the second quarter of 2023 and less than 1 basis point in the third quarter of 2022. The increase in net charge-offs was primarily due to a $9.6 million charge-off on a nursing/extended care related credit following a comprehensive review of this portfolio during the quarter. This charge-off accounted for 23 basis points of the 28 basis points of total net charge-offs recorded in the third quarter of 2023.
Provision for credit losses totaled $7.7 million in the third quarter of 2023, compared to $0.1 million in both the second quarter of 2023 and the third quarter of 2022. The increase in provision for credit losses on a sequential and year-over-year basis reflected portfolio activity and changes in macroeconomic variables. The allowance for credit losses at the end of the third quarter of 2023 was $218.5 million, compared to $210.0 million at the end of the second quarter of 2023 and $197.6 million at the end of the third quarter of 2022. The allowance for credit losses as a percentage of total loans at the end of the third quarter of 2023 was 1.30 percent, compared to 1.25 percent at the end of the second quarter of 2023 and 1.27 percent at the end of the third quarter of 2022. The nonperforming loan coverage ratio ended the quarter at 267 percent, compared to 292 percent at the end of the second quarter of 2023 and 342 percent at the end of the third quarter of 2022. The reserve for unfunded commitments totaled $25.6 million at the end of the third quarter of 2023, compared to $36.9 million at the end of the second quarter of 2023 and $41.9 million at the end of the third quarter of 2022. The decrease in the reserve for unfunded commitments reflects a lower level of unfunded commitments as customers continue to utilize available lines of credit.
Asset Quality $ in millions |
Q3 23 | Q2 23 | Q1 23 | Q4 22 | Q3 22 | |||||||||||||||
Allowance for credit losses on loans to total loans | 1.30 | % | 1.25 | % | 1.25 | % | 1.22 | % | 1.27 | % | ||||||||||
Allowance for credit losses on loans to nonperforming loans | 267 | 292 | 324 | 334 | 342 | |||||||||||||||
Nonperforming loans to total loans | 0.49 | 0.43 | 0.38 | 0.37 | 0.37 | |||||||||||||||
Net charge-off ratio (annualized) | 0.28 | 0.04 | 0.03 | 0.13 | - | |||||||||||||||
Net charge-off ratio YTD (annualized) | 0.12 | 0.04 | 0.03 | 0.09 | 0.07 | |||||||||||||||
Total nonperforming loans | $ | 81.9 | $ | 72.0 | $ | 63.7 | $ | 58.9 | $ | 57.8 | ||||||||||
Total other nonperforming assets | 5.2 | 4.9 | 7.7 | 3.6 | 4.7 | |||||||||||||||
Total nonperforming assets | $ | 87.1 | $ | 76.9 | $ | 71.4 | $ | 62.5 | $ | 62.5 | ||||||||||
Reserve for unfunded commitments | $ | 25.6 | $ | 36.9 | $ | 41.9 | $ | 41.9 | $ | 41.9 |
Capital
Total common stockholders’ equity at the end of the third quarter of 2023 was $3.3 billion, compared to $3.4 billion at the end of the second quarter of 2023 and $3.2 billion at the end of the third quarter of 2022. Book value per share at the end of the third quarter of 2023 was $26.26, compared to $26.59 at the end of the second quarter of 2023 and $24.87 at the end of the third quarter of 2022. Tangible book value per share1 was $14.77 at the end of the third quarter of 2023, compared to $15.17 at the end of the second quarter of 2023 and $13.51 at the end of the third quarter of 2022. Stockholders’ equity as a percentage of total assets at September 30, 2023, was 11.9 percent, compared to 12.0 percent at June 30, 2023, and 11.7 percent at September 30, 2022. Tangible common equity as a percentage of tangible assets1 was 7.1 percent at September 30, 2023, compared to 7.2 percent at June 30, 2023, and 6.7 percent at September 30, 2022. Simmons maintained a strong regulatory capital position, with all regulatory capital ratios continuing to significantly exceed “well capitalized” guidelines.
Select Capital Ratios | Q3 23 | Q2 23 | Q1 23 | Q4 22 | Q3 22 | |||||||||||||||
Stockholders’ equity to total assets | 11.9 | % | 12.0 | % | 12.1 | % | 11.9 | % | 11.7 | % | ||||||||||
Tangible common equity to tangible assets1 | 7.1 | 7.2 | 7.3 | 7.0 | 6.7 | |||||||||||||||
Common equity tier 1 (CET1) ratio | 12.0 | 11.9 | 11.9 | 11.9 | 11.7 | |||||||||||||||
Tier 1 leverage ratio | 9.3 | 9.2 | 9.2 | 9.3 | 9.2 | |||||||||||||||
Tier 1 risk-based capital ratio | 12.0 | 11.9 | 11.9 | 11.9 | 11.7 | |||||||||||||||
Total risk-based capital ratio | 14.3 | 14.2 | 14.5 | 14.2 | 14.1 |
Share Repurchase Program
During the third quarter of 2023, Simmons repurchased approximately 1.1 million shares of its Class A common stock at an average price of $17.69 under its 2022 stock repurchase program (2022 Program). Remaining authorization under the 2022 Program as of September 30, 2023, was approximately $40 million. Market conditions and our capital needs (among other things) will drive decisions regarding future stock repurchases, if any; the timing, pricing and amount of any repurchases under the 2022 Program will be determined by Simmons’ management at its discretion; and the 2022 Program does not obligate Simmons to repurchase any common stock and may be modified, discontinued or suspended at any time without prior notice.
(1) Non-GAAP measurement. See “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below
(2) FTE – fully taxable equivalent basis using an effective tax rate of 26.135%
Conference Call
Management will conduct a live conference call to review this information beginning at 9:00 a.m. Central Time today, Tuesday, October 24, 2023. Interested persons can listen to this call by dialing toll-free 1-844-481-2779 (North America only) and asking for the Simmons First National Corporation conference call, conference ID 10182813. In addition, the call will be available live or in recorded version on Simmons’ website at simmonsbank.com for at least 60 days following the date of the call.
Simmons First National Corporation
Simmons First National Corporation (NASDAQ: SFNC) is a Mid-South based financial holding company that has paid cash dividends to its shareholders for 114 consecutive years. Its principal subsidiary, Simmons Bank, operates 232 branches in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas. Founded in 1903, Simmons Bank offers comprehensive financial solutions delivered with a client-centric approach. In 2023, Simmons Bank was recognized by Forbes as one of America’s Best Midsize Employers and among the World’s Best Banks for the fourth consecutive year. In 2022, Simmons Bank was named to Forbes’ list of "America's Best Banks" for the second consecutive year. Additional information about Simmons Bank can be found on our website at simmonsbank.com, by following @Simmons_Bank on X (formerly Twitter) or by visiting our newsroom.
Non-GAAP Financial Measures
This press release contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (GAAP). The Company’s management uses these non-GAAP financial measures in their analysis of the Company’s performance. These measures adjust GAAP performance measures to, among other things, include the tax benefit associated with revenue items that are tax-exempt, as well as exclude from net income (including on a per share diluted basis), pre-tax, pre-provision earnings, net charge-offs, income available to common shareholders, non-interest income, and non-interest expense certain income and expense items attributable to, for example, merger activity (primarily including merger-related expenses and Day 2 CECL provisions), gains and/or losses on sale of branches, net branch right-sizing initiatives, loss on redemption of trust preferred securities and gain on sale of intellectual property. In addition, the Company also presents certain figures based on tangible common stockholders’ equity, tangible assets and tangible book value, which exclude goodwill and other intangible assets. The Company further presents certain figures that are exclusive of the impact of PPP loans, deposits and/or loans acquired through acquisitions, mortgage warehouse loans, and/or energy loans, or gains and/or losses on the sale of securities. The Company’s management believes that these non-GAAP financial measures are useful to investors because they, among other things, present the results of the Company’s ongoing operations without the effect of mergers or other items not central to the Company’s ongoing business, as well as normalize for tax effects, the effects of the PPP, and certain other effects. Management, therefore, believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s ongoing businesses, and management uses these non-GAAP financial measures to assess the performance of the Company’s ongoing businesses as related to prior financial periods. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the tables of this release.
Forward-Looking Statements
Certain statements in this press release may not be based on historical facts and should be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, including, without limitation, statements made in Mr. Fehlman’s quote, may be identified by reference to future periods or by the use of forward-looking terminology, such as “believe,” “budget,” “expect,” “foresee,” “anticipate,” “intend,” “indicate,” “target,” “estimate,” “plan,” “project,” “continue,” “contemplate,” “positions,” “prospects,” “predict,” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could,” “might” or “may,” or by variations of such words or by similar expressions. These forward-looking statements include, without limitation, statements relating to Simmons’ future growth, business strategies, lending capacity and lending activity, loan demand, revenue, assets, asset quality, profitability, dividends, net interest margin, non-interest revenue, share repurchase program, acquisition strategy, digital banking initiatives, the Company’s ability to recruit and retain key employees, the estimated cost savings associated with the Company’s Better Bank Initiative, the adequacy of the allowance for credit losses, and future economic conditions and interest rates. Any forward-looking statement speaks only as of the date of this press release, and Simmons undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this press release. By nature, forward-looking statements are based on various assumptions and involve inherent risk and uncertainties. Various factors, including, but not limited to, changes in economic conditions, changes in credit quality, changes in interest rates and related governmental policies, changes in loan demand, changes in deposit flows, changes in real estate values, changes in the assumptions used in making the forward-looking statements, changes in the securities markets generally or the price of Simmons’ common stock specifically, and changes in information technology affecting the financial industry; changes in customer behaviors, including consumer spending, borrowing, and saving habits; general economic and market conditions; market disruptions including pandemics or significant health hazards, severe weather conditions, natural disasters, terrorist activities, financial crises, political crises, war and other military conflicts (including the ongoing military conflicts between Russia and Ukraine and between Israel and Hamas) or other major events, or the prospect of these events; the soundness of other financial institutions and indirect exposure related to the closings of Silicon Valley Bank (SVB), Signature Bank and Silvergate Bank and their impact on the broader market through other customers, suppliers and partners (or that the conditions which resulted in the liquidity concerns with SVB, Signature Bank and Silvergate Bank may also adversely impact, directly or indirectly, other financial institutions and market participants with which the Company has commercial or deposit relationships); increased inflation; the loss of key employees; increased competition in the markets in which the Company operates; increased unemployment; labor shortages; claims, damages, and fines related to litigation or government actions; changes in accounting principles relating to loan loss recognition (current expected credit losses); the Company’s ability to manage and successfully integrate its mergers and acquisitions and to fully realize cost savings and other benefits associated with those transactions; cyber threats, attacks or events; reliance on third parties for key services; government legislation; and other factors, many of which are beyond the control of the Company, could cause actual results to differ materially from those projected in or contemplated by the forward-looking statements. Additional information on factors that might affect the Company’s financial results is included in the Company’s Form 10-K for the year ended December 31, 2022, the Company’s Form 10-Q for the quarterly period ended March 31, 2023, and other reports that the Company has filed with or furnished to the U.S. Securities and Exchange Commission (the SEC), all of which are available from the SEC on its website, www.sec.gov. In addition, there can be no guarantee that the board of directors (Board) of Simmons will approve a quarterly dividend in future quarters, and the timing, payment, and amount of future dividends (if any) is subject to, among other things, the discretion of the Board and may differ significantly from past dividends.
FOR MORE INFORMATION CONTACT:
Ed Bilek, EVP, Director of Investor and Media Relations
ed.bilek@simmonsbank.com or 205.612.3378 (cell)
Simmons First National Corporation | SFNC | |||||||||||||||||||
Consolidated End of Period Balance Sheets | ||||||||||||||||||||
For the Quarters Ended | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |||||||||||||||
(Unaudited) | 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||
Cash and noninterest bearing balances due from banks | $ | 181,822 | $ | 181,268 | $ | 199,316 | $ | 200,616 | $ | 175,547 | ||||||||||
Interest bearing balances due from banks and federal funds sold | 423,826 | 564,644 | 325,135 | 481,506 | 503,863 | |||||||||||||||
Cash and cash equivalents | 605,648 | 745,912 | 524,451 | 682,122 | 679,410 | |||||||||||||||
Interest bearing balances due from banks - time | 100 | 545 | 795 | 795 | 1,290 | |||||||||||||||
Investment securities - held-to-maturity | 3,742,292 | 3,756,754 | 3,765,483 | 3,759,706 | 3,787,076 | |||||||||||||||
Investment securities - available-for-sale | 3,358,421 | 3,579,758 | 3,755,956 | 3,852,854 | 3,937,543 | |||||||||||||||
Mortgage loans held for sale | 11,690 | 10,342 | 4,244 | 3,486 | 12,759 | |||||||||||||||
Other loans held for sale | - | - | - | - | 2,292 | |||||||||||||||
Loans: | ||||||||||||||||||||
Loans | 16,771,888 | 16,833,653 | 16,555,098 | 16,142,124 | 15,607,135 | |||||||||||||||
Allowance for credit losses on loans | (218,547 | ) | (209,966 | ) | (206,557 | ) | (196,955 | ) | (197,589 | ) | ||||||||||
Net loans | 16,553,341 | 16,623,687 | 16,348,541 | 15,945,169 | 15,409,546 | |||||||||||||||
Premises and equipment | 567,167 | 562,025 | 564,497 | 548,741 | 549,932 | |||||||||||||||
Foreclosed assets and other real estate owned | 3,809 | 3,909 | 2,721 | 2,887 | 3,612 | |||||||||||||||
Interest receivable | 110,361 | 103,431 | 98,775 | 102,892 | 86,637 | |||||||||||||||
Bank owned life insurance | 497,465 | 494,370 | 493,191 | 491,340 | 488,364 | |||||||||||||||
Goodwill | 1,320,799 | 1,320,799 | 1,320,799 | 1,319,598 | 1,309,000 | |||||||||||||||
Other intangible assets | 116,660 | 120,758 | 124,854 | 128,951 | 133,059 | |||||||||||||||
Other assets | 676,572 | 636,833 | 579,139 | 622,520 | 675,554 | |||||||||||||||
Total assets | $ | 27,564,325 | $ | 27,959,123 | $ | 27,583,446 | $ | 27,461,061 | $ | 27,076,074 | ||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Noninterest bearing transaction accounts | $ | 4,991,034 | $ | 5,264,962 | $ | 5,489,434 | $ | 6,016,651 | $ | 6,218,283 | ||||||||||
Interest bearing transaction accounts and savings deposits | 10,571,807 | 10,866,078 | 11,283,584 | 11,762,885 | 12,103,994 | |||||||||||||||
Time deposits | 6,668,370 | 6,357,682 | 5,678,757 | 4,768,558 | 3,826,415 | |||||||||||||||
Total deposits | 22,231,211 | 22,488,722 | 22,451,775 | 22,548,094 | 22,148,692 | |||||||||||||||
Federal funds purchased and securities sold | ||||||||||||||||||||
under agreements to repurchase | 74,482 | 102,586 | 142,862 | 160,403 | 168,513 | |||||||||||||||
Other borrowings | 1,347,855 | 1,373,339 | 1,023,826 | 859,296 | 964,772 | |||||||||||||||
Subordinated notes and debentures | 366,103 | 366,065 | 366,027 | 365,989 | 365,951 | |||||||||||||||
Accrued interest and other liabilities | 259,119 | 272,085 | 259,055 | 257,917 | 270,995 | |||||||||||||||
Total liabilities | 24,278,770 | 24,602,797 | 24,243,545 | 24,191,699 | 23,918,923 | |||||||||||||||
Stockholders' equity: | ||||||||||||||||||||
Common stock | 1,251 | 1,262 | 1,273 | 1,270 | 1,269 | |||||||||||||||
Surplus | 2,497,874 | 2,516,398 | 2,533,589 | 2,530,066 | 2,527,153 | |||||||||||||||
Undivided profits | 1,330,810 | 1,308,654 | 1,275,720 | 1,255,586 | 1,196,459 | |||||||||||||||
Accumulated other comprehensive (loss) income | (544,380 | ) | (469,988 | ) | (470,681 | ) | (517,560 | ) | (567,730 | ) | ||||||||||
Total stockholders' equity | 3,285,555 | 3,356,326 | 3,339,901 | 3,269,362 | 3,157,151 | |||||||||||||||
Total liabilities and stockholders' equity | $ | 27,564,325 | $ | 27,959,123 | $ | 27,583,446 | $ | 27,461,061 | $ | 27,076,074 |
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Simmons First National Corporation | SFNC | |||||||||||||||||||
Consolidated Statements of Income - Quarter-to-Date | ||||||||||||||||||||
For the Quarters Ended | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |||||||||||||||
(Unaudited) | 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
($ in thousands, except per share data) | ||||||||||||||||||||
INTEREST INCOME | ||||||||||||||||||||
Loans (including fees) | $ | 255,901 | $ | 244,292 | $ | 227,498 | $ | 216,091 | $ | 187,347 | ||||||||||
Interest bearing balances due from banks and federal funds sold | 3,569 | 4,023 | 2,783 | 2,593 | 1,141 | |||||||||||||||
Investment securities | 50,638 | 48,751 | 48,774 | 45,689 | 40,954 | |||||||||||||||
Mortgage loans held for sale | 178 | 154 | 82 | 152 | 178 | |||||||||||||||
Other loans held for sale | - | - | - | 59 | 998 | |||||||||||||||
TOTAL INTEREST INCOME | 310,286 | 297,220 | 279,137 | 264,584 | 230,618 | |||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||||
Time deposits | 68,062 | 53,879 | 39,538 | 22,434 | 8,204 | |||||||||||||||
Other deposits | 65,095 | 54,485 | 47,990 | 34,615 | 17,225 | |||||||||||||||
Federal funds purchased and securities | ||||||||||||||||||||
sold under agreements to repurchase | 277 | 318 | 323 | 449 | 305 | |||||||||||||||
Other borrowings | 16,450 | 18,612 | 8,848 | 9,263 | 6,048 | |||||||||||||||
Subordinated notes and debentures | 6,969 | 6,696 | 4,603 | 4,797 | 5,251 | |||||||||||||||
TOTAL INTEREST EXPENSE | 156,853 | 133,990 | 101,302 | 71,558 | 37,033 | |||||||||||||||
NET INTEREST INCOME | 153,433 | 163,230 | 177,835 | 193,026 | 193,585 | |||||||||||||||
PROVISION FOR CREDIT LOSSES | ||||||||||||||||||||
Provision for credit losses on loans | 20,222 | 5,061 | 10,916 | 26 | (15,897 | ) | ||||||||||||||
Provision for credit losses on unfunded commitments | (11,300 | ) | (5,000 | ) | - | - | 16,000 | |||||||||||||
Provision for credit losses on investment securities - AFS | (1,200 | ) | (1,326 | ) | 12,800 | - | - | |||||||||||||
Provision for credit losses on investment securities - HTM | - | 1,326 | 500 | - | - | |||||||||||||||
TOTAL PROVISION FOR CREDIT LOSSES | 7,722 | 61 | 24,216 | 26 | 103 | |||||||||||||||
NET INTEREST INCOME AFTER PROVISION | ||||||||||||||||||||
FOR CREDIT LOSSES | 145,711 | 163,169 | 153,619 | 193,000 | 193,482 | |||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||||
Service charges on deposit accounts | 12,429 | 12,882 | 12,437 | 11,892 | 12,560 | |||||||||||||||
Debit and credit card fees | 7,712 | 7,986 | 7,952 | 7,845 | 7,685 | |||||||||||||||
Wealth management fees | 7,719 | 7,440 | 7,365 | 8,151 | 8,562 | |||||||||||||||
Mortgage lending income | 2,157 | 2,403 | 1,570 | 1,139 | 2,593 | |||||||||||||||
Bank owned life insurance income | 3,095 | 2,555 | 2,973 | 2,975 | 2,902 | |||||||||||||||
Other service charges and fees (includes insurance income) | 2,232 | 2,262 | 2,282 | 2,023 | 2,085 | |||||||||||||||
Gain (loss) on sale of securities | - | (391 | ) | - | (52 | ) | (22 | ) | ||||||||||||
Gain on insurance settlement | - | - | - | 4,074 | - | |||||||||||||||
Other income | 7,433 | 9,843 | 11,256 | 6,600 | 6,658 | |||||||||||||||
TOTAL NONINTEREST INCOME | 42,777 | 44,980 | 45,835 | 44,647 | 43,023 | |||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||
Salaries and employee benefits | 67,374 | 74,723 | 77,038 | 73,018 | 71,923 | |||||||||||||||
Occupancy expense, net | 12,020 | 11,410 | 11,578 | 11,620 | 11,674 | |||||||||||||||
Furniture and equipment expense | 5,117 | 5,128 | 5,051 | 5,392 | 5,394 | |||||||||||||||
Other real estate and foreclosure expense | 228 | 289 | 186 | 350 | 168 | |||||||||||||||
Deposit insurance | 4,672 | 5,201 | 4,893 | 3,680 | 3,278 | |||||||||||||||
Merger-related costs | 5 | 19 | 1,396 | 35 | 1,422 | |||||||||||||||
Other operating expenses | 42,582 | 42,926 | 43,086 | 48,480 | 45,084 | |||||||||||||||
TOTAL NONINTEREST EXPENSE | 131,998 | 139,696 | 143,228 | 142,575 | 138,943 | |||||||||||||||
NET INCOME BEFORE INCOME TAXES | 56,490 | 68,453 | 56,226 | 95,072 | 97,562 | |||||||||||||||
Provision for income taxes | 9,243 | 10,139 | 10,637 | 11,812 | 16,959 | |||||||||||||||
NET INCOME | $ | 47,247 | $ | 58,314 | $ | 45,589 | $ | 83,260 | $ | 80,603 | ||||||||||
BASIC EARNINGS PER SHARE | $ | 0.38 | $ | 0.46 | $ | 0.36 | $ | 0.66 | $ | 0.63 | ||||||||||
DILUTED EARNINGS PER SHARE | $ | 0.37 | $ | 0.46 | $ | 0.36 | $ | 0.65 | $ | 0.63 |
Page |
Simmons First National Corporation | SFNC | |||||||||||||||||||
Consolidated Risk-Based Capital | ||||||||||||||||||||
For the Quarters Ended | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |||||||||||||||
(Unaudited) | 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
Tier 1 capital | ||||||||||||||||||||
Stockholders' equity | $ | 3,285,555 | $ | 3,356,326 | $ | 3,339,901 | $ | 3,269,362 | $ | 3,157,151 | ||||||||||
CECL transition provision (1) | 61,746 | 61,746 | 61,746 | 92,619 | 92,619 | |||||||||||||||
Disallowed intangible assets, net of deferred tax | (1,402,682 | ) | (1,406,500 | ) | (1,410,141 | ) | (1,412,667 | ) | (1,416,453 | ) | ||||||||||
Unrealized loss (gain) on AFS securities | 544,380 | 469,988 | 470,681 | 517,560 | 567,730 | |||||||||||||||
Total Tier 1 capital | 2,488,999 | 2,481,560 | 2,462,187 | 2,466,874 | 2,401,047 | |||||||||||||||
Tier 2 capital | ||||||||||||||||||||
Subordinated notes and debentures | 366,103 | 366,065 | 366,027 | 365,989 | 365,951 | |||||||||||||||
Subordinated debt phase out | (66,000 | ) | (66,000 | ) | - | - | - | |||||||||||||
Qualifying allowance for loan losses and | ||||||||||||||||||||
reserve for unfunded commitments | 165,490 | 169,409 | 173,077 | 115,627 | 116,257 | |||||||||||||||
Total Tier 2 capital | 465,593 | 469,474 | 539,104 | 481,616 | 482,208 | |||||||||||||||
Total risk-based capital | $ | 2,954,592 | $ | 2,951,034 | $ | 3,001,291 | $ | 2,948,490 | $ | 2,883,255 | ||||||||||
Risk weighted assets | $ | 20,703,669 | $ | 20,821,075 | $ | 20,748,605 | $ | 20,738,727 | $ | 20,470,918 | ||||||||||
Adjusted average assets for leverage ratio | $ | 26,733,658 | $ | 26,896,289 | $ | 26,632,691 | $ | 26,407,061 | $ | 25,986,938 | ||||||||||
Ratios at end of quarter | ||||||||||||||||||||
Equity to assets | 11.92 | % | 12.00 | % | 12.11 | % | 11.91 | % | 11.66 | % | ||||||||||
Tangible common equity to tangible assets (2) | 7.07 | % | 7.22 | % | 7.25 | % | 7.00 | % | 6.69 | % | ||||||||||
Common equity Tier 1 ratio (CET1) | 12.02 | % | 11.92 | % | 11.87 | % | 11.90 | % | 11.73 | % | ||||||||||
Tier 1 leverage ratio | 9.31 | % | 9.23 | % | 9.24 | % | 9.34 | % | 9.24 | % | ||||||||||
Tier 1 risk-based capital ratio | 12.02 | % | 11.92 | % | 11.87 | % | 11.90 | % | 11.73 | % | ||||||||||
Total risk-based capital ratio | 14.27 | % | 14.17 | % | 14.47 | % | 14.22 | % | 14.08 | % |
(1) The Company has elected to use the CECL transition provision allowed for in the year of adopting ASC 326.
(2) Calculations of tangible common equity to tangible assets and the reconciliations to GAAP are included in the schedules accompanying this release.
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Simmons First National Corporation | SFNC | |||||||||||||||||||
Consolidated Investment Securities | ||||||||||||||||||||
For the Quarters Ended | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |||||||||||||||
(Unaudited) | 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
Investment Securities - End of Period | ||||||||||||||||||||
Held-to-Maturity | ||||||||||||||||||||
U.S. Government agencies | $ | 452,428 | $ | 451,737 | $ | 451,052 | $ | 448,012 | $ | 447,400 | ||||||||||
Mortgage-backed securities | 1,178,324 | 1,193,118 | 1,201,418 | 1,190,781 | 1,214,882 | |||||||||||||||
State and political subdivisions | 1,857,652 | 1,859,022 | 1,859,970 | 1,860,992 | 1,865,203 | |||||||||||||||
Other securities | 253,888 | 252,877 | 253,043 | 259,921 | 259,591 | |||||||||||||||
Total held-to-maturity (net of credit losses) | 3,742,292 | 3,756,754 | 3,765,483 | 3,759,706 | 3,787,076 | |||||||||||||||
Available-for-Sale | ||||||||||||||||||||
U.S. Treasury | $ | 2,224 | $ | 2,209 | $ | 2,220 | $ | 2,197 | $ | 2,191 | ||||||||||
U.S. Government agencies | 172,759 | 176,564 | 181,843 | 184,279 | 188,060 | |||||||||||||||
Mortgage-backed securities | 2,157,092 | 2,282,328 | 2,433,530 | 2,542,902 | 2,670,348 | |||||||||||||||
State and political subdivisions | 790,344 | 885,505 | 895,896 | 871,074 | 822,509 | |||||||||||||||
Other securities | 236,002 | 233,152 | 242,467 | 252,402 | 254,435 | |||||||||||||||
Total available-for-sale (net of credit losses) | 3,358,421 | 3,579,758 | 3,755,956 | 3,852,854 | 3,937,543 | |||||||||||||||
Total investment securities (net of credit losses) | $ | 7,100,713 | $ | 7,336,512 | $ | 7,521,439 | $ | 7,612,560 | $ | 7,724,619 | ||||||||||
Fair value - HTM investment securities | $ | 2,848,211 | $ | 3,094,958 | $ | 3,148,976 | $ | 3,063,233 | $ | 2,984,040 |
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Simmons First National Corporation | SFNC | |||||||||||||||||||
Consolidated Loans | ||||||||||||||||||||
For the Quarters Ended | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |||||||||||||||
(Unaudited) | 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
Loan Portfolio - End of Period | ||||||||||||||||||||
Consumer: | ||||||||||||||||||||
Credit cards | $ | 191,550 | $ | 209,452 | $ | 188,590 | $ | 196,928 | $ | 192,559 | ||||||||||
Other consumer | 112,832 | 148,333 | 142,817 | 152,882 | 180,604 | |||||||||||||||
Total consumer | 304,382 | 357,785 | 331,407 | 349,810 | 373,163 | |||||||||||||||
Real Estate: | ||||||||||||||||||||
Construction | 3,022,321 | 2,930,586 | 2,777,122 | 2,566,649 | 2,372,294 | |||||||||||||||
Single-family residential | 2,657,879 | 2,633,365 | 2,589,831 | 2,546,115 | 2,467,008 | |||||||||||||||
Other commercial real estate | 7,565,008 | 7,546,130 | 7,520,964 | 7,468,498 | 7,249,891 | |||||||||||||||
Total real estate | 13,245,208 | 13,110,081 | 12,887,917 | 12,581,262 | 12,089,193 | |||||||||||||||
Commercial: | ||||||||||||||||||||
Commercial | 2,477,077 | 2,569,330 | 2,669,731 | 2,632,290 | 2,525,218 | |||||||||||||||
Agricultural | 296,912 | 280,541 | 220,641 | 205,623 | 263,539 | |||||||||||||||
Total commercial | 2,773,989 | 2,849,871 | 2,890,372 | 2,837,913 | 2,788,757 | |||||||||||||||
Other | 448,309 | 515,916 | 445,402 | 373,139 | 356,022 | |||||||||||||||
Total loans | $ | 16,771,888 | $ | 16,833,653 | $ | 16,555,098 | $ | 16,142,124 | $ | 15,607,135 |
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Simmons First National Corporation | SFNC | |||||||||||||||||||
Consolidated Allowance and Asset Quality | ||||||||||||||||||||
For the Quarters Ended | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |||||||||||||||
(Unaudited) | 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
Allowance for Credit Losses on Loans | ||||||||||||||||||||
Beginning balance | $ | 209,966 | $ | 206,557 | $ | 196,955 | $ | 197,589 | $ | 212,611 | ||||||||||
Day 1 PCD allowance from acquisitions: | ||||||||||||||||||||
Spirit of Texas (04/08/2022) | - | - | - | 4,523 | 1,057 | |||||||||||||||
Total Day 1 PCD allowance | - | - | - | 4,523 | 1,057 | |||||||||||||||
Loans charged off: | ||||||||||||||||||||
Credit cards | 1,318 | 1,409 | 1,076 | 1,035 | 903 | |||||||||||||||
Other consumer | 633 | 666 | 456 | 439 | 505 | |||||||||||||||
Real estate | 9,723 | 435 | 1,204 | 3,392 | 130 | |||||||||||||||
Commercial | 1,219 | 1,225 | 413 | 5,389 | 1,874 | |||||||||||||||
Total loans charged off | 12,893 | 3,735 | 3,149 | 10,255 | 3,412 | |||||||||||||||
Recoveries of loans previously charged off: | ||||||||||||||||||||
Credit cards | 234 | 298 | 234 | 251 | 250 | |||||||||||||||
Other consumer | 344 | 436 | 240 | 230 | 278 | |||||||||||||||
Real estate | 429 | 878 | 294 | 4,117 | 1,982 | |||||||||||||||
Commercial | 245 | 471 | 1,067 | 475 | 720 | |||||||||||||||
Total recoveries | 1,252 | 2,083 | 1,835 | 5,073 | 3,230 | |||||||||||||||
Net loans charged off | 11,641 | 1,652 | 1,314 | 5,182 | 182 | |||||||||||||||
Provision for credit losses on loans | 20,222 | 5,061 | 10,916 | 25 | (15,897 | ) | ||||||||||||||
Balance, end of quarter | $ | 218,547 | $ | 209,966 | $ | 206,557 | $ | 196,955 | $ | 197,589 | ||||||||||
Nonperforming assets | ||||||||||||||||||||
Nonperforming loans: | ||||||||||||||||||||
Nonaccrual loans | $ | 81,135 | $ | 71,279 | $ | 63,218 | $ | 58,434 | $ | 57,534 | ||||||||||
Loans past due 90 days or more | 806 | 738 | 437 | 507 | 242 | |||||||||||||||
Total nonperforming loans | 81,941 | 72,017 | 63,655 | 58,941 | 57,776 | |||||||||||||||
Other nonperforming assets: | ||||||||||||||||||||
Foreclosed assets and other real estate owned | 3,809 | 3,909 | 2,721 | 2,887 | 3,612 | |||||||||||||||
Other nonperforming assets | 1,417 | 1,013 | 5,012 | 644 | 1,146 | |||||||||||||||
Total other nonperforming assets | 5,226 | 4,922 | 7,733 | 3,531 | 4,758 | |||||||||||||||
Total nonperforming assets | $ | 87,167 | $ | 76,939 | $ | 71,388 | $ | 62,472 | $ | 62,534 | ||||||||||
Performing FDMs (modifications to borrowers | ||||||||||||||||||||
experiencing financial difficulty) | $ | 33,723 | $ | 2,996 | $ | 2,183 | $ | 1,849 | $ | 1,869 | ||||||||||
Ratios | ||||||||||||||||||||
Allowance for credit losses on loans to total loans | 1.30 | % | 1.25 | % | 1.25 | % | 1.22 | % | 1.27 | % | ||||||||||
Allowance for credit losses to nonperforming loans | 267 | % | 292 | % | 324 | % | 334 | % | 342 | % | ||||||||||
Nonperforming loans to total loans | 0.49 | % | 0.43 | % | 0.38 | % | 0.37 | % | 0.37 | % | ||||||||||
Nonperforming assets (including performing FDMs) | ||||||||||||||||||||
to total assets | 0.44 | % | 0.29 | % | 0.27 | % | 0.23 | % | 0.24 | % | ||||||||||
Nonperforming assets to total assets | 0.32 | % | 0.28 | % | 0.26 | % | 0.23 | % | 0.23 | % | ||||||||||
Annualized net charge offs to average loans (QTD) | 0.28 | % | 0.04 | % | 0.03 | % | 0.13 | % | 0.00 | % | ||||||||||
Annualized net charge offs to average loans (YTD) | 0.12 | % | 0.04 | % | 0.03 | % | 0.09 | % | 0.07 | % | ||||||||||
Annualized net credit card charge offs to | ||||||||||||||||||||
average credit card loans (QTD) | 2.19 | % | 2.25 | % | 1.69 | % | 1.52 | % | 1.30 | % |
Page |
Simmons First National Corporation | SFNC | |||||||||||||||||||||||||||||||||||
Consolidated - Average Balance Sheet and Net Interest Income Analysis | ||||||||||||||||||||||||||||||||||||
For the Quarters Ended | ||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||
Three Months Ended Sep 2023 |
Three Months Ended Jun 2023 |
Three Months Ended Sep 2022 |
||||||||||||||||||||||||||||||||||
($ in thousands) | Average Balance |
Income/ Expense |
Yield/ Rate |
Average Balance |
Income/ Expense |
Yield/ Rate |
Average Balance |
Income/ Expense |
Yield/ Rate |
|||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||||||||||||
Earning assets: | ||||||||||||||||||||||||||||||||||||
Interest bearing balances due from banks | ||||||||||||||||||||||||||||||||||||
and federal funds sold | $ | 331,444 | $ | 3,569 | 4.27 | % | $ | 404,639 | $ | 4,023 | 3.99 | % | $ | 327,841 | $ | 1,141 | 1.38 | % | ||||||||||||||||||
Investment securities - taxable | 4,638,486 | 34,734 | 2.97 | % | 4,821,231 | 32,745 | 2.72 | % | 5,408,189 | 24,848 | 1.82 | % | ||||||||||||||||||||||||
Investment securities - non-taxable (FTE) | 2,617,152 | 21,563 | 3.27 | % | 2,627,192 | 21,253 | 3.24 | % | 2,665,515 | 21,805 | 3.25 | % | ||||||||||||||||||||||||
Mortgage loans held for sale | 9,542 | 178 | 7.40 | % | 9,560 | 154 | 6.46 | % | 13,280 | 178 | 5.32 | % | ||||||||||||||||||||||||
Other loans held for sale | - | - | 0.00 | % | - | - | 0.00 | % | 9,439 | 998 | 41.95 | % | ||||||||||||||||||||||||
Loans - including fees (FTE) | 16,758,597 | 256,757 | 6.08 | % | 16,702,403 | 245,151 | 5.89 | % | 15,320,833 | 187,851 | 4.86 | % | ||||||||||||||||||||||||
Total interest earning assets (FTE) | 24,355,221 | 316,801 | 5.16 | % | 24,565,025 | 303,326 | 4.95 | % | 23,745,097 | 236,821 | 3.96 | % | ||||||||||||||||||||||||
Non-earning assets | 3,239,390 | 3,201,114 | 3,123,634 | |||||||||||||||||||||||||||||||||
Total assets | $ | 27,594,611 | $ | 27,766,139 | $ | 26,868,731 | ||||||||||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||||||||||||||||||
Interest bearing liabilities: | ||||||||||||||||||||||||||||||||||||
Interest bearing transaction and | ||||||||||||||||||||||||||||||||||||
savings accounts | $ | 10,682,767 | $ | 65,095 | 2.42 | % | $ | 11,011,746 | $ | 54,485 | 1.98 | % | $ | 12,264,655 | $ | 17,225 | 0.56 | % | ||||||||||||||||||
Time deposits | 6,558,110 | 68,062 | 4.12 | % | 5,911,139 | 53,879 | 3.66 | % | 3,314,948 | 8,204 | 0.98 | % | ||||||||||||||||||||||||
Total interest bearing deposits | 17,240,877 | 133,157 | 3.06 | % | 16,922,885 | 108,364 | 2.57 | % | 15,579,603 | 25,429 | 0.65 | % | ||||||||||||||||||||||||
Federal funds purchased and securities | ||||||||||||||||||||||||||||||||||||
sold under agreement to repurchase | 89,769 | 277 | 1.22 | % | 119,985 | 318 | 1.06 | % | 196,047 | 305 | 0.62 | % | ||||||||||||||||||||||||
Other borrowings | 1,222,557 | 16,450 | 5.34 | % | 1,449,403 | 18,612 | 5.15 | % | 1,123,797 | 6,048 | 2.14 | % | ||||||||||||||||||||||||
Subordinated notes and debentures | 366,085 | 6,969 | 7.55 | % | 366,047 | 6,696 | 7.34 | % | 411,018 | 5,251 | 5.07 | % | ||||||||||||||||||||||||
Total interest bearing liabilities | 18,919,288 | 156,853 | 3.29 | % | 18,858,320 | 133,990 | 2.85 | % | 17,310,465 | 37,033 | 0.85 | % | ||||||||||||||||||||||||
Noninterest bearing liabilities: | ||||||||||||||||||||||||||||||||||||
Noninterest bearing deposits | 5,032,631 | 5,276,267 | 6,022,899 | |||||||||||||||||||||||||||||||||
Other liabilities | 271,014 | 272,628 | 243,296 | |||||||||||||||||||||||||||||||||
Total liabilities | 24,222,933 | 24,407,215 | 23,576,660 | |||||||||||||||||||||||||||||||||
Stockholders' equity | 3,371,678 | 3,358,924 | 3,292,071 | |||||||||||||||||||||||||||||||||
Total liabilities and stockholders' equity | $ | 27,594,611 | $ | 27,766,139 | $ | 26,868,731 | ||||||||||||||||||||||||||||||
Net interest income (FTE) | $ | 159,948 | $ | 169,336 | $ | 199,788 | ||||||||||||||||||||||||||||||
Net interest spread (FTE) | 1.87 | % | 2.10 | % | 3.11 | % | ||||||||||||||||||||||||||||||
Net interest margin (FTE) | 2.61 | % | 2.76 | % | 3.34 | % |
Page |
Simmons First National Corporation | SFNC | |||||||||||||||||||
Consolidated - Selected Financial Data | ||||||||||||||||||||
For the Quarters Ended | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |||||||||||||||
(Unaudited) | 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
($ in thousands, except share data) | ||||||||||||||||||||
QUARTER-TO-DATE | ||||||||||||||||||||
Financial Highlights - As Reported | ||||||||||||||||||||
Net Income | $ | 47,247 | $ | 58,314 | $ | 45,589 | $ | 83,260 | $ | 80,603 | ||||||||||
Diluted earnings per share | 0.37 | 0.46 | 0.36 | 0.65 | 0.63 | |||||||||||||||
Return on average assets | 0.68 | % | 0.84 | % | 0.67 | % | 1.22 | % | 1.19 | % | ||||||||||
Return on average common equity | 5.56 | % | 6.96 | % | 5.49 | % | 10.27 | % | 9.71 | % | ||||||||||
Return on tangible common equity (non-GAAP) (1) | 10.33 | % | 12.85 | % | 10.25 | % | 19.29 | % | 17.99 | % | ||||||||||
Net interest margin (FTE) | 2.61 | % | 2.76 | % | 3.09 | % | 3.31 | % | 3.34 | % | ||||||||||
Efficiency ratio (2) | 65.11 | % | 65.18 | % | 62.28 | % | 58.33 | % | 57.22 | % | ||||||||||
FTE adjustment | 6,515 | 6,106 | 6,311 | 6,770 | 6,203 | |||||||||||||||
Average diluted shares outstanding | 126,283,609 | 127,379,976 | 127,516,478 | 127,505,996 | 128,336,422 | |||||||||||||||
Shares repurchased under plan | 1,128,962 | 1,128,087 | - | - | 1,883,713 | |||||||||||||||
Average price of shares repurchased | 17.69 | 17.75 | - | - | 23.91 | |||||||||||||||
Cash dividends declared per common share | 0.200 | 0.200 | 0.200 | 0.190 | 0.190 | |||||||||||||||
Accretable yield on acquired loans | 2,146 | 2,267 | 2,579 | 4,473 | 5,834 | |||||||||||||||
Financial Highlights - Adjusted (non-GAAP) (1) | ||||||||||||||||||||
Adjusted earnings | $ | 48,804 | $ | 61,065 | $ | 47,343 | $ | 81,093 | $ | 82,281 | ||||||||||
Adjusted diluted earnings per share | 0.39 | 0.48 | 0.37 | 0.64 | 0.64 | |||||||||||||||
Adjusted return on average assets | 0.70 | % | 0.88 | % | 0.70 | % | 1.18 | % | 1.21 | % | ||||||||||
Adjusted return on average common equity | 5.74 | % | 7.29 | % | 5.70 | % | 10.01 | % | 9.92 | % | ||||||||||
Adjusted return on tangible common equity | 10.64 | % | 13.42 | % | 10.62 | % | 18.81 | % | 18.35 | % | ||||||||||
Adjusted efficiency ratio (2) | 61.94 | % | 61.29 | % | 59.38 | % | 56.97 | % | 54.41 | % | ||||||||||
YEAR-TO-DATE | ||||||||||||||||||||
Financial Highlights - GAAP | ||||||||||||||||||||
Net Income | $ | 151,150 | $ | 103,903 | $ | 45,589 | $ | 256,412 | $ | 173,152 | ||||||||||
Diluted earnings per share | 1.19 | 0.82 | 0.36 | 2.06 | 1.40 | |||||||||||||||
Return on average assets | 0.73 | % | 0.76 | % | 0.67 | % | 0.97 | % | 0.88 | % | ||||||||||
Return on average common equity | 6.00 | % | 6.23 | % | 5.49 | % | 7.87 | % | 7.07 | % | ||||||||||
Return on tangible common equity (non-GAAP) (1) | 11.14 | % | 11.55 | % | 10.25 | % | 14.33 | % | 12.77 | % | ||||||||||
Net interest margin (FTE) | 2.82 | % | 2.92 | % | 3.09 | % | 3.17 | % | 3.12 | % | ||||||||||
Efficiency ratio (2) | 64.13 | % | 63.68 | % | 62.28 | % | 62.14 | % | 63.54 | % | ||||||||||
FTE adjustment | 18,932 | 12,417 | 6,311 | 24,671 | 17,901 | |||||||||||||||
Average diluted shares outstanding | 127,099,727 | 127,421,034 | 127,516,478 | 124,470,184 | 123,387,503 | |||||||||||||||
Cash dividends declared per common share | 0.600 | 0.400 | 0.200 | 0.760 | 0.570 | |||||||||||||||
Financial Highlights - Adjusted (non-GAAP) (1) | ||||||||||||||||||||
Adjusted earnings | $ | 157,212 | $ | 108,408 | $ | 47,343 | $ | 298,635 | $ | 217,542 | ||||||||||
Adjusted diluted earnings per share | 1.24 | 0.85 | 0.37 | 2.40 | 1.76 | |||||||||||||||
Adjusted return on average assets | 0.76 | % | 0.79 | % | 0.70 | % | 1.13 | % | 1.11 | % | ||||||||||
Adjusted return on average common equity | 6.24 | % | 6.50 | % | 5.70 | % | 9.16 | % | 8.88 | % | ||||||||||
Adjusted return on tangible common equity | 11.56 | % | 12.03 | % | 10.62 | % | 16.59 | % | 15.89 | % | ||||||||||
Adjusted efficiency ratio (2) | 60.81 | % | 60.30 | % | 59.38 | % | 57.50 | % | 57.69 | % | ||||||||||
END OF PERIOD | ||||||||||||||||||||
Book value per share | $ | 26.26 | $ | 26.59 | $ | 26.24 | $ | 25.73 | $ | 24.87 | ||||||||||
Tangible book value per share | 14.77 | 15.17 | 14.88 | 14.33 | 13.51 | |||||||||||||||
Shares outstanding | 125,133,281 | 126,224,707 | 127,282,192 | 127,046,654 | 126,943,467 | |||||||||||||||
Full-time equivalent employees | 3,005 | 3,066 | 3,189 | 3,236 | 3,206 | |||||||||||||||
Total number of financial centers | 232 | 231 | 231 | 230 | 230 |
(1) Non-GAAP measurement that management believes aids in the understanding and discussion of results. Reconciliations to GAAP are included in the schedules accompanying this release.
(2) Efficiency ratio is noninterest expense as a percent of net interest income (fully taxable equivalent) and noninterest revenues. Adjusted efficiency ratio is noninterest expense before foreclosed property expense, amortization of intangibles and certain adjusting items as a percent of net interest income (fully taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and certain adjusting items, and is a non-GAAP measurement.
Page |
Simmons First National Corporation | SFNC | |||||||||||||||||||
Reconciliation Of Non-GAAP Financial Measures - Adjusted Earnings - Quarter-to-Date | ||||||||||||||||||||
For the Quarters Ended | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |||||||||||||||
(Unaudited) | 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||
QUARTER-TO-DATE | ||||||||||||||||||||
Net income | $ | 47,247 | $ | 58,314 | $ | 45,589 | $ | 83,260 | $ | 80,603 | ||||||||||
Certain items: | ||||||||||||||||||||
(Gain) loss from early retirement of TruPS | - | - | - | - | 365 | |||||||||||||||
Gain on sale of intellectual property | - | - | - | - | (750 | ) | ||||||||||||||
Gain on insurance settlement | - | - | - | (4,074 | ) | - | ||||||||||||||
Donation to Simmons First Foundation | - | - | - | - | - | |||||||||||||||
Merger related costs | 5 | 19 | 1,396 | 35 | 1,422 | |||||||||||||||
Early retirement program | 1,557 | 3,609 | - | - | - | |||||||||||||||
Branch right sizing (net) | 547 | 95 | 979 | 1,104 | 1,235 | |||||||||||||||
Day 2 CECL provision | - | - | - | - | - | |||||||||||||||
Tax effect (1) | (552 | ) | (972 | ) | (621 | ) | 768 | (594 | ) | |||||||||||
Certain items, net of tax | 1,557 | 2,751 | 1,754 | (2,167 | ) | 1,678 | ||||||||||||||
Adjusted earnings (non-GAAP) | $ | 48,804 | $ | 61,065 | $ | 47,343 | $ | 81,093 | $ | 82,281 | ||||||||||
Diluted earnings per share | $ | 0.37 | $ | 0.46 | $ | 0.36 | $ | 0.65 | $ | 0.63 | ||||||||||
Certain items: | ||||||||||||||||||||
(Gain) loss from early retirement of TruPS | - | - | - | - | - | |||||||||||||||
Gain on sale of intellectual property | - | - | - | - | (0.01 | ) | ||||||||||||||
Gain on insurance settlement | - | - | - | (0.03 | ) | |||||||||||||||
Donation to Simmons First Foundation | - | - | - | - | - | |||||||||||||||
Merger related costs | - | - | 0.01 | - | 0.01 | |||||||||||||||
Early retirement program | 0.01 | 0.03 | - | - | - | |||||||||||||||
Branch right sizing (net) | 0.01 | - | 0.01 | 0.01 | 0.01 | |||||||||||||||
Day 2 CECL provision | - | - | - | - | - | |||||||||||||||
Tax effect (1) | - | (0.01 | ) | (0.01 | ) | 0.01 | - | |||||||||||||
Certain items, net of tax | 0.02 | 0.02 | 0.01 | (0.01 | ) | 0.01 | ||||||||||||||
Adjusted diluted earnings per share (non-GAAP) | $ | 0.39 | $ | 0.48 | $ | 0.37 | $ | 0.64 | $ | 0.64 | ||||||||||
(1) Effective tax rate of 26.135%. | ||||||||||||||||||||
Reconciliation of Certain Noninterest Income and Expense Items (non-GAAP) | ||||||||||||||||||||
QUARTER-TO-DATE | ||||||||||||||||||||
Noninterest income | $ | 42,777 | $ | 44,980 | $ | 45,835 | $ | 44,647 | $ | 43,023 | ||||||||||
Certain noninterest income items (1) | ||||||||||||||||||||
Gain on insurance settlement | - | - | - | (4,074 | ) | - | ||||||||||||||
(Gain) loss from early retirement of TruPS | - | - | - | - | 365 | |||||||||||||||
Gain on sale of intellectual property | - | - | - | - | (750 | ) | ||||||||||||||
Branch right sizing income | - | - | - | - | 65 | |||||||||||||||
Adjusted noninterest income (non-GAAP) | $ | 42,777 | $ | 44,980 | $ | 45,835 | $ | 40,573 | $ | 42,703 | ||||||||||
Other income | $ | 7,433 | $ | 9,843 | $ | 11,256 | $ | 6,600 | $ | 6,658 | ||||||||||
Certain other income items (1) | ||||||||||||||||||||
(Gain) loss from early retirement of TruPS | - | - | - | - | 365 | |||||||||||||||
Gain on sale of intellectual property | - | - | - | - | (750 | ) | ||||||||||||||
Branch right sizing income | - | - | - | - | 65 | |||||||||||||||
Adjusted other income (non-GAAP) | $ | 7,433 | $ | 9,843 | $ | 11,256 | $ | 6,600 | $ | 6,338 | ||||||||||
Noninterest expense | $ | 131,998 | $ | 139,696 | $ | 143,228 | $ | 142,575 | $ | 138,943 | ||||||||||
Certain noninterest expense items (1) | ||||||||||||||||||||
Merger related costs | (5 | ) | (19 | ) | (1,396 | ) | (35 | ) | (1,422 | ) | ||||||||||
Early retirement program | (1,557 | ) | (3,609 | ) | - | - | - | |||||||||||||
Donation to Simmons First Foundation | - | - | - | - | - | |||||||||||||||
Branch right sizing expense | (547 | ) | (95 | ) | (979 | ) | (1,104 | ) | (1,170 | ) | ||||||||||
Adjusted noninterest expense (non-GAAP) | $ | 129,889 | $ | 135,973 | $ | 140,853 | $ | 141,436 | $ | 136,351 | ||||||||||
Salaries and employee benefits | $ | 67,374 | $ | 74,723 | $ | 77,038 | $ | 73,018 | $ | 71,923 | ||||||||||
Certain salaries and employee benefits items (1) | ||||||||||||||||||||
Early retirement program | (1,557 | ) | (3,609 | ) | - | - | - | |||||||||||||
Other | - | - | - | - | - | |||||||||||||||
Adjusted salaries and employee benefits (non-GAAP) | $ | 65,817 | $ | 71,114 | $ | 77,038 | $ | 73,018 | $ | 71,923 | ||||||||||
Other operating expenses | $ | 42,582 | $ | 42,926 | $ | 43,086 | $ | 48,480 | $ | 45,084 | ||||||||||
Certain other operating expenses items (1) | ||||||||||||||||||||
Donation to Simmons First Foundation | - | - | - | - | - | |||||||||||||||
Branch right sizing expense | (466 | ) | 53 | (816 | ) | (953 | ) | (973 | ) | |||||||||||
Adjusted other operating expenses (non-GAAP) | $ | 42,116 | $ | 42,979 | $ | 42,270 | $ | 47,527 | $ | 44,111 |
(1) Certain items include gain from early retirement of trust preferred securities, gain on sale of intellectual property, gain on insurance settlement, donation to Simmons First Foundation, merger related costs, early retirement program costs, branch right sizing costs and Day 2 CECL provision.
Page |
Simmons First National Corporation | SFNC | |||||||||||||||||||
Reconciliation Of Non-GAAP Financial Measures - Adjusted Earnings - Year-to-Date | ||||||||||||||||||||
For the Quarters Ended | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |||||||||||||||
(Unaudited) | 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||||
YEAR-TO-DATE | ||||||||||||||||||||
Net income | $ | 151,150 | $ | 103,903 | $ | 45,589 | $ | 256,412 | $ | 173,152 | ||||||||||
Certain items: | ||||||||||||||||||||
(Gain) loss from early retirement of TruPS | - | - | - | 365 | 365 | |||||||||||||||
Gain on sale of intellectual property | - | - | - | (750 | ) | (750 | ) | |||||||||||||
Gain on insurance settlement | - | - | - | (4,074 | ) | - | ||||||||||||||
Donation to Simmons First Foundation | - | - | - | 1,738 | 1,738 | |||||||||||||||
Merger related costs | 1,420 | 1,415 | 1,396 | 22,476 | 22,441 | |||||||||||||||
Early retirement program | 5,166 | 3,609 | - | - | - | |||||||||||||||
Branch right sizing (net) | 1,621 | 1,074 | 979 | 3,628 | 2,524 | |||||||||||||||
Day 2 CECL provision | - | - | - | 33,779 | 33,779 | |||||||||||||||
Tax effect (1) | (2,145 | ) | (1,593 | ) | (621 | ) | (14,939 | ) | (15,707 | ) | ||||||||||
Certain items, net of tax | 6,062 | 4,505 | 1,754 | 42,223 | 44,390 | |||||||||||||||
Adjusted earnings (non-GAAP) | $ | 157,212 | $ | 108,408 | $ | 47,343 | $ | 298,635 | $ | 217,542 | ||||||||||
Diluted earnings per share | $ | 1.19 | $ | 0.82 | $ | 0.36 | $ | 2.06 | $ | 1.40 | ||||||||||
Certain items: | ||||||||||||||||||||
(Gain) loss from early retirement of TruPS | - | - | - | - | - | |||||||||||||||
Gain on sale of intellectual property | - | - | - | (0.01 | ) | (0.01 | ) | |||||||||||||
Gain on insurance settlement | - | - | - | (0.03 | ) | - | ||||||||||||||
Donation to Simmons First Foundation | - | - | - | 0.01 | 0.01 | |||||||||||||||
Merger related costs | 0.01 | 0.01 | 0.01 | 0.18 | 0.18 | |||||||||||||||
Early retirement program | 0.04 | 0.03 | - | - | - | |||||||||||||||
Branch right sizing (net) | 0.02 | 0.01 | 0.01 | 0.03 | 0.02 | |||||||||||||||
Day 2 CECL provision | - | - | - | 0.28 | 0.28 | |||||||||||||||
Tax effect (1) | (0.02 | ) | (0.02 | ) | (0.01 | ) | (0.12 | ) | (0.12 | ) | ||||||||||
Certain items, net of tax | 0.05 | 0.03 | 0.01 | 0.34 | 0.36 | |||||||||||||||
Adjusted diluted earnings per share (non-GAAP) | $ | 1.24 | $ | 0.85 | $ | 0.37 | $ | 2.40 | $ | 1.76 | ||||||||||
(1) Effective tax rate of 26.135%. | ||||||||||||||||||||
Reconciliation of Certain Noninterest Income and Expense Items (non-GAAP) | ||||||||||||||||||||
YEAR-TO-DATE | ||||||||||||||||||||
Noninterest income | $ | 133,592 | $ | 90,815 | $ | 45,835 | $ | 170,066 | $ | 125,419 | ||||||||||
Certain noninterest income items (1) | ||||||||||||||||||||
Gain on insurance settlement | - | - | - | (4,074 | ) | - | ||||||||||||||
(Gain) loss from early retirement of TruPS | - | - | - | 365 | 365 | |||||||||||||||
Gain on sale of intellectual property | - | - | - | (750 | ) | (750 | ) | |||||||||||||
Branch right sizing income | - | - | - | 153 | 153 | |||||||||||||||
Adjusted noninterest income (non-GAAP) | $ | 133,592 | $ | 90,815 | $ | 45,835 | $ | 165,760 | $ | 125,187 | ||||||||||
Other income | $ | 28,532 | $ | 21,099 | $ | 11,256 | $ | 27,361 | $ | 20,761 | ||||||||||
Certain other income items (1) | ||||||||||||||||||||
(Gain) loss from early retirement of TruPS | - | - | - | 365 | 365 | |||||||||||||||
Gain on sale of intellectual property | - | - | - | (750 | ) | (750 | ) | |||||||||||||
Branch right sizing income | - | - | - | 153 | 153 | |||||||||||||||
Adjusted other income (non-GAAP) | $ | 28,532 | $ | 21,099 | $ | 11,256 | $ | 27,129 | $ | 20,529 | ||||||||||
Noninterest expense | $ | 414,922 | $ | 282,924 | $ | 143,228 | $ | 566,748 | $ | 424,173 | ||||||||||
Certain noninterest expense items (1) | ||||||||||||||||||||
Merger related costs | (1,420 | ) | (1,415 | ) | (1,396 | ) | (22,476 | ) | (22,441 | ) | ||||||||||
Early retirement program | (5,166 | ) | (3,609 | ) | - | - | - | |||||||||||||
Donation to Simmons First Foundation | - | - | - | (1,738 | ) | (1,738 | ) | |||||||||||||
Branch right sizing expense | (1,621 | ) | (1,074 | ) | (979 | ) | (3,475 | ) | (2,371 | ) | ||||||||||
Adjusted noninterest expense (non-GAAP) | $ | 406,715 | $ | 276,826 | $ | 140,853 | $ | 539,059 | $ | 397,623 | ||||||||||
Salaries and employee benefits | $ | 219,135 | $ | 151,761 | $ | 77,038 | $ | 286,982 | $ | 213,964 | ||||||||||
Certain salaries and employee benefits items (1) | ||||||||||||||||||||
Early retirement program | (5,166 | ) | (3,609 | ) | - | - | - | |||||||||||||
Other | - | - | - | - | - | |||||||||||||||
Adjusted salaries and employee benefits (non-GAAP) | $ | 213,969 | $ | 148,152 | $ | 77,038 | $ | 286,982 | $ | 213,964 | ||||||||||
Other operating expenses | $ | 128,594 | $ | 86,012 | $ | 43,086 | $ | 179,693 | $ | 131,213 | ||||||||||
Certain other operating expenses items (1) | ||||||||||||||||||||
Donation to Simmons First Foundation | - | - | - | (1,738 | ) | (1,738 | ) | |||||||||||||
Branch right sizing expense | (1,229 | ) | (763 | ) | (816 | ) | (2,650 | ) | (1,697 | ) | ||||||||||
Adjusted other operating expenses (non-GAAP) | $ | 127,365 | $ | 85,249 | $ | 42,270 | $ | 175,305 | $ | 127,778 |
(1) Certain items include gain from early retirement of trust preferred securities, gain on sale of intellectual property, gain on insurance settlement, donation to Simmons First Foundation, merger related costs, early retirement program costs, branch right sizing costs and Day 2 CECL provision.
Page |
Simmons First National Corporation | SFNC | |||||||||||||||||||
Reconciliation Of Non-GAAP Financial Measures - End of Period | ||||||||||||||||||||
For the Quarters Ended | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |||||||||||||||
(Unaudited) | 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
($ in thousands, except per share data) | ||||||||||||||||||||
Calculation of Tangible Common Equity and the Ratio of Tangible Common Equity to Tangible Assets | ||||||||||||||||||||
Total common stockholders' equity | $ | 3,285,555 | $ | 3,356,326 | $ | 3,339,901 | $ | 3,269,362 | $ | 3,157,151 | ||||||||||
Intangible assets: | ||||||||||||||||||||
Goodwill | (1,320,799 | ) | (1,320,799 | ) | (1,320,799 | ) | (1,319,598 | ) | (1,309,000 | ) | ||||||||||
Other intangible assets | (116,660 | ) | (120,758 | ) | (124,854 | ) | (128,951 | ) | (133,059 | ) | ||||||||||
Total intangibles | (1,437,459 | ) | (1,441,557 | ) | (1,445,653 | ) | (1,448,549 | ) | (1,442,059 | ) | ||||||||||
Tangible common stockholders' equity | $ | 1,848,096 | $ | 1,914,769 | $ | 1,894,248 | $ | 1,820,813 | $ | 1,715,092 | ||||||||||
Total assets | $ | 27,564,325 | $ | 27,959,123 | $ | 27,583,446 | $ | 27,461,061 | $ | 27,076,074 | ||||||||||
Intangible assets: | ||||||||||||||||||||
Goodwill | (1,320,799 | ) | (1,320,799 | ) | (1,320,799 | ) | (1,319,598 | ) | (1,309,000 | ) | ||||||||||
Other intangible assets | (116,660 | ) | (120,758 | ) | (124,854 | ) | (128,951 | ) | (133,059 | ) | ||||||||||
Total intangibles | (1,437,459 | ) | (1,441,557 | ) | (1,445,653 | ) | (1,448,549 | ) | (1,442,059 | ) | ||||||||||
Tangible assets | $ | 26,126,866 | $ | 26,517,566 | $ | 26,137,793 | $ | 26,012,512 | $ | 25,634,015 | ||||||||||
Ratio of common equity to assets | 11.92 | % | 12.00 | % | 12.11 | % | 11.91 | % | 11.66 | % | ||||||||||
Ratio of tangible common equity to tangible assets | 7.07 | % | 7.22 | % | 7.25 | % | 7.00 | % | 6.69 | % | ||||||||||
Calculation of Tangible Book Value per Share | ||||||||||||||||||||
Total common stockholders' equity | $ | 3,285,555 | $ | 3,356,326 | $ | 3,339,901 | $ | 3,269,362 | $ | 3,157,151 | ||||||||||
Intangible assets: | ||||||||||||||||||||
Goodwill | (1,320,799 | ) | (1,320,799 | ) | (1,320,799 | ) | (1,319,598 | ) | (1,309,000 | ) | ||||||||||
Other intangible assets | (116,660 | ) | (120,758 | ) | (124,854 | ) | (128,951 | ) | (133,059 | ) | ||||||||||
Total intangibles | (1,437,459 | ) | (1,441,557 | ) | (1,445,653 | ) | (1,448,549 | ) | (1,442,059 | ) | ||||||||||
Tangible common stockholders' equity | $ | 1,848,096 | $ | 1,914,769 | $ | 1,894,248 | $ | 1,820,813 | $ | 1,715,092 | ||||||||||
Shares of common stock outstanding | 125,133,281 | 126,224,707 | 127,282,192 | 127,046,654 | 126,943,467 | |||||||||||||||
Book value per common share | $ | 26.26 | $ | 26.59 | $ | 26.24 | $ | 25.73 | $ | 24.87 | ||||||||||
Tangible book value per common share | $ | 14.77 | $ | 15.17 | $ | 14.88 | $ | 14.33 | $ | 13.51 | ||||||||||
Calculation of Coverage Ratio of Uninsured, Non-Collateralized Deposits | ||||||||||||||||||||
Uninsured deposits at Simmons Bank | $ | 8,143,200 | $ | 8,507,395 | $ | 8,978,581 | $ | 8,913,990 | $ | 9,315,086 | ||||||||||
Less: Collateralized deposits (excluding portion that is FDIC insured) | 2,835,405 | 3,030,550 | 3,081,829 | 2,759,248 | 3,094,859 | |||||||||||||||
Less: Intercompany eliminations | 676,840 | 674,552 | 628,592 | 529,042 | 438,047 | |||||||||||||||
Total uninsured, non-collateralized deposits | $ | 4,630,955 | $ | 4,802,293 | $ | 5,268,160 | $ | 5,625,700 | $ | 5,782,180 | ||||||||||
FHLB borrowing availability | $ | 5,372,000 | $ | 5,345,000 | $ | 5,574,000 | $ | 5,442,000 | $ | 3,220,000 | ||||||||||
Unpledged securities | 4,124,000 | 3,877,000 | 3,000,000 | 3,180,000 | 4,985,000 | |||||||||||||||
Fed funds lines, Fed discount window and | ||||||||||||||||||||
Bank Term Funding Program | 1,951,000 | 1,874,000 | 2,206,000 | 1,982,000 | 504,000 | |||||||||||||||
Additional liquidity sources | $ | 11,447,000 | $ | 11,096,000 | $ | 10,780,000 | $ | 10,604,000 | $ | 8,709,000 | ||||||||||
Uninsured, non-collateralized deposit coverage ratio | 2.5 | 2.3 | 2.0 | 1.9 | 1.5 |
Page |
Simmons First National Corporation | SFNC | |||||||||||||||||||
Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date | ||||||||||||||||||||
For the Quarters Ended | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |||||||||||||||
(Unaudited) | 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
Calculation of Adjusted Return on Average Assets | ||||||||||||||||||||
Net income | $ | 47,247 | $ | 58,314 | $ | 45,589 | $ | 83,260 | $ | 80,603 | ||||||||||
Certain items (non-GAAP) | ||||||||||||||||||||
(Gain) loss from early retirement of TruPS | - | - | - | - | 365 | |||||||||||||||
Gain on sale of intellectual property | - | - | - | - | (750 | ) | ||||||||||||||
Gain on insurance settlement | - | - | - | (4,074 | ) | - | ||||||||||||||
Donation to Simmons First Foundation | - | - | - | - | - | |||||||||||||||
Merger related costs | 5 | 19 | 1,396 | 35 | 1,422 | |||||||||||||||
Early retirement program | 1,557 | 3,609 | - | - | - | |||||||||||||||
Branch right sizing (net) | 547 | 95 | 979 | 1,104 | 1,235 | |||||||||||||||
Day 2 CECL provision | - | - | - | - | - | |||||||||||||||
Tax effect of certain items (2) | (552 | ) | (972 | ) | (621 | ) | 768 | (594 | ) | |||||||||||
Adjusted earnings (non-GAAP) | $ | 48,804 | $ | 61,065 | $ | 47,343 | $ | 81,093 | $ | 82,281 | ||||||||||
Average total assets | $ | 27,594,611 | $ | 27,766,139 | $ | 27,488,732 | $ | 27,180,575 | $ | 26,868,731 | ||||||||||
Return on average assets | 0.68 | % | 0.84 | % | 0.67 | % | 1.22 | % | 1.19 | % | ||||||||||
Adjusted return on average assets (non-GAAP) | 0.70 | % | 0.88 | % | 0.70 | % | 1.18 | % | 1.21 | % | ||||||||||
Calculation of Return on Tangible Common Equity | ||||||||||||||||||||
Net income available to common stockholders | $ | 47,247 | $ | 58,314 | $ | 45,589 | $ | 83,260 | $ | 80,603 | ||||||||||
Amortization of intangibles, net of taxes | 3,027 | 3,026 | 3,026 | 3,035 | 3,121 | |||||||||||||||
Total income available to common stockholders | $ | 50,274 | $ | 61,340 | $ | 48,615 | $ | 86,295 | $ | 83,724 | ||||||||||
Certain items (non-GAAP) | ||||||||||||||||||||
(Gain) loss from early retirement of TruPS | - | - | - | - | 365 | |||||||||||||||
Gain on sale of intellectual property | - | - | - | - | (750 | ) | ||||||||||||||
Gain on insurance settlement | - | - | - | (4,074 | ) | - | ||||||||||||||
Donation to Simmons First Foundation | - | - | - | - | - | |||||||||||||||
Merger related costs | 5 | 19 | 1,396 | 35 | 1,422 | |||||||||||||||
Early retirement program | 1,557 | 3,609 | - | - | - | |||||||||||||||
Branch right sizing (net) | 547 | 95 | 979 | 1,104 | 1,235 | |||||||||||||||
Day 2 CECL provision | - | - | - | - | - | |||||||||||||||
Tax effect of certain items (2) | (552 | ) | (972 | ) | (621 | ) | 768 | (594 | ) | |||||||||||
Adjusted earnings (non-GAAP) | 48,804 | 61,065 | 47,343 | 81,093 | 82,281 | |||||||||||||||
Amortization of intangibles, net of taxes | 3,027 | 3,026 | 3,026 | 3,035 | 3,121 | |||||||||||||||
Total adjusted earnings available to common stockholders (non-GAAP) | $ | 51,831 | $ | 64,091 | $ | 50,369 | $ | 84,128 | $ | 85,402 | ||||||||||
Average common stockholders' equity | $ | 3,371,678 | $ | 3,358,924 | $ | 3,370,651 | $ | 3,214,912 | $ | 3,292,071 | ||||||||||
Average intangible assets: | ||||||||||||||||||||
Goodwill | (1,320,799 | ) | (1,320,799 | ) | (1,319,624 | ) | (1,309,124 | ) | (1,309,804 | ) | ||||||||||
Other intangibles | (119,125 | ) | (123,173 | ) | (127,394 | ) | (131,229 | ) | (135,718 | ) | ||||||||||
Total average intangibles | (1,439,924 | ) | (1,443,972 | ) | (1,447,018 | ) | (1,440,353 | ) | (1,445,522 | ) | ||||||||||
Average tangible common stockholders' equity (non-GAAP) | $ | 1,931,754 | $ | 1,914,952 | $ | 1,923,633 | $ | 1,774,559 | $ | 1,846,549 | ||||||||||
Return on average common equity | 5.56 | % | 6.96 | % | 5.49 | % | 10.27 | % | 9.71 | % | ||||||||||
Return on tangible common equity | 10.33 | % | 12.85 | % | 10.25 | % | 19.29 | % | 17.99 | % | ||||||||||
Adjusted return on average common equity (non-GAAP) | 5.74 | % | 7.29 | % | 5.70 | % | 10.01 | % | 9.92 | % | ||||||||||
Adjusted return on tangible common equity (non-GAAP) | 10.64 | % | 13.42 | % | 10.62 | % | 18.81 | % | 18.35 | % | ||||||||||
Calculation of Efficiency Ratio and Adjusted Efficiency Ratio (1) | ||||||||||||||||||||
Noninterest expense (efficiency ratio numerator) | $ | 131,998 | $ | 139,696 | $ | 143,228 | $ | 142,575 | $ | 138,943 | ||||||||||
Certain noninterest expense items (non-GAAP) | ||||||||||||||||||||
Merger related costs | (5 | ) | (19 | ) | (1,396 | ) | (35 | ) | (1,422 | ) | ||||||||||
Early retirement program | (1,557 | ) | (3,609 | ) | - | - | - | |||||||||||||
Donation to Simmons First Foundation | - | - | - | - | - | |||||||||||||||
Branch right sizing expense | (547 | ) | (95 | ) | (979 | ) | (1,104 | ) | (1,170 | ) | ||||||||||
Other real estate and foreclosure expense adjustment | (228 | ) | (289 | ) | (186 | ) | (350 | ) | (168 | ) | ||||||||||
Amortization of intangibles adjustment | (4,097 | ) | (4,098 | ) | (4,096 | ) | (4,108 | ) | (4,225 | ) | ||||||||||
Adjusted efficiency ratio numerator | $ | 125,564 | $ | 131,586 | $ | 136,571 | $ | 136,978 | $ | 131,958 | ||||||||||
Net interest income | $ | 153,433 | $ | 163,230 | $ | 177,835 | $ | 193,026 | $ | 193,585 | ||||||||||
Noninterest income | 42,777 | 44,980 | 45,835 | 44,647 | 43,023 | |||||||||||||||
Fully tax-equivalent adjustment (effective tax rate of 26.135%) | 6,515 | 6,106 | 6,311 | 6,770 | 6,203 | |||||||||||||||
Efficiency ratio denominator | 202,725 | 214,316 | 229,981 | 244,443 | 242,811 | |||||||||||||||
Certain noninterest income items (non-GAAP) | ||||||||||||||||||||
Gain on insurance settlement | - | - | - | (4,074 | ) | - | ||||||||||||||
(Gain) loss from early retirement of TruPS | - | - | - | - | 365 | |||||||||||||||
Gain on sale of intellectual property | - | - | - | - | (750 | ) | ||||||||||||||
Branch right sizing income | - | - | - | - | 65 | |||||||||||||||
(Gain) loss on sale of securities | - | 391 | - | 52 | 22 | |||||||||||||||
Adjusted efficiency ratio denominator | $ | 202,725 | $ | 214,707 | $ | 229,981 | $ | 240,421 | $ | 242,513 | ||||||||||
Efficiency ratio (1) | 65.11 | % | 65.18 | % | 62.28 | % | 58.33 | % | 57.22 | % | ||||||||||
Adjusted efficiency ratio (non-GAAP) (1) | 61.94 | % | 61.29 | % | 59.38 | % | 56.97 | % | 54.41 | % |
(1) Efficiency ratio is noninterest expense as a percent of net interest income (fully taxable equivalent) and noninterest revenues. Adjusted efficiency ratio is noninterest expense before foreclosed property expense, amortization of intangibles and certain adjusting items as a percent of net interest income (fully taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and certain adjusting items, and is a non-GAAP measurement.
(2) Effective tax rate of 26.135%.
Page |
Simmons First National Corporation | SFNC | |||||||||||||||||||
Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date (continued) | ||||||||||||||||||||
For the Quarters Ended | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |||||||||||||||
(Unaudited) | 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
Calculation of Pre-Provision Net Revenue (PPNR) | ||||||||||||||||||||
Net interest income | $ | 153,433 | $ | 163,230 | $ | 177,835 | $ | 193,026 | $ | 193,585 | ||||||||||
Noninterest income | 42,777 | 44,980 | 45,835 | 44,647 | 43,023 | |||||||||||||||
Revenue | 196,210 | 208,210 | 223,670 | 237,673 | 236,608 | |||||||||||||||
Less: Gain (loss) on sale of securities | - | (391 | ) | - | (52 | ) | (22 | ) | ||||||||||||
Less: Noninterest expense | 131,998 | 139,696 | 143,228 | 142,575 | 138,943 | |||||||||||||||
Pre-Provision Net Revenue (PPNR) | $ | 64,212 | $ | 68,905 | $ | 80,442 | $ | 95,150 | $ | 97,687 | ||||||||||
Calculation of Adjusted Pre-Provision Net Revenue | ||||||||||||||||||||
Pre-Provision Net Revenue (PPNR) | $ | 64,212 | $ | 68,905 | $ | 80,442 | $ | 95,150 | $ | 97,687 | ||||||||||
Plus: Loss from early retirement of TruPS | - | - | - | - | 365 | |||||||||||||||
Less: Gain on sale of intellectual property | - | - | - | - | (750 | ) | ||||||||||||||
Less: Gain on insurance settlement | - | - | - | (4,074 | ) | - | ||||||||||||||
Plus: Donation to Simmons First Foundation | - | - | - | - | - | |||||||||||||||
Plus: Merger related costs | 5 | 19 | 1,396 | 35 | 1,422 | |||||||||||||||
Plus: Early retirement program costs | 1,557 | 3,609 | - | - | - | |||||||||||||||
Plus: Branch right sizing costs | 547 | 95 | 979 | 1,104 | 1,235 | |||||||||||||||
Adjusted Pre-Provision Net Revenue | $ | 66,321 | $ | 72,628 | $ | 82,817 | $ | 92,215 | $ | 99,959 |
Page |
Simmons First National Corporation | SFNC | |||||||||||||||||||
Reconciliation Of Non-GAAP Financial Measures - Year-to-Date | ||||||||||||||||||||
For the Quarters Ended | Sep 30 | Jun 30 | Mar 31 | Dec 31 | Sep 30 | |||||||||||||||
(Unaudited) | 2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
($ in thousands) | ||||||||||||||||||||
Calculation of Adjusted Return on Average Assets | ||||||||||||||||||||
Net income | $ | 151,150 | $ | 103,903 | $ | 45,589 | $ | 256,412 | $ | 173,152 | ||||||||||
Certain items (non-GAAP) | ||||||||||||||||||||
(Gain) loss from early retirement of TruPS | - | - | - | 365 | 365 | |||||||||||||||
Gain on sale of intellectual property | - | - | - | (750 | ) | (750 | ) | |||||||||||||
Gain on insurance settlement | - | - | - | (4,074 | ) | - | ||||||||||||||
Donation to Simmons First Foundation | - | - | - | 1,738 | 1,738 | |||||||||||||||
Merger related costs | 1,420 | 1,415 | 1,396 | 22,476 | 22,441 | |||||||||||||||
Early retirement program | 5,166 | 3,609 | - | - | - | |||||||||||||||
Branch right sizing (net) | 1,621 | 1,074 | 979 | 3,628 | 2,524 | |||||||||||||||
Day 2 CECL provision | - | - | - | 33,779 | 33,779 | |||||||||||||||
Tax effect of certain items (2) | (2,145 | ) | (1,593 | ) | (621 | ) | (14,939 | ) | (15,707 | ) | ||||||||||
Adjusted earnings (non-GAAP) | $ | 157,212 | $ | 108,408 | $ | 47,343 | $ | 298,635 | $ | 217,542 | ||||||||||
Average total assets | $ | 27,616,882 | $ | 27,628,202 | $ | 27,488,732 | $ | 26,418,838 | $ | 26,162,136 | ||||||||||
Return on average assets | 0.73 | % | 0.76 | % | 0.67 | % | 0.97 | % | 0.88 | % | ||||||||||
Adjusted return on average assets (non-GAAP) | 0.76 | % | 0.79 | % | 0.70 | % | 1.13 | % | 1.11 | % | ||||||||||
Calculation of Return on Tangible Common Equity | ||||||||||||||||||||
Net income available to common stockholders | $ | 151,150 | $ | 103,903 | $ | 45,589 | $ | 256,412 | $ | 173,152 | ||||||||||
Amortization of intangibles, net of taxes | 9,079 | 6,052 | 3,026 | 11,756 | 8,721 | |||||||||||||||
Total income available to common stockholders | $ | 160,229 | $ | 109,955 | $ | 48,615 | $ | 268,168 | $ | 181,873 | ||||||||||
Certain items (non-GAAP) | ||||||||||||||||||||
(Gain) loss from early retirement of TruPS | $ | - | $ | - | $ | - | $ | 365 | $ | 365 | ||||||||||
Gain on sale of intellectual property | - | - | - | (750 | ) | (750 | ) | |||||||||||||
Gain on insurance settlement | - | - | - | (4,074 | ) | - | ||||||||||||||
Donation to Simmons First Foundation | - | - | - | 1,738 | 1,738 | |||||||||||||||
Merger related costs | 1,420 | 1,415 | 1,396 | 22,476 | 22,441 | |||||||||||||||
Early retirement program | 5,166 | 3,609 | - | - | - | |||||||||||||||
Branch right sizing (net) | 1,621 | 1,074 | 979 | 3,628 | 2,524 | |||||||||||||||
Day 2 CECL provision | - | - | - | 33,779 | 33,779 | |||||||||||||||
Tax effect of certain items (2) | (2,145 | ) | (1,593 | ) | (621 | ) | (14,939 | ) | (15,707 | ) | ||||||||||
Adjusted earnings (non-GAAP) | 157,212 | 108,408 | 47,343 | 298,635 | 217,542 | |||||||||||||||
Amortization of intangibles, net of taxes | 9,079 | 6,052 | 3,026 | 11,756 | 8,721 | |||||||||||||||
Total adjusted earnings available to common stockholders (non-GAAP) | $ | 166,291 | $ | 114,460 | $ | 50,369 | $ | 310,391 | $ | 226,263 | ||||||||||
Average common stockholders' equity | $ | 3,367,088 | $ | 3,364,755 | $ | 3,370,651 | $ | 3,259,664 | $ | 3,274,743 | ||||||||||
Average intangible assets: | ||||||||||||||||||||
Goodwill | (1,320,412 | ) | (1,320,215 | ) | (1,319,624 | ) | (1,266,762 | ) | (1,252,486 | ) | ||||||||||
Other intangibles | (123,200 | ) | (125,272 | ) | (127,394 | ) | (121,622 | ) | (118,385 | ) | ||||||||||
Total average intangibles | (1,443,612 | ) | (1,445,487 | ) | (1,447,018 | ) | (1,388,384 | ) | (1,370,871 | ) | ||||||||||
Average tangible common stockholders' equity (non-GAAP) | $ | 1,923,476 | $ | 1,919,268 | $ | 1,923,633 | $ | 1,871,280 | $ | 1,903,872 | ||||||||||
Return on average common equity | 6.00 | % | 6.23 | % | 5.49 | % | 7.87 | % | 7.07 | % | ||||||||||
Return on tangible common equity | 11.14 | % | 11.55 | % | 10.25 | % | 14.33 | % | 12.77 | % | ||||||||||
Adjusted return on average common equity (non-GAAP) | 6.24 | % | 6.50 | % | 5.70 | % | 9.16 | % | 8.88 | % | ||||||||||
Adjusted return on tangible common equity (non-GAAP) | 11.56 | % | 12.03 | % | 10.62 | % | 16.59 | % | 15.89 | % | ||||||||||
Calculation of Efficiency Ratio and Adjusted Efficiency Ratio (1) | ||||||||||||||||||||
Noninterest expense (efficiency ratio numerator) | $ | 414,922 | $ | 282,924 | $ | 143,228 | $ | 566,748 | $ | 424,173 | ||||||||||
Certain noninterest expense items (non-GAAP) | ||||||||||||||||||||
Merger related costs | (1,420 | ) | (1,415 | ) | (1,396 | ) | (22,476 | ) | (22,441 | ) | ||||||||||
Early retirement program | (5,166 | ) | (3,609 | ) | - | - | - | |||||||||||||
Donation to Simmons First Foundation | - | - | - | (1,738 | ) | (1,738 | ) | |||||||||||||
Branch right sizing expense | (1,621 | ) | (1,074 | ) | (979 | ) | (3,475 | ) | (2,371 | ) | ||||||||||
Other real estate and foreclosure expense adjustment | (703 | ) | (475 | ) | (186 | ) | (1,003 | ) | (653 | ) | ||||||||||
Amortization of intangibles adjustment | (12,291 | ) | (8,194 | ) | (4,096 | ) | (15,915 | ) | (11,807 | ) | ||||||||||
Adjusted efficiency ratio numerator | $ | 393,721 | $ | 268,157 | $ | 136,571 | $ | 522,141 | $ | 385,163 | ||||||||||
Net interest income | $ | 494,498 | $ | 341,065 | $ | 177,835 | $ | 717,316 | $ | 524,290 | ||||||||||
Noninterest income | 133,592 | 90,815 | 45,835 | 170,066 | 125,419 | |||||||||||||||
Fully tax-equivalent adjustment (effective tax rate of 26.135%) | 18,932 | 12,417 | 6,311 | 24,671 | 17,901 | |||||||||||||||
Efficiency ratio denominator | 647,022 | 444,297 | 229,981 | 912,053 | 667,610 | |||||||||||||||
Certain noninterest income items (non-GAAP) | ||||||||||||||||||||
Gain on insurance settlement | - | - | - | (4,074 | ) | - | ||||||||||||||
(Gain) loss from early retirement of TruPS | - | - | - | 365 | 365 | |||||||||||||||
Gain on sale of intellectual property | - | - | - | (750 | ) | (750 | ) | |||||||||||||
Branch right sizing income | - | - | - | 153 | 153 | |||||||||||||||
(Gain) loss on sale of securities | 391 | 391 | - | 278 | 226 | |||||||||||||||
Adjusted efficiency ratio denominator | $ | 647,413 | $ | 444,688 | $ | 229,981 | $ | 908,025 | $ | 667,604 | ||||||||||
Efficiency ratio (1) | 64.13 | % | 63.68 | % | 62.28 | % | 62.14 | % | 63.54 | % | ||||||||||
Adjusted efficiency ratio (non-GAAP) (1) | 60.81 | % | 60.30 | % | 59.38 | % | 57.50 | % | 57.69 | % |
(1) Efficiency ratio is noninterest expense as a percent of net interest income (fully taxable equivalent) and noninterest revenues. Adjusted efficiency ratio is noninterest expense before foreclosed property expense, amortization of intangibles and certain adjusting items as a percent of net interest income (fully taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and certain adjusting items, and is a non-GAAP measurement.
(2) Effective tax rate of 26.135%.
Page 14
Exhibit 99.2
Nasdaq: SFNC 3 rd Quarter 2023 Earnings Presentation Contents 3 Company Profile 4 Q3 Financial Highlights 12 Deposits, Securities, Liquidity, Interest Rate Sensitivity and Capital 18 Loan Portfolio 22 Credit Quality 26 Q3 23 Key Takeaways 28 Appendix
2 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 based on historical facts and should be considered "forward - looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 . These forward - looking statements may be identified by reference to a future period(s) or by the use of forward - looking terminology, such as "anticipate," “believe,” “continue,” "estimate," "expect," "foresee,“ “indicate,” “plan,” “potential,” “project,” “target,” "may," "might," "will," "would," "could,“ “should,” “likely” or "intend," future or conditional verb tenses, and variations or negatives of such terms or by similar expressions . These forward - looking statements include, without limitation, statements relating to the Company’s future growth ; business strategies ; product development ; revenue ; expenses (including interest expense and non - interest expenses) ; assets ; loan demand (including loan growth, loan capacity, and other lending activity) ; deposit levels ; asset quality ; profitability ; earnings ; critical accounting policies ; accretion ; net interest margin ; noninterest income ; the Company's common stock repurchase program ; adequacy of the allowance for credit losses ; income tax deductions ; credit quality ; level of credit losses from lending commitments ; net interest revenue ; interest rate sensitivity (including, among other things, the potential impact of rising rates) ; loan loss experience ; liquidity ; capital resources ; future economic conditions and market risk ; interest rates ; the expected benefits, milestones, timelines, and costs associated with the Company’s merger and acquisition strategy and activity ; the Company’s ability to recruit and retain key employees ; increases in, and cash flows associated with, the Company’s securities portfolio ; legal and regulatory limitations and compliance and competition ; anticipated loan principal reductions ; plans for investments in and cash flows from securities ; projections regarding securities investments and maturities thereof ; estimates of future swap income set forth on slide 8 ; statements contained in the “ 2023 Efficiency Targets Update” and “Long - Term Objectives” set forth on slide 11 ; the interest rate sensitivity estimates noted on slide 16 ; and dividends . Readers are cautioned not to place undue reliance on the forward - looking statements contained in this presentation in that actual results could differ materially from those indicated in or implied by such forward - looking statements due to a variety of factors . These factors include, but are not limited to, changes in the Company's operating or expansion strategy ; the availability of and costs associated with obtaining adequate and timely sources of liquidity ; the ability to maintain credit quality ; changes in general market and economic conditions ; increased unemployment ; labor shortages ; possible adverse rulings, judgments, settlements and other outcomes of pending or future litigation ; the ability of the Company to collect amounts due under loan agreements ; changes in consumer preferences and loan demand ; the effectiveness of the Company's interest rate risk management strategies ; laws and regulations affecting financial institutions in general or relating to taxes ; the effect of pending or future legislation ; the ability of the Company to repurchase its common stock on favorable terms ; the ability of the Company to successfully manage and implement its acquisition strategy and integrate acquired institutions ; difficulties and delays in integrating an acquired business or fully realizing cost savings and other benefits of mergers and acquisitions ; changes in interest rates, deposit flows, real estate values, and capital markets ; increased inflation ; customer acceptance of the Company's products and services ; changes or disruptions in technology and IT systems (including cyber threats, attacks and events) ; changes in accounting principles relating to loan loss recognition (current expected credit losses, or CECL) ; the benefits associated with the Company’s early retirement program ; political crises, war, and other military conflicts (including the ongoing military conflicts between Russia and Ukraine and between Israel and Hamas) or other major events, or the prospect of these events ; increased competition ; changes in governmental policies ; loss of key employees ; the soundness of other financial institutions and indirect exposure related to the closings of Silicon Valley Bank (“SVB”), Signature Bank and Silvergate Bank and their impact on the broader market through other customers, suppliers and partners (or that the conditions which resulted in the liquidity concerns with SVB, Signature Bank and Silvergate Bank may also adversely impact, directly or indirectly, other financial institutions and market participants with which the Company has commercial or deposit relationships) ; and other risk factors . Other relevant risk factors may be detailed from time to time in the Company's press releases and filings with the U . S . Securities and Exchange Commission, including, without limitation, the Company’s Form 10 - K for the year ended December 31 , 2022 , and the Company’s Form 10 - Q for the quarterly period ended March 31 , 2023 . In addition, there can be no guarantee that the board of directors (“Board”) of the Company will approve a quarterly dividend in future quarters, and the timing, payment, and amount of future dividends (if any) is subject to, among other things, the discretion of the Board and may differ significantly from past dividends . Any forward - looking statement speaks only as of the date of this presentation, and the Company undertakes no obligation to update these forward - looking statements to reflect events or circumstances that occur after the date of this presentation . Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results . Non - GAAP Financial Measures . This presentation contains financial information determined by methods other than in accordance with U . S . generally accepted accounting principles (“GAAP”) . The Company’s management uses these non - GAAP financial measures in their analysis of the Company’s performance and capital adequacy . These measures adjust GAAP performance measures to, among other things, include the tax benefit associated with revenue items that are tax - exempt, as well as exclude from net income (including on a per share diluted basis), pre - tax, pre - provision earnings, net charge - offs, income available to common shareholders, non - interest income, and non - interest expense certain income and expense items attributable to, for example, merger activity (primarily including merger - related expenses and Day 2 CECL provisions), gains and/or losses on sale of branches, net branch right - sizing initiatives, loss on redemption of trust preferred securities and gain on sale of intellectual property . In addition, the Company also presents certain figures based on tangible common stockholders’ equity, tangible assets and tangible book value, which exclude goodwill and other intangible assets, and presents certain other figures to include the effect that accumulated other comprehensive income could have on the Company’s capital levels . The Company further presents certain figures that are exclusive of the impact of Paycheck Protection Program (“PPP”) loans, deposits and/or loans acquired through acquisitions, mortgage warehouse loans, and/or energy loans, or gains and/or losses on the sale of securities . The Company’s management believes that these non - GAAP financial measures are useful to investors because they, among other things, present the results of the Company’s ongoing operations without the effect of mergers or other items not central to the Company’s ongoing business, present the Company’s capital inclusive of the potential impact of AOCI (primarily comprised of unrealized losses on securities), as well as normalize for tax effects, the effects of the PPP, and certain other effects . Management, therefore, believes presentations of these non - GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s ongoing businesses, and management uses these non - GAAP financial measures to assess the performance of the Company’s ongoing businesses as related to prior financial periods . These non - GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non - GAAP performance measures that may be presented by other companies . Where non - GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the appendix to this presentation .
3 Simmons First National Corporation A Mid - South based financial holding company serving our customers and the communities where we work and live since 1903 Company Overview $27.6 BILLION TOTAL ASSETS $22.2 BILLION TOTAL DEPOSITS 114 CONSECUTIVE YEARS PAYING DIVIDENDS 3 $7.7 BILLION ASSETS UNDER MANAGEMENT/ ADMINISTRATION $16.8 BILLION TOTAL LOANS 120 YEARS OF SERVICE 232 FINANCIAL CENTERS ACROSS SIX STATES 14.3% TOTAL RBC RATIO 7.1% TCE RATIO 1 4.8% DIVIDEND YIELD 2 75% LOAN TO DEPOSIT RATIO 0.32% NPA TO TOTAL ASSETS 267% NPL COVERAGE RATIO Figures presented on this slide are as of September 30, 2023, unless otherwise noted (1) Non - GAAP measures that management believes aid in the discussion of results.
Q3 23 Financial Highlights
See appendix for Non - GAAP reconciliation (2) Based on October 6, 2023, closing stock price of $16.77 and projected annualized dividend rate of $0.80 per share (3) The future payment of dividends is not guaranteed and is subject to various factors, including approval by the Company’ s b oard of directors 5 Q3 23 Highlights Q 3 net income $47.2M Adjusted earnings 1 of $48.8M 1 Q 3 diluted EPS $0.37 Adjusted EPS 1 of $0.39 1 Bottom line results reflect continued focus on maintaining strong asset quality, c apital and l iquidity positions while navigating the challenging interest rate environment Q 3 noninterest expense - 6% vs Q2 23 Adjusted NIE 1 down 4% 2 Continued implementation of Better Bank Initiative with focus on managing controllable expenses leads to decline in noninterest expense . Annual cost savings from Better Bank Initiative achieved ahead of schedule NIE as a % of avg assets 1.90% in Q3 Adjusted NIE (1) at 1.87% Balance sheet optimization Avg loans +1% ( QoQ annualized) Avg deposits +1% ( QoQ annualized) Avg assets - 2% ( QoQ annualized) 3 Balance sheet optimization aimed at targeted loan growth that reflects prudent underwriting standards and pricing discipline remains a key priority . Continued to utilize securities portfolio to fund loan growth or reduce wholesale funding ACL to total loans ratio 1.30% at end of Q3 NPA to total assets at 32 bps Book value per share +6% vs Q3 22 Tangible BVPS 1 +9% 4 Maintained strong capital position and regulatory capital ratios significantly above “well - capitalized” levels while focused on growing tangible book value per share Share repurchase activity : 1.1M shares in Q3 $40M remaining capacity 2 QoQ = 3Q23 vs 2Q23 PE – Period End NCO Ratio – Net Charge - Offs as a Percentage of Average Loans (annualized) ACL – Allowan ce for Credit Losses (1) Non - GAAP measures that management believes aid in the discussion of results.
See Appendix for Non - GAAP reconciliation (2) Market conditions and our capital needs (among other things) will drive decisions regarding additional, future stock re pur chases 6 Balance Sheet Highlights $ in millions, except per share data Q3 23 Q2 23 Q3 22 $ Change % Change $ Change % Change Period End Balances Total loans $16,771.9 $16,833.7 $15,607.1 $(61.8) - % $1,164.8 7 % Investment securities 7,100.7 7,336.5 7,724.6 (235.8) (3) (623.9) (8) Total assets 27,564.3 27,959.1 27,076.1 (394.8) (1) 488.3 2 Total deposits 22,231.2 22,488.7 22,148.7 (257.5) (1) 82.5 - Borrowed funds 1,788.4 1,842.0 1,499.2 (53.6) (3) 289.2 19 Total stockholders' equity 3,285.6 3,356.3 3,157.2 (70.8) (2) 128.4 4 Average Balances Total loans $16,758.6 $16,702.4 $15,320.8 $56.2 - % $1,437.8 9 % Investment securities 7,255.6 7,448.4 8,073.7 (192.8) (3) (818.1) (10) Total assets 27,594.6 27,766.1 26,868.7 (171.5) (1) 725.9 3 Total deposits 22,273.5 22,199.2 21,602.5 74.4 - 671.0 3 Borrowed funds 1,678.4 1,935.4 1,730.9 (257.0) (13) (52.5) (3) Total stockholders' equity 3,371.7 3,358.9 3,292.1 12.8 - 79.6 2 Select Other Data Equity to assets 11.92% 12.00% 11.66% Tangible common equity to tangible assets 1 7.07 7.22 6.69 Book value per share $26.26 $26.59 $24.87 $(0.33) (1)% $1.39 6 % Tangible book value per share 1 14.77 15.17 13.51 (0.40) (3) 1.26 9 Allowance for credit losses to total loans 1.30% 1.25% 1.27% Nonperforming loan coverage ratio 267 292 342 Q3 23 vs Q2 23 Q3 23 vs Q3 22 (1) Non - GAAP measures that management believes aid in the discussion of results. See appendix for Non - GAAP reconciliation Q3 23 Highlights Linked Quarter Comparison (Q3 23 vs Q2 23) □ While period end balances reflect a decrease from Q 2 23 levels, average balances reflect a strategic priority centered on balance sheet optimization ▪ + $ 56 . 2 M increase in average loans ▪ + $ 74 . 4 M increase in average deposits ▪ - $ 192 . 8 M decrease in average securities ▪ - $ 257 .
0 M decrease in borrowed funds Q3 23 Highlights Income Summary $ in millions, except per share data Q3 23 Q2 23 Q3 22 Q2 23 Q3 22 Net interest income $153.4 $163.2 $193.6 (6) % (21)% Noninterest income, excluding securities gain (loss) 1 42.8 45.4 43.0 (6) (1) Total revenue, excluding securities gain (loss) 1 196.2 208.6 236.6 (6) (17) Noninterest expense 132.0 139.7 138.9 (6) (5) Pre-provision net revenue 1 64.2 68.9 97.7 (7) (34) Gain (loss) on sale of securities - (0.4) - NM NM Provision for credit losses on loans 8.9 0.1 0.1 NM NM Provision for credit losses on investment securities (1.2) - - NM NM Provision for income taxes 9.2 10.1 17.0 (9) (45) Net income $ 47.2 $ 58.3 $ 80.6 (19) % (41)% Diluted EPS $ 0.37 $ 0.46 $ 0.63 (20) % (41)% Impact of certain items, net of tax 1, 2 $ 1.6 $ 2.8 $ 1.7 Adjusted pre-provision net revenue 1 $ 66.3 $ 72.6 $ 100.0 (9) % (34)% Adjusted earnings 1 $ 48.8 $ 61.1 $ 82.3 (20) % (41)% Adjusted diluted EPS 1 $ 0.39 $ 0.48 $ 0.64 (19) % (39)% % Change vs 7 Income Summary Note: Numbers may not add due to rounding NM – not meaningful (1) Non - GAAP measures that management believes aid in the discussion of results. See appendix for Non - GAAP reconciliation (2) Effective tax rate of 26.135% Linked Quarter Comparison (Q3 23 vs Q2 23) □ Total revenue of $ 196 . 2 million reflects impact from higher deposit costs and change in deposit mix as customers continue to migrate to higher rate deposit offerings . □ Continued implementation of Better Bank Initiative with focus on managing controllable expenses leads to decline in noninterest expense ▪ $ 7 . 7 million, or 6 % , decline in noninterest expense ▪ $6.1 million, or 4%, decline in adjusted noninterest expense 1 □ Pre - provision net revenue of $ 64 . 2 million ; adjusted pre - provision net revenue of $ 66 .
3 million Q3 23 Highlights 8 Net Interest Income and Margin (FTE) FTE – Fully taxable equivalent using an effective tax rate of 26.135% Totals may not foot due to rounding 1 Estimated swap income based on projected forward effective fed funds rates of 5.35% for Q4 23, 5.32% for Q1 24, 5.20% for Q 2 2 4, 4.97% for Q3 24, 4.70% for Q4 24 and 4.11% for the full - year of 2025. Does not include potential impact of hedge ineffectiven ess that is recorded in interest income. Under the terms of the swap agreement, the Company receives Effective Fed Funds rate and pays a fix ed rate of 1.21% $199.8 $199.8 $184.1 $169.3 $159.9 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Net Interest Income and Margin $ in millions; FTE Δ in Interest Income (FTE) excluding impact of swap Δ in Interest Expense - Deposits Impact of swap, net Net Interest Income Evolution $ in millions; FTE 4.86 5.40 5.67 5.89 6.08 2.29 2.68 2.92 2.91 3.08 0.47 1.02 1.58 1.96 2.37 2.66 3.92 4.29 5.31 5.60 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Loan Yield (FTE) Securities (FTE) Cost of Deposits Other Borrowings Select Yields/Rates FTE (%) Q2 23 Q3 23 Linked Quarter Comparison (Q3 23 vs Q2 23) □ Asset portion of balance sheet ▪ + 19 bps increase in yield on loans ▪ + 17 bps increase in yield on investment securities ▪ + 21 bps increase in yield on earnings assets ▪ 3 % decrease in average investment securities □ Liability portion of balance sheet ▪ + 41 bps increase in cost of deposits reflects change in mix of deposits and competitive environment ▪ 13 % decrease in average other borrowings ▪ Excess cash flows from investments securities portfolio not utilized to fund loan growth applied to reduce other borrowings □ Estimated future swap income based on projected average Effective Fed Fund rates . Estimated interest income derived from swap of $ 29 . 7 million 1 for FY 2025 based on projected average Effective Fed Fund rate of 4 . 11 % □ Remaining balance of purchase accounting accretion at 9 / 30 / 23 was $ 15 .
0 million Δ in Interest Expense - Borrowings Estimated Future Swap Income 1 $ in millions; Based on forward Fed Fund rates 3.34% 3.31% 3.09% 2.76% 2.61% $10.7 $10.5 $10.2 $9.7 $9.0 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Assumed Average Effective Fed Funds Rate 5.35% 5.32% 5.20% 4.97% 4.70% NIM $13.4 $13.8 $14.4 $14.7 $14.2 $13.3 $12.6 $14.4 $14.8 $14.2 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Noninterest income per employee Adjusted noninterest income, excluding securities gain (loss) per employee(1) Noninterest Income Per Employee (FTE) ($ in thousands) $ in millions Q3 23 Q2 23 Q3 22 Q2 23 Q3 22 Service charges on deposit accounts $12.4 $12.9 $ 12.6 (4) % (1) % Wealth management fees 7.7 7.4 8.6 4 (10) Debit and credit card fees 7.7 8.0 7.7 (3) - Mortgage lending income 2.2 2.4 2.6 (10) (17) Bank owned life insurance 3.1 2.6 2.9 21 7 Other service charges and fees 2.2 2.3 2.1 (1) 7 Other 7.4 9.8 6.7 (24) 12 42.8 45.4 43.0 (6) (1) Gain (loss) on sale of securities - (0.4) - NM NM Total noninterest income $42.8 $45.0 $43.0 (5) % (1)% Adjusted noninterest income 1 $42.8 $45.0 $42.7 (5) % - % % Change vs 18.2% 18.8% 20.5% 21.6% 21.8% 18.1% 17.4% 20.5% 21.8% 21.8% Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Noninterest income/total revenue Adjusted Noninterest Income, excluding securities gain (loss)/adjusted total revenue(1) Noninterest Income to Total Revenue $73.8 $73.4 $70.1 $67.9 $65.3 $73.7 $72.2 $70.1 $68.0 $65.3 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Total revenue per employee Adjusted total revenue per employee(1) Revenue Per Employee (FTE) ($ in thousands) 9 Noninterest Income Totals may not foot due to rounding NM – not meaningful FTE – Full - time equivalent (1) Non - GAAP measures that management believes aid in the discussion of results.
See appendix for Non - GAAP reconciliation Q3 23 Highlights Linked Quarter Comparison (Q3 23 vs Q2 23) □ Decrease in service charges on deposits accounts was primarily due to certain insufficient funds fee structure changes for consumer deposit accounts that were implemented during the quarter □ Decrease in other income primarily reflects the positive impact of fair value adjustments related to certain equity investments and death benefits from bank owned life insurance recorded in Q 2 23 $ in millions Q3 23 Q2 23 Q3 22 Q2 23 Q3 22 Salaries and employee benefits $67.4 $74.7 $71.9 (10) % (6)% Occupancy expense, net 12.0 11.4 11.7 5 3 Furniture and equipment 5.1 5.1 5.4 - (5) Deposit insurance 4.7 5.2 3.3 (10) 43 OREO and foreclosure expense 0.2 0.3 0.2 (21) 36 Other 42.6 42.9 45.1 (1) (6) Merger related costs - - 1.4 - (100) Total noninterest expense $132.0 $139.7 $138.9 (6) % (5)% Adjusted noninterest expense 1 $129.9 $136.0 $136.4 (4) % (5)% % Change vs 3,206 3,236 3,189 3,066 3,005 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Employees (FTE) 57.2% 58.3% 62.3% 65.2% 65.1% 54.4% 57.0% 59.4% 61.3% 61.9% Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Efficiency ratio Adjusted efficiency ratio (1) Efficiency Ratio 2.07% 2.10% 2.11% 2.02% 1.90% 2.03% 2.08% 2.08% 1.96% 1.87% Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Noninterest expense Adjusted noninterest expense (1) Noninterest Expense as a Percentage of Total Average Assets 10 Noninterest Expense Note: Numbers may not add due to rounding NM – not meaningful FTE – full - time equivalent (1) Non - GAAP measures that management believes aid in the discussion of results. See appendix for Non - GAAP reconciliation Q3 23 Highlights Linked Quarter Comparison (Q3 23 vs Q2 23) □ Better Bank Initiative and focus on actively managing controllable expenses leads to decline in noninterest expense ▪ $ 7 . 7 million, or 6 % , decline in noninterest expense ▪ $6.1 million, or 4%, decline in adjusted noninterest expense □ Decline in salaries and employee benefits primarily reflects reduced level of base salaries, $ 4 . 0 million incentive accrual adjustment offset, in part, by early retirement program expense of $ 1 . 6 million □ Noninterest expense as a percentage of average assets at 1 . 90 % and adjusted noninterest expense at 1 .
87 % - below 2 % target Note: The “2023 Efficiency Targets Update” and “Long - Term Objectives” sections of this slide contain Company expectations and pr ojections Better Bank Initiative: Achieved 2023 efficiency targets ahead of schedule Long - Term Objectives (3 - 5 years) ROA ≥ 1.50% Efficiency ratio = low 50% 11 2023 Efficiency Targets Update Better Bank Initiative □ Balance sheet, liquidity & revenue optimization □ Enhance deposit and lending operations processes □ Expand data analytics capabilities and decision process □ Optimize product delivery channels □ Continued optimization of branch and digital delivery channels □ Early Retirement Program ▪ Program completed during Q 3 ▪ ~ $ 5 . 1 million of annual cost savings □ Other Identified Opportunities ▪ Completed other identified opportunities during Q 2 and Q 3 ▪ Achieved 100 % of original annual costs savings by the end of Q 3 ~$15M annual cost savings 100% achieved by the end of Q4 Original Estimate ~$15M annual cost savings 100% achieved by the end of Q3 Actual Results Deposits, Securities, Liquidity, Interest Rate Sensitivity and Capital
Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Noninterest Bearing Interest Bearing Transactions Time Deposits Deposit Mix $ in billions 13 Deposits: Mix shift reflects continued customer migration to higher rate deposit offerings Source: Average Fed Funds rate based on data from www.macrotrends.net (1) Non - GAAP measures that management believes aid in the discussion of results. See appendix for Non - GAAP reconciliation. Col lateralized deposits represent collateralized deposits less the portion that is FDIC insured (2) Deposit beta calculated as change in cost of deposits from Q1 22 to Q3 23 divided by the change in quarterly average Fe der al Funds Effective rate for Q1 22 vs Q3 23 $22.1 $22.5 $22.5 $22.5 $25 $319 $(328) $(274) $(258) Linked Quarter Deposit Change $ in millions Total Deposits Noninterest Bearing Transaction Accounts Interest Bearing Transaction Accounts Time Deposits Brokered Deposits (money market & CDs) 0.65% 1.41% 2.10% 2.57% 3.06% 0.47% 1.02% 1.58% 1.96% 2.37% 2.20% 3.65% 4.52% 4.99% 5.26% Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Interest Bearing Deposits Cost of Deposits Avg Fed Funds Rate Evolution of Funding Rates 44% deposit beta during this cycle 2 $22.2 $14.8 $2.8 $4.6 Deposit Composition $22.2 Conservative Deposit Base 1 $ in billions as of September 30, 2023 FDIC Insured Collateralized Deposits Uninsured, Non - Collateralized Deposits Approximately 79% of deposits are FDIC insured or are collateralized deposits Securities Portfolio: Utilizing as a funding source to support balance sheet optimization FTE – fully taxable equivalent using an effective tax rate of 26.135% Data presented on this slide is as of September 30, 2023, unless otherwise noted (1) Effective yield of securities portfolio at 9/30/23, excluding AOCI impact of HTM transfers made during Q2 22 (2) Bond ratings reflect highest rating by Moody's Investors Service, Inc., Standard & Poor's or Fitch Ratings.
Government re lat ed or government sponsored enterprise securities represent implied rating by one of the previously noted rating agencies 14 9% 37% 47% 7% Securities Portfolio by Type Treasury/Agency States and Political Subdivisions MBS/CMO Corporate & Other AFS HTM At September 30, 2023 $2,615 $2,111 Aaa /AAA 464 1,159 Aa/AA 88 311 A 178 158 Baa/BBB 13 7 Not Rated $3,358 $ 3 , 746 Total $3,358 $ 2 , 851 Fair value Securities Portfolio Bond Ratings 2 $ in millions 39% 61% Senior Debt Subordinated Debt Corporate Bond Portfolio Effective Duration Yield (FTE) (1) At September 30, 2023 Fixed Rate 13.36 3.27% Municipal 5.10 2.08 MBS/CMO 7.65 2.30 Treasury/Agency 3.85 4.73 Corporate 10.90 2.02 Other - 5.58 Variable Rate 7.35 3.13% Total Securities Portfolio Summary Including the impact of $1B matched swap on certain fixed rate securities, the effective duration of the securities portfolio is reduced to 6.51 Securities Portfolio Highlights □ Focus on balance sheet optimization leads to further decline in securities portfolio . □ Average securities to total earning assets of 30 % at 9 / 30 / 23 compared to 39 % at 12 / 31 / 21 □ Cash flows from principal maturities of securities utilized to fund loan growth and reduce wholesale funding . □ Approximately $ 140 - $ 180 million per quarter of projected principal maturities □ 95 % of total securities portfolio A - rated or higher at 9 / 30 / 23 □ 53 % of corporate bond portfolio invested in Fortune 500 companies □ Recaptured $ 1 .
2 million of provision for credit losses on investment securities available for sale in the corporate bond portfolio during Q 3 23 43% 10% 21% 26% Fortune 500 - Banks Fortune 500 - Other Banks >$20B in assets Banks <$20B in assets Loan to Deposit Ratio 60% 62% 62% 69% 70% 72% 74% 75% 75% Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Peer Median 1 71% 69% 69% 74% 79% 83% 84% 84% NA 15 Liquidity: Significant sources of liquidity and low reliance on borrowed funds Cash and Cash Equivalents + Variable Rate Securities $ in millions Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Cash & Cash Equivalents Variable Rate Securities $3,286 $3,150 $3,132 $2,321 $1,910 $1,824 NA – not available (1) Source: S&P Global Market Intelligence. Represents peer median loan to deposit ratio. Peer group includes ABCB, AUB, OZK, BO KF, CADE, CBSH, FBK, HWC, HTLF, HOMB, IBTX, ONB, PNFP, PB, RNST, SSB, SNV, TRMK, UMBF, UCBI (2) Uninsured, non - collateralized deposits represent uninsured deposits of Simmons Bank, less the uninsured portion of collatera lized deposits, and deposit balances of SFNC subsidiaries.
See appendix for Non - GAAP reconciliation Borrowed Funds as a Percent of Total Liabilities Period End Balances 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Q1 23 Q2 23 Q3 23 7% 6% 6% 5% 6% 13% 13% 10% 10% 9% 6% 6% $1,572 $1,578 7% FHLB borrowing availability Unpledged securities Fed Funds lines and Fed Discount Window and Bank Term Funding Program Additional Liquidity Sources $ in millions Total at 9.30.23 $11,447 $ 5,372 4,124 1,951 Uninsured, non - collateralized deposits 2 $4,631 Coverage ratio 2.5x 7% $1,406 $1,633.5 $913.7 $749.4 $366.6 $1,348.9 $997.0 $155.4 $1.5 Q4 23 Q1 24 Q2 24 Q3 24 Other CDs Brokered CDs Weighted Average Rates 4.23% 4.90% 3.64% 5.09% 3.99% 5.29% 3.35% 4.05% 1 6 Interest Rate Sensitivity Balance Sheet Interest Rate Sensitivity Over the next 12 months (estimated) 0.43% 0.22% (0.21)% D50 bps D25 bps U25 bps Estimated net interest income sensitivity given immediate, parallel shift in interest rates across the yield curve with a static balance sheet Immediate change in interest rates 44% 56% Variable Rate Loans Fixed Rate Loans Fixed vs Variable Rate 48% 25% 5% 22% Daily Within 3Mo 4 to 12 Mo Over 12 Mo Variable Rate Loans – Rate Reset Date Gradual change in interest rates* Estimated net interest income sensitivity given gradual, parallel shift in interest rates across the yield curve with a static balance sheet Schedule of Select Maturities (over the next 12 months) $ in millions * Assumptions used in balance sheet interest rate sensitivity estimates under a gradual increase/decrease in interest rates i ncl ude the following: Down 50 bps scenario – 25 bp decrease in March 2024 and 25 bp decrease in June 2024 Down 25 bps scenario – 25 bp decrease in March 2024 Up 25 bps scenario – 25 bp increase December 2023 (0.17)% (0.16)% (0.07)% D50 bps D25 bps U25 bps Loan Portfolio At September 30, 2023 □ ~ $ 140 - $ 180 million per quarter of projected securities principal maturities □ ~ $ 1 . 0 billion of fixed rate loans principal maturities at a weighted average rate of 5 . 78 % □ ~ $ 1 . 2 billion of FHLB advances maturing at a weighted average rate of 5 .
44 % 17 Capital: Strong regulatory capital position and focused on tangible book value per share (1) Q3 23 data as of September 30, 2023, Q2 23 data as of June 30, 2023, and Q3 22 data as of September 30, 2022 (2) Non - GAAP measure that management believes aid in the discussion of results. See Appendix for Non - GAAP reconciliation (3) Market conditions and our capital needs (among other things) will drive decisions regarding additional, future stock re pur chases 9.2% 9.2% 9.3% Q3 22 Q2 23 Q3 23 W ELL C APITALIZED 5.0% Tier 1 Leverage Ratio 1 11.7% 11.9% 12.0% Q3 22 Q2 23 Q3 23 CET 1 Capital Ratio 1 W ELL C APITALIZED 6.5% 11.7% 11.9% 12.0% Q3 22 Q2 23 Q3 23 Tier 1 Risk - Based Capital Ratio 1 14.1% 14.2% 14.3% Q3 22 Q2 23 Q3 23 Total Risk - Based Capital Ratio 1 W ELL C APITALIZED 10.0% W ELL C APITALIZED 8.0% $24.87 $26.59 $26.26 Q3 22 Q2 23 Q3 23 Book Value Per Common Share 1 +6% $13.51 $15.17 $14.77 Q3 22 Q2 23 Q3 23 Tangible Book Value Per Common Share 1,2 Capital Ratios (at 9/30/23) CET 1 Capital Ratio 12.0% CET 1 Capital Ratio, Including AOCI 2 9.4% Equity to Assets 11.9% Tangible Common Equity Ratio 2 7.1% +9% Share Repurchase Activity 3 (Q3 23) • 1.1 million shares repurchased • $17.69 weighted average price • $20M total cost of shares repurchased • ~$40M remaining share authorization $5,138 $5,000 $4,725 $4,443 $4,049 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Unfunded Commitments $ in millions Mortgage Warehouse Agricultural 19 Loan Portfolio: Well - diversified, granular portfolio with no significant concentrations Total loans at 9/30/23 Total loans at 6/30/23 $(57) $16 $(64) $25 $(92) $91 $19 $(62) Linked Quarter Loan Growth $ in millions Total Loans RE - Commercial RE - Construction Commercial RE – Single Family Loan Portfolio Waterfall $ in millions Consumer & Other Funded loans /advances Paydowns/ payoffs 82% variable rate • 73% tied to Prime • 27% tied to SOFR Loan Portfolio Highlights □ Well - diversified, granular portfolio with no significant industry or geographic concentrations □ Highly focused on maintaining conservative underwriting standards and structure guidelines while emphasizing prudent pricing discipline □ Very limited exposure to Shared National Credits (SNCs) ▪ SNCs represent < 1 % of total loans ▪ Additional banking relationships with all borrowers Includes $160M payoff of low fixed rate or elevated risk rated loans
Loan Portfolio
43% 10% 12% 3% 3% 3% 26% Texas Arkansas Tennessee Missouri Oklahoma Kansas Other $3.0B Office Portfolio (non - owner occupied) 20 Loan Portfolio: Well - performing and low leverage in key portfolios (1) Total loans and commitments excluding credit card portfolio and mortgage warehouse Data shown above as of September 30, 2023. By State Loan Portfolio – Geographic diversification 32% 18% 15% 10% 5% 2% 18% Texas Arkansas Tennessee Missouri Oklahoma Kansas Other % of Total Commitments 1 % of Total Loans 1 Top 10 MSAs 10.1% 10.0% Dallas - Plano - Irving 8.7% 8.6% Houston - Sugarland - Baytown 6.0% 6.0% Memphis 5.8% 5.5% Little Rock - North Little Rock - Conway 5.0% 5.2% Fort Worth - Arlington 5.9% 5.2% Nashville - Davidson - Murfreesboro 3.2% 3.5% St.
Louis 3.0% 3.2% Fayetteville - Springdale - Rogers 2.2% 2.3% Oklahoma City 2.0% 2.1% Jonesboro, AR 44% 13% 12% 10% 2% 2% 17% Texas Arkansas Tennessee Missouri Oklahoma Kansas Other At 9/30/23 Key Statistics 0.00% NPL Ratio 0.00% Past Due 30+ Days $2.3M Average Loan Size $0.5M Median Loan Size 64% Number of Loans <$1M 48.7% Average LTV 55.6% Weighted Average LTV $16.4B 1 At 9/30/23 Key Statistics 0.09% NPL Ratio 0.00% Past Due 30+ Days $3.3M Average Loan Size $0.6M Median Loan Size 62% Number of Loans <$1M 53.0% Average LTV 61.2% Weighted Average LTV Multifamily 40% 12% 12% 6% 6% 9% 15% Texas Arkansas Tennessee Missouri Oklahoma Kansas Other Construction - Land Development At 9/30/23 Key Statistics 0.10% NPL Ratio 0.01% Past Due 30+ Days $1.2M Average Loan Size $0.3M Median Loan Size 83% Number of Loans <$1M 56.7% Average LTV 58.3% Weighted Average LTV By State By State By State $0.9B $1.3B +49 bps $750 $824 $455 $392 $292 $248 $244 $838 $1,077 $542 $460 $252 $167 $200 $776 $1,114 $552 $270 $504 $274 $433 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Opportunity Proposal Ready to Close $2,364 $3,015 $1,549 $1,122 21 Loan Pipelines: Capitalizing on opportunities that meet pricing and disciplined credit appetite 1 Rate ready to close represents the weighted average rate on commercial loans that are ready to close and does not include f ees , including FAS 91 fees, associated with those commercial loans Rate Ready to Close 1 3.43% 4.45% 5.84% 6.85% 7.32% 7.94% 8.43% Commercial Loan Pipeline by Category $ in millions $219 $223 $183 $127 $106 $152 $101 $99 $58 $36 $21 $36 $32 $24 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Mortgage Closed Loan Volume Mortgage Pipeline Volume Mortgage Loan Volume $ in millions $1,048 Q3 23 Highlights □ Focused on maintaining prudent underwriting standards and pricing discipline given projections surrounding near - term future economic growth □ While loan growth has moderated throughout the year, as expected, linked quarter increase in ready to close loans represents ability to capitalize on opportunities that meet pricing and disciplined credit appetite □ Rate ready to close + 49 bps on a linked quarter basis □ Mortgage loan originations in Q 3 23 : ▪ 82 % purchase ▪ 18 % refinance $689 $877 23 Credit Quality: Key credit quality metrics remain near historical lows Source: S&P Global Market Intelligence 2017 – 2022 (1) As of December 31, for each respective year shown above; quarterly data as of the end of the quarter for each respectiv e p eriod (2) Net charge - offs to average loans for the full - year for each respective year shown above; quarterly annualized data for eac h respective quarter (3) Non - GAAP measures that management believes aid in the discussion of results.
Credit Quality
See Appendix for Non - GAAP reconciliation 0.81% 0.67% 0.65% 0.96% 0.57% 0.37% 0.37% 0.38% 0.43% 0.49% 2017 2018 2019 2020 2021 2022 Q4 22 Q1 23 Q2 23 Q3 23 Annual Nonperforming loans / loans 1 Strategic decision to de - risk certain elements of the loan portfolio through planned run - off of particular acquired non - relationship credits Quarterly Nonperforming assets / total assets 1 0.83% 0.64% 0.55% 0.64% 0.31% 0.23% 0.23% 0.26% 0.28% 0.32% 2017 2018 2019 2020 2021 2022 Q4 22 Q1 23 Q2 23 Q3 23 Annual Quarterly Net charge - offs to average loans 2 0.31% 0.21% 0.24% 0.45% 0.13% 0.09% 0.13% 0.03% 0.04% 0.28% 0.05% 2017 2018 2019 2020 2021 2022 Q4 22 Q1 23 Q2 23 Q3 23 NCO Ratio (as reported) NCO Ratio (excluding single credit)(3) Annual Quarterly K ey Credit Metrics : ▪ Average FICO Scores 754 ▪ Balance Weighted Average FICO Score 746 ▪ Line Utilization 19% 1.61% 1.64% 1.86% 1.60% 1.40% 1.44% 1.52% 1.69% 2.25% 2.19% 2017 2018 2019 2020 2021 2022 Q4 22 Q1 23 Q2 23 Q3 23 Credit card portfolio net charge - off ratio 2 Annual Quarterly Linked Quarter Comparison (Q3 23 vs Q2 23) □ Increase in nonperforming assets primarily due to a commercial credit totaling approximately $ 8 . 0 million, offset in part by payoffs received on previously identified nonaccrual commercial and agricultural loans □ Completed a comprehensive review of our $ 305 million nursing/extended care portfolio during the quarter ▪ Net charge - off ratio reflects $ 9 . 6 million charge - off on a single nursing/extended care related credit that accounted for 23 bps of total 28 bps of net charge - offs in the quarter □ ACL to total loans ended the quarter at 1 .
30 % □ NPL coverage ratio ended the quarter at 267 % Key Highlights 0.29% 0.19% 0.24% 0.21% 0.11% 0.18% 0.18% 0.15% 0.10% 0.11% 2017 2018 2019 2020 2021 2022 Q4 22 Q1 23 Q2 23 Q3 23 Past due 30+ days / total loans 1 Annual Quarterly 24 ACL: Reflects current economic forecast and composition of loan portfolio Note: Numbers may not add due to rounding ACL – Allowance for Credit Losses on Loans (1) As of December 31, for each respective year shown above; quarterly data as of the end of the quarter for each respectiv e p eriod ACL / Loans ACL $ in millions 1.41% $ 212.6 ACL as of 6/30/22 (15.9) Q3 22 Recapture of Provision (0.2) Q3 22 Net Charge - Offs 1.1 Day 1 PCD Allowance Adjustment (Spirit) 1.27% $ 197.6 ACL as of 9/30/22 - Q4 22 Provision (5.1) Q4 22 Net Charge - Offs 4.5 Day 1 PCD Allowance Adjustment (Spirit) 1.22% $ 197.0 ACL as of 12/31/22 10.9 Q1 23 Provision (1.3) Q1 23 Net Charge - Offs 1.25% $ 206.6 ACL as of 3/31/23 5.1 Q2 23 Provision (1.6) Q2 23 Net Charge - Offs 1.25% $ 210.0 ACL as of 6/30/23 20.2 Q3 23 Provision (11.7) Q3 23 Net Charge - Offs 1.30% $ 218.5 ACL as of 9/30/23 Allowance for Credit Losses on Loans and Loan Coverage Reserve for Unfunded Commitments As of 9/30/23 As of 6/30/23 As of 3/31/23 As of 12/31/22 As of 9/30/22 $ in millions $4,049 $4,443 $4,725 $5,000 $5,138 Unfunded Commitments $25.6 $36.9 $41.9 $41.9 $41.9 Reserve for Unfunded Commitments $(11.3) $(5.0) - - $16.0 Provision for Unfunded Commitments 0.6% 0.8% 0.9% 0.8% 0.8% Reserve / Unfunded Balance ACL METHODOLOGY AS OF 9/30/23: ▪ Moody’s September 2023 scenarios with management’s weighting: Baseline (75%) / S1 (15%) / S3 (10%) ▪ Total credit coverage / total commitments: 1.17% ACL / Loans (%) and ACL ($) 1 $ in millions $220 $238 $205 $179 $213 $198 $197 $207 $210 $219 1.52% 1.85% 1.71% 1.49% 1.41% 1.27% 1.22% 1.25% 1.25% 1.30% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 1.80% 2.00% $0 $25 $50 $75 $100 $125 $150 $175 $200 $225 $250 1/1/20 CECL Adoption 2020 2021 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Recapture of reserve for unfunded commitments over the past two quarters reflects the decline in unfunded commitments 25 Breakout: Loan portfolio by category as of September 30, 2023 as of June 30, 2023 Unfunded Commitment Reserve ACL % Unfunded Commitment $ Nonperforming $ Classified $ % of Total Loans Balance $ % of Total Loans Balance $ $ in millions Total Loan Portfolio - 3.2% - 1 1 1% 192 1% 210 Consumer - Credit Card 0.5% 2.6% 26 - - - 113 1% 148 Consumer - Other 1.0% 1.2% 2,095 3 5 18% 3,022 17% 2,931 Real Estate - Construction 0.5% 1.1% 260 12 205 45% 7,565 45% 7,546 Real Estate - Commercial 0.3% 1.8% 320 24 29 16% 2,658 16% 2,633 Real Estate - Single - family 0.1% 1.3% 1,260 41 46 15% 2,477 15% 2,569 Commercial - 0.2% - - - 1% 158 1% 215 Mortgage Warehouse 0.1% 0.5% 88 1 1 2% 297 2% 281 Agriculture 1.0% 0.7% - - - 2% 290 2% 301 Other 0.6% 1.30% 4,049 82 287 100% 16,772 100% 16,834 Total Loan Portfolio Loan Concentration (Holding Company Level) : 102% 99% C&D 274% 273% CRE Select Loan Categories 1.1% 1.2% 113 1 5 8% 1,285 8% 1,332 Retail 0.1% 4.9% 2 - 101 2% 305 2% 329 Nursing / Extended Care 0.5% 1.0% 149 4 15 3% 577 3% 553 Healthcare 0.6% 0.7% 832 1 16 8% 1,307 7% 1,228 Multifamily 1.6% 2.1% 73 5 51 4% 720 4% 745 Hotel 0.5% 1.0% 40 2 3 3% 508 3% 523 Restaurant 3.0% 2.3% 85 - 5 5% 906 5% 924 NOO Office 0.3% 0.2% 394 - - 9% 1,540 8% 1,423 NOO Industrial Warehouse
Q3 23 Key Takeaways
Balance sheet optimization remains a primary focus and will be driven by targeted loan growth that reflects conservative underwriting standards and disciplined pricing strategy 27 Q3 23 Key Takeaways 1 Continued implementation of Better Bank Initiative with focus on actively managing expenses enabled us to achieve $ 15 M in targeted annual cost savings ahead of schedule 2 Focused on maintaining strong asset quality, capital and liquidity positions . Regulatory capital ratios continue to significantly exceed “well - capitalized” guidelines, allowance ratio at 1 .
Appendix
30 % and loan - to - deposit ratio at 75 % 3 Continue to navigate challenging interest rate environment by utilizing cash flows from securities portfolio to fund loan growth and/or reduce wholesale funding while continuing to focus on deepening customer relationships 4 29 Non - GAAP Reconciliations Q3 Q2 Q1 Q4 Q3 2023 2023 2023 2022 2022 $ in thousands, except per share data Calculation of Adjusted Earnings $ 47,247 $ 58,314 $ 45,589 $ 83,260 $ 80,603 Net Income Certain items 5 19 1,396 35 1,422 Merger related costs 547 95 979 1,104 1,235 Branch right sizing, net - - - - 365 Loss from early retirement of TruPS - - - - (750) Gain on sale of intellectual property - - - (4,074) - Gain on insurance settlement 1,557 3,609 - - - Early retirement program (552) (972) (621) _ 768 _ (594) Tax effect⁽¹⁾ 1,557 2,751 1,754 (2,167) 1,678 Certain items, net of tax $ 48,804 $ 61,065 $ 47,343 $ 81,093 $ 82,281 Adjusted earnings (non - GAAP) Calculation of Earnings and Adjusted Earnings per Diluted Share $ 47,247 $ 58,314 $ 45,589 $ 83,260 $ 80,603 Earnings available to common shareholders $ 0.37 $ 0.46 $ 0.36 $ 0.65 $ 0.63 Diluted earnings per share $ 48,804 $ 61,065 $ 47,343 $ 81,093 $ 82,281 Adjusted earnings available to common shareholders (non - GAAP) $ 0.39 $ 0.48 $ 0.37 $ 0.64 $ 0.64 Adjusted diluted earnings per share (non - GAAP) (1) Effective tax rate of 26.135% Q3 Q2 Q1 Q4 Q3 2023 2023 2023 2022 2022 $ in thousands Calculation of Pre - Provision Net Revenue (PPNR) $ 153,433 $ 163,230 $ 177,835 $ 193,026 $ 193,585 Net interest income 42,777 44,980 45,835 44,647 43,023 Noninterest income - (391) - (52) (22) Less: Gain (loss) on sale of securities 131,998 139,696 143,228 142,575 138,943 Less: Noninterest expense $ 64,212 $ 68,905 $ 80,442 $ 95,150 $ 97,687 Pre - Provision Net Revenue (PPNR) (non - GAAP) Calculation of Adjusted Pre - Provision Net Revenue $ 64,212 $ 68,905 $ 80,442 $ 95,150 $ 97,687 Pre - Provision Net Revenue (PPNR) (non - GAAP) 5 19 1,396 35 1,422 Plus: Merger related costs 547 95 979 1,104 1,235 Plus: Branch right sizing costs, net - - - - 365 Plus: Loss from early retirement of TruPS 1,557 3,609 - - - Plus: Early Retirement Program - - - - (750) Less: Gain on sale of intellectual property - - - (4,074) - Less: Gain on insurance settlement $ 66,321 $ 72,628 $ 82,817 $ 92,215 $ 99,959 Adjusted Pre - Provision Net Revenue (non - GAAP) 30 Non - GAAP Reconciliations Calculation of Book Value and Tangible Book Value per Share $ 3,285,555 $ 3,356,326 $ 3,339,901 $ 3,269,362 $ 3,157,151 Total common stockholders' equity Intangible assets: (1,320,799) (1,320,799) (1,320,799) (1,319,598) (1,309,000) Goodwill (116,660) (120,758) (124,854) (128,951) (133,059) Other intangible assets (1,437,459) (1,441,557) (1,445,653) (1,448,549) (1,442,059) Total intangible assets $ 1,848,096 $ 1,914,769 $ 1,894,248 $ 1,820,813 $ 1,715,092 Tangible common stockholders' equity (non - GAAP) 125,133,281 126,224,707 127,282,192 127,046,654 126,943,467 Shares of common stock outstanding $ 26.26 $ 26.59 $ 26.24 $ 25.73 $ 24.87 Book value per common share $ 14.77 $ 15.17 $ 14.88 $ 14.33 $ 13.51 Tangible book value per common share (non - GAAP)
31 Non - GAAP Reconciliations Q3 Q2 Q1 Q4 Q3 2023 2023 2023 2022 2022 $ in thousands, except number of employees (FTE) Calculation of Total Revenue Excluding Securities Gain (Loss) and Adjusted Total Revenue $ 153,433 $ 163,230 $ 177,835 $ 193,026 $ 193,585 Net Interest Income (GAAP) 42,777 44,980 45,835 44,647 43,023 Noninterest Income (GAAP) 196,210 208,210 223,670 237,673 236,608 Total Revenue - (391) - (52) (22) Less: Gain (loss) on sales of securities $ 196,210 $ 208,601 $ 223,670 $ 237,725 $ 236,630 Total Revenue, excluding securities gain (loss) (non - GAAP) $ 196,210 $ 208,601 $ 223,670 $ 237,725 $ 236,630 Total Revenue, excluding securities gain (loss) (non - GAAP) - - - - (65) Less: Branch right sizing income - - - - 750 Less: Gain on sale of intellectual property - - - - (365) Less: Loss from early retirement of TruPS - - - 4,074 - Less: Gain on insurance settlement $ 196,210 $ 208,601 $ 223,670 $ 233,651 $ 236,310 Adjusted Total Revenue (non - GAAP) 3,005 3,066 3,189 3,236 3,206 Employees (FTE) $ 65.29 $ 67.91 $ 70.14 $ 73.45 $ 73.80 Total Revenue per Employee (FTE) $ 65.29 $ 68.04 $ 70.14 $ 72.20 $ 73.71 Adjusted Total Revenue per Employee (FTE) FTE – Full time equivalent Calculation of Adjusted Noninterest Income and Adjusted Noninterest Income Excluding Securities Gain (Loss) $ 42,777 $ 44,980 $ 45,835 $ 44,647 $ 43,023 Noninterest Income (GAAP) - - - - (65) Less: Branch right sizing income - - - - 750 Less: Gain on sale of intellectual property - - - - (365) Less: Loss from early retirement of TruPS - - - 4,074 - Less: Gain on insurances settlement $ 42,777 $ 44,980 $ 45,835 $ 40,573 $ 42,703 Adjusted Noninterest Income (non - GAAP) $ 42,777 $ 44,980 $ 40,835 $ 40,573 $ 42,703 Adjusted Noninterest Income (non - GAAP) - (391) - (52) _ (22) Less: Gain (loss) on sale of securities $ 42,777 $ 45,371 $ 40,835 $ 40,625 $ 42,725 Adjusted Noninterest Income, excluding securities gains (losses) (non - GAAP)
32 Non - GAAP Reconciliations Calculation of Adjusted Noninterest Expense $ 131,998 $ 139,696 $ 143,228 $ 142,575 $ 138,943 Noninterest Expense (GAAP) 5 19 1,396 35 1,422 Less: Merger related costs 547 95 979 1,104 1,170 Less: Branch right sizing expense 1,557 3,609 - - - Less: Early Retirement Program $ 129,889 $ 135,973 $ 140,853 $ 141,436 $ 136,351 Adjusted Noninterest Expense (non - GAAP) Calculation of Noninterest Expense to Average Assets $ 27,594,611 $ 27,766,139 $ 27,488,732 $ 27,180,575 $ 26,868,731 Average total assets 1.90% 2.02% 2.11% 2.10% 2.07% Noninterest expense to average total assets 1.87% 1.96% 2.08% 2.08% 2.03% Adjusted noninterest expense to average assets (non - GAAP) FTE – Full time equivalent Q3 Q2 Q1 Q4 Q3 2023 2023 2023 2022 2022 $ in thousands Calculation of Noninterest Income to Total Revenue 21.80% 21.60% 20.49% 18.79% 18.18% Noninterest Income to Total Revenue 21.80% 21.75% 20.49% 17.39% 18.08% Adjusted Noninterest Income, excluding securities gain (loss) to Adjusted Total Revenue (non - GAAP) (reconciliation shown on page 31) $ 14.24 $ 14.67 $ 14.37 $ 13.80 $ 13.42 Noninterest Income per Employee $ 14.24 $ 14.80 $ 14.37 $ 12.55 $ 13.33 Adjusted Noninterest Income per Employee (FTE)
33 Non - GAAP Reconciliations Q3 Q2 Q1 Q4 Q3 2023 2023 2023 2022 2022 $ in thousands Calculation of Efficiency Ratio and Adjusted Efficiency Ratio $ 131,998 $ 139,696 $ 143,228 $ 142,575 $ 138,943 Noninterest Expense (efficiency ratio numerator) $ 196,210 $ 208,210 $ 223,670 $ 237,673 $ 236,608 Total Revenue ___ _ _6,515 ___ _ _6,106 ___ _ _6,311 ___ _ _6,770 ___ _ _6,203 Fully taxable equivalent adjustment $ 202,725 $ 214,316 $ 229,981 $ 244,443 $ 242,811 Efficiency ratio denominator 65.11% 65.18% 62.28% 58.33% 57.22% Efficiency ratio (based on GAAP figures) $ 129,889 $ 135,973 $ 140,853 $ 141,436 $ 136,351 Adjusted Noninterest Expense (non - GAAP) (reconciliation shown on page 32) 228 289 186 350 168 Less: Other real estate and foreclosure expense ___ __ 4,097 ___ __ 4,098 ___ __ 4,096 ___ __ 4,108 ___ __ 4,225 Less: Amortization of intangible assets $ 125,564 $ 131,586 $ 136,571 $ 136,978 $ 131,958 Adjusted efficiency ratio numerator (non - GAAP) $ 196,210 $ 208,601 $ 223,670 $ 233,651 $ 236,310 Adjusted Total Revenue (non - GAAP) (reconciliation shown on page 31) ___ _ _6,515 ___ _ _6,106 ___ _ _6,311 ___ _ _6,770 ___ _ _6,203 Fully taxable equivalent adjustment $ 202,725 $ 214,707 $ 229,981 $ 240,421 $ 242,513 Adjusted efficiency ratio denominator non - GAAP) 61.94% 61.29% 59.38% 56.97% 54.41% Adjusted Efficiency Ratio (non - GAAP) Fully taxable equivalent adjustment using an effective tax rate of 26.135% 34 Non - GAAP Reconciliations FTE - Fully taxable equivalent adjustment using an effective tax rate of 26.135% Q3 Q2 Q3 2023 2023 2022 $ in thousands Calculation of Tangible Common Equity (TCE) $ 3,285,555 $ 3,356,326 $ 3,157,151 Total common stockholders’ equity $ 27,564,325 $ 27,959,123 $ 27,076,074 Total assets (1,437,459) (1,441,557) (1,442,059) Less: Intangible assets $ 26,126,866 $ 26,517,566 $ 25,634,015 Total tangible assets 11.92% 12.00% 11.66% Common equity to total assets 7.07% 7.22% 6.69% Tangible common equity to tangible common assets (non - GAAP) Calculation of CET 1 Capital Ratio, Including the Impact of AOCI $ 3,285,555 $ 3,356,326 $ 3,157,151 Total stockholders’ equity 61,746 61,746 92,619 CECL transition provision (1,402,682) (1,406,500) (1,416,453) Disallowed allowed intangible assets, net of deferred tax ____ _ 544,380 ____ _ 469,988 ____ _ 567,730 Unrealized loss (gain) on available for sale securities (AOCI) $ 2,488,999 $ 2,481,560 $ 2,401,047 Total tier 1 capital (CET 1) $ 2,488,999 $ 2,481,560 $ 2,401,047 Total tier 1 capital (CET 1) 544,380 469,988 567,730 Less: Unrealized loss (gain) on available for sale securities (AOCI) $ 1,944,619 $ 2,011,572 $ 1,833,317 Total tier 1 capital, including AOCI (non - GAAP) $ 20,703,669 $ 20,821,075 $ 20,470,918 Risk weighted assets 12.02% 11.92% 11.73% CET 1 capital ratio 9.39% 9.66% 8.96% CET 1 capital ratio, including AOCI
35 Non - GAAP Reconciliations FTE - Fully taxable equivalent adjustment using an effective tax rate of 26.135% Q3 Q2 Q3 2023 2023 2022 $ in thousands Calculation of Uninsured, Non - Collateralized Deposit Coverage Ratio $ 8,143,200 $ 8,507,395 $ 9,315,086 Uninsured deposits at Simmons Bank 2,835,405 3,030,550 3,094,859 Less: Collateralized deposits (excluding portion that is FDIC insured) ______676,840 ______674,552 ____ _438,047 Less: Intercompany eliminations $ 4,630,955 $ 4,802,293 $ 5,782,180 Total uninsured, non - collateralized deposits $ 5,372,000 $ 5,345,000 $ 3,220,000 FHLB borrowing availability 4,124,000 3,877,000 4,985,000 Unpledged securities 1,951,000 1,874,000 504,000 Fed funds lines, Fed discount window and Bank Term Funding Program $ 11,447,000 $ 11,096,000 $ 8,709,000 Additional liquidity sources 2.5x 2.3x 1.5x Uninsured, non - collateralized deposit coverage ratio Calculation of Net Charge - Off Ratio $ 11,641 Net charge - offs ______ 9,600 Less: Partial charge - off of nursing/extended care related loan $ 2,041 Net charge offs excluding nursing/extended care related credit $ 16,758,597 Average total loans 0.28% Net charge - offs as a percentage of average total loans (annualized) (NCO ratio) 0.05% NCO ratio, excluding nursing/extended care related credit (annualized)
Nasdaq: SFNC 3 rd Quarter 2023 Earnings Presentation Contents 3 Company Profile 4 Q3 Financial Highlights 12 Deposits, Securities, Liquidity, Interest Rate Sensitivity and Capital 18 Loan Portfolio 22 Credit Quality 26 Q3 23 Key Takeaways 28 Appendix