SIMMONS FIRST NATIONAL CORPORATION Nasdaq: SFNC
4th Quarter 2022
Earnings Presentation
Contents
5 Q4 Highlights
6 Q4 Results Overview
12 Loans
16 Deposits, Liquidity, Securities,
Interest Rate Sensitivity &
Capital
21 Credit Quality
25 Key Takeaways
27 Appendix
Forward-Looking Statements and Non-GAAP Financial Measures
Forward-LookingStatements.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); asset quality; profitability; earnings; critical accounting policies; accretion; net interest margin; noninterest revenue; 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; the interest rate sensitivity estimates noted on slide 19; digital bank initiatives; 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; the effect of steps the Company takes in response to the COVID-19 pandemic; the pace of recovery when the pandemic subsides and the heightened impact it has on many of the risks described herein; the effects of the pandemic on, among other things, the Company's operations, liquidity, and 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; 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 conflict between Russia and Ukraine) or other major events, or the prospect of these events; increased competition; changes in governmental policies; loss of key employees; 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, 2021. 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-GAAPFinancial 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. 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 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 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, 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.
2
Simmons Bank: The culmination of a deliberate growth strategy…
1903 - 2012
A firm foundation
Since 2012, we have dramatically improved our growth profile through geographic diversification, building brand awareness…
Geographic transformation | Building brand awareness |
On March 23, 1903, Simmons National Bank opens for business in Pine Bluff, AR
Total deposits collected on Day 1 were $3,338.22
In 1909, Simmons paid its first cash dividend to shareholders
Southwest Bancorp, Inc.
Landmark Community Bank
Triumph Bancshares, Inc. | $27.5 | |||||||||
First Texas BHC | ||||||||||
Liberty Bancshares, Inc. | $22.4 | $24.7 | ||||||||
Hardeman County | $21.3 | |||||||||
Investment Company, Inc. | ||||||||||
Community First Bancshares, Inc. | $16.5 | |||||||||
$15.1 | ||||||||||
Trust Company of the Ozarks | $8.4 | |||||||||
$7.6 | ||||||||||
$3.5 | $4.4 | $4.6 | ||||||||
2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
Will Zalatoris Team Simmons Bank
2022 FEDEX St. Jude Championship Winner
2021 PGA Tour Rookie of the Year
2022 Korn Ferry Tour
Tournament of the Year
On October 16, 1992, shares of Simmons First National Corporation begin trading on the NASDAQ stock exchange
Delta Trust & Banking | Citizens National | |
Metropolitan | Bank | |
Corporation | ||
National Bank | ||
6%
Reliance Bancshares, Inc.
Spirit of Texas | ||
Bancshares, Inc. | Memphis, TN | |
Landrum Company | ||
Ground-breaking support for female student athletes at 10 universities across our six-state footprint
9%
1%
$2.6B1 | 35% | Simmons Bank Plaza at Dickies Arena | ||
16%$22.2B2 | Little Rock, AR | Fort Worth, TX | ||
Total Deposits | Total Deposits | Union City, TN | ||
83 branches | ||||
17% 230 branches | ||||
94% | 22% | |||
Arkansas Kansas | Arkansas | Texas Tennessee Missouri Oklahoma | Kansas | |
Figures presented in acquisition timeline represent total assets (in billions) of SFNC as of December 31 of each respective year | ||
(1) | Total deposits and branch data as of June 30, 2012, based on FDIC Summary of Deposits filing | 3 |
(2) | Total deposits as of June 30, 2022, based on FDIC Summary of Deposits filing, branch data as of December 31, 2022 |
… that sets a strong foundation for the next stage
… substantial investments in leading edge technology and digital banking, while creating a well-defined culture…
that sets a strong foundation for 2023 and beyond
Technology/Digital enhancements | A well-defined corporate culture | Strong foundation for the next stage | |
Culture defines who we are at Simmons Bank. It provides parameters for our behaviors, values and attitudes and sets expectations for the ways we interact with others. This has been our story for more than 100 years as we've built a legacy around doing right by our team, customers and communities.
A $100 million, multi-year project that began in 2018 to upgrade customer-facing and back-office IT systems so that they compete both now and well into the future
Simmons Bank Mobile App…
like having a bank in your pocket
4.8 out of 5 star rating on IOS app store
Coin Checking and Savings
Simmons Bank's first fully digital account origination solutions that generally require no human intervention on the bank's side from beginning to end, while offering a streamlined and engaging opening process
Established the Simmons
First Foundation in 2014
A fast, safe and easy way to send money to friends, family and other people you trust, regardless of where they bank1
Deposit Market Share2
2nd | in Arkansas | ||||||||||
8th | in Tennessee | ||||||||||
9th | |||||||||||
in Missouri | |||||||||||
11th | |||||||||||
in Oklahoma | |||||||||||
$0.76 | |||||||||||
$0.72 | |||||||||||
$0.68 | |||||||||||
$0.60 | $0.64 | 1 of only 24 | |||||||||
$0.40 | $0.42 | $0.44 | $0.46 | $0.48 | $0.50 | U.S. companies that | |||||
$0.38 | $0.38 | have paid dividends | |||||||||
for 100+ years3
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
People
Better Bank Initiative Processes Organic Growth
Systems
Zelle and Zelle related marks are wholly owned by Early Warning Services, LLC and are used herein under license | ||
(1) | U.S. checking or savings account required to use Zelle®. Transactions between enrolled consumers typically occur in minutes. | 4 |
(2) | Deposit market share ranking based on S&P Global Market Intelligence information based on FDIC Summary of Deposits report as of June 30, 2022 | |
(3) | Based on research performed by Dividend Power |
Q4 22 and FY 22 Highlights
1 Net income up 3% QoQ and up 73% YoY EPS up 3% QoQ and up 55% YoY
ROA of 1.22%, ROE of 10.27% and ROTCE(1) of 19.29%
2 Record revenue of $887.4 million reported in FY 22, up 13% YoY. Positive operating leverage results in 13% increase in FY 22 pre-provision net revenue.
3 Solid balance sheet growth with loans up 3% and deposits up 2% linked quarter. NPL ratio of 37 basis points unchanged on a linked quarter basis. Net charge-offs for FY22 total 9 bps and NPL coverage ratio remains healthy at 334%
4 Regulatory capital ratios increase on a linked quarter basis and remain significantly above "well-capitalized" guidelines.
Q4 net income | Q4 earnings per share | |
$83.3M | $0.65 | |
FY22 earnings of $256.4M | Q4 adjusted EPS of $0.64(1) | |
Q4 total revenue of | Pre-provision net revenue(1) | |
$237.7M | $95.2M in Q4 | |
FY22 revenue +13% | FY22 PPNR(1) +13% | |
QoQ loan growth +3% to | NPL coverage ratio at | |
$16.1B | 334% | |
Unfunded commitments $5B | NPAs/total assets at 23 bps | |
Book value per share | Equity to asset ratio +25 bps | |
+3% vs Q3 22 and | 11.9% at 12/31/22 | |
Tangible BVPS(1) +6% | TCE ratio(1) up +31 bps to 7% |
QoQ = 4Q22 vs 3Q22 YoY = 4Q22 vs 4Q21 | |
(1) Non-GAAP measures that management believes aids in the discussion of results. See Appendix for Non-GAAP reconciliation | 5 |
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Simmons First National Corporation published this content on 24 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 January 2023 13:16:03 UTC.
