Simmons First National Corporation Reports Third Quarter 2024 Results
PINE BLUFF, Ark., Oct. 18, 2024 /PRNewswire/ --
Bob Fehlman, Simmons' Chief Executive Officer, commented on third quarter 2024 results:
Simmons' third quarter results were highlighted by positive underlying trends across the board. Net interest income increased 10 percent annualized on a linked quarter basis as loan yields continued to increase, while deposit costs were unchanged from second quarter 2024 levels and appear to have peaked.
We also were proactive in responding to favorable market conditions when opportunities presented themselves. During the quarter, we decided to sell certain lower yielding bonds in our securities portfolio to hasten the pace of our ongoing balance sheet optimization strategy. While the loss on the sale of these securities weighed on reported results, on an adjusted basis total revenue, noninterest income and pre-provision net revenue posted solid growth on a linked quarter basis. Equally important, credit trends remained steady in the quarter and our allowance for credit losses on loans ended the quarter at 1.35 percent.
As we enter the final quarter of 2024, we believe our strong capital and liquidity positions combined with the liability sensitivity position of our balance sheet will provide tailwinds as we navigate an uncertain macroeconomic environment.
Financial Highlights
3Q24
2Q24
3Q23
3Q24 Highlights
Balance Sheet (in millions)
Comparisons reflect 3Q24 vs 2Q24
Total loans
$17,336
$17,192
$16,772
Total investment securities
6,350
6,571
7,101
Total deposits
21,935
21,841
22,231
• Net income of $24.7 million and diluted EPS of $0.20
Total assets
27,269
27,369
27,564
Total shareholders' equity
3,529
3,459
3,286
Asset Quality
• Adjusted earnings1 of $46.0 million and adjusted diluted EPS1 of $0.37
Net charge-off ratio (NCO ratio)
0.22 %
0.19 %
0.28 %
Nonperforming loan ratio
0.59
0.60
0.49
Nonperforming assets to total assets
0.38
0.39
0.32
• Total revenue of $174.8 million and PPNR1 of $37.6 million
Allowance for credit losses to loans (ACL)
1.35
1.34
1.30
Nonperforming loan coverage ratio
229
223
267
Performance Measures (in millions)
• Adjusted total revenue1 of $203.2 million and adjusted PPNR1 of $66.4 million
Total revenue
$174.8
$197.2
$196.2
Adjusted total revenue1
203.2
197.2
196.2
Pre-provision net revenue1 (PPNR)
37.6
57.9
64.2
• Net interest margin of 2.74%, up 5 bps
Adjusted pre-provision net revenue1
66.4
59.4
66.3
Provision for credit losses
12.1
11.1
7.7
• Cost of deposits unchanged from 2Q24 levels at 2.79%
Per share Data
Diluted earnings
$ 0.20
$ 0.32
$ 0.37
Adjusted diluted earnings1
0.37
0.33
0.39
• Provision for credit losses on loans exceeded net charge-offs in the quarter by $2.8 million
Book value
28.11
27.56
26.26
Tangible book value1
16.78
16.20
14.77
Capital Ratios
• NCO ratio 22 bps in 3Q24; 9 bps of NCO ratio associated with run-off portfolio
Equity to assets (EA ratio)
12.94 %
12.64 %
11.92 %
Tangible common equity (TCE) ratio1
8.15
7.84
7.07
Common equity tier 1 (CET1) ratio
12.06
12.00
12.02
• ACL ratio ends the quarter at 1.35%
Total risk-based capital ratio
14.25
14.17
14.27
Liquidity ($ in millions)
• EA ratio 12.94%; TCE ratio1 up 31 bps to 8.15%
Loan to deposit ratio
79.03 %
78.72 %
75.44 %
Borrowed funds to total liabilities
6.16
7.38
7.37
Uninsured, non-collateralized deposits (UCD)
$ 4,659
$ 4,408
$ 4,631
• Book value per share up 2%; tangible book value per share1 up 4%
Additional liquidity sources
11,174
11,120
11,447
Coverage ratio of UCD
2.4x
2.5x
2.5x
Simmons First National Corporation (NASDAQ:SFNC) (Simmons or Company) today reported net income of $24.7 million for the third quarter of 2024, compared to $40.8 million in the second quarter of 2024 and $47.2 million in the third quarter of 2023. Diluted earnings per share were $0.20 for the third quarter of 2024, compared to $0.32 in the second quarter of 2024 and $0.37 in the third quarter of 2023. Adjusted earnings1 for the third quarter of 2024 were $46.0 million, compared to $41.9 million in the second quarter of 2024 and $48.8 million in the third quarter of 2023. Adjusted diluted earnings per share1 for the third quarter of 2024 were $0.37, compared to $0.33 in the second quarter of 2024 and $0.39 in the third quarter of 2023.
During the third quarter of 2024, given prevailing market conditions, we executed a strategic decision to sell approximately $252 million of available-for-sale (AFS) investment securities with a weighted average yield of approximately 1.29 percent, resulting in an after-tax loss of $21.0 million. The proceeds from the sale were used to pay off higher rate wholesale funding consisting of Federal Home Loan Bank advances. The table below summarizes the impact of this transaction, along with the impact of certain other items consisting primarily of branch right sizing, early retirement, and termination of vendor and software services. They are also described in further detail in the "Reconciliation of Non-GAAP Financial Measures" tables contained in this press release.
Impact of Certain Items on Earnings and Diluted EPS
$ in millions, except per share data
3Q24
2Q24
3Q23
Net income
$ 24.7
$ 40.8
$ 47.2
FDIC special assessment
-
0.3
-
Branch right sizing, net
0.4
0.5
0.5
Early retirement program
-
0.1
1.6
Termination of vendor and software services
-
0.6
-
Loss on sale of AFS investment securities
28.4
-
-
Total pre-tax impact
28.8
1.5
2.1
Tax effect2
(7.5)
(0.4)
(0.5)
Total impact on earnings
21.3
1.1
1.6
Adjusted earnings1
$ 46.0
$ 41.9
$ 48.8
Diluted EPS
$ 0.20
$ 0.32
$ 0.37
FDIC special assessment
-
-
-
Branch right sizing, net
-
-
0.01
Early retirement program
-
-
0.01
Termination of vendor and software contracts
-
0.01
-
Loss on sale of AFS investment securities
0.23
-
-
Total pre-tax impact
0.23
0.01
0.02
Tax effect2
(0.6)
-
-
Total impact on earnings
0.17
0.01
0.02
Adjusted Diluted EPS1
$ 0.37
$ 0.33
$ 0.39
Net Interest IncomeNet interest income for the third quarter of 2024 totaled $157.7 million, compared to $153.9 million in the second quarter of 2024 and $153.4 million in the third quarter of 2023. Interest income totaled $334.3 million in the third quarter of 2024, compared to $329.1 million in the second quarter of 2024 and $310.3 million in the third quarter of 2023. The increase in interest income was primarily driven by an increase in total loans, coupled with an increase in the rate earned on loans. Interest expense totaled $176.6 million in the third quarter of 2024, up $1.3 million on a linked quarter basis primarily due to an increase in other borrowings costs, offset in part by a decrease in the interest expense on interest bearing deposits. Included in net interest income is accretion recognized on loans, which totaled $1.5 million in the third quarter of 2024, $1.6 million in the second quarter of 2024 and $2.1 million in the third quarter of 2023.
The yield on loans on a fully taxable equivalent (FTE) basis for the third quarter of 2024 was 6.44 percent, up 5 basis points from the 6.39 percent for the second quarter of 2024 and up 36 basis points from the 6.08 percent for the third quarter of 2023. Cost of deposits for the third quarter of 2024 was 2.79 percent, unchanged from second quarter 2024 levels. The net interest margin on an FTE basis for the third quarter of 2024 was 2.74 percent, compared to 2.69 percent for the second quarter of 2024 and 2.61 percent for the third quarter of 2023. The 5 basis point increase in the net interest margin on a linked quarter basis included an estimated 3 basis point benefit from the strategic sale of AFS investment securities.
Select Yield/Rates
3Q24
2Q24
1Q24
4Q23
3Q23
Loan yield (FTE)2
6.44 %
6.39 %
6.24 %
6.20 %
6.08 %
Investment securities yield (FTE)2
3.63
3.68
3.76
3.67
3.08
Cost of interest bearing deposits
3.52
3.53
3.48
3.31
3.06
Cost of deposits
2.79
2.79
2.75
2.58
2.37
Cost of borrowed funds
5.79
5.84
5.85
5.79
5.60
Net interest spread (FTE)2
1.95
1.92
1.89
1.93
1.87
Net interest margin (FTE)2
2.74
2.69
2.66
2.68
2.61
Noninterest IncomeNoninterest income for the third quarter of 2024 was $17.1 million, compared to $43.3 million in the second quarter of 2024 and $42.8 million in the third quarter of 2023. Included in the third quarter of 2024 was a $28.4 million pre-tax loss on the strategic sale of AFS investment securities. Excluding this item, adjusted noninterest income1 was $45.5 million in the third quarter of 2024, compared to $43.3 million in the second quarter of 2024 and $42.8 million in the third quarter of 2023. The increase in adjusted noninterest income on a linked quarter basis was primarily due to an increase in other noninterest income reflecting gains on the sale of other real estate owned.
Noninterest Income
$ in millions
3Q24
2Q24
1Q24
4Q23
3Q23
Service charges on deposit accounts
$ 12.7
$ 12.3
$ 12.0
$ 12.8
$ 12.4
Wealth management fees
8.2
8.3
7.5
7.7
7.7
Debit and credit card fees
8.1
8.2
8.2
7.8
7.7
Mortgage lending income
2.0
2.0
2.3
1.6
2.2
Other service charges and fees
2.4
2.4
2.2
2.3
2.2
Bank owned life insurance
3.8
3.9
3.8
3.1
3.1
Gain (loss) on sale of securities
(28.4)
-
-
(20.2)
-
Other income
8.3
6.4
7.2
6.9
7.4
Total noninterest income
$ 17.1
$ 43.3
$ 43.2
$ 22.0
$ 42.8
Adjusted noninterest income1
$ 45.5
$ 43.3
$ 43.2
$ 42.2
$ 42.8
Noninterest ExpenseNoninterest expense for the third quarter of 2024 was $137.2 million, compared to $139.4 million in the second quarter of 2024 and $132.0 million in the third quarter of 2023. Included in noninterest expense are certain items consisting of branch right sizing, early retirement, and termination of vendor and software services, amongst others. Collectively, these items totaled $0.4 million in the third quarter of 2024, $1.5 million in the second quarter of 2024 and $2.1 million in the third quarter of 2023. Excluding these items (which are described in the "Reconciliation of Non-GAAP Financial Measures" tables below), adjusted noninterest expense1 was $136.8 million in the third quarter of 2024, $137.8 million in the second quarter of 2024 and $129.9 million in the third quarter of 2023. The decrease in noninterest expense and adjusted noninterest expense on a linked quarter basis was primarily attributable to a decline in salaries and employee benefits reflecting incentive compensation accrual adjustments.
Noninterest Expense
$ in millions
3Q24
2Q24
1Q24
4Q23
3Q23
Salaries and employee benefits
$ 69.2
$ 70.7
$ 72.7
$ 67.0
$ 67.4
Occupancy expense, net
12.2
11.9
12.3
11.7
12.0
Furniture and equipment
5.6
5.6
5.1
5.4
5.1
Deposit insurance
5.6
5.4
5.5
4.7
4.7
Other real estate and foreclosure expense
0.1
0.1
0.2
0.2
0.2
FDIC special assessment
-
0.3
1.6
10.5
-
Other operating expenses
44.5
45.4
42.5
48.6
42.6
Total noninterest expense
$137.2
$139.4
$139.9
$148.1
$132.0
Adjusted salaries and employee benefits1
$ 69.2
$ 70.6
$ 72.4
$ 66.0
$ 65.8
Adjusted other operating expenses1
44.4
44.3
42.4
44.9
42.1
Adjusted noninterest expense1
136.8
137.8
137.9
132.7
129.9
Efficiency ratio
75.70 %
68.38 %
69.41 %
80.46 %
65.11 %
Adjusted efficiency ratio1
63.38
65.68
66.42
62.91
61.94
Full-time equivalent employees
2,972
2,961
2,989
3,007
3,005
Loans and Unfunded Loan CommitmentsTotal loans at the end of the third quarter of 2024 were $17.3 billion, up $564.2 million, or 3 percent, compared to $16.8 billion at the end of the third quarter of 2023. Total loans on a linked quarter basis increased $143.6 million, or 3 percent on an annualized basis. Unfunded loan commitments at the end of the third quarter of 2024 were $3.7 billion, down slightly from second quarter 2024 levels. The commercial loan pipeline ended the third quarter of 2024 at $1.2 billion, compared to $1.0 billion at the end of the second quarter of 2024 and $877 million at the end of the third quarter of 2023. The rate on ready to close commercial loans at the end of the third quarter of 2024 was 8.31 percent.
Loans and Unfunded Loan Commitments
$ in millions
3Q24
2Q24
1Q24
4Q23
3Q23
Total loans
$17,336
$17,192
$17,002
$16,846
$16,772
Unfunded loan commitments
3,681
3,746
3,875
3,880
4,049
DepositsTotal deposits at the end of the third quarter of 2024 were $21.9 billion, compared to $21.8 billion at the end of the second quarter of 2024 and $22.2 billion at the end of the third quarter of 2023. The increase in total deposits on a linked quarter basis was primarily attributable to an increase in public funds and brokered deposits. During the third quarter of 2024, the brokered deposit market reflected more favorable pricing opportunities compared to other wholesale funding options. As a result, while the utilization of brokered deposits increased during the third quarter of 2024, other borrowings totaled $1.0 billion, down $300.5 million on a linked quarter basis. The loan to deposit ratio at the end of the third quarter of 2024 was 79 percent, unchanged from second quarter 2024 levels.
Deposits
$ in millions
3Q24
2Q24
1Q24
4Q23
3Q23
Noninterest bearing deposits
$ 4,522
$ 4,624
$ 4,698
$ 4,801
$ 4,991
Interest bearing transaction accounts
10,038
10,092
10,316
10,277
9,875
Time deposits
4,014
4,185
4,314
4,266
4,103
Brokered deposits
3,361
2,940
3,025
2,901
3,262
Total deposits
$21,935
$21,841
$22,353
$22,245
$22,231
Noninterest bearing deposits to total deposits
21 %
21 %
21 %
22 %
22 %
Total loans to total deposits
79
79
76
76
75
Asset QualityProvision for credit losses totaled $12.1 million for the third quarter of 2024, compared to $11.1 for the second quarter of 2024 and $7.7 million for the third quarter of 2023. Provision for credit losses on loans exceeded net charge-offs by $2.8 million during the third quarter of 2024. The allowance for credit losses on loans at the end of the third quarter of 2024 was $233.2 million, compared to $230.4 million at the end of the second quarter of 2024 and $218.5 million at the end of the third quarter of 2023. The increase in allowance for credit losses on loans on a linked quarter and year-over-year basis reflected normalization of the credit environment from historical lows, as well as changes in the macroeconomic conditions and increased activity in the loan portfolio. The allowance for credit losses on loans as a percentage of total loans was 1.35 percent at the end of the third quarter of 2024, compared to 1.34 percent at the end of the second quarter of 2024 and 1.30 percent at the end of the third quarter of 2023.
Net charge-offs as a percentage of average loans for the third quarter of 2024 were 22 basis points, compared to 19 basis points in the second quarter of 2024 and 28 basis points in the third quarter of 2023. Net charge-offs in the third quarter of 2024 included $3.5 million of charge-offs associated with the run-off portfolio, which consists of an acquired asset-based lending portfolio and a small ticket equipment finance portfolio. Net charge-offs from the run-off portfolio accounted for 9 basis points of total net charge-offs during the third quarter of 2024 and 16 basis points of total net charge-offs during the second quarter of 2024.
Total nonperforming loans at the end of the third quarter of 2024 were $101.7 million, compared to $103.4 million at the end of the second quarter of 2024 and $81.9 million at the end of the third quarter of 2023. The decrease in nonperforming loans on a linked quarter basis reflected $5 million of payoffs from the run-off portfolio and the previously noted charge-offs associated with this portfolio. The nonperforming loan coverage ratio ended the third quarter of 2024 at 229 percent, compared to 223 percent at the end of the second quarter of 2024 and 267 percent at the end of the third quarter of 2023. Total nonperforming assets as a percentage of total assets were 38 basis points at the end of the third quarter of 2024, compared to 39 basis points at the end of the second quarter of 2024 and 32 basis points at the end of the third quarter of 2023.
Asset Quality
$ in millions
3Q24
2Q24
1Q24
4Q23
3Q23
Allowance for credit losses on loans to total loans
1.35 %
1.34 %
1.34 %
1.34 %
1.30 %
Allowance for credit losses on loans to nonperforming loans
229
223
212
267
267
Nonperforming loans to total loans
0.59
0.60
0.63
0.50
0.49
Net charge-off ratio (annualized)
0.22
0.19
0.19
0.11
0.28
Net charge-off ratio YTD (annualized)
0.20
0.19
0.19
0.12
0.12
Total nonperforming loans
$101.7
$103.4
$107.3
$84.5
$81.9
Total other nonperforming assets
2.6
3.4
5.0
5.8
5.2
Total nonperforming assets
$104.3
$106.8
$112.3
$90.3
$87.1
Reserve for unfunded commitments
$25.6
$25.6
$25.6
$25.6
$25.6
CapitalTotal stockholders' equity at the end of the third quarter of 2024 was $3.5 billion, compared to $3.3 billion at the end of the third quarter of 2023. On a linked quarter basis, total stockholders' equity increased $70.0 million, primarily as a result of a $69.6 million recapture of accumulated other comprehensive income principally associated with mark-to-market adjustment on AFS investment securities. Book value per share at the end of the third quarter of 2024 was $28.11, up 2 percent on a linked quarter basis and up 7 percent compared to the end of the third quarter of 2023. Tangible book value per share1 at the end of the third quarter of 2024 was $16.78, up 4 percent on a linked quarter basis and up 14 percent compared to the end of the third quarter of 2023.
Total stockholders' equity as a percentage of total assets at September 30, 2024 was 12.9 percent, up from 12.6 percent reported at the end of the second quarter of 2024 and up from 11.9 percent reported at the end of the third quarter of 2023. Tangible common equity as a percentage of tangible assets1 was 8.2 percent, up from 7.8 percent reported at the end of the second quarter of 2024 and up from 7.1 percent reported at the end of the third quarter of 2023. Each of the regulatory capital ratios for Simmons and its lead subsidiary, Simmons Bank, continue to significantly exceed "well-capitalized" guidelines.
Select Capital Ratios
3Q24
2Q24
1Q24
4Q23
3Q23
Stockholders' equity to total assets
12.9 %
12.6 %
12.6 %
12.5 %
11.9 %
Tangible common equity to tangible assets1
8.2
7.8
7.8
7.7
7.1
Common equity tier 1 (CET1) ratio
12.1
12.0
12.0
12.1
12.0
Tier 1 leverage ratio
9.6
9.5
9.4
9.4
9.3
Tier 1 risk-based capital ratio
12.1
12.0
12.0
12.1
12.0
Total risk-based capital ratio
14.3
14.2
14.4
14.4
14.3
Share Repurchase ProgramDuring the third quarter of 2024, Simmons did not repurchase shares under its stock repurchase program that was authorized in January 2024 (2024 Program), which replaced its former repurchase program that was authorized in January 2022. Remaining authorization under the 2024 Program as of September 30, 2024, was approximately $175 million. The timing, pricing and amount of any repurchases under the 2024 Program will be determined by Simmons' management at its discretion based on a variety of factors including, but not limited to, market conditions, trading volume and market price of Simmons' common stock, Simmons' capital needs, Simmons' working capital and investment requirements, other corporate considerations, economic conditions, and legal requirements. The 2024 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 CallManagement will conduct a live conference call to review this information beginning at 9:00 a.m. Central Time today, Friday, October 18, 2024. 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 10193072. 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 CorporationSimmons First National Corporation (NASDAQ:SFNC) is a Mid-South based financial holding company that has paid cash dividends to its shareholders for 115 consecutive years. Its principal subsidiary, Simmons Bank, operates 234 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 2024, Simmons Bank was recognized by U.S. News & World Report as one of the 2024-2025 Best Companies to Work For in the South and by Forbes as one of America's Best-In-State Banks 2024 in Tennessee and America's Best-In-State Banks 2024 in Missouri. 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 MeasuresThis 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), gains and/or losses on sale of branches, net branch right-sizing initiatives, FDIC special assessment charges and gain/loss on the sale of AFS investment securities. The Company has updated its calculation of certain non-GAAP financial measures to exclude the impact of gains or losses on the sale of AFS investment securities in light of the impact of the Company's strategic AFS investment securities transactions during the fourth quarter of 2023 and has presented past periods on a comparable basis.
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 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 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 StatementsCertain 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 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, changes in information technology affecting the financial industry, and changes in customer behaviors, including consumer spending, borrowing, and saving habits; general economic and market conditions; changes in governmental administrations; 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 any indirect exposure related to the closings of other financial institutions and their impact on the broader market through other customers, suppliers and partners, or that the conditions which resulted in the liquidity concerns experienced by closed financial institutions 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 and from non-bank financial institutions; 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 acquisitions; increased delinquency and foreclosure rates on commercial real estate loans; 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, 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.
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)
2024
2024
2024
2023
2023
($ in thousands)
ASSETS
Cash and noninterest bearing balances due from banks
$ 398,321
$ 320,021
$ 380,324
$ 345,258
$ 181,822
Interest bearing balances due from banks and federal funds sold
205,081
254,312
222,979
268,834
423,826
Cash and cash equivalents
603,402
574,333
603,303
614,092
605,648
Interest bearing balances due from banks - time
100
100
100
100
100
Investment securities - held-to-maturity
3,658,700
3,685,450
3,707,258
3,726,288
3,742,292
Investment securities - available-for-sale
2,691,094
2,885,904
3,027,558
3,152,153
3,358,421
Mortgage loans held for sale
8,270
13,053
11,899
9,373
11,690
Loans:
Loans
17,336,040
17,192,437
17,001,760
16,845,670
16,771,888
Allowance for credit losses on loans
(233,223)
(230,389)
(227,367)
(225,231)
(218,547)
Net loans
17,102,817
16,962,048
16,774,393
16,620,439
16,553,341
Premises and equipment
584,366
581,893
576,466
570,678
567,167
Foreclosed assets and other real estate owned
1,299
2,209
3,511
4,073
3,809
Interest receivable
125,700
126,625
122,781
122,430
110,361
Bank owned life insurance
508,781
505,023
503,348
500,559
497,465
Goodwill
1,320,799
1,320,799
1,320,799
1,320,799
1,320,799
Other intangible assets
101,093
104,943
108,795
112,645
116,660
Other assets
562,983
606,692
611,964
592,045
676,572
Total assets
$ 27,269,404
$ 27,369,072
$ 27,372,175
$ 27,345,674
$ 27,564,325
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest bearing transaction accounts
$ 4,521,715
$ 4,624,186
$ 4,697,539
$ 4,800,880
$ 4,991,034
Interest bearing transaction accounts and savings deposits
10,863,945
10,925,179
11,071,762
10,997,425
10,571,807
Time deposits
6,549,774
6,291,518
6,583,703
6,446,673
6,668,370
Total deposits
21,935,434
21,840,883
22,353,004
22,244,978
22,231,211
Federal funds purchased and securities sold
under agreements to repurchase
51,071
52,705
58,760
67,969
74,482
Other borrowings
1,045,878
1,346,378
871,874
972,366
1,347,855
Subordinated notes and debentures
366,255
366,217
366,179
366,141
366,103
Accrued interest and other liabilities
341,933
304,020
283,232
267,732
259,119
Total liabilities
23,740,571
23,910,203
23,933,049
23,919,186
24,278,770
Stockholders' equity:
Common stock
1,256
1,255
1,254
1,252
1,251
Surplus
2,508,438
2,506,469
2,503,673
2,499,930
2,497,874
Undivided profits
1,355,000
1,356,626
1,342,215
1,329,681
1,330,810
Accumulated other comprehensive (loss) income
(335,861)
(405,481)
(408,016)
(404,375)
(544,380)
Total stockholders' equity
3,528,833
3,458,869
3,439,126
3,426,488
3,285,555
Total liabilities and stockholders' equity
$ 27,269,404
$ 27,369,072
$ 27,372,175
$ 27,345,674
$ 27,564,325
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)
2024
2024
2024
2023
2023
($ in thousands, except per share data)
INTEREST INCOME
Loans (including fees)
$ 277,939
$ 270,937
$ 261,490
$ 261,505
$ 255,901
Interest bearing balances due from banks and federal funds sold
2,921
2,964
3,010
3,115
3,569
Investment securities
53,220
55,050
58,001
58,755
50,638
Mortgage loans held for sale
209
194
148
143
178
TOTAL INTEREST INCOME
334,289
329,145
322,649
323,518
310,286
INTEREST EXPENSE
Time deposits
73,937
73,946
73,241
72,458
68,062
Other deposits
78,307
79,087
78,692
71,412
65,095
Federal funds purchased and securities
sold under agreements to repurchase
138
156
189
232
277
Other borrowings
17,067
15,025
11,649
16,607
16,450
Subordinated notes and debentures
7,128
7,026
6,972
7,181
6,969
TOTAL INTEREST EXPENSE
176,577
175,240
170,743
167,890
156,853
NET INTEREST INCOME
157,712
153,905
151,906
155,628
153,433
PROVISION FOR CREDIT LOSSES
Provision for credit losses on loans
12,148
11,099
10,206
11,225
20,222
Provision for credit losses on unfunded commitments
-
-
-
-
(11,300)
Provision for credit losses on investment securities - AFS
-
-
-
(1,196)
(1,200)
Provision for credit losses on investment securities - HTM
-
-
-
-
-
TOTAL PROVISION FOR CREDIT LOSSES
12,148
11,099
10,206
10,029
7,722
NET INTEREST INCOME AFTER PROVISION
FOR CREDIT LOSSES
145,564
142,806
141,700
145,599
145,711
NONINTEREST INCOME
Service charges on deposit accounts
12,713
12,252
11,955
12,782
12,429
Debit and credit card fees
8,144
8,162
8,246
7,822
7,712
Wealth management fees
8,226
8,274
7,478
7,679
7,719
Mortgage lending income
1,956
1,973
2,320
1,603
2,157
Bank owned life insurance income
3,757
3,876
3,814
3,094
3,095
Other service charges and fees (includes insurance income)
2,381
2,352
2,199
2,346
2,232
Gain (loss) on sale of securities
(28,393)
-
-
(20,218)
-
Other income
8,346
6,410
7,172
6,866
7,433
TOTAL NONINTEREST INCOME
17,130
43,299
43,184
21,974
42,777
NONINTEREST EXPENSE
Salaries and employee benefits
69,167
70,716
72,653
66,982
67,374
Occupancy expense, net
12,216
11,864
12,258
11,733
12,020
Furniture and equipment expense
5,612
5,623
5,141
5,445
5,117
Other real estate and foreclosure expense
87
117
179
189
228
Deposit insurance
5,571
5,682
7,135
15,220
4,672
Merger-related costs
-
-
-
-
5
Other operating expenses
44,540
45,352
42,513
48,570
42,582
TOTAL NONINTEREST EXPENSE
137,193
139,354
139,879
148,139
131,998
NET INCOME BEFORE INCOME TAXES
25,501
46,751
45,005
19,434
56,490
Provision for income taxes
761
5,988
6,134
(4,473)
9,243
NET INCOME
$ 24,740
$ 40,763
$ 38,871
$ 23,907
$ 47,247
BASIC EARNINGS PER SHARE
$ 0.20
$ 0.32
$ 0.31
$ 0.19
$ 0.38
DILUTED EARNINGS PER SHARE
$ 0.20
$ 0.32
$ 0.31
$ 0.19
$ 0.37
Simmons First National Corporation
SFNC
Consolidated Risk-Based Capital
For the Quarters Ended
Sep 30
Jun 30
Mar 31
Dec 31
Sep 30
(Unaudited)
2024
2024
2024
2023
2023
($ in thousands)
Tier 1 capital
Stockholders' equity
$ 3,528,833
$ 3,458,869
$ 3,439,126
$ 3,426,488
$ 3,285,555
CECL transition provision (1)
30,873
30,873
30,873
61,746
61,746
Disallowed intangible assets, net of deferred tax
(1,388,549)
(1,391,969)
(1,394,672)
(1,398,810)
(1,402,682)
Unrealized loss (gain) on AFS securities
335,861
405,481
408,016
404,375
544,380
Total Tier 1 capital
2,507,018
2,503,254
2,483,343
2,493,799
2,488,999
Tier 2 capital
Subordinated notes and debentures
366,255
366,217
366,179
366,141
366,103
Subordinated debt phase out
(132,000)
(132,000)
(66,000)
(66,000)
(66,000)
Qualifying allowance for loan losses and
reserve for unfunded commitments
220,517
217,684
214,660
170,977
165,490
Total Tier 2 capital
454,772
451,901
514,839
471,118
465,593
Total risk-based capital
$ 2,961,790
$ 2,955,155
$ 2,998,182
$ 2,964,917
$ 2,954,592
Risk weighted assets
$ 20,790,941
$ 20,856,194
$ 20,782,094
$ 20,599,238
$ 20,703,669
Adjusted average assets for leverage ratio
$ 26,198,178
$ 26,371,545
$ 26,312,873
$ 26,552,988
$ 26,733,658
Ratios at end of quarter
