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Simmons First National Corporation Stock Price: Quote, Forecast, Splits & News (SFNC)

Perplexity Finance

Company Profile

Simmons First National Corporation Price & Performance (SFNC)

Stock Performance

Updated Apr 23, 5:32 PM UTC

Simmons First National Corporation

$18.21USD

+$0.28 (+1.53%)

Open

$18.33

Market Cap

$2.29B

Year High

$25.95

High

$18.60

P/E Ratio

15.7

Year Low

$16.03

Low

$18.07

Dividend Yield

4.63%

Volume

210.64K

Latest News

Analysts Adjust Simmons First National Price Targets After Q1 Earnings Miss
Apr 17, 2025
Simmons First National saw its price target cut from $27 to $25 by Stephens following a first-quarter earnings per share miss, while Piper Sandler upgraded the stock to neutral and raised its target to $21. Analysts cited higher loan loss provisions but noted the bank’s strong dividend record and stable outlook for 2025.12
Earnings Report Reveals Mixed Results for Simmons First National in Q1 2025
Apr 21, 2025
Simmons First National reported Q1 2025 earnings per share of $0.26, below analyst forecasts, though revenue slightly topped expectations. The EPS miss was attributed to increased loan loss provisions, while management highlighted ongoing deposit growth and a positive outlook for operating leverage this year. The stock remains near its 52-week low.34
Institutional Investors Increase Stakes Despite Simmons First National’s Recent Share Price Dip
Apr 17, 2025
Several institutional investors, including Barclays and JPMorgan Chase, have boosted their holdings in Simmons First National, even as the stock trades near its annual low. This activity suggests some confidence in the bank’s long-term value, despite recent underperformance and challenging market conditions.12

What's Happening

Peers

Earnings

Report Date

—

Rev Estimate

—

Avg 1d Change

1.95%

Report Period

Q1 2025

EPS Estimate

—

Implied Move 1d

—

Transcript

10m 48s

Additional information concerning some of these factors is contained our earnings release and investor presentation furnished with our Form eight ks yesterday and our Form 10 ks for the year ended 12/31/2024, including the risk factors contained in that Form 10 ks. These forward looking statements speak only as of the date they are made, and Simmons assumes no obligation to update or revise any forward looking statements or other information. Finally, in this presentation, we will discuss certain non GAAP financial metrics we believe provide information to investors. Additional disclosures regarding non GAAP metrics including the reconciliations of those non GAAP metrics to GAAP, are contained in our earnings release and investor presentation furnished as exhibits to the Form eight ks we filed yesterday with the SEC, are also available on the Investor Relations page of our website SimmonsBank.com. Before we begin the Q and A, I'd like to turn the call over to our President, Jay Brogdon. For some opening remarks. Thanks, Ed. I appreciate everyone joining us on the call this morning. I know we typically go right into q and a. But I think it's important to provide clarity regarding certain asset quality actions we under undertook in the quarter as well as to highlight the underlying strength of our top line results.

12m 6s

My comments will be relatively brief, and we'll touch on trends within three broad categories. Balance sheet, earnings, and credit. Starting with the balance sheet, total period end loans were up 2% on a linked quarter annualized basis. This level of growth consistent with our outlook However, average loans were down for the quarter as most of our funded growth was back end loaded. Our commercial loan pipeline was up 43% linked quarter, and is at its highest level since the second quarter of twenty twenty two. We remain cautious about loan growth in the current macro backdrop, but we're pleased with the ability of our borrowers to lock in attractive economics, and move forward with planned investments throughout q one. Shifting to the right hand side of the balance sheet, total deposits were down slightly on a linked quarter basis due to reductions in brokered funding. Customer deposits grew 183,000,000 during the quarter roughly 4% linked quarter annualized, as we continue to see a positive remixing into lower cost transaction accounts. One non financial metric we monitor closely as a measure of the health of our deposit franchise is the growth and the number of consumer checking accounts. This metric grew by one and a half percent year over year.

13m 28s

Overall, we are very pleased with loan and deposit trends for the quarter. Moving to earnings, from a top line perspective, total revenue was up 1,100,000 linked quarter despite fewer days in the first quarter of twenty twenty five. This was our fourth consecutive quarter delivering top line adjusted revenue growth, and net interest margin expansion. First quarter net interest margin was 2.95%, up eight bps linked quarter and up 29 bps year over year. Primarily driven by 19 bps decline in total funding cost linked quarter. We continue to benefit from fixed rate loan repricing and expect this to be an ongoing tailwind. Noninterest income grew 6% linked quarter. We delivered strong swap fee income in our q one loan production, as well as diversified growth from our other fee based businesses. Adjusted non interest expense increased $4,300,000 linked quarter including a customer deposit fraud event that involved entities affiliated with a borrower whose credit relationship was placed on nonaccrual this quarter. Excluding this item, adjusted noninterest expense would have totaled a hundred and 39,300,000.0 down slightly from fourth quarter twenty twenty four levels, and reflective of our continued expense management discipline. For some time now, you've heard us say that our focus is on soundness, profitability, and growth.

15m

And in that order. This first quarter reflected our continued commitment to soundness, as well as Simmons' conservative nature when we have historically tackled potential challenge credits early and aggressively. To that end, and moving the credit, we migrated two specific credit relationships to nonperforming in the quarter. And boosted our level of specific reserves associated with each credit. These relationships have been on our classified list for some time. Given further deterioration in the quarter in each relationship, we chose to take action and expedite our path toward resolution, The first credit was originated pre pandemic and relates to a hotel property in Downtown Saint Louis and it represents our only credit in the downtown area. This is a $27,000,000 loan that has been in our classified total since early twenty twenty one primarily due to the pandemic and subsequent deterioration of business and consumer activity in Downtown Saint Louis. The property securing the credit remains open and operating, and we believe is entering seasonally stronger occupancy and financial performance with spring and summer months ahead. We have recourse to the operator, and continue discussions on appropriate resolution strategies. Based on current conditions and market valuations, we believe the level of specific reserves we have in place represents a very conservative march against any possible exposure.

16m 32s

The second credit is to a borrower that is a fast food franchise operator and it was primarily an acquired relationship from our most recent acquisition. The relationship totals 23,000,000 and has been in our classified total since June 2024. The borrower is part of a larger franchise operation that involves multiple entities with multiple brands across a broad geography, Late in the quarter, we discovered activity in deposit accounts of entities affiliated with our borrower, that gave us concern. Upon further investigation, we determined there was a fraudulent activity occurring in those accounts, and as a result, we recorded a $4,300,000 fraud The fraud charge is a non interest expense this quarter. We are exploring our rights and remedies with respect to this situation including potential opportunities for some level of recovery, in future periods. The loan relationship with our borrower, though, remains current as of the end of q one. However, considering the fraud event, and the global cash flow challenges experienced by the borrower, we moved the relationship to non accrual and increased our reserve levels as of 03/31. We have personal recourse to the principal, and we are in active discussions regarding the best possible outcome for the bank.

17m 55s

In prior quarters, we carried roughly 30% specific reserves on each of these two relationships. Due to recent developments, we increased our specific reserves to approximately 60% for each relationship, which resulted in additional provision expense of $15,600,000 in the quarter. As a result, total provision expense for the quarter was 26,800,000.0 and our ACL ratio increased to 1.48%. In both cases, we believe we are exercising a proactive and conservative approach to address these two situations. Importantly, and not to overlook the serious nature of credit deterioration, we believe these situations are unique to these particular borrowers and we believe our overall loan portfolio remains healthy. To illustrate this point further, I will outline a few portfolio statistics. Past due loans were 21 basis points as of 03/31. Down from 22 bps at 12/31. NPLs increased 89 bps in the quarter, However, absent the two specific relationships, nonperforming loans declined five bps linked quarter to 60 basis points. Net charge offs for the quarter were 23 bps, compared to 27 bps in Q4 of twenty twenty four. As I reflect on recent weeks, it seems like the word of the day is uncertainty. Amidst this challenging backdrop, I will conclude my remarks this morning with three things we believe about Simmons, as we look to the rest of 2025.

19m 36s

Number one, our original 2025 outlook that calls for 3% plus positive operating leverage and implies mid teens year over year growth in PPNR remains intact. Number two, our net interest margin could cross 3% sooner than originally anticipated given positive trends in customer deposits, and favorable asset repricing. I will also remind you that our 2025 outlook contemplated only one rate cut in q four of this year. And number three, we feel very good about our asset quality outlook for the remainder of the year. We are confident in our level of reserves based on today's circumstances. In March, our bank celebrated its one hundred and twenty second year. Our focus on soundness, profitability, and growth remains unwavering and we believe we are well positioned to navigate even the uncertain times with a high level of confidence in the future of Simmons. I will now turn the call back to the operator and we look forward to answering your questions. We will now begin the question and answer session. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2.

21m 6s

At this time, we will pause momentarily to assemble our roster. The first question comes from David Feaster with Raymond James. Please go ahead. Hi. Good morning, everybody. Morning, David. I just wanted to, you know, appreciate all that color. That was extremely helpful. Do you have a timeline for resolution of those credits? I I know you mentioned that there could potentially be [indiscernible] resolution by end of year in the guidance slide. But I'm just kind of curious, expectations for the timeline of potentially resolving these? Yeah, David, I'll respond on that at least initially here. So I would say, the fact pattern could be a little different between the two the two situations. On the Downtown St. Louis Hotel, again, they're entering, as we've indicated, into seasonally stronger months here. We'd probably like to see some of that seasonality come into the mix as we evaluate our options there. I think in any scenario we'd like to see that one resolved before the end of the year. But again, if it benefits us to to be patient around that situation, we'll allow that to happen to get to the best kind of net result in terms of recovery around that or best dollar in terms of resolution.

22m 30s

On the other one, again, this is a loan that's been classified since last year. However, the fraud related activity is not something that we anticipated.

22m 44s

It happened late in the quarter. So we're still early in our analysis of that situation both as it relates to the the fraud event and potential recovery there as well as resolution of the credit relationship itself. So again, we're going to be as proactive possible and we want to move these out of the bank as quickly as possible. But we're going be thoughtful in how we do that and make sure that we've got the best possible path forward. So I think the short answer to your question is, we'd love to get them out this year. But they're both going to have some timeline associated with them. In any scenario, we think whatever charge off risk is there, is adequately covered in our level of specific reserves today.

23m 31s

Okay. Terrific. Then maybe I just wanted to touch on the pipeline. It's extremely encouraging to see that improvement and with really attractive rates. I guess the first part of my question is, could you just touch on what's driving that? Where are you seeing opportunities and just kind of the pulse of the client from your perspective? And then secondarily, how has that pipeline shifted early in the second quarter and your thoughts on pull through and whether you started to see any of that fallout kind of given to use Jamie Dimon's words, kerfuffle in the market. I mean, it's just just kind of curious your thoughts on that.

24m 8s

Yeah, so I would say that we're pretty cautious about the kerfuffle in the market ourselves. But when we talk to our borrowers, when we talk to our bankers on the front line, one of the consistent themes is nothing's happened yet. We're all concerned about it. We're seeing some delays in activity or delays in investments, but it's really more conversational. It's more hey, we're thinking about delaying investment The flip side of what we saw in the quarter is that maybe David is is a pull forward in some of the demand. We saw some of the projects that were closer to the start date further in their analysis. Further in the initiatives to get off the ground, whether it was C and I, CRE or otherwise, those situations we had borrowers who were, I think, very effective in locking in economics. [indiscernible] whether that's preordering supplies, whether that's hedging, etcetera. So that allowed, I think, some of our opportunities that were in the pipeline to pull forward a bit. And then the flip side or the other piece of it is, it's broad based. When we look deeply into the pipeline, we see it really across the, what I'll call, the community and the commercial bank.

25m 38s

It's broad based within our geography and even within category. There's C and I, there's CRE, there's agriculture, [indiscernible] And we do have some seasonal benefits this time of year as well in that pipeline. That's that's not the driver of the seasonal piece, but just keep in mind within there, for example, agricultural, mortgage warehouse, etcetera, are entering more seasonally positive periods here. And I think that's what drove some of the late quarter nature of the funding that we saw. [indiscernible] That's helpful. And then and maybe along those same lines on the other side of the balance sheet, just touching on deposits. I mean, the core deposit trends that you saw were also very encouraging. And again, in seasonally weaker quarter with tax payments and end the year payments and all those kinds of things. Just wanted to get your thoughts on you know, deposit growth strategy where you're seeing opportunity, kind of the competitive landscape and how you think about deposit growth and your ability to continue to drive deposit growth and whether it's primarily going to be like flattish balances and really a remixing and optimization in there. Just kind of curious how you're thinking about the deposit side today.

26m 52s

Yeah. So lot of things to unpack there, David, in that in that question. But I would just start with one of the things you included in your comment was or in your question was the competitive environment. It's still very competitive. Look, rest assured that it is competitive environment. One of the things we've been pleased with both within our own balance sheet and sort of that competitive landscape is it does seem that the banks have done a good job of aggressively moving prices down on the deposit side with the rate moves late last year. So that's been good news. But again, we're still seeing a lot of deposit competition, a lot of protection of existing relationships, etcetera. And I really don't expect that to abate anytime soon. Keep in mind when you think about our deposits and this is really reflected in how we talk about the outlook both back in January and still today. Actively working to remix deposits and to reduce the level of brokered funding We were successful with that in the first quarter. That's gonna continue to be a focus for us. In addition, you'll see that we were successful in the quarter in remixing out of customer CDs and into interest bearing transaction accounts.

28m 15s

And while NIBs were basically flat or very, very slightly down linked [indiscernible] Best quarter we've had in NIBs in quite some period of time. And so we're pretty positive that a lot of those trends are inflecting We have all of the systems on go really with focus around deposits and we have had for quite some time. Every lending opportunity that we're looking at has a deposit conversation involved in it. And really the hurdle requires that deposit activity. And so continue to be pleased with the trends there. But again, I want to reiterate that the competitive environment is still pretty difficult. Daniel, you want add anything on the deposit front? Yeah. Hi, David. I think the thing that I would add is if you think Jay's comments around NIB being relatively flat, we were down $5,000,000 but relatively flat. First time in a while that we've been close to that. If you break that down into our different businesses and you look at the consumer customer our consumer deposits make up about mid 40% of our total customer deposit base. We're actually pleased with what we're seeing there. The last two quarters, we've seen positive growth That's kind of the first time in a long time probably since Traditional, seasonal, patterns that's predictable So we feel good about that.

29m 53s

The other thing I would say about consumer is we're actually growing the core customer account. So you think about the core checking account, which is number one driver of revenue. In the consumer bank, we've grown that year over year one and a 5%, and we'll continue to focus on that have a number of initiatives that we're working on this year with various campaigns and whatnot that we expect to continue to grow that. And then the other piece of that we've seen some in this quarter specifically, just some seasonality in nature public funds. And then on the commercial side, I would tell you there's still probably some pressure on the commercial side. It's less than it has been. We were down a little bit on the NIV side there, but hopefully, over the coming quarters, if we can get that piece back to flattish or to growing, that will provide us a lot of tailwind as we think about just the overall deposit cost going forward. Jay talked about time deposits. We are seeing some really positive shifts there into interest bearing If you go back to the last ninety days and you look at the CD closures that occurred, we retained about 65 to 70% of those deposits and we're okay with the others that left because they were seeking higher rate.

31m 15s

Of that 65%, about two thirds of those stayed in CDs but at a lower cost. The CDs that matured in the last quarter was in that four fourteen, four fifteen range. And the renewal rates is in the three forty range. So we feel good about that piece of it. But then that other third of the CDs that closed went into DD accounts, which are at a much lower cost. We feel good about that as well. So we're encouraged about the momentum that we've got along with the deposits and the cost of those deposits. We're kind of thinking about deposits continued deposit optimization, maybe deposit balances relatively stable and the growth kind of funded by by securities cash flows and that remixing and repricing of both assets and liabilities is what's driving margin expansion. Am I thinking about that the right way?

32m 11s

You are. Yep.

32m 12s

That's exactly right. Thank you. Awesome. Thanks, everybody.

32m 16s

Thank you. Thank you.

32m 18s

The next question comes from Woody Lay with KBW. Please go ahead. Hey, good morning guys.

32m 27s

Good morning, Woody. Had a couple of follow ups on the credit side. Wanted to start with the fast food operator. Just any color you could give on the underlying collateral there? It sounds like it's tied potentially to a couple different entities. Yeah, I mean, we've got the stores themselves, the real estate collateral, we have again, full recourse as we've outlined in the materials. To the principal here. So I think we've got a decent amount of collateral and guarantor support. But again, we're also maybe more aware now given what we discovered late in quarter on the fraud event of some some global concerns around the cash flow picture for the principal So the guarantor reliance is not probably as valuable as we would have otherwise hoped. But again, we have real estate, we have the stores, we have the equipment in the stores, etc.

33m 30s

Got it. That's helpful.

33m 32s

And then maybe shifting over to hospitality. It it looks like hotels are about 4% of loans. Just any commentary on how the rest of the portfolio is performing? And are there any other geographic concentrations within that portfolio?

33m 50s

No, there's no real concentrations to to speak to there on the hospitality side. And really this has been you think back to the pandemic, this was obviously a major focus across all of that hospitality portfolio, You flash forward to today, but for maybe a small exception or two that I can't even think of, this is the one. I mean, is the one we've been talking about. Internally since since what you might call the dust settling on the pandemic a couple of years ago. And what really happened in this situation, Woody, is we believe is just unique to that downtown area. Unfortunately, the business climate there has just continued to suffer. And again, specific to point out that we obviously have a very good St. Louis presence. We really like our our presence in that market. It's that downtown area that's suffering so bad, and this is the only credit of any kind, not just hospitality of any kind, that you would kind of put in the city blocks of downtown that's in our portfolio.

35m 7s

Got it.

35m 9s

And then last for me. It was helpful that you provided the ACL methodology. On slide 26. Just two quick questions around that. First, did you adjust the scenario weighting quarter over quarter? And then second, I think if you look at April Moody's baseline, it looks like GDP was moved a little lower and unemployment was moved higher. How would y'all expect this to impact Ford reserve levels?

35m 35s

Yes, I think we would expect the baseline scenarios based on everything we know today to continue to worsen. From what we and we did update scenarios, update baseline from to Q1. We'll do that every quarter. So we do that again in Q2. So my expectation, unless there is a really significant about shift, you know, that would be that you would see a worse in the baseline scenarios You could see a worsening in the weightings, a shifting in how we weight the scenarios, but we'll determine that later in the quarter in Q2. But I think it would be our expectation that I'm going to make this comment outside of the specific reserves for these two specific credits. Think it would be our expectation that based on trends we see today that reserves for the industry would be building throughout the year this year based on those dynamics.

36m 35s

Yeah, maybe I'd add one thing to that. We use Moody's analytics for our modeling and we have taken a look at the April scenarios and they did worsen as you would expect. Our management percentages that we put in fourth quarter versus first quarter the mix didn't change very much. But as you think about where we land in our range, so our models spit out kind of an estimate We put ranges on both sides of that. We are currently reserved at the high end of our range. So you think about the scenarios worsening, you would think that range would go up Even if we held our reserve where it is, would still likely be in the middle of that range. So to Jay's point, we will will evaluate all the different components of that come June and and make decisions accordingly. But I just want to make a point that we are already reserved in the high end of our range.

37m 40s

Good point.

37m 41s

All right. Thanks for taking my questions. Thank you, Woody. The next question comes from Matt Olney with Stephens. Please go ahead.

37m 52s

Thanks. Good morning, everybody.

37m 53s

Hey, Matt. Good morning.

37m 56s

Sticking with credit, it sounds like you've got a meaningful specific reserve on each of these two credits. Any color on just the process of how you ended up with a specific reserve allocation Was there an appraisal of the assets? Just trying to appreciate the risk of additional impact to the reserve when these two loans do kind of reach resolution. Yeah, I would just say, Matt, both of these credit relationships have been for some period of time now managed within our special assets group. So we're intimately familiar with the properties, the values around the properties, We've been in active conversations with the borrowers even before this quarter given that treatment. So I think we've got as good a handle as you can have around what we think the underlying value upon resolution could be here Now that said, both both situations are struggling properties. [indiscernible] as an example, on the St. Louis Hotel, in a struggling market [indiscernible] So we were pretty heavy in our discounts to what we thought that value would be or said differently. Were very conservative in our approach to where we would kind of record net value here. And the whole thought process around all of that was to ensure that whatever we're going to build the provision to here would be an area where we would have strong conviction that there wouldn't be incremental loss beyond those reserves today.

39m 42s

Okay. Alright. Appreciate that Jay. And then I guess switching over to the expense side, if I understand this right, it sounds like you reiterated the full year expense guidance even though there were some higher fraud expenses in the first quarter. So it sounds like there was some good progress kind of beneath the surface. Any color on kind of the progress you're seeing on expense side?

40m 5s

Yeah, I'll quickly say and I bet Daniel maybe want to make a comment or two. Here as well. But I'll just quickly say that even if you strip out the fraud impact in the first quarter, our expenses in the quarter actually came in a little ahead of where we had budgeted and thought they would. We were already seeing and working on some opportunities [indiscernible] thought could give us some expense tailwinds in the balance of the year. And again, we're seeing pull forwards in some of that. Even here in the first quarter. So already had a pretty bullish view on the expense outlook. For our bank as we were making progress through the quarter. Obviously, the fraud event is feel very strongly is a one time item. We also recorded 100% of that expense this quarter. Given how late in the quarter it came through, it's difficult for us to estimate yet what we think the recovery on that will be. Would offset that expense to a degree. And we're continuing to explore very aggressively all of those opportunities for recovery. And then I think we'll just be, you know, this will enhance our already disciplined focus around expenses as we think about the balance of the year.

41m 21s

And when we put all of that together, my at least top of house view is think we can stand by the expense guidance that we had originally given for the year this year. Even with the $4,300,000 fraud in there. Daniel, if you've any color you'd want to provide on that.

41m 37s

Yeah. You know, we've talked about before that the things that we focus on the things that we can control and expenses are the one thing that we can control. We talk about continuous improvement and we continue to have a pipeline of ongoing initiatives all the time that we are looking to be more efficient We're continuing to get benefit out of our centralized procurement group through contract renegotiations to establishing standards and processes by how we do things. Every time a physician comes we evaluate whether we need to refill it. We have a lot of conversation and discussion around new positions, I'll make a a point there. If you look at our headcount, we were up three headcount quarter over quarter. But we self funded We added 15 on the banking side, so revenue producing, and we funded that with 12 reductions on the support group side. So everything that we do when we spend a dollar, we're evaluating that. Having said that, I will say again that we are making investments in our business %. And we'll continue to do that. That won't be anything that we stop. So we do feel good and confident about our expense guide.

42m 59s

Even with the $4,300,000 fraud in there. Then to the extent that the recovery comes in, would give us even more ground there.

43m 10s

Okay.

43m 11s

Appreciate that, Daniel. And then I guess going back to previous comment, I was looking for little more color around broker deposits and remixing away from those. I think it's still a pretty material balance around $2,900,000,000 Good progress in the quarter, but still on a year over year basis, it looks like broker deposits are still relatively flat. So just looking for any kind of help thinking about kind of what is the plan to remix that over the next year?

43m 42s

Yes. So if you look at it year over year, we're down close to about $100,000,000 And we've talked about growing customer deposits. So for every NIB dollar that we can grow, or every customer deposit even if it's interest bearing or time, that's a dollar brokered that we don't have to have. So [indiscernible] [indiscernible] back end funding mechanism that we do to fund the balance sheet. At the end of the day. Along with SHLB. And by the way, those two things we kind of kind of go in and out of depending on what's most feasible from a cost standpoint. But the main focus there is growing core deposits, and that's the arm that's going to let us reduce our reliance on wholesale funding. We've got a number of initiatives going in this year. With the addition of Chris Van Steenberg. He's brought a number of ideas and things to the table, and so we'll continue to work on that but that's primary mechanism by how we can reduce, wholesale funding.

44m 46s

And the only other thing I'd add in there, Matt, is it's grow core deposits to everything Daniel said. And then to the extent there's not loan growth, and we're growing loans and seeking to grow but to the extent there's not good profitable loan growth, the other thing that would reduce the on wholesale funding is just ongoing reduction in the securities balances. [indiscernible] Okay.

45m 15s

All right, guys. Thank you.

45m 17s

Thank you, Matt.

45m 19s

The next question comes from Ahmad Hassan with D. A. Davidson. Please go ahead. Hey. Good morning, guys. I just got one quick one on capital deployment. [indiscernible] you guys had a strong capital with modest loan growth projected for the year. And which year is just modestly above tangible book what would kind of get you off the sidelines on buybacks? Was it like the pressure on earnings this quarter from higher provisioning? Was that why guys did not execute repurchases this order?

45m 55s

Yeah, I appreciate the question. I think generally, and we've said for a number of quarters and continue to fill that this way today that really our priorities around capital sort of start with organic growth in the balance sheet, We've also been in that same vein. We've very much been in capital preservation mode or opting to have optionality around capital as it relates to securities restructurings, etcetera. You've seen us do a couple of those over the past several quarters. And so we'll continue to be opportunistic in that regard. So that's kind of priority one for us. Priority two, is, of course, our dividend. And then any other kind of capital deployment opportunity is really beneath those those first couple of priorities. And I think just overall, the outlook that's there, we want for the macro outlook, we think it's smart right now and the right thing to do as we think about the long game. To preserve capital and be smart with our capital. But at the same time, we always want to have the buyback in place. If we were to see market dislocation or opportunities where it was very, very attractive for us to leverage some of our excess capital in the buyback regard.

47m 24s

We have that tool in the toolkit if and when we need it.

47m 30s

That sounds great. Thanks.

47m 32s

Thank you.

47m 34s

This concludes our question and answer session. I would like to turn the conference back over to George Macris for any closing remarks.

47m 44s

Thank you very much and I appreciate everyone joining us today. As you can tell from our comments, we're pleased with our profitability trends and we expect those to continue to improve.

47m 55s

We took some very conservative actions on two specific credits, which is not a surprise. Regarding the way Simmons handles our risk management. For the time being, we're going to keep our head down and keep focused on organic growth opportunities, which have some positive momentum right now. I guess to quote Jerome Powell in the in today's session, For the time being, we're well positioned to wait for greater clarity. So thanks again for joining our call this morning. We will do this again three months from [indiscernible] Have a great day.

48m 42s

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Key Insights

Total period-end loans increased 2% on a linked quarter annualized basis, with the commercial loan pipeline up 43% to its highest level since Q2 2022; customer deposits grew $183 million (4% linked quarter annualized), while brokered funding was reduced.
First quarter net interest margin expanded to 2.95% (up 8 bps linked quarter, 29 bps year over year), driven by a 19 bps decline in total funding cost; noninterest income grew 6% linked quarter, and this was the fourth consecutive quarter of top line adjusted revenue growth.
Two specific credit relationships (a $27 million downtown St. Louis hotel loan and a $23 million fast food franchise operator loan) were moved to nonaccrual, with specific reserves increased to ~60% for each, resulting in $15.6 million additional provision expense and a total provision expense of $26.8 million for the quarter; the ACL ratio rose to 1.48%.
The company reiterated its 2025 outlook: targeting 3%+ positive operating leverage and mid-teens year-over-year growth in pre-provision net revenue (PPNR); net interest margin could cross 3% sooner than anticipated, and only one rate cut is assumed in Q4 2025.
Expense guidance for the full year remains intact despite a $4.3 million fraud-related charge in Q1; management continues to focus on core deposit growth, remixing away from brokered funding, and disciplined expense management, with ongoing initiatives to optimize both deposits and costs.

Recent Transcripts

Simmons delivered top-line growth and margin expansion, while proactively addressing two credit issues.

Q4 2024 net interest margin outperformed expectations, setting strong 2025 outlook.

Jan 22

Q4 2024

NIM Expansion

2.87% Q4, targeting 3%+ in 2025

Deposit Optimization

Costs -19bps, 75% retention on relationship CDs

Income Statement

Revenue

	2020	2021	2022	2023	2024
Revenue	$861M	$768M	$875M	$760M	$763M
Cost of Revenue	$0	$0	$0	-$22M	-$549M
Gross Profit	$861M	$768M	$875M	$782M	$1.3B
Gross Profit %	100%	100%	100%	103%	172%
R&D Expenses	$0	$0	$0	$0	$0

Cash Flow

Net Income

	2020	2021	2022	2023	2024
Net Income	$255M	$271M	$256M	$175M	$153M
Dep. & Amort.	$49M	$47M	$49M	$48M	$1.6M
Def. Tax	-$122K	$11M	$15M	-$2.5M	-$3.2M
Stock Comp.	$13M	$16M	$15M	$12M	$11M
Chg. in WC	$16M	-$71M	-$10M	$250M	$0

2020

2021

2022

2023

2024

Net Income

$255M

$271M

$256M

$175M

$153M

Dep. & Amort.

$49M

$47M

$49M

$48M

$1.6M

Def. Tax

-$122K

$11M

$15M

-$2.5M

-$3.2M

Stock Comp.

$13M

$16M

$15M

$12M

$11M

Chg. in WC

$16M

-$71M

-$10M

$250M

Balance Sheet

Cash

	2020	2021	2022	2023	2024
Cash	$3.5B	$1.7B	$682M	$614M	$0
ST Investments	$3.5B	$7.1B	$3.9B	$3.2B	$3.9B
Cash & ST Inv.	$6.9B	$8.8B	$4.5B	$3.8B	$3.9B
Receivables	$0	$0	$103M	$122M	$123M
Inventory	$0	$0	$0	$0	$0

2020

2021

2022

2023

2024

Cash

$3.5B

$1.7B

$682M

$614M

ST Investments

$3.5B

$7.1B

$3.9B

$3.2B

$3.9B

Cash & ST Inv.

$6.9B

$8.8B

$4.5B

$3.8B

$3.9B

Receivables

$103M

$122M

$123M

Inventory

Go Deeper

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Overview
Latest News
Earnings
Income Statement
Cash Flow
Balance Sheet
Related

Earnings

Report Date

—

Rev Estimate

—

Avg 1d Change

1.95%

Report Period

Q1 2025

EPS Estimate

—

Implied Move 1d

—

Transcript

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On the other one, again, this is a loan that's been classified since last year. However, the fraud related activity is not something that we anticipated.

22m 44s

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32m 11s

You are. Yep.

32m 12s

That's exactly right. Thank you. Awesome. Thanks, everybody.

32m 16s

Thank you. Thank you.

32m 18s

The next question comes from Woody Lay with KBW. Please go ahead. Hey, good morning guys.

32m 27s

33m 30s

Got it. That's helpful.

33m 32s

33m 50s

35m 7s

Got it.

35m 9s

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36m 35s

37m 40s

Good point.

37m 41s

All right. Thanks for taking my questions. Thank you, Woody. The next question comes from Matt Olney with Stephens. Please go ahead.

37m 52s

Thanks. Good morning, everybody.

37m 53s

Hey, Matt. Good morning.

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42m 59s

Even with the $4,300,000 fraud in there. Then to the extent that the recovery comes in, would give us even more ground there.

43m 10s

Okay.

43m 11s

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44m 46s

45m 15s

All right, guys. Thank you.

45m 17s

Thank you, Matt.

45m 19s

45m 55s

47m 24s

We have that tool in the toolkit if and when we need it.

47m 30s

That sounds great. Thanks.

47m 32s

Thank you.

47m 34s

This concludes our question and answer session. I would like to turn the conference back over to George Macris for any closing remarks.

47m 44s

Thank you very much and I appreciate everyone joining us today. As you can tell from our comments, we're pleased with our profitability trends and we expect those to continue to improve.

47m 55s

48m 42s

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Key Insights

Total period-end loans increased 2% on a linked quarter annualized basis, with the commercial loan pipeline up 43% to its highest level since Q2 2022; customer deposits grew $183 million (4% linked quarter annualized), while brokered funding was reduced.
First quarter net interest margin expanded to 2.95% (up 8 bps linked quarter, 29 bps year over year), driven by a 19 bps decline in total funding cost; noninterest income grew 6% linked quarter, and this was the fourth consecutive quarter of top line adjusted revenue growth.
Two specific credit relationships (a $27 million downtown St. Louis hotel loan and a $23 million fast food franchise operator loan) were moved to nonaccrual, with specific reserves increased to ~60% for each, resulting in $15.6 million additional provision expense and a total provision expense of $26.8 million for the quarter; the ACL ratio rose to 1.48%.
The company reiterated its 2025 outlook: targeting 3%+ positive operating leverage and mid-teens year-over-year growth in pre-provision net revenue (PPNR); net interest margin could cross 3% sooner than anticipated, and only one rate cut is assumed in Q4 2025.
Expense guidance for the full year remains intact despite a $4.3 million fraud-related charge in Q1; management continues to focus on core deposit growth, remixing away from brokered funding, and disciplined expense management, with ongoing initiatives to optimize both deposits and costs.

Simmons First National Corporation Price & Performance (SFNC)

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