SFNC - Earnings call transcript Q4 2021 | Simmons First National Corporation

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Operator

Good day and thank you for standing by. Welcome to the Simmons First National Corporation's Fourth Quarter 2021 Earnings Conference Call and Webcast. At this time, all participants are in a listen only mode. [Operator Instructions] I would now like to hand the conference over to your speaker today, Ed Bilek. Please go ahead.

Ed Bilek

you our thank call. quarter and morning for fourth joining earnings Good name of Corporation. First Director Ed of My Bilek, Simmons Investor is Relations at National

me quarterly Matt Chief Financial Executive and and Garner, Treasurer; and purpose the Makris, Chief are the Banking the Officer Operating Bob Officer. The Administrative Officer; Massanelli, company's Officer; of release David its information company Chief data Accounting Brogdon, is the discuss Fehlman, President our Chief Joining Chief morning Jay Chief Officer; to remainder Steve this by today and provided in Reddin, discuss and earnings issued George call Officer; Chairman and of to XXXX. for outlook

begin by will We prepared comments with followed session. a Q&A

investors including on provide analysts of listen firms simmonsbank.com in at and posted participate be page days. Relations and equity guests call, All to only company are institutional research least the the Recording the will this the that for sixty Q&A in our session. mode. on other our from have We call the on prepared Investor session conference remarks, today's under website invited Q&A

we looking our plans, outlook. forward-looking those to or statement statements due a expectations, could differ make today's results future materially not and will implied that from statements I'd projected estimates, reliance about projections, you variety you on forward-looking any During goals, remind by should call, undue forward of place factors. as the actual

update the obligation the release forward-looking December The this for the is revise or forward-looking of XX-K earnings the ended risk company's statements filings, without to any description including company these information. issued Form assumes information other certain Additional XXXX information SEC concerning in section contained limitation morning. and of contained year in company's factors the of some factors no the or company's XX,

certain we Finally, will in we investors. to discuss provide useful non-GAAP information metrics presentation, financial this believe

included morning GAAP, to company's over non-GAAP page website of investor filed earnings as to Form on the George now the X-K are call metrics, fourth exhibits company's reconciliations the Makris. the non-GAAP are metrics this regarding company's current of press SEC including simmonsbank.com. report disclosures release which contained the with and Additional quarter I these turn Investor and in to on available will Relations the the presentation,

George Makris

Thanks, announced fourth welcome two million give Ed full could XXXX increase with XXXX, and despite thanking artificial today, Earlier call. operational we my the earnings I of XXXX, in and the years. the to challenges associates pandemic record comments earnings about for once Bank the Simmons again our quarter of $XXX XXXX. past a producing associated created the over If X% the economy year for over of earnings year

release. Bank, today available And Landmark of based last our year. and the both also integrated Investor is from our available We page of acquired Memphis previous for per $X.XX, quarter in the We share year. increase Bank the Community an an Investor simmonsbank.com. Presentation important diluted and of information earlier Relations and Triumph simultaneously in October X% press the for fourth financial on published reported of the earnings Other full year

in where So, significantly items, non-core the to a activity were has and a quarter announced shares, been share diluted of for enhanced income has after Landmark banks our our after our Texas Houston, our and is Texas Spirit Austin, share. market $XX.X in Shortly strengthening partner establishes based quarter we earnings priority of College these $XX.X and Spirit acquisition as of for definitive our agreement deposit Bank were not fourth in to these four results to scale only also the bank completed on Included Net acquisitions, their tax the for Antonio, we the our quarter and largest Trial. Station. enhances related a platform current and was results. strategic with footprint, primarily million franchise for acquisitions included The in but Tennessee, size San $X.XX. million now growth of in we rank

Excluding $XX.X the $X.XX per items, were million core basis. or earnings on diluted share

think acquisitions tangible that stock we is book foundation closed $X.X shares million value I to of grew contributed it approximately and remarkable million our our X.X two integrated repurchased our and of share loan fourth quarter XXXX the The quarter. positive fourth the began third see in quarter by the alone. momentum X% of accelerated growth during per in we to during terms

funded billion. loans quarter in $X.X totaled Newly the

on quarter this of -- rose fifth growth, as in in to loan consecutive XX% $X.X encouraged basis. believe we We're leading quarter, XX% which pipeline to billion level producers considered and terms basis increase our to positions and in loan community well for positive corporate Metro commercial unfunded markets new as loan commitments with broad-based indicator combined throughout well new well up $X.X have actively growth in linked-quarter unit. year linked-quarter as our in the also banking momentum billion, rose new us of a our our loan the of by Our the as We the continue on a added in was growth XXXX fourth a recruit ahead.

existing fourth stock million exhausted share quarter XXXX, January, our our X.X program. shares remaining substantially of capacity the under in the of repurchase During XXXX repurchased we

results, to Directors producing authorized raise the share. In speed significant the growth efficiency and allow of result, the our in we we to transformation, quarterly meet deliver technology, investments investments made X% and with customers. meaningful needs and and have that customers which M&A ever-changing dividend we scale in products on The significantly with the closing, building of a and growth representative a to new As particularly profile. services emphasis our will our capabilities, share our improving expanding XXX high while with markets made $X.XX million program terms of per an enhance in us our help to geographic continue cash Board solid purchase digital

to we're later ability Spirit our acquisition record, the Given seamlessly in tremendous our this integrate and opportunity year convert successful growth this capitalize on and presents. track confident

our with the challenging momentum ever footprint capture This throughout environment. comments. are successful and well-positioned institutional concludes to ability our year result, our growth another turn and to economic opportunities will will year. and in to we're operator confident line positive questions a we We invite prepared landscape that changing believe respond our enter and now I our lead to As to analysts the investors. over from the

Operator

question Feaster [Operator Raymond first of in line the Instructions] from Our James. comes David

is Your open. now line

David Feaster

good Hey, morning everybody.

George Makris

Good morning, David.

Matt Reddin

Good morning.

David Feaster

originations we're of sounds new growth made We've it at remarks. like sounds pipeline's like the improving. still bunch hires. prepared in I commentary good. of outlook. -- the just I a the kind on to It the wanted your expecting Appreciate the it's touch looking clear guidance, mean, growth year. what And just the paydowns happening How payoffs think gives accelerate curious at you takes going rate what's you look that I'm as just and we're the kind and going and to growth to accelerations see of puts of in you throughout some confidence about the everything. and forward. of pace are

Matt Reddin

others the join Hey, first Davis. It’s I'll in. Matt. stab can at that take and

just $X looking key in billion of that every talked production on we've ramped really And Even kind a we this, new in absolutely point give originations. fourth infection saw quarter. as As quarter And for we you we were that close point. the up. in about December,

we December. -- we it really in saw so, saw inflection And point

that and still what as an today at comments interesting growing. earlier, but Now and month January's pipeline it's $X.X is happens always an as -- where George overall January, were looks in our billion pipeline,

standpoint, that a production from we what looks from see So good. really

indicators Our to headwinds certain answer be positive, look less all some accelerated a there But I'm true net are long this less. And growth glad payoffs? to areas. and Yes. year. specifics around Will any early

me me in. to would to. like You you kind know dive I'm of where glad let

David Feaster

the maybe the the how you loan -- opportunities, you -- change any and guess is details just kind see is any just the of I guess, I do trended steepening you of some do how growth yields just on the -- pricing you curve? pipeline and -- most where Where makes at and just improvement looking upside? just see on where commentary pricing are given seeing pipeline new the

Matt Reddin

would Arkansas seeing acquisition really on term quality to XXXX. standpoint, rates real Kansas of also into where conservative of nice to our are new Triumph. We pick put a sheet we rates been of all fourth showing, and market those say very sign us the is Northwest opportunities, in the try our we're show shining also Landmark long-term we top David, for are quarter, bit, at to asset a we're very has only some lot the Memphis, for year, that that City the in starting into rebounded in as real great couple focused but but Where books, little and up of nicely as finish that a production -- weeks, a pickups deals. great in I seeing -- rates fourth some moving. we with and still in see to were the strong. it's Texas that nature list, can our quarter -- and We're to on what a starting assets us. is the starting moving of had going production that from for Yeah. we're nice us our star a their out and the are very our where pipeline build we're in are in point that Nashville. the pipeline And the pointing absolutely. we're we're last to starting

about commercial right that to be seeing lot in our that group, going our we happen We've but and our from the -- that'll because think it banking you in the a increase said financing. now pipeline pipeline of corporate doing can it's get I And and the in slow new we're to growth, a them other that only there fully corporate -- talked comment integrated XXXX. see want we that's -- way. team, deck

group, where So, lending municipal a really that banking grow build we're you're public growth to we a -- some also that's with in there. our the seeing sector within seeing asset group, based pipeline through opportunity group trying that's Triumph. group have institutional there, our nice We're finance, but

nice So, accelerating really XXXX. that's been in see a and we that addition

David Feaster

an sounds then, looking in relatively earning so stable, should color. loan guidance, the the great see you. Thank That's And taking improving mix. digit, deposits at Okay. high asset single like growth,

rate and continued perform think the see hoping bit where asset kind should of impacting was basis, could think you maybe we've you how on how expansion. essentially you hit one whether could sensitivity a little a your on -- And Just -- color remind you us and think us maybe margin, give on the you the here you -- of trough hike of a a just, pro margin?

Jay Brogdon

unpack maybe the to Hey, question. first on Yeah. there to you're the Jay. our is of David. the just A couple go guide XX on in from I'd But referring This to or slides. that the remarks thing page outlook

think about in year. timing hinge interest, inflection As margin, on margin the real to throughout of that from income is net interest growth going net our the I of the perspective sort the

from driver -- primary of margin view by the margin as indicated. a asset driven mix, So, true interest is you net point

to into this are as So, investing, year loans expansion. some see that we with going liquidity growth, margin you're

headwind the that to of the natural margin rolloff expansion PPP. is Now,

asset are inflect In as more environment, where think to loan loans where enough that, than we paying of the I rates side. is addition on. on to growth the off But the coming lower rate the have some offset versus been mix

cash Part of fed in got we've B, to to and point kind question. some it part you our keep securities. your rate additional in XX rate that's mind, for interest page I'd at statistics slides $X.XX but A about there, So maybe as and to in the sensitivity, floating in billion relates

sensitive, will. all going So that's asset fully sort if of to be you

loan On of our a page, statistics give side, this down the rate we portfolio. breaking you loan on lot variable

point if the way So, see to kind would rate be ramp point fed, there. October, thing portfolio $X the statistics you incremental thinking just But ramp those you million interest is portfolio. of this loan of that can variable in year, basis if on we the will. you we're that's I the the you June, March, hikes off XX show we income loan about And alone, from

questions So, of to hopefully that there. unpack the gives some bit color

David Feaster

helpful. here. very just then on parts expenses, that's a lot moving touching No, And of there's

in think the in Triumph how rate? how about that already the as what you are Just kind growth the curious just the and forma given synergies you been guys Landmark expense of rate rate well. of run maybe realized kind speed And have pressures once are deal just a making investments STX and of we pro just get and and run -- the then of run much inflationary do kind

Jay Brogdon

Yeah.

in point slide we bottom some give give page you kind point page of a to detail you table middle the page. up of you I'll on you at to XX color, additional the and I'd on But top. the the the again, but So, deck, quarter the of that

show there, Triumph specifically core take as the expense, the non-retained well as the and foundation, contribution call non-interest to employees. what we you If on out expense Landmark I salary as,

as of cetera. days, don't that of So, month, integration, of We all we folks two part our when day a retain those et -- months, headcount sort for reduction realize XX one.

there quarter, quarter we fourth -- before we in the but $X those had fully the million first we're of left. So, by folks before about expense

X% to that's more average a -- sort our focus about non-interest really normalized rate we run about rate. expense I the down which of think I've to assets, run continued on as what is going that's million, quarter So, there of close in fourth $XXX.X that be to think

So, line opportunities given had, the area. scale there's continuing hold some to that wage of that inflation. I continue we've M&A our I to Yeah, around combat some to But think kind ability got out in of we're think, there. et the and cetera X% we've inflation,

Matt Reddin

I add. And Yeah. Jay, just

is As going normal of have merit you that and more here, XXXX a the said, raises cost inflation increases and get XXX other we into in And going we're baseline. as to up. we think of

doing addition the to what of that that. is been we've be investing we'll so side year last doing some the on -- In production or

those increase should side the an production. but to other see see you in numbers, the will on you revenue So, related

David Feaster

helpful. That's Thank you. Okay.

Operator

Thank you.

next from of Brady Our from Gailey question line comes the KBW.

Your now line open. is

Brady Gailey

thanks. Good Hey, morning guys.

George Makris

morning. Good

Jay Brogdon

morning. Good

Brady Gailey

of some close, two the know at in ask in had prior acquisitions, prior just bit. in are there any your in loans be fourth that I Are kind closed Texas, you've that one strategically in look going in Maybe to there buckets you the like a those to of of you've on that'll done here When anything other runoff. runoff out growth. thing loan kind little out Spirit targets? that of those you've quarter Are of put of deals? targets some

Matt Reddin

-- there and a are amortize within nothing in we're Hey, XXXX, Landmark, it we the we're There that's account Brady. Matt. It’s mortgages Triumph, about is was Hey, purchase some -- think we Yeah. going $XXX be or that just those that just not -- million off within were will but portfolio but that and to within for book we pursuing as to not knew. And that. but less, it only thing anymore amortize. going

Brady Gailey

then And of on right. All the Spirit anything Texas side?

Matt Reddin

that we kind lot a do. today billion a because is size, Spirit get they and them XXX,XXX of -- in April, what us. It's loan integrated in spot. that's is Their Brady, looks -- a lot average This sweet pipeline and now right Nothing right now of ours. like our all. to their anecdotally like see There at really $X No. over excited lot right

of feel certain them with coming about runoff sector. So, no on plans a we good

Brady Gailey

they growth their some which was see. I quarter, good in up saw put really to fourth good Yeah.

see book tangible is compelling this the And So you're and to aggressive? XXX XXX done great the should million $XXX or the done in think stock year, -- $XX under the Could times -- too so I it's XX price. with month earnings, see be of value. about that's you buyback. do times it's think new active pretty this being a still XXXX? the buyback we million -- mean, it's all earlier That's we

Bob Fehlman

year. the you There's in Brady, have end is lot One it's a if all it there. be this know by going the year. Bob. factors the don't would say to I price, in of said. over like we'll to is I timed

can we file The is when be can in can't timing other be and the when we XXbX. in market we and our when

-- All we a a period we're of in and also plan that that of systematic over time. measured have

be it's position goal and So but get our in be as can. going utilize -- all tell mean, you to can't to this year, we I best by would I capital our

Brady Gailey

little Okay. the of ticked be quarter, yield But is know the me. in in know that And how on. were I two deals do for closed, you think about Texas potentially Spirit I a fourth then, up accretable could but where accretion bit yield finally XXXX? from coming

Bob Fehlman

portion was you, different mark, yields you it the it at is a as and the last have I'll CECL, negative you're Well, of a tell accretable portion than you in it little rate have have deals, that are credit because on then mark. point that under of interest a you

than we less deals. it in -- deals to lot if last. be as those recent and do mean, we a I as I asset on know any there in was there's don't it So, size it's as we guidance but much per there, had accretion won't have be going --

Matt Reddin

with Agreed. Yeah, I that. agree

Brady Gailey

All Okay. Great. guys. you Thank right.

Bob Fehlman

Thanks Brady.

Operator

Thank you.

the Stephens. Our from next question from line Olney comes of Matt

now is line Your open.

Matt Olney

thanks. Hey, guys. Good morning,

George Makris

Matt. morning, Good

Matt Olney

less the around will rate these and that around else did a how Want to What it I'm go the you -- and sensitivity, repriced repriced? tell back us interest repriced. index mentioned I bit that these what structure think with Jay repriced those also was kind about to securities variable little $X.X billion. what and the rate these discussion quickly of how familiar can on

Jay Brogdon

to to cash similar our position. similar repriced They'll

was -- they're -- mid-XXs yield, in points. the the think So, and I quarter those basis the on

just XX So, cash they're basis our XX but going the at call now, points. like at it, right points, to XX, area move Matt, basis

from lockstep going move with the You're any increase that in of kind to see fed.

those So, same I think way. the of would both

Matt Olney

it. Got

that. Okay. for Thanks

Jay Brogdon

Yeah.

Matt Olney

in added XX, give nice the as talking graphic XXXX. there portfolio, producers a new us as And you slide on the loan then far about

acquired into those year? -- Thanks. does big to for growth there. And the year? net kind that or numbers closed want the Are that Just last include pretty banks that, numbers of dive

Matt Reddin

include that acquired within well not going would bankers, be Matt. replacement to bankers new net as our bankers, That is as but

Matt Olney

it. Got

Okay. guys slide think outlook acquisition this of it's or XX, impact on And as then, I you give, of exclude the general Spirit as the far the outlook of Texas, pending include you Spirit? got does

Jay Brogdon

that. Yeah. Great It question. excludes

really outlook the standalone you is a if So, will. Simmons,

So, M&A of that pending Matt. kind future to XXXX any outlook, incremental XXXX, would be or to

Matt Olney

model Spirit the think there? date can I expected as Any it see XXXX. says my any guidance I details what you in the more I've color And like was give got -- us not just or that second Okay. that quarter, that for the recall timeline as -- -- looks closing be the it on far then said if was can't Texas, of would I helpful.

George Makris

this George. all point. still We're the necessary the We've is Matt, optimistic applications this second in at quarter. filed

all just through the received approvals. been haven't the We haven't timeline We yet. requisite

is diligence Our well underway.

with constant think of good folks, really conversations. We Spirit Texas are in communication having the and I

think is indicative I in our about optimism when fourth combination the that quarter performance of their happens. the

to going optimistic the So, still bit quite converted. deal finalized, things the Federal we're control. second we're out of are at these that that Reserve this days. closed, get disruption a in our There's quarter, is certain of There

how companies anything two see So, we that would between we concern. for affect our exactly any but might don't don't know that approval, cause pause us

fact, In the be more fit. good really the is going it, into get I we deeper realize to this think a we

Matt Olney

Spirit that average that than our we at Is down that, have we forecast X% that that any for Okay. that? as that give level level over dynamic assets? color in maintaining ticks maybe think George. initially you goal of can a guess, on operating talk should time that guys assume I works about higher of or you expenses about you loan where generally Thanks just into layering XXXX, can And then in

Jay Brogdon

yeah. Well,

all same We're into going on think the that. and about one. cost in the allow prudent we realize to I way We're Matt, day the got Triumph quarter to Triumph of -- be to going synergies, fourth you've Landmark. not how with for go

in And so, take or cost all quarter get a to saves. it's going realizing there and of two to those terms

run the day one. happen of our expense on So, of overall rate core kind synergized budge off it expectation. it doesn't But really me won't

Matt Olney

Okay. Thanks guys.

Jay Brogdon

Matt. Thanks

George Makris

Thank you.

Operator

back Thank showing turn to to questions. you. George Makris At closing over no would for time, the remarks. further I'm call this I like

George Makris

one that talk is about, going and and point net to make A I'm cause that to we of our principles Bob the sort the accounting ask charge-offs Fehlman like Thank question little about to of that we'd elevated you. that that the There quarter. anticipated fourth sort new to is for happen.

Bob Fehlman

of happened that old on and about the to was million related million charge-offs rules, under the prior fair date acquisitions had charge-offs is $X.X flowed under and after in CECL been $X would've the adjusted to to acquisition the Yeah. would've about in that quarter, those -- We that rules it that the value through. recent CECL charge

we identified So, was us acquired for It no surprises the during our due and diligence. with at banks all.

in on just it's So, a little the is how difference accounting that.

for negligible quarter. was So, than other charge-offs that, it the

George Makris

And to that Yeah. two net and Landmark things recognized and the I'd exceeded energy considering on just little Triumph previously those charge-off that, million charge-offs the charge-off. credit add a between, our $X.X

So, really it's we're our time the first requirements but the this a new reporting. CECL is dealing that misleading, with in little

to needs our addition million includes Triumph thing million be the actually on that in and that expressed provision to reversal $X.X is Landmark the based $XX acquisition. provision other an that, of The

$XX more So, million the that. that without charge, would've than been reversal much

make this that a we sure wanted that that couple just about quarter, accounting today. to talked were issues So, we of unusual

ordinary again, lot it's Bank. team news to report We're the looking the with of Texas at hope we new welcoming associates two last we XXXX. have have really the good who forward Simmons. once that to due and years, our in last April. with that, forward We a here partners I built to that COVID. all to We're really, want looking the Spirit think with our I year So, Simmons results put thank particularly with are economy to in And over up

in do XX us We'll So, much very for days. this you joining thank this morning. again

Operator

you This for concludes Thank call. participating. today's conference

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Simmons First National (SFNC) 27 Jan 222021 Q4 Earnings call transcript