SFNC - Earnings call 4 2023 | Simmons First National Corporation

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Operator

Good morning, and welcome to the Simmons First National Corporation Fourth Quarter Earnings Conference Call. [Operator Instructions]. This event is being recorded. I would now like to turn the conference over to Ed Bilek, Director of Investor Relations. Please go ahead.

Edward Bilek

to National welcome XXXX Fourth and Call. Earnings morning, Simmons Corporation's First Quarter Good

are of Bob several team, today Daniel me Joining members Executive Brogdon; CFO, George Hobbs Jay ]. including our Chairman, Makris, President, CEO, Fehlman; and [ our management executive

be call will a in Today's format. Q&A

tab. that the our earnings we presentation release you to deck begin, Investor website earnings quarter are like would fourth Before on at and under simmonsbank.com materials Relations I available remind our including the

not call, make projections future outlook, outlook will today's activity, results reliance plans, liquidity as net variety goals, interest implied including, to These our forward-looking statements credit of our differ any During could by place statements due about deposit and undue expressed statements and the conditions, should, involve interest we forward-looking others, risks in lending economic actual on expectations, and regarding margin. and a factors. from quality, underlies materially those and statements or rates, estimates, future forward-looking among therefore, you

some presentation of investor in earnings contained our these today. is factors and concerning Form with release our furnished information X-K Additional

revise including the Our XXXX, and for Simmons no as only March they Form forward-looking made, ended December date in or are any year or Form factors statements risk obligation XX, and ended assumes forward-looking for XX, XX-K Form XX-Q statements speak contained our the other to XXXX, information. that the These quarter XX-K. of update the

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

of presentation, SEC also our we to website, the to simmonsbank.com. session. we metrics earnings the ready reconciliations filed as exhibits X-K page Q&A GAAP in to our Operator, contained Investor available non-GAAP which with non-GAAP these included the metrics regarding disclosures the Relations the are including are Additional release are on and and investor Form are of

Operator

first with [Operator Raymond Feaster Instructions] question The James. comes David from

David Feaster

out to on maybe just the start wanted I margin.

guidance. were it forward the kind in some sheet balance margin good It managing rate on actively But in screen the some the see first rate to been the over looking more of course going -- looks your I today. trajectory have with and like you And that, incorporating even the the sure the forward sense maybe the on the obvious the that discussion schedule, of year. trajectory neutral looks way over you then incorporating job restructuring clarify of and correct. think just really just if the to should giving kind that into the of just kind done with get fourth guys quarter margin the You of But to to year. should points the sensitivity a expansion wanted benefit at about curve just you're some help course wanted But you margin make some that was the margin like be repricing guidance. quarter. from how should of the that and the of want thinking. There's just curve was

Unknown Executive

David, Jay. this is

take answering me at Let of crack a questions. those some

what of kind budgeting our curve. forward embedded forecasting in have are year. X I'll cuts than conservative all, our assumptions now of more First the we right about little a We the for talk rate probably are and

year. the cuts rate those of X/X the would pretty course, be Of late in

from lot in that So year not going XXXX. to of see impact the you're a

We we we your the NIM gave trajectory of rate just quarter. to with NIM you third kind that's how pleased guidance second for think the year. I'm assumptions at So with going I in to the there, of obviously and question we're kind When the stick about were looking of that for the a are and good thought underlie direction. was we lot those maybe to where be. some there still very would a and quarter, results quarter this still that favorable trends But I puts a that the little trends takes. of compared think the point fourth

Their flows were with quarter to seasonal early attributes the We deposits quarter. of both year. part fourth our this pleased deposits in some and the of in the

So still QX, again, just got term again, we of amount some cash of We takes lesser QX some there. will a around in the you point in lot some to and then degree of but disclosure our than fair them to puts a deposits, again flows. And some in deck that of reprice, have the I'll still QX. timing

still range deposit the of front. need again, So of near we're in fight in exist the optimistic to in I think we're of that the operating some still But the term, that around sort on kind pressures overall. NIM and

efforts we continued the the rate assumptions good around margin us move see that good are feel optimizing expansion that immediate income. we the balance we help year repricing the will sheet in move we of of some year, the in kind the that assets, the assumptions, term, through this that of As of the past balance and assets to out again, interest repricing have and feel assuming there net confident are

of expectations the we of as kind look balance our the immediate the year. to through then that's term So and

David Feaster

touching That's then growth the sense. great. loan on That just makes And maybe side.

curious are But slowing pipeline doing looking and are X market grow taking straight and geographies gain Where demand the quarters. pricing. just continue pricing? yields Obviously, an the about growth same in we've on the that color you some segments pushing yields, demand seen driving of great very what at I'm you kind at that push to pipeline just a press seeing a the just opportunity some in origination new driving the conservative maybe And for time, to job approach. slowing about talked the guys pipeline you of You the and share? improvement and release are growth? what's you're maybe in despite the

Unknown Executive

about remember loan of I it's growth, Yes, David. kind to important talk to One point thing we out I want think as that.

would still I masked little we're And some in even a While moderating argue fourth are we bit the that's quarter. seeing experiencing growth. growth,

down a part low. had seasonally Ag those see have we'll here growth very loans begin production and the year fourth some team and still of bank, ag up we're and back Despite the in the to were in early we We quarter. loans good the that, ag pick history at here.

And on think light really a about We're so I overall, fronts. staying particularly pretty the perspective, incredibly feel the from in results environment. good we growth disciplined loan X of

focused our of Of staying credit system what all let on also relentlessly very the pricing and through and course, front, we profitability. be there disciplined on to continuing the underwriting,

the quarter to make continue that push and in some with focus, we'll saw to loan we even pipeline, the So in that. a see fourth expansion

macro on I And that, think I Fed just disciplined I'll term the year optimistic just earlier. that same there. we'll actions important that optimistic, this use to of lot a about and really stay and fronts of We're but cautiously are on that the year all kind used depends we're the backdrop. throughout us

David Feaster

touching Okay. side, That's of helpful. side on just funding on the the the other coin. touching Maybe

of You've I'm great job driving down core in curious, kind on a modestly wholesale reliance focusing talked done deposits about the remixing. funding. you reduced being the maybe deposits quarter, on

seeing about? rates able is you are where quickly opportunities get And do deposit -- able side? these kind pricing seeing quickly to in going then expect just you're to Just that deposits How that cut reprice be talking do do if you of on growth? to reprice some relationships interest-bearing some core these you're How of you're new of core to curious, drive lower? to like think you be how

Unknown Executive

Yes.

David. there, questions good Some

trends this on say will slower in the -- a the [ moderating underlying So We I'd were that none and again, here results pleased side, at very pace, pace. with the fourth hope but ] of down these on the deposit the some early quarter, year. were in trend continue of we a again

interest-bearing I'd So But level we'd incredibly there. savings trend remains some et it money that out. for quarter, the tell for as relative That accounts, has you of bucked unpack an to market the cetera, deposit NIB very consumer troughing you, had stable quarter candidly, of accounts, other piece if the period recent front side, strong been love very, to that growth time. see really on the the quarters.

quarter, bit kind will, it's on of probably downward the just more the you if little side. consumer very spending, a than it's holiday modest, maybe nothing a and have pressure in You but

on So in grow feel really commercial side. saw for growth been stable That's to the us a there, focus key good area. some but continue we to the is commercial

And in had some the regard so wins in we quarter. that nice

related. of that be timing will Some

are not -- those won't sticky. we XXX% dollars to going of So be

focused in The of indications planning et and is very strategically customers continue what result for the been the But good allowed here. we've of quarter, the results first the of Some focus commercial there. some portfolio wholesale good again, year, some that of on be the cetera. things to higher-cost that, really That funding. in year with combined pull the to us for will down all throughout of sale a us part

on other your question, in a we in do little sheet, it you see months, months like. liability in if of XX you'd Page a see period screen little I of information past maybe more the have right that as to scenario now, rate-down deck. you're a neutral liability we're on of look to X-month bit timing to bit We kind you there On sensitive. on especially think X going asset sensitivity maybe -- even a few related would that basis, those where look to some balance first But what move slide at and some a sensitive XX-month our

Operator

with KBW. The from next Brady comes question Gailey

Brady Gailey

on I want guidance Slide to the make I expense XX. understand sure

at roughly that base basically expense looking see you adjusted $XXX So and you're growth. could million an annualized saying X% of

the would [ mark. translate expenses? think XX that expenses XXXX to right ] that into way expected Is your total around about that So

Unknown Executive

down is think another puts what on a rate takes as Better there accrual we of million. guided in guide guide, expense And kind lot some -- expenses outlook view a when exceeded We XXXX the Better result that savings all to from That's adjustments the whatnot. initiative it. year. tried Bank XX run launched was of particularly and at and again, when X-year you're we Bank of around our And a infrastructure, throughout Slide the I to of outline point over and those see initiatives, there. million X% our the were look we into $XX a think really we outlook sort that's of we X% exactly as year that of one given right. from is initiative, a really noninterest the this initiated XXXX, We X-year $XXX on Brady, that where

there. progress So of very the we're we've proud made

don't top. want on call the bow I with of finished to Again, that sort

investment some opportunities to alluded continuing we'll going think a all lot out evaluate, us able pressures are to And to into We've I are have on prior here. as the result initiatives. continuous continue we and focus leverage in to is We that I've we a strong offset future some those as this, very -- of improvement in of positive have for but monset move some the think, we'll we conversations, to operating we be inflationary that there. got

Robert Fehlman

one the showing 'XX in we're line we Brady, that But in And relatively reiterate on thing Jay going pressure still baseline inflationary the said showed hold what is yet, the to just there QX But It there will the just savings in our be 'XX. expenses. there. was we're I'd 'XX. of

Brady Gailey

it think then X% the to that I on That's it And my question would today, the next be see. repurchase about of authorization, million $XXX if company. you great buyback

fairly something in something that active that you use XXXX? day? that you notable have rainy in to size. really could is Or that place expect be Is a you that a So on

Robert Fehlman

was to this Yes. Brady, plan the of coming in our year. prior January end

is really So this it. just re-upping

be that's we it We times does all fight as year. the think growth did levels challenging through different you to we're still talked have need capital, we quarter of the is banking in and strategy no deployed where maintain. trying to what going? where to than We about, last need some NIM loan last do side, and is in Where

organic think a plan. is our we growth. stock and growth, a our that, is loan to buyback on plan use it X-year it's focus prudent to capital This in still is place. keep for we So first on strategy But

years. it over Second pay group I'll paying best to the tell capital dividends of then mess to that. up. don't to for down shareholders. been that the one We -- stock our them what of at ad cash to is use want that that is XXX that, We've And after you point. buyback. be that And XXX to is comes

quarter. this sheet balance optimization opportunities we like on sales there with is is, bond Another had

analyze stay so our And we cash less the the it. realm buyback, in quarter, to earnings for would back. dividends we'll be our I is within you the But the of stock strategy amount would tell buy maximum still

Brady Gailey

for you and me, ROA a And finally the basis points. at look core Okay. if on was look you it then basis, XX XXXX full at year running if about

the profitability in are get an Simmons the wanting industry, so is term to think but for past realize has about alone not I so entire talked a level? you XXX basis higher and path ROE ROA get think you do longer I of that. the pressure guys double points, ROA under to how towards about Simmons to

Unknown Executive

of to chipping pleased our proactive function approach continue, the but But continue time kind ratio be at goes of the I area with of results and and line Brady, our aspect very think get XX% at quarter in you we incredibly kind end That's plus ability Again, or fourth think minus. be of balanced when our first look that. we're sheet so back accelerate to that of that rate prudent think, about a we the and of I loan-to-deposit and a the the to Yes. efforts. and in in can are day, to time we biggest will at away that. to and balance optimization where how we'll and

the in You bank we into of pencil on put about results infrastructure think of scalability expense and that our that better system. what the we've worked our that's out and initiatives the terms

results to work us realistic very for towards. are those think I

XXX when I that just But to are to proposed on pressure. have about kind to Bank the being in within Honestly, industry. fee with to what of ought me is on given deal balance of side. that strategy we've are ought and some are under be past the that, still our wildcard there focused biggest be goals that and as business really an wrapped and that we'll to around. guidance and Fees I range think an There that Simmons model, things ROA of that, is sheet and react out optimized think the at XXX our where we to

Operator

Stephens, Gent with Inc. next [ question from comes Jordan The ]

Unknown Analyst

restructure And is there I XQ, had remaining, restructure that just Could when had a questions maybe few on place impact what's guys it securities XQ place. on 'XX the the took insight any took the 'XX? NII? then give for you if and any

Unknown Executive

in quarter transaction So portion ]. is quarter that we closed of the Nothing [ consummated the the fully pass carries tents fourth the in quarter. first late into good albeit the a trade

about translates what to point basis quarter. in the impact of So fourth margin that is X net interest

trade margin And to linked the about X that of basis think is give a only you part bps to as XXX closed reason lot I credit the the XXX trade. X the point So the of of can from latter basis quarter, again, point of quarter. that result X it's a in improved

Unknown Analyst

clarify And there on follow-up one just repurchase securities were maybe the that. with -- any that? then And word, Perfect. just to

Unknown Executive

X.XX% securities wholesale off we was north That and were at of I paying the selling funding X%. trade. at mean

Robert Fehlman

just of things And ]. out [ that, point a I'd on couple Trey

conservative our our nature for For company.

we it did number get sizes. done this is one. And another sheet First measured reduce is take of this is funding. in and look continue time a very we some balance over off, opportunity a to It's at to off by hit. do the noncore was really rip paying not our band other another thought in all and smaller at small big case, the prudent We'll once size. it to We're there the

it buy the was go take the and did and securities back sheet we rate to offset We effectively. better the balance didn't what sheet reduce to and risk that's higher balance take money here. off it, So

Operator

from comes question next with The Gary Tenner D.A. Davidson.

Gary Tenner

thoughts I about and of kind and first the maturities brokerage just the a couple questions in of had guide retail the deposit around CD quarter.

year? the of to more think little first kind quarter? the being then coming expect you're the front-loaded maturities As the there the maturities of lion's Or amount up a stable renew we in do and about for over in runoff of kind bit first course given of XXXX and down kind you deposits of the looking share of quarter, should in the

Unknown Executive

Yes.

that you allowed core some back as point a to will If deposit got to loan the manned wholesale I'll off in we've lot the see think of a loan cash balance funding. of the I lot quarter, to excess of demand. well some sell function fourth the a quarter reduce sheet, then renewing. you'd growth be et actually of ability flows us as more to have the other in cetera, us securities

require best fund the wholesale we're is right to kind seasonality, answer. to what to capital going to shrink be do. not timing through may front-end the is factors sheet, going cetera. dependent investments may Gary, the and is we that's at aspects such credit the to straight that to think our that going areas. all on it's inherent demand, a of somewhat loaded. be funding, of invest and have opportunities So it's we'll to If of we that really wins, flows cash be those we believe going It's like elevated the little the going some wouldn't I our But balance levels line, us more -- et profitability to loan pricing bit loan of be as in evaluating us expectation to how demand and that us It's help stay those or then

Gary Tenner

] so something? those over, year lower you Great. as does those trying I cut, XX could to or similar what's duration [ in comes versus start shorten reprice a at or same rolling Fed about months sooner think appreciate renewals it the you that do to to assuming maturities, the or that. On topic, of that the

Unknown Executive

Yes.

already we we've a fact, early in XXXX, repricing that we were and around that, some go done actually And in made little quarter that's and to I quarter why fourth at volumes some XXXX the of the extending quarter had and of bit. some last year first liabilities point at In see you that year. and in that was point fourth higher decision a the funding. and -- back

were that we now prior of some you So where reasons to extend, then now making to we're really making to mentioned. on shorten the decisions for that decisions

Gary Tenner

missed sensitivities so I points think, minimally, Fed I that you the Great. XX -- what on I using internally terms you provided, does and the actually that the think you're if rate XX, apologize Appreciate year? XX, case that. of And base in But first hop you this question. are of cuts, I where terms basis in what's

Unknown Executive

what cuts that this I'll is cut again earlier, And Three to in it of mention third did I everything we're modeling mention kind here, as to you the really internally. Gary, year. late so

if cuts intents it's all for way. of it X kind So and think that you purposes, of

Gary Tenner

Okay.

So that effectively -- in is right? top line with the

Unknown Executive

aligned line is Yes, much thinking forward the internal the more assumptions dot curves. right. our to That's -- than plot much for exactly to more

Operator

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

George Makris

and in in Thank market. to these to I in conditions. want understandable assure we that our much think Okay. manage execution flexibility real continue our reflect I will success -- this it's results create to And as volatile try clear we about much. be you conservatively current business to hope very I you just react our that our market

dot of between forward some discrepancy are As the in this one plot mentioned, on time. curve, either was at point betting and we're just not them and the there

that future. we Simmons you forward, we us more great a having and good of have to we So for Thanks as in conservative come management calls same joining the the forward day. and kind at today, go recognize look to expect

Operator

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

now You disconnect. may

Simmons First National (SFNC) 24 Jan 242023 Q4 Earnings call transcript