SFNC - Earnings call transcript Q1 2024 | Simmons First National Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the Simmons First National Corporation First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note 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

Good morning, and welcome to Simmons First National Corporation's First Quarter 2024 Earnings Call.

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

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

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

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

Simmons these contained update the the or year Form These XX, of risk our for X-K only XX-K some our no concerning including the Form XXXX, factors today of with earnings information in speak release Form made, ended date investor information. assumes other furnished is or Additional and to and factors they XX-K. forward-looking obligation revise as any are statements contained that presentation in and our statements December forward-looking

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

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

Operator, Q&A we ready the to session. begin are

Operator

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

David Feaster

how sense It pipeline start do with forecast, grown. I'm growth. construction see. a appetite whether was increasing the the credit would curious, and demand? Maybe is clients? just pulse on pipeline I'm it's any That has increased about on driven of What's your loan increase helpful. just was to growth? in be of growth outlook let's the just for fundings loan the above the get trying just you by by think great end? out driven Or thoughts your to Whether

Jay Brogdon

jump seasonal were Yes, time loan We pleased David, and from Jay. these growth in some in of this an quarter fourth the quarter, And that. out is unfavorable quarter. with remarks periods I'll with initial again the on I'll this sort ag of in perspective. call the are particular, in

we so from that And should see couple some throughout quarters. tailwinds next the of

some quarter. So to loan in growth the first see

right? it You of point it I'll so commitments, in I fund on. mind. hit ups some is And a of bucket. from unfunded that that the of keep out lot came mean construction

I'd change pipeline, not outlook a perspective. say Our in is our credit from a

seeking are growth. loan We

incredibly We a being credit disciplined, of both and are from pricing from view. point a

around it's loan of toward some So category for it's this a expansion this, balance in our at aggressiveness with just think a more optimism outlook. David. I'll or up When not execution it my wrap the disciplined comment the the about When to the outlook given year, about kind change of really the I think of point. growth. outlook I growth -- but balanced see that discipline, I'm pleased loan in indicative or pipeline, I put in of

that expect pipeline, paydowns range. we you things we'll existing are when out through of to sort we're out single-digit some all about in And some loan that in me the continue seeing some of see the from But together think there. on range will of healthy environment, borrower continue fund-ups deliver pulling there We'll demand of right that projects more are growth. low we but There hit see the we permanent construction loan rate think the think the kind the focused We stay the to to need expect that side. some is continue that market, the Again, doesn't growth on and higher-for-longer year. we a optimistic cetera. make we'll think that to put about that et to balance success

David Feaster

helpful. side, other That's on Okay. the Great. touching funding And side. then the maybe

growth. how curious deposit about think you Just

that supplementing wholesale successful, on cost You've the funding money CD been savings account market especially pretty and in with the side, side. higher

do think seeing? what's on you're NIB deposit your funding strategy thoughts how then any growth how forward? -- curious, you loan Just you about And just that trends growth today? going And

Jay Brogdon

Yes.

we I success the side interest-bearing some seen equation. in think the have of

to that's a continue We'll stay good so there. thing. focused And

We the now. trends NIB the right have combating industry around is considerable that efforts facing

And so we got those some we we've continue to can pull there levers think trends. to combat

really month that we'll it focused a of So quarter, trends, on give continue to glimpse, the of only the the worth a and throughout in back I if really think January. monthly noting or we're of -- deposit happened some -- very look migration the be. on David, of of the kind To you basis, NIB

quarter. a that margin unfortunately, the from a to in perspective higher as quarter, event took So early in place relates it the

March better But to kind and January. at of when lot some got really get NIBs what are. QX QX a even look date we we the pierce trends sense of in core trends what in saw to seasonality, we see than in and April, February, through to You've a in both

been a and pressure, kind on side. bit towards threat higher coming few to going can loan for still that's I'm favorable growth rate mentioned, last the and be see longer But the deposit the side, I So have optimistic. that months makes a from months to given we on of migration the same be again, the And me going over as us. seasonality hopefully, cautious, a continue quarters. of little just some that

Robert Fehlman

customers. increase of seeing and number continual track too, we a we're of thing I'd customers, a one David, number our point out, in

and out this not quarter. point each it's decreasing we So customers,

higher at the noninterest like just their moving customers, less inflation. number bearing. money Our they're number in everybody money accounts, has their out across of rates looking two, one, to from And country,

we're So dealing with it. all

we a a February, As one trend our of feel on and today. new I know Jay that's can March. that's that's getting we optimism and yet. don't we're But taking had of control. a what What in care little to if hard is said, focused bit control we customers customers,

David Feaster

for we just of year. curious, the For putting expecting you higher the look do repricing side. And for balance encouraging we the the sheet? environment think about as just all you're trajectory those together, trajectory? core deposit well a then time a just modest the about think the you trends. managing we're margin structurally mean kind how are course margin earning how how sure. Maybe forward? of And you Curious positioned given last over longer it I talked, improvement base think mean and asset do about I some the

given about sensitivity So this managing rate how point, asset the pretty we're just neutral? curious think at you

Jay Brogdon

say, David, a couple of on I'd to Yes. comments try that to unpack.

quarter. of intact. a sort from back is range-bound first this bit of guidance of First of the gave down talked of perspective, or outlook still year We sort that we the quarters couple think about a margin generally in a January couple range the being all, my little I majority the be basis the to we second that in mind. sort same January NIB I points of in expect in was -- that declines. first headwind the within of the again, first case in quarter of that If quarter sort the from

that as much then. of haven't since We seen

things A I to our expectation would of for is to and the hold all the best sort So is we're year, liability of that. sensitivity sort first year second we the of in have kind balance of of into half year expansion our that margin of the the couple doing increasing throughout of part expansion in and of the here, next some balance the One the line still expectation. the sheet. footnote year

it, have do the to control And have over we nor so that when is is benefits down. to that going coming factor do to a Fed Fed but do be to don't full the start we expect what when rates going is do going some macro

migration, if toward that margin the just this of for naturally and throughout I'd year lead thing out of deposit particular, in point liabilities migration, second toward at expansion. and would assets that repricing The all is year the NIB look at you as isolate look we

migration. And so wildcard throughout The we for us setup the and really NIB that's to a think one the of the good of the level year. difficult predict is most balance

that will be that not I and year. the shape the inflection of the inflection that that is think, really helps over balance how one, or steep So further

Operator

comes Woody Lay question KBW. from next The from

Wood Lay

maturing. up sort Could just on have CD I deposit priced And wanted those your costs. had quarter, in of changed first CDs out we a to the CDs talk wave quarter-over-quarter? much to offerings know of start I you current to? where

Edward Bilek

take Dan? to want that, you Do

Charles Hobbs

Yes.

is this Daniel. Woody, So

So and that's more in CDs if then to price to we if naturally, you at day-ish that have it, customer that's X, range. at going you that look back brokered over call X.XX the of go And last our level. look X.XX the CDs, XX a be wholesale

second billion if got on about And that's XX, in look our we've Page to quarter, $X.X so you going at reprice.

be that's there XXX. Now that public higher that. going customer to that's one in probably a that, particular a be piece to than customer going there's of There's more that's than

to X% group is reprice going XXX range, to we reprice absent one of probably that would in X.XX I customer, So to that but $X.X you call that going have, in tell billion that's it, that range.

so... And

Unknown Executive

range. XXX

Charles Hobbs

me, excuse XXX range. Yes,

some to the the production And last new on so over historic if that we there there's like margin. opportunity production days, XX think goes

Wood Lay

Yes.

fair the that pace increases So deposit do the begins the moderate -- second it's you quarter? to in cost think to of assume

Jay Brogdon

in I on I'll that. Yes, say so. would jump

that's think I fair.

it move volume David's sides back for migration and just asset we couple that and And just opportunity both some that. liability repricing, are margin repricing, If as there's of seeing or ago of think we question. my goes not actually comment minutes a at to to look we're think forward. on I we favorable kind to isolate

Wood Lay

for details just appreciate NPA I was seeing last segment. curious to credit. the any shift in the then I But you out break segments on criticized trends the the wanted I or to me, just quarter? on over you're in And it. classified Got all

Jay Brogdon

I quarter flat. linked I'd Classifieds are tell question. what on that a -- appreciate basis you So essentially

I fourth pleased level basis linked due focus past couple first quarter, metrics the quarter. being of down points are credit when think down from And on actually points in XX classifieds the loans leading to loans due and flat linked at are So were we in I quarter. our quarter. then the about basis Those past a came with XX indicators of perspective,

trends the due we how to we'll the classified that, of classified portfolio, are, X credit we much conservative past the shape within pockets quarter, couple certainly mid-single deal sub-bullet of within will where give overall of I'd we're which is feels those our be points the and We're us. with historically XX stable dues. maybe on portfolio, commercial you So level past as portfolio, of in points just at very ended a obviously to total on focused digits of be, we the dollar basis of larger kind volume further basis we that areas.

as overall, picture relates I credit So portfolio. feel core the the to broader pretty about good it

Operator

next The Thomas Wendler from from comes question Stephens.

Unknown Analyst

them that wanted came thinking in off quarter. average Is about be forward? with that we operating start should how assets around expenses to I this X% moving

Charles Hobbs

what you Daniel. back that's million. you down QX X% take X% we'd above slightly But be that guided fair. be which to we adjusted go forward. is number, $XXX is We of as this about I Yes, It think annualized last to quarter. our kind from told that I'll may we Thomas,

XXX, kind you then that can So -- that to for get to quarter, math. year. of that XXX came the do in the we And you the just at you million we're XXX, number math that take do XXX for will where and if you

it some we So get efficiency And quarter. of side, below the there's good good to And the we view our help two pretty good And the to side can expenses. expense the ratio We about where today. about is we that. feel goal us There's feel that. to well to get then about manage obviously, on have forward feel if and time long-term really components our rate ability revenue we there. a

I the a we've don't I we're things think we lost and investments number are initiative. that be Bank investments. over we've in although the with in of Better have looking still we're the got We're proven And that. across that at, bank. to that making on hopper time people, process tools want making

a be our of There seasonality. may So I guide would doesn't tell little change. you, bit

and taxes in. you've to quarter, in come that's payroll that's quarter higher. merit first second The some XXX(k) the had generally But going then got

I But question, that we'll to probably stick So fair a X%-ish think for is your us be. place to original to back guide.

Jay Brogdon

there, all only the want hit thing Daniel And across we're Yes. further bank. the emphasize it, I to making investments

Our that as last relentless funding self focus year, pretty well. now where year with into good is we those continue success focused this And and very, we'll we've to that in be can. right on investments had very and

Unknown Analyst

Great. appreciate then just there. kind levels? an shifting your here. I appetite you at gears the of for repurchasing shares color us And give current idea Can of

Robert Fehlman

I'll Yes. on kind our now. of right just reiterate is of what strategy kind capital our

we're moved fourth analysis a lot another when #X quarter, right to First of rates had just shows shareholders of could think us Band-Aid and a better what go to to would be we our Those now kind them prudent moved as going dividend sale it's right we off, rip to balanced The optimization. QX. it that our for had liked there's it, sheet growth. up. We for providing the time. a and of it's XX-year have our in capital it's off today, those bond the is balance over happen. that organic through bond are -- sale. period we we time priority but to against next not to doing do the call make do enough priorities In We us. The

a We're see is shares We where those optimization, of wait is to it of that is we'd of forward So use. capital to used didn't any put quarter. capital we cash stock to first we that and retirement -- where look the in continue to going kind debt like and at balance it. put buyback. repurchase sheet Any in is it

Operator

concludes would back the our George no conference This to session. turn for over remarks. I like There more to any closing are Makris queue. questions in the question-and-answer

George Makris

us Well, thank morning. you very this joining much for

neutral has and can meantime, for and you our we our industry and moving uncertainty more with it, a on tell, rate And still environment. interest of speculation As forward focus the asset solid as growth looking normalization, our of flexibility. is to still this associated quality, in principles a lot wait we're to capital

you've the that a Thank you and in think all and participation I work of seen see and this team, forward. performance, I think have appreciate you great appreciate we that much, of going our today. your can day. I very

Operator

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

You may disconnect. now

Simmons First National (SFNC) 24 Apr 242024 Q1 Earnings call transcript