Executive Summary

EPS beat with profitability inflection: Q2 2025 diluted EPS was $0.43 and adjusted EPS $0.44; Street “Primary EPS” consensus was $0.39, implying a beat driven by NIM expansion, higher NII and lower adjusted expenses . EPS actual vs consensus per S&P Global was $0.44 vs $0.39*.
Top line mixed: Company “total revenue” was $214.2M (NII $171.8M + noninterest $42.4M), up 2% q/q and 9% y/y . S&P revenue printed $202.2M vs $216.7M consensus, indicating a revenue miss on that basis*.
NIM surpassed 3% ahead of plan (3.06%, +11 bps q/q), as fixed‑rate loan repricing and deposit remixing lowered funding costs; cost of deposits fell 8 bps to 2.36% .
Credit normalization continued: provision fell to $11.9M (from $26.8M in Q1) as the incremental build for two large credits was largely in Q1; NCO ratio 25 bps; NPLs 0.92% with coverage 161% .
Potential catalysts: margin trajectory and operating leverage, plus the July 22 equity raise ($300.1M gross at $18.50) to support optional balance sheet repositioning and growth .

What Went Well and What Went Wrong

What Went Well

Sustained NIM and NII momentum: NIM hit 3.06% (5th straight increase) and NII rose 5% q/q on disciplined loan pricing and fixed‑rate repricing; deposit cost fell to 2.36% with positive mix shift .
Expense discipline and operating leverage: Adjusted noninterest expense declined 5% q/q to $136.8M; adjusted PPNR increased to $77.3M (from $66.0M) .
Balance sheet mix improvements: Low‑cost customer deposits up $233M; borrowed funds/total liabilities declined to 4.46% from 5.59% q/q .
Management tone/confidence: “We were pleased with our second quarter results… net interest margin… surpassed the 3 percent mark ahead of expectations… deposit costs declined for the third consecutive quarter… asset quality metrics were stable.” — CEO George Makris .
Strategic talent and technology investments continue alongside cost control, supporting capacity and growth, per management Q&A .

What Went Wrong

Noninterest income softer sequentially: Down to $42.4M from $46.2M on lower swap fees (large Q1 transaction) and SBIC valuation adjustment .
Asset quality metrics slightly higher y/y: NPL/loans 0.92% (from 0.60% y/y), largely tied to two specific credits identified in Q1; coverage remained robust at 161% .
Revenue vs S&P fell short: S&P revenue “actual” $202.2M vs $216.7M consensus (definition differs from company’s “total revenue”) — a headline miss on that basis*.
Payoffs remained a headwind to loan growth; management is prioritizing pricing/credit discipline over volume, implying moderated loan growth near term .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Total Revenue ($M)	$208.5	$209.6	$214.2
Net Interest Income ($M)	$164.9	$163.4	$171.8
Noninterest Income ($M)	$43.6	$46.2	$42.4
Provision for Credit Losses on Loans ($M)	$13.3	$26.8	$11.9
Diluted EPS (GAAP)	$0.38	$0.26	$0.43
Adjusted Diluted EPS	$0.39	$0.26	$0.44
Net Interest Margin (FTE)	2.87%	2.95%	3.06%
Efficiency Ratio	65.66%	66.94%	62.82%

Estimate comparison (S&P Global definitions):

Metric	Actual (Q2 2025)	Consensus (Q2 2025)	Surprise
Primary EPS	0.44*	0.39*	+0.05*
Revenue ($M)	202.23*	216.66*	-14.43*
Values retrieved from S&P Global. Note: S&P “Revenue” may differ from company “Total revenue.” Company-reported total revenue was $214.2M .

Key KPIs and balance sheet

KPI	Q4 2024	Q1 2025	Q2 2025
Total Loans ($B)	$17.006	$17.094	$17.111
Total Deposits ($B)	$21.886	$21.685	$21.825
Loan Yield (FTE)	6.32%	6.20%	6.26%
Cost of Deposits	2.60%	2.44%	2.36%
NIM (FTE)	2.87%	2.95%	3.06%
NCO Ratio (annualized)	0.27%	0.23%	0.25%
NPL/Loans	0.65%	0.89%	0.92%
CET1 Ratio	12.38%	12.21%	12.36%
TCE / Tang. Assets	8.29%	8.34%	8.46%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal numerical guidance	2025	Company typically provides outlook in January	No formal update in Q2; reiterated confidence in achieving performance targets; emphasized NIM expansion tailwinds from fixed‑rate loan repricing; deposit repricing benefits fading	Maintained qualitative outlook
Net Interest Margin	Near term	N/A	Expect continued support from fixed‑rate loan repricing; funding cost relief moderating	Qualitative positive
Loan Growth/Pipeline	2H25	N/A	Pipeline strong; C&I mix improving; payoffs to remain a factor; disciplined pricing could temper growth	Qualitative positive
Credit Costs	Near term	N/A	Provision normalized from Q1 spike tied to two specific credits; asset quality stable	Improved vs Q1
Dividend	Regular quarterly	$0.2125–$0.213/share	Q2 cash dividend $0.213/share (declared)	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
NIM trajectory	Q4: NIM up 13 bps; deposit costs down 19 bps . Q1: NIM up 8 bps; deposit costs down 16 bps .	NIM 3.06% (+11 bps); loan repricing and deposit mix drove gains .	Improving; ahead of expectations
Deposit costs/mix	Q4: Cost of deposits 2.60%; remix to lower-cost deposits . Q1: 2.44%; customer deposits +$183M .	Cost of deposits 2.36%; low-cost deposits +$233M; brokered up seasonally .	Continued improvement
Loan growth & pipeline	Q4: Ready-to-close $552M; pipeline rising . Q1: Pipeline $1.8B; unfunded commitments +4% .	Unfunded commitments $3.95B; pipeline $1.6B; C&I mix strengthening .	Solid; disciplined pricing limits volume
Credit quality	Q4: NPL 0.65%; ACL 1.38% . Q1: Two specific credits to NPL; provision +$15.6M tied to them .	NPL 0.92%; provision $11.9M; coverage 161% .	Stabilizing/normalizing vs Q1
Macro/tariffs	Q1: Watching economic volatility; policy uncertainty .	Tariff volatility “looms large” for rates/conditions (CEO) .	Ongoing watch item
Talent/technology	Q1/Q4: Operating leverage efforts.	Continued investment in talent/technology to unlock capacity; hiring environment favorable .	Positive

Management Commentary

“Our net interest margin increased for the fifth consecutive quarter and surpassed the 3 percent mark ahead of expectations. Loan yields were up and deposit costs declined for the third consecutive quarter… asset quality metrics were stable.” — George Makris, Chairman & CEO .
Outlook cadence: “Historically, we’ve really only provided guidance or outlook commentary in January each year… the acceleration in our performance improvement… continues to exceed even our internal expectations… we’re as confident as ever about our ability to execute.” — President Jay Brogdon .
NIM drivers: Fixed‑rate loan repricing remains the primary asset-side tailwind; deposit repricing opportunity is fading but remix continues to help .
Loan mix/discipline: “We are very willing to see lower growth rate in loans as we are maintaining that discipline around credit as well as that discipline around pricing.” — Jay Brogdon .
Talent and operating model: Continued investments in talent and automation to improve associate and customer experience, redeploy savings to growth .

Q&A Highlights

Guidance framework: No mid‑year formal guidance; management conveyed heightened confidence in achieving performance targets amid accelerating improvement .
NIM sustainability: Loan repricing and variable mix (75–80% of new production variable) remain tailwinds; CD repricing benefits moderate ahead; expect continued, albeit slower, funding cost relief .
Loan growth/payoffs: Payoffs elevated in Q1; Q2 normalized; expect similar environment in H2 with disciplined pricing tempering growth .
Pipeline/composition: Unfunded commitments up; C&I presence increasing in pipeline, supporting relationship growth .
Credit tone: Classifications/past dues consistent with recent trends; two specific credits from Q1 remain the primary drivers; overall stable/normalizing .

Estimates Context

EPS beat: S&P “Primary EPS” actual $0.44 vs consensus $0.39 (beat by $0.05)*.
Revenue miss on S&P basis: S&P “Revenue” actual $202.23M vs consensus $216.66M (miss by $14.43M). Company-reported “total revenue” was $214.18M (NII + noninterest income) .
Values retrieved from S&P Global. EPS estimates count: 5; revenue estimates count: 6.

Implications: Street EPS likely moves higher on NIM trajectory/expense control; revenue modeling may require definition alignment (company “total revenue” vs S&P revenue line) and lower swap fee assumptions near term .

Key Takeaways for Investors

Margin expansion remains the core driver: NIM 3.06% with clear visibility to continued support from fixed‑rate loan repricing and deposit mix, though funding repricing tailwinds will moderate .
Operating leverage is showing up: Adjusted expenses -5% q/q; adjusted PPNR +17% q/q; efficiency ratio improved to 60.5% adjusted .
Credit normalized from Q1 spike: Provision down to $11.9M; NCOs 25 bps with coverage at 161%; watch the two previously identified credits but broader metrics stable .
Growth remains disciplined: Pipelines/unfunded commitments healthy with rising C&I mix; management prioritizes pricing and credit discipline over volume, implying quality over quantity in H2 .
Capital buffers intact and improving: CET1 12.36%, TCE 8.46%; July equity raise strengthens flexibility for potential balance sheet repositioning and growth .
Trading lens: EPS beat and NIM >3% are positive catalysts; revenue headline variance depends on S&P definition; investors should focus on NIM trajectory, expense control, and credit normalization as key stock drivers this quarter .

Additional Notes

Prior quarters for trend analysis: Q1 2025 total revenue $209.6M, EPS $0.26, NIM 2.95% ; Q4 2024 total revenue $208.5M, EPS $0.38, NIM 2.87% .
Other Q2‑period press releases: July 22 common stock offering priced at $18.50 per share for ~$300.1M gross proceeds to support a potential balance sheet repositioning and growth .
Non‑GAAP adjustments in Q2 were minimal (early retirement $1.6M pre‑tax; +$0.01 to EPS), with adjusted EPS of $0.44 vs GAAP $0.43 .

SIMMONS FIRST NATIONAL CORP (SFNC)·Q2 2025 Earnings Summary