Executive Summary

Q3 2025 was dominated by a strategic balance sheet repositioning: SFNC sold ~$2.4B of low‑yield securities at a pre‑tax loss of $801.5M (after‑tax impact ~$627.7M), producing GAAP net loss of $562.8M and diluted EPS of $(4.00). Adjusted net income rose to $64.9M and adjusted EPS to $0.46 .
Core profitability improved: net interest income +9% q/q to $186.7M, net interest margin (FTE) expanded 44 bps to 3.50%—the sixth consecutive quarterly NIM increase—driven by funding cost reductions and deposit mix improvement (cost of deposits down 11 bps q/q to 2.25%) .
Versus Wall Street consensus (S&P Global): normalized EPS of $0.46 was a slight miss vs $0.47; adjusted total revenue of $232.5M was essentially in line with ~$233.5M, while GAAP revenue was deeply negative due to the securities loss; management guided Q4 2025 NIM to ≥3.65% and sees margin defensibility over the next 12 months *.
Catalysts: removal of high‑cost brokered/public funds ($1.4B brokered deposits reduced q/q), asset‑sensitive shift and hedging program, plus repricing tailwinds on ~$3B fixed‑rate loans (~3.9% yield) over the next 24 months; dividend maintained at $0.2125 per share (Nov 10 declaration) .

What Went Well and What Went Wrong

What Went Well
- Net interest margin expanded to 3.50% (+44 bps q/q), the sixth consecutive quarterly increase, with net interest income up 9% q/q; cost of deposits fell 11 bps q/q to 2.25% .
- Deposit remix: noninterest‑bearing deposits rose to 22.1% of total (from 20.5% in Q2), while brokered deposits declined to $1.84B; other borrowings fell to $18.8M (from $634.3M) .
- Management tone: “We successfully raised $327 million of equity capital…reposition our balance sheet…unlock our future earnings stream,” and September run‑rate profitability was “very encouraging” .
- Strategic outlook: president highlighted tailwinds from repricing ~$3B of 3.9% fixed‑rate loans over 24 months and guided Q4 NIM ≥3.65%; asset‑sensitive shift with hedging to defend NIM 3.50–3.75 across ±200–250 bps rate moves .
What Went Wrong
- One‑time securities sale loss of $801.5M (pre‑tax) drove GAAP net loss of $562.8M; total GAAP revenue was $(569.5)M .
- Book value per share fell to $23.18 (from $28.17 in Q2), tangible book to $13.45 (from $16.97), reflecting the realized loss on securities .
- Competitive loan pricing remains intense; management cited a term sheet from a larger bank at 4.5% loan rate and Fed funds minus 25 bps on deposits—SFNC will not sacrifice returns for volume .
- Credit: NPL ratio rose y/y to 0.90% (from 0.59% in Q3 2024), driven by two specific credits earlier in 2025; nonetheless, ACL coverage improved to 168% and provision modestly exceeded net charge‑offs .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Total Revenue ($USD Millions)	$174.8	$209.6	$214.2	$(569.5)
Adjusted Total Revenue ($USD Millions)	$203.2	$209.6	$214.2	$232.5
Diluted EPS (GAAP) ($USD)	$0.20	$0.26	$0.43	$(4.00)
Adjusted Diluted EPS ($USD)	$0.37	$0.26	$0.44	$0.46
Net Interest Margin (FTE) (%)	2.74	2.95	3.06	3.50
Efficiency Ratio (%)	75.70	66.94	62.82	(25.11)
Adjusted Efficiency Ratio (%)	63.38	64.75	60.52	57.72

EPS/revenue vs S&P Global consensus (Q3 2025):

Metric	Consensus (S&P Global)	Actual GAAP	Actual Adjusted
EPS (Primary/Normalized) ($USD)	0.47*	(4.00)	0.46
Revenue ($USD Millions)	233.5*	(569.5)	232.5

Notes: EPS was a slight miss (−$0.01); adjusted revenue was essentially in line; GAAP revenue hugely negative due to the one‑time securities loss. Values retrieved from S&P Global.*

Loan portfolio (end of period, $USD Millions):

Category	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Construction (RE)	$2,796.4	$2,778.2	$2,784.6	$2,874.8
Single‑Family Residential	$2,724.6	$2,647.5	$2,625.7	$2,617.8
Other Commercial RE	$7,992.4	$8,051.3	$7,961.4	$7,875.6
Commercial	$2,467.4	$2,372.7	$2,440.5	$2,397.4
Agricultural	$314.3	$370.9	$333.1	$353.2
Credit Cards	$177.7	$179.7	$176.2	$173.0
Other Consumer	$113.9	$97.2	$123.8	$112.3
Other	$749.3	$596.6	$665.8	$784.6
Total Loans	$17,336.0	$17,094.1	$17,111.1	$17,188.8

Deposit mix (end of period, $USD Millions):

Category	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Noninterest‑Bearing	$4,521.7	$4,455.3	$4,468.2	$4,377.2
Interest‑Bearing Transaction	$10,863.9	$11,265.6	$11,176.8	$10,932.9
Time Deposits	$6,549.8	$5,963.8	$6,180.0	$4,527.6
Brokered Deposits	$3,361.0	$2,914.0	$3,237.0	$1,841.0
Total Deposits	$21,935.4	$21,684.6	$21,825.0	$19,837.7
NIB as % of Total	21%	21%	20%	22%

Key KPIs and risk metrics:

KPI	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Loan Yield (FTE) (%)	6.44	6.20	6.26	6.31
Cost of Deposits (%)	2.79	2.44	2.36	2.25
Net Interest Margin (FTE) (%)	2.74	2.95	3.06	3.50
NCO Ratio (annualized) (%)	0.22	0.23	0.25	0.25
NPL / Loans (%)	0.59	0.89	0.92	0.90
ACL / Loans (%)	1.35	1.48	1.48	1.50
CET1 Ratio (%)	12.06	12.21	12.36	11.54
TCE / Tangible Assets (%)	8.15	8.34	8.46	8.53
Equity / Assets (%)	12.94	13.18	13.30	13.85

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Margin (FTE)	Q4 2025	Not previously specified	≥3.65% launch point from Sept; defensible ~3.50–3.75 over next 12 months with hedges and repricing tailwinds	Introduced; constructive trajectory
Deposit Betas (Cumulative)	Next 12 months	65% cumulative through cycle to date	Expected to moderate due to reduced brokered/public funds and competitive dynamics	Lower expected going forward
Brokered Deposits Strategy	Long‑term	n/a	Target to 0 over time via core deposit growth and marketing initiatives	Lowered reliance (structural)
CD Repricing	Q4 2025	n/a	Customer CDs matured ~3.77% vs renewals ~3.53%; expected to continue moderating, with remix into core deposits	Moderating reprice tailwind
NIM Run‑Rate Reference	Q3 2025 exit	n/a	September NIM ~3.76% as run‑rate into Q4	Positive exit rate
Dividend	Q4 2025	$0.2125 prior quarter	$0.2125 declared payable Jan 2, 2026	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2025 + Q2 2025)	Current Period (Q3 2025)	Trend
Margin & Hedging	NIM expansion to 2.95% (Q1); remix funding; low single‑digit loan growth; asset repricing tailwinds	NIM 3.50%; Q4 guide ≥3.65%; asset‑sensitive with hedging to defend 3.50–3.75 NIM across rate scenarios	Strengthening/defensive
Deposit Mix & Betas	Consumer core accounts +1.5% y/y; remix from CDs to transactions; managing brokered backfill	NIB % rose to 22%; brokered down to $1.84B; cumulative beta 65% expected to moderate	Improving mix; moderating betas
Loan Growth Discipline	Strong pipeline; pricing discipline amid competition; payoff headwinds	Intensified competition; SFNC refusing irrational pricing; pipeline/production strong; repricing of ~$3B fixed loans	Disciplined growth
Credit Outlook	Two specific credits migrated to NPLs; specific reserves ~60%; stable portfolio metrics	NPLs 0.90%; coverage 168%; benign quarter; targeted resolution in Q4	Stabilizing/managed
Capital Actions	Preservation optionality; buybacks secondary to growth/dividend	$325M subordinated notes at 6.25% due 2035; repaid $330M 2028 notes; equity raise ~$327M in July	Strengthened capital stack
Talent & Technology	Investments in automation and talent; operating leverage	Continued talent acquisition given dislocation; warehouse lending leadership hire	Execution focus

Management Commentary

Chairman & CEO: “We successfully raised $327 million of equity capital…effectively addressed a negative arbitrage…While the one‑time loss…was significant…the financial strength…allowed us that opportunity…results from the month of September are very encouraging for our future performance” .
President (on margin): “We have almost $3 billion of fixed‑rate loans…yielding about 3.9%. All…reprice over the next 24 months…We see significant tailwind…September net interest margin of 3.76%…We feel like we are in an incredibly strong position” .
CFO (on hedging): “Goal…in an up or down 200–250 bps move, we’d like to keep our NIM somewhere in that 3.50 to 3.75 range…hedging program…will allow us to do that” .
On competition: “A larger bank…put out a term sheet for 4.5% on a loan and Fed funds minus 25 bps on the deposit relationship. That just doesn’t seem very smart to us. We’re just not like that” .

Q&A Highlights

Deposit betas and mix: cumulative beta ~65% to date expected to moderate as brokered/public funds shrink; CD renewals ~3.53% vs ~3.77% maturities; remix from CDs to core deposits supports pricing .
Brokered deposits: long‑term target to zero; replacing with core growth via marketing and treasury initiatives .
Margin trajectory: Q4 NIM ≥3.65%; asset‑sensitive with hedges; defensible margin over next 12 months under the forward curve .
Credit: benign quarter; strategic resolution of two earlier nonperformers expected; specific reserves at high end of range .
Expenses and talent: balanced approach—ongoing efficiency plus selective talent infusion; Q3 expense run‑rate slightly above what’s expected in Q4 .

Estimates Context

EPS: Normalized EPS of $0.46 was a slight miss vs S&P Global consensus of $0.47; GAAP EPS was $(4.00) due to the securities loss *.
Revenue: Adjusted total revenue of $232.5M was essentially in line with S&P Global consensus of ~$233.5M; GAAP revenue was $(569.5)M due to the realized loss *.
Implications: Expect upward revisions to NIM outlook and net interest income for Q4 and 2026 given management guidance and repricing tailwinds; consensus may adjust presentation focus to adjusted results given non‑recurring loss. Values retrieved from S&P Global.*

Key Takeaways for Investors

Core profitability inflecting: NIM expansion (3.50% current; ≥3.65% guided for Q4) with reduced funding costs and deposit mix improvement; hedging adds defensibility .
One‑time hit cleans the slate: realized securities loss and deleveraging removed negative carry; book value reset positions SFNC for stronger ROA/ROE going forward .
Funding risk reduced: brokered deposits and other borrowings sharply down; NIB mix up to 22%—positive for future NII .
Repricing tailwinds: ~$3B fixed‑rate loans (~3.9% yield) reprice over 24 months—mechanical uplift to asset yields without requiring volume growth .
Credit contained: NPLs elevated vs 2024 but coverage robust; provision modestly above net charge‑offs; proactive resolution underway .
Capital flexibility: $325M new subordinated notes, redemption of 2028 notes, and prior equity raise strengthen capital and liquidity; dividend maintained .
Trading/PM angle: Focus near‑term on adjusted metrics and NIM trajectory; watch deposit share gains and brokered runoff pace; monitor Q4 margin and credit resolutions as catalysts .

Additional relevant releases:

Earnings release date and call logistics (Sept 24) .
Subordinated notes offering pricing (Sept 9) .
Dividend declaration (Nov 10) .

SIMMONS FIRST NATIONAL CORP (SFNC)·Q3 2025 Earnings Summary