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SIMMONS FIRST NATIONAL CORP (SFNC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered clear sequential improvement: revenue rose to $208.5M, net interest income to $164.9M, diluted EPS to $0.38, and FTE NIM expanded 13 bps to 2.87% as deposit costs fell 19 bps to 2.60% .
  • Credit normalization continued: provision exceeded net charge-offs by $1.8M; NCO ratio was 0.27% (annualized), ACL/loans increased to 1.38% while NPLs/loans rose to 0.65% .
  • 2025 outlook (from investor deck): NII up 5–7%, loans up low-single-digits (EOP), deposits relatively stable, adjusted noninterest expense up ~2%, adjusted noninterest income up ~1%, NCOs 25–30 bps, and “NIM above 3%” in the 2H 2025 .
  • Capital remains strong (CET1 12.38%, TCE 8.29%); no Q4 buybacks; dividend increased to $0.2125 per share (Jan 30, 2025 declaration) .
  • Management emphasized profitability-first discipline; on the call, leadership reiterated confidence in achieving >3% NIM in 2H and highlighted improved deposit pricing elasticity and reduced reliance on wholesale funding as key supports .

What Went Well and What Went Wrong

  • What Went Well

    • NIM expansion and funding optimization: NIM (FTE) rose to 2.87% (+13 bps Q/Q) as deposit costs fell 19 bps to 2.60% and other borrowing rates declined; management cited proactive deposit pricing and lower wholesale usage .
    • Profitability momentum: revenue increased to $208.5M, NII rose to $164.9M, PPNR to $67.4M; adjusted EPS $0.39; CEO: “Simmons’ fourth quarter results were encouraging as we head into 2025. Profitability trends improved…” .
    • Strategic clarity on 2025: guidance calls for NII +5–7% with “NIM above 3% in the 2nd half,” disciplined loan growth, stable deposits, and continued efficiency gains .

    Selected quotes:

    • “our ability, our belief that we could cross over a 3% net interest margin in the back half of the year” .
    • “we outperformed our expectations… on the loan pricing and the deposit pricing side” and “we effectively eliminated a lag” in deposit betas .

  • What Went Wrong

    • Loan balances declined Q/Q to $17.0B (from $17.3B), driven by seasonal ag/mortgage warehouse and ongoing run-off portfolio shrinkage .
    • Asset quality normalization: NPLs/loans rose to 0.65% (from 0.59%), NPAs/Assets to 0.45% (from 0.38%); NCOs increased to 0.27% (annualized), with 6 bps from the run-off portfolio .
    • Noninterest expense ticked up Q/Q to $141.1M on seasonal comp; adjusted NIE was $139.3M (+1.9% Q/Q) .

Financial Results

Income, profitability, and margin comparison

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Total Revenue ($M)$177.6 $197.2 $174.8 $208.5
Net Interest Income ($M)$155.6 $153.9 $157.7 $164.9
Diluted EPS ($)$0.19 $0.32 $0.20 $0.38
Adjusted Diluted EPS ($)$0.40 $0.33 $0.37 $0.39
PPNR ($M)$29.5 $57.9 $37.6 $67.4
Adjusted PPNR ($M)$65.1 $59.4 $66.4 $69.2
NIM (FTE, %)2.68% 2.69% 2.74% 2.87%
Cost of Deposits (%)2.58% 2.79% 2.79% 2.60%
Loan Yield (FTE, %)6.20% 6.39% 6.44% 6.32%

Credit, capital and balance metrics

MetricQ4 2023Q2 2024Q3 2024Q4 2024
NCO Ratio (annualized, %)0.11% 0.19% 0.22% 0.27%
ACL / Loans (%)1.34% 1.34% 1.35% 1.38%
NPLs / Loans (%)0.50% 0.60% 0.59% 0.65%
CET1 (%)12.11% 12.00% 12.06% 12.38%
TCE Ratio (%)7.69% 7.84% 8.15% 8.29%
Loans (EOP, $B)$16.85 $17.19 $17.34 $17.01
Deposits (EOP, $B)$22.25 $21.84 $21.94 $21.89

Noninterest income mix (select lines)

($M)Q4 2023Q2 2024Q3 2024Q4 2024
Service charges on deposit accounts$12.8 $12.3 $12.7 $13.0
Wealth management fees$7.7 $8.3 $8.2 $8.8
Debit and credit card fees$7.8 $8.2 $8.1 $8.3
Mortgage lending income$1.6 $2.0 $2.0 $1.8
Bank owned life insurance$3.1 $3.9 $3.8 $3.8
Gain (loss) on sale of securities$(20.2) $0.0 $(28.4) $0.0
Other income$6.9 $6.4 $8.3 $5.6
Total noninterest income$22.0 $43.3 $17.1 $43.6

Estimates comparison (Q4 2024)

  • S&P Global consensus for EPS and Revenue was unavailable at the time of this analysis due to provider request limits; comparison to estimates cannot be shown currently. We will update when S&P Global access is restored.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Interest IncomeFY 2025Not providedUp 5%–7% YoYNew 2025 outlook
NIM (FTE)2H 2025Not providedAbove 3%New 2025 outlook
Loans (EOP)FY 2025Not providedUp low-single-digitsNew 2025 outlook
Total Deposits (EOP)FY 2025Not providedRelatively stableNew 2025 outlook
Adjusted Noninterest IncomeFY 2025Not providedUp ~1%New 2025 outlook
Adjusted Noninterest ExpenseFY 2025Not providedUp ~2%New 2025 outlook
Net Charge-offsFY 2025Not provided25–30 bpsNew 2025 outlook
Dividend2025 run-rate$0.21/qtr in 2024$0.2125/qtr (declared Jan 30, 2025)Raised ~1%

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
NIM trajectory, deposit costsQ2: NIM +3 bps; deposit cost increase slowed +4 bps . Q3: NIM +5 bps; deposit costs “unchanged…and appear to have peaked” .NIM 2.87% (+13 bps Q/Q); cost of deposits down 19 bps; confidence in >3% NIM in 2H 2025 .Improving; positive operating leverage.
Loan growth disciplineQ2: disciplined pricing; loans +$191M Q/Q . Q3: pipeline up to $1.2B .Loans down Q/Q on seasonality and run-off; pipeline $1.3B; ready-to-close $552M; competitive pricing on high-quality credits .Cautious; profitable growth focus.
Credit normalizationQ2: NPLs down; ACL 1.34% . Q3: provision > NCO; NPL coverage 229% .NCO 0.27%; ACL 1.38%; NPLs/loans 0.65%; normalization continues .Normalizing with small uptick.
Funding/wholesale relianceQ3: other borrowings down ~$300M Q/Q .Other borrowings down to $1.1B (from $1.5B) .Improving funding mix.
Balance sheet restructuringQ3: strategic AFS sale (loss) to optimize .Will continue to evaluate restructures under multi-scenario framework .Opportunistic.
Capital returnsNo buybacks; dividend paid .No Q4 buybacks; dividend increased to $0.2125 (Jan 30, 2025) .Dividend growth; buybacks optional.

Management Commentary

  • CEO (press release): “Simmons’ fourth quarter results were encouraging as we head into 2025. Profitability trends improved and should be a good foundation from which to build.”
  • NIM outlook (President): “our ability, our belief that we could cross over a 3% net interest margin in the back half of the year” .
  • Funding costs (CFO): “we outperformed our expectations… on the loan pricing and the deposit pricing side… We effectively eliminated a lag” .
  • Deposits: “the competitive environment… continues to be… very competitive,” but elasticity testing has supported pricing actions .
  • Capital priorities: “#1 priority around capital continues to be organic growth initiatives… dividend is a priority… buyback maintained and evaluated after those” .
  • Credit: “Normalization is still exactly the right term… we’re not seeing… new concerns” .

Q&A Highlights

  • NII/NIM framework and rate path: Guide anchored to Jan 13 forwards (first full cut by Oct-25); earlier cuts push outcome toward high-end; no cuts still supports low-end; plan remains to exceed 3% NIM in 2H 2025 .
  • Deposit pricing and elasticity: Administered rate moves showed strong retention—e.g., over 75% of maturing CDs from relationship customers retained into lower-cost CDs or IB deposits; growth in consumer checking (+1.5% in 2024) supports funding mix .
  • Loan pipeline and pricing: Repricing tailwind persists (fixed-rate renewals ~200 bps above payoffs), but competition is intense on top-tier credits; growth to be risk-adjusted and relationship-driven .
  • Capital deployment: First priority is organic growth and possible balance sheet restructures; dividend maintained; buybacks remain authorized but secondary .
  • Restructure evaluation: Scenario-rich process comparing earnings/capital trade-offs across rate shocks over multi-year horizons .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable at the time of this analysis due to provider request limits. As a result, we cannot provide a numerical beat/miss assessment versus consensus for this quarter. We will update this section when S&P Global data access is restored.

Key Takeaways for Investors

  • NIM inflected with tangible funding cost relief; management expects >3% in 2H 2025—supporting operating leverage if deposit beta progress persists .
  • Profitability improved (NII, PPNR, EPS up Q/Q), aided by reduced wholesale funding and proactive administered deposit pricing .
  • Credit metrics are normalizing (higher NCOs/NPLs), but reserve coverage increased (ACL/loans 1.38%) and provision exceeded NCOs—consistent with a cautious stance .
  • Balance sheet discipline remains central: modest loan growth focus, pricing discipline amid competitive pressure, and selective consideration of restructurings to accelerate earnings profile .
  • Strong capital (CET1 12.38%, TCE 8.29%) provides flexibility; dividend raised to $0.2125, with buybacks optional depending on conditions .
  • 2025 guide (NII +5–7%, stable deposits, measured expense growth) implies continued positive operating leverage even without aggressive balance sheet expansion .
  • Watch items: competitive loan pricing potentially moderating repricing tailwinds; continued progress on reducing wholesale funding; trajectory of NPLs/net charge-offs as normalization proceeds .