Mendon Capital bought nearly $7.8 million worth of Simmons First National stock during the third quarter.Mendon Capital Advisors reported a new position in Simmons First National Corporation (SFNC +0.99%) on its November 14, 2025, SEC filing, acquiring 406,570 shares valued at $7,793,947.What HappenedAccording to a filing with the U.S. Securities and Exchange Commission dated November 14, 2025, Mendon Capital Advisors initiated a new equity position in Simmons First National Corporation during the third qua ...

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Financial Performance - The net loss for Q3 2025 was $562.8 million, or $(4.00) diluted earnings per share, compared to a net income of $54.8 million, or $0.43 diluted earnings per share for Q2 2025 [219]. - Adjusted earnings for Q3 2025 were $64.9 million, or $0.46 adjusted diluted earnings per share, compared to $56.1 million, or $0.44 adjusted diluted earnings per share for Q2 2025 [219]. - Total net income available to common stockholders for the three months ended September 30, 2025, was $(562,792) thousand, compared to $54,773 thousand for the previous quarter [354]. - Adjusted earnings (non-GAAP) for the three months ended September 30, 2025, were $64,930 thousand, an increase from $56,071 thousand in the previous quarter [354]. - The diluted earnings per share for the three months ended September 30, 2025, was $(4.00), compared to $0.43 in the previous quarter [354]. - Noninterest income for Q3 2025 was $(756,187) thousand, while adjusted noninterest income (non-GAAP) was $45,875 thousand [357]. - The company reported a realized after-tax loss of $625.6 million from the sale of approximately $3.2 billion in AFS securities during the third quarter of 2025 [278]. - Loss on sale of securities for Q3 2025 amounted to $801,492 thousand, significantly impacting net income [354]. Balance Sheet and Capital Management - The company raised $326.9 million in equity capital to reposition its balance sheet and address negative arbitrage between long-term bond yields and short-term funding costs [217]. - Stockholders' equity was $3.35 billion as of September 30, 2025, with a book value per share of $23.18 and tangible book value per share of $13.45 [223]. - Total assets decreased to $26.07 billion as of September 30, 2025, from $27.26 billion a year earlier, representing a decline of approximately 4.4% [254]. - The common equity to asset ratio improved to 13.85% at September 30, 2025, compared to 13.13% at year-end 2024, reflecting stronger capital management [325]. - The company raised $327.4 million from a public offering of 18,653,000 shares at $18.50 per share, which helped offset a realized after-tax loss of $625.6 million from selling AFS securities [329]. - The total Tier 1 capital was $2,291,191 thousand, down from $2,535,527 as of December 31, 2024 [337]. - The company's common equity Tier 1 ratio (CET1) was 11.54% as of September 30, 2025, compared to 12.38% at the end of 2024 [337]. - Total risk-based capital as of September 30, 2025, was $2,990,877, slightly down from $2,992,133 at the end of 2024 [337]. - Risk-weighted assets decreased to $19,861,879 as of September 30, 2025, from $20,473,960 as of December 31, 2024 [337]. - The company did not repurchase any shares during the three and nine month periods ended September 30, 2025 and 2024, with future repurchase decisions dependent on market conditions and capital needs [332]. Deposits and Loans - Total deposits as of September 30, 2025, were $19.84 billion, down from $21.89 billion as of December 31, 2024 [221]. - The loan to deposit ratio increased to 87% as of September 30, 2025, compared to 78% as of December 31, 2024 [221]. - As of September 30, 2025, total loans amounted to $17.19 billion, an increase of $182.9 million from December 31, 2024 [284]. - The loan portfolio averaged $16.98 billion during the first nine months of 2025, compared to $17.07 billion in the same period of 2024 [284]. - Real estate loans represented 77.8% of total loans at September 30, 2025, totaling $13.37 billion, a decrease of $23.2 million from December 31, 2024 [288]. - Commercial loans increased to $2.75 billion, or 16.0% of total loans, reflecting a growth of $55.2 million, or 2.0%, from December 31, 2024 [289]. - Nonperforming loans as of September 30, 2025, were $153.9 million, up from $110.8 million as of December 31, 2024 [222]. - The allowance for credit losses was 1.50% of total loans as of September 30, 2025, with a coverage ratio of 168% of nonperforming loans [299]. - The commercial loan pipeline was $1.61 billion at September 30, 2025, with $489.9 million approved and ready to close [291]. Interest Income and Expenses - Net interest income for Q3 2025 was $190.5 million, an increase of $12.2 million, or 6.9%, compared to Q2 2025 [240]. - Net interest margin on a fully taxable equivalent basis was 3.50% for the three months ended September 30, 2025, compared to 3.06% for the three months ended June 30, 2025, representing a 44 basis point increase [247]. - A $108.2 million decrease in interest expense was mainly due to a reduction in deposit account rates and lower volumes of higher-rate wholesale borrowings [246]. - Interest expense for the nine months ended September 30, 2025, totaled $108.2 million, compared to $73.6 million for the same period in 2024, reflecting an increase of 47.0% [256]. - The average rate paid on interest-bearing transaction and savings deposits was 2.45% as of September 30, 2025, down from 2.81% at December 31, 2024 [320]. Noninterest Income and Expenses - Noninterest income for the three months ended September 30, 2025, showed a loss of $756.2 million, a decrease of approximately $798.5 million compared to the previous quarter [261]. - Adjusted noninterest income for the three months ended September 30, 2025, increased by $3.5 million, or 8.3%, from the prior sequential quarter [261]. - Noninterest expense for the three months ended September 30, 2025 was $142.0 million, an increase of $3.4 million or 2.5% compared to the previous quarter [269]. - Salaries and employee benefits expense increased by $2.4 million or 3.2% for the three months ended September 30, 2025 compared to the previous quarter [271]. - Noninterest expense for the nine months ended September 30, 2025 increased by approximately $8.8 million or 2.1% compared to the same period in 2024 [270]. Credit Losses and Provisions - Provision for credit losses for the nine months ended September 30, 2025, was $50.7 million, up from $33.5 million for the same period in 2024, reflecting an increase of 51.4% [259]. - The provision for credit losses for the first nine months of 2025 was $53.9 million, compared to $33.5 million for the same period in 2024, reflecting a significant increase in credit risk [308]. - The allowance for credit losses increased by approximately $23.0 million from December 31, 2024, to September 30, 2025, while total loans increased by $182.9 million during the same period [310].

Core Viewpoint - Simmons First National (SFNC) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, making it a valuable tool for investors [2][4]. - The recent upgrade for Simmons First National reflects an improvement in its earnings outlook, which is expected to positively impact its stock price [5][10]. Earnings Estimate Revisions - Simmons First National is projected to earn $1.74 per share for the fiscal year ending December 2025, with no year-over-year change anticipated [8]. - Over the past three months, the Zacks Consensus Estimate for Simmons First National has increased by 5.9%, indicating a positive trend in earnings estimates [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - The upgrade to Zacks Rank 2 places Simmons First National in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [10].

Financial Data and Key Metrics Changes - The company reported a September net interest margin of 3.76% and expects it to be at or above 3.65% in the fourth quarter, indicating a positive outlook for net interest income growth [18][22][28] - Cumulative deposit beta was reported at 65% through the rate cycle, but is expected to moderate due to the reduction of brokered deposits [36][38] Business Line Data and Key Metrics Changes - The company has focused on improving organic growth capabilities, including talent acquisition and operational excellence, to drive efficiency and growth [11][19] - The restructuring of the balance sheet has led to an increase in net interest margin, with core balance sheet NIM growing seven basis points [26][28] Market Data and Key Metrics Changes - The competitive environment remains intense, with the company maintaining discipline in pricing despite pressures from larger banks offering lower rates [62][63] - The company has seen growth in consumer accounts but faces challenges with average balances per account declining [39] Company Strategy and Development Direction - The company aims to grow core deposits while reducing reliance on brokered deposits, with a long-term goal of eliminating brokered deposits entirely [58] - The focus is on generating consistent, strong, risk-adjusted returns without sacrificing soundness and profitability [13][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth opportunities, citing strong pipeline activity and production volumes [15][63] - The company is proactive in managing credit quality and expects to resolve existing loan issues while maintaining a sound balance sheet [46][50] Other Important Information - The company has implemented a hedging program to manage interest rate risk effectively, aiming to maintain net interest margin within a range of 3.50% to 3.75% [28][72] - The CEO announced his retirement, marking a significant transition for the company [79] Q&A Session Summary Question: What are the key strategic initiatives moving forward? - Management highlighted a focus on addressing structural challenges and enhancing organic growth capabilities, including talent acquisition and operational excellence [10][11] Question: How is the company approaching loan growth in a competitive environment? - Management emphasized the importance of soundness and profitability in growth strategies, with expectations for low single-digit loan growth rates [14][15] Question: What is the outlook for net interest margin? - Management provided guidance for a net interest margin of 3.65% or higher for the fourth quarter, supported by loan repricing dynamics [22][25] Question: How have deposit betas trended with recent rate cuts? - The cumulative deposit beta was reported at 65%, but management expects it to moderate due to the reduction of brokered deposits [36][38] Question: What is the company's credit outlook? - Management reported a benign quarter for credit metrics and expressed confidence in maintaining strong reserve levels [46][50]

Financial Data and Key Metrics Changes - The company reported a net interest margin (NIM) of 3.76% for September, with expectations for the fourth quarter to be at or above 3.65% [13][15][19] - Cumulative beta for deposits was reported at 65% through the rate cycle, with expectations for moderation due to the reduction of brokered deposits [21][22] Business Line Data and Key Metrics Changes - The company has focused on improving organic growth capabilities, including talent acquisition and operational efficiency [9][10] - The restructuring actions taken are expected to support loan growth, with a focus on maintaining soundness and profitability [10][11] Market Data and Key Metrics Changes - The company has seen a competitive environment with intense pricing pressures, but remains disciplined in its approach to growth [10][41] - The deposit base has been leaner, with a significant reduction in brokered deposits, which are now targeted to be reduced to zero over the long term [21][38] Company Strategy and Development Direction - The company is prioritizing operational excellence and efficiency while also investing in talent acquisition to drive organic growth [9][28] - The strategic plan includes growing core deposits to reduce reliance on brokered deposits, with a focus on enhancing customer relationships [38] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth opportunities, citing strong pipeline activity and production volumes [11][41] - The company is committed to maintaining discipline in its growth strategy, focusing on risk-adjusted returns rather than volume alone [10][41] Other Important Information - The company underwent significant restructuring in the third quarter, which management described as a bold and exceptional move [55][56] - The CEO announced his retirement, marking the end of his tenure and expressing confidence in the company's future [56][57] Q&A Session Summary Question: What are the key strategic initiatives moving forward? - Management highlighted a focus on addressing structural challenges and enhancing organic growth capabilities [8] Question: How is the company approaching loan growth in a competitive environment? - Management emphasized the importance of soundness and profitability over volume, with expectations for low single-digit growth rates [10][11] Question: What is the outlook for deposit betas with upcoming rate cuts? - Management expects the beta to moderate due to the reduction of brokered deposits, which had a 100% beta [21][22] Question: How does the company view its credit outlook? - Management reported a benign quarter for credit metrics and expressed optimism about resolving specific loans [30][32] Question: What is the company's strategy regarding brokered deposits? - The goal is to reduce brokered deposits to zero over time by growing core deposits [38] Question: What are the expectations for loan pricing and competitive dynamics? - Management noted that competitive pricing pressures are significant but remains committed to generating strong risk-adjusted returns [41]

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Financial Performance - The company's net income was a loss of $(5628) million, but adjusted net income was $649 million, a 16% increase compared to the last quarter[11] - Adjusted total revenue reached $2325 million, up 9% from the previous quarter[11] - Adjusted PPNR (Pre-Provision Net Revenue) increased by 20% to $928 million[11] - Net interest margin (NIM) increased by 44 bps to 350%[11] Balance Sheet and Capital - Total assets amounted to $242 billion, with total deposits of $198 billion[3] - Total loans reached $172 billion, with a loan to deposit ratio of 87%[3] - The total risk-based capital ratio stood at 1507%, and the TCE (Tangible Common Equity) ratio was 853%[3] - The company completed balance sheet repositioning, deleveraging the balance sheet by paying down higher cost deposits and wholesale borrowings[9, 12] Loan Portfolio and Credit Quality - Total loans increased by 2% on a linked quarter annualized basis, reaching $172 billion[12] - The ACL (Allowance for Credit Losses) ratio ended the quarter at 150%, up 2 bps[12] - The NCO (Net Charge-Off) ratio was 25 bps, with provision expense exceeding net charge-offs by $45 million[12] - Nonperforming loans represented 090% of total loans[11] Deposits and Funding - Total deposits decreased due to deleveraging, while the deposit mix and costs improved[12] - Noninterest-bearing deposits accounted for 221% of total deposits[57] - The cost of deposits decreased by 11 bps on a linked quarter basis[59] Interest Rate Sensitivity and Hedging - The company executed $1625 billion of interest rate swaps in 3Q25 to reduce the negative impact of falling rates by approximately 50%[76] - The company expects 4Q25 NIM to be 365% or higher[16]

Core Insights - Simmons First National (SFNC) reported a revenue of $231.97 million for the quarter ended September 2025, marking a year-over-year increase of 32.7% [1] - The earnings per share (EPS) for the same period was $0.46, compared to $0.37 a year ago, although it fell short of the consensus estimate of $0.48, resulting in an EPS surprise of -4.17% [1] Financial Performance - The reported revenue exceeded the Zacks Consensus Estimate of $228.9 million, resulting in a surprise of +1.34% [1] - The efficiency ratio was reported at -25.1%, significantly better than the average estimate of 59.6% based on two analysts [4] - The net interest margin was reported at 3.5%, matching the average estimate from two analysts [4] - Total interest-earning assets (FTE) averaged $21.56 billion, slightly above the average estimate of $21.45 billion [4] - Total nonperforming assets were $160.72 million, slightly higher than the average estimate of $160.32 million [4] - Total nonperforming loans were reported at $153.94 million, compared to the average estimate of $150.16 million [4] - Annualized net charge-offs to average loans were reported at 0.3%, in line with the average estimate [4] - Net interest income (FTE) was $190.47 million, exceeding the average estimate of $188.51 million [4] - Total non-interest income was reported at $45.31 million, surpassing the average estimate of $43.96 million [4] - Net interest income was $186.66 million, compared to the average estimate of $184.99 million [4] Stock Performance - Shares of Simmons First National have returned -3.9% over the past month, while the Zacks S&P 500 composite has seen a +0.9% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - Simmons First National (SFNC) reported quarterly earnings of $0.46 per share, missing the Zacks Consensus Estimate of $0.48 per share, but showing an increase from $0.37 per share a year ago, resulting in an earnings surprise of -4.17% [1] - The company posted revenues of $231.97 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.34% and increasing from $174.84 million year-over-year [2] - The stock has underperformed the market, losing about 14.3% since the beginning of the year compared to the S&P 500's gain of 13.4% [3] Earnings Outlook - The current consensus EPS estimate for the coming quarter is $0.49 on revenues of $236.7 million, and for the current fiscal year, it is $1.72 on revenues of $889.52 million [7] - The estimate revisions trend for Simmons First National was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Zacks Industry Rank for Banks - Southeast is currently in the top 35% of over 250 Zacks industries, suggesting that the industry outlook can significantly impact stock performance [8] - Another company in the same industry, Stock Yards Bancorp (SYBT), is expected to report quarterly earnings of $1.15 per share, reflecting a year-over-year change of +15%, with revenues projected at $99.8 million, up 11.1% from the previous year [9][10]