Simmons First National (US:SFNC)2025-08-05 17:22Part I: Financial Information Financial Statements (Unaudited) Simmons First National Corporation reported increased H1 2025 net income, stable assets, and a significant subsequent balance sheet repositioning Consolidated Balance Sheets | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $26,693,620 | $26,876,049 | | Net Loans | $16,857,559 | $16,770,918 | | Total Investments | $5,996,851 | $6,166,062 | | Goodwill | $1,320,799 | $1,320,799 | | Total Liabilities | $23,144,410 | $23,347,177 | | Total Deposits | $21,824,990 | $21,885,750 | | Total Stockholders' Equity | $3,549,210 | $3,528,872 | - Total assets decreased slightly from $26.88 billion at the end of 2024 to $26.69 billion as of June 30, 2025, primarily driven by a decrease in total investments, while net loans saw a modest increase9 Consolidated Statements of Income | (In thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $171,824 | $153,905 | $335,246 | $305,811 | | Provision for credit losses | $11,945 | $11,099 | $38,742 | $21,305 | | Net Income | $54,773 | $40,763 | $87,161 | $79,634 | | Diluted Earnings Per Share | $0.43 | $0.32 | $0.69 | $0.63 | - Net income for Q2 2025 was $54.8 million, a significant increase from $40.8 million in Q2 2024, with six-month net income rising to $87.2 million from $79.6 million year-over-year, driven by higher net interest income11 - The provision for credit losses increased to $38.7 million for the first six months of 2025, up from $21.3 million in the same period of 2024, indicating a more cautious outlook on credit quality11 Consolidated Statements of Comprehensive Income (Loss) | (In thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $54,773 | $40,763 | $87,161 | $79,634 | | Total Other Comprehensive Income (Loss) | $(13,190) | $2,535 | $(19,990) | $(1,106) | | Comprehensive Income | $41,583 | $43,298 | $67,171 | $78,528 | Consolidated Statements of Cash Flows | (In thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $110,439 | $143,654 | | Net cash provided by (used in) investing activities | $79,677 | $(84,382) | | Net cash used in financing activities | $(233,031) | $(99,031) | | Decrease in Cash and Cash Equivalents | $(42,915) | $(39,759) | Consolidated Statements of Stockholders' Equity - Total stockholders' equity increased from $3.53 billion at the end of 2024 to $3.55 billion at June 30, 2025, driven by net income of $87.2 million, partially offset by dividends paid of $53.5 million and an increase in accumulated other comprehensive loss of $20.0 million21 Condensed Notes to Consolidated Financial Statements - The company operates approximately 223 financial centers across Arkansas, Kansas, Missouri, Oklahoma, Tennessee, and Texas as of June 30, 202523 - A significant subsequent event in July 2025 involved reclassifying $3.6 billion of Held-to-Maturity securities to Available-for-Sale and selling approximately $3.2 billion of AFS securities, resulting in an estimated after-tax loss of approximately $604.0 million to be recorded in Q3 202556198 - In July 2025, the company closed a public offering of 18,653,000 shares of its Class A common stock, generating net proceeds of approximately $326.9 million125197 Report of Independent Registered Public Accounting Firm - The independent registered public accounting firm, Forvis Mazars, LLP, reviewed the interim financial statements and is not aware of any material modifications needed for them to conform with U.S. GAAP200 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses improved H1 2025 profitability driven by net interest margin expansion, stable asset quality, and a significant balance sheet repositioning | Metric | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Net Income | $54.8 million | $32.4 million | | Diluted EPS | $0.43 | $0.26 | | Adjusted Net Income (non-GAAP) | $56.1 million | $33.1 million | | Adjusted Diluted EPS (non-GAAP) | $0.44 | $0.26 | - Nonperforming assets as a percentage of total assets increased to 0.62% at June 30, 2025, compared to 0.45% at December 31, 2024, primarily due to two specific credit relationships migrating to nonperforming status209278 - The company maintains a strong liquidity position with a loan-to-deposit ratio of 78% and available liquidity sources of $10.72 billion, providing 2.3x coverage for uninsured, non-collateralized deposits211 Quantitative and Qualitative Disclosures About Market Risk The company manages interest rate risk with a liability-sensitive balance sheet, projecting impacts on net interest income, and maintains ample liquidity - The parent company's primary sources of liquidity are dividends from its subsidiary, Simmons Bank, with $78.2 million available for dividends to the parent company without prior regulatory approval as of June 30, 2025344 - The company has seven primary and secondary sources of liquidity, including federal funds lines ($435.0 million), FHLB credit lines ($5.13 billion), wholesale and retail deposits, a laddered investment portfolio, correspondent bank lines, and the Federal Reserve Discount Window348 | Interest Rate Scenario | % Change in Net Interest Income from Base | | :--- | :--- | | Up 200 basis points | (2.48)% | | Up 100 basis points | (1.10)% | | Down 100 basis points | 0.10% | | Down 200 basis points | 0.37% | Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls - The CEO, CFO, and Chief Accounting Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report362 - No changes in internal control over financial reporting occurred during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, these controls363 Part II: Other Information Legal Proceedings The company is involved in various legal proceedings, with management expecting no material adverse effect on financial condition - The company is party to various legal proceedings in the ordinary course of business, and management believes the ultimate outcome will not have a material adverse effect on the company's financial condition120121 Risk Factors A new risk factor addresses the potential adverse tax implications of a significant Q3 2025 investment securities loss - A new risk factor was added regarding the tax treatment of the estimated $604.0 million after-tax loss from the sale of investment securities in Q3 2025, with the company expecting ordinary treatment for the losses, but an adverse IRS determination could have a material negative impact367368 Unregistered Sales of Equity Securities and Use of Proceeds The company has an active stock repurchase program, though no shares were repurchased during Q2 2025 - The company has a stock repurchase program authorizing up to $175.0 million in share buybacks, which is effective until January 31, 2026369 - No shares were repurchased during the three months ended June 30, 2025370 Other Information No directors or officers adopted, modified, or terminated trading arrangements during Q2 2025 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the second quarter of 2025371 Exhibits This section lists the exhibits filed with the Form 10-Q, including corporate documents and certifications Signatures The report is duly signed and authorized by the company's key executives as of August 5, 2025