Breaking Down Simmons First National Corporation (SFNC) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments and seeking a clear picture of the financial health of Simmons First National Corporation (SFNC)? With a recent revenue of $728.85 million in 2024, a 4.06% decrease compared to the previous year, and earnings of $152.69 million, down by 12.78%, understanding the key drivers behind these figures is crucial. Dive into this analysis to uncover insights into SFNC's performance, strategic initiatives like the 'Better Bank' plan aiming for a 3% net interest margin by late 2025, and what analysts predict for its stock, with some forecasting a potential 33.39% upside from the latest price.

Simmons First National Corporation (SFNC) Revenue Analysis

Understanding Simmons First National Corporation's (SFNC) revenue streams is crucial for investors seeking insights into the company's financial health. A detailed analysis of revenue sources, growth rates, and segment contributions provides a comprehensive view of the company's financial performance.

Breakdown of Primary Revenue Sources:

• Consumer, Real Estate, and Commercial Loans: SFNC provides a variety of loan products.
• Checking, Savings, and Time Deposits: These form a core part of SFNC's revenue.
• Specialized Products and Services: Including credit cards, trust and fiduciary services, investments, agricultural finance lending, equipment lending, insurance, and Small Business Administration (SBA) lending.

Year-over-Year Revenue Growth Rate:

Analyzing historical trends in revenue growth rates helps to understand SFNC's performance over time. Here's a look at the year-over-year revenue changes:

In the quarter ending March 31, 2025, Simmons First National had revenue of $182.78M, a decrease of -1.14%. The company's revenue in the last twelve months was $726.75M, down -2.98% year-over-year.

Contribution of Different Business Segments to Overall Revenue:

Simmons Bank, the primary subsidiary, operates 222 branches across Arkansas, Kansas, Missouri, Oklahoma, Tennessee, and Texas, offering a broad spectrum of financial solutions. Key business segments include:

• Retail Banking: Services include checking and savings accounts, personal loans, and mortgages.
• Commercial Banking: This segment focuses on commercial lending, deposit services, and treasury management for businesses.
• Wealth Management: Encompassing trust services, investment management, and financial planning.

Analysis of Any Significant Changes in Revenue Streams:

Recent financial results indicate some volatility in Simmons First National's revenue streams. For example, first-quarter net income for 2025 was reported at $32.4 million, a 16.7% decrease compared to 2024. However, revenue for the quarter was $209.6 million, exceeding the 2024 figure of $195.1 million.

Factors influencing these changes include:

• Net Interest Margin: A critical driver, with the company aiming to reach 3% by the second half of 2025.
• Economic Conditions: The CEO has expressed a need for 'stability in economic policy' to better pursue growth opportunities.
• Non-interest Income: Increased swap fee income and fair value adjustments on Small Business Investment Company (SBIC) investments have positively impacted non-interest income.

For more detailed insights into Simmons First National Corporation's (SFNC) financial health, you can refer to this comprehensive analysis: Breaking Down Simmons First National Corporation (SFNC) Financial Health: Key Insights for Investors

Simmons First National Corporation (SFNC) Profitability Metrics

Analyzing Simmons First National Corporation's (SFNC) profitability involves examining several key metrics that provide insights into its financial health and operational efficiency. These metrics include gross profit, operating profit, and net profit margins, which are essential for understanding the company's ability to generate earnings from its revenue.

Here's a breakdown of essential profitability aspects:

• Gross Profit: Assesses the revenue remaining after deducting the cost of goods sold.
• Operating Profit: Measures earnings before interest and taxes, reflecting core operational performance.
• Net Profit: Represents the actual profit after all expenses, including taxes and interest, are paid.

Evaluating these elements over time can reveal trends in SFNC’s profitability, indicating whether the company is improving its efficiency and earnings capabilities. Comparing these profitability ratios with industry averages provides a benchmark to gauge SFNC’s performance relative to its peers.

For instance, a consistent increase in gross margin may suggest that SFNC is effectively managing its production costs or increasing its pricing power. Conversely, a declining operating margin could indicate rising operating expenses or inefficiencies in its core business functions.

Furthermore, analyzing operational efficiency involves scrutinizing cost management strategies and gross margin trends. Effective cost management directly impacts the bottom line, while consistent gross margin improvements can signal enhanced profitability and competitive advantage.

Here is a sample table illustrating how profitability metrics might be tracked (note that this is a hypothetical example for demonstration purposes):

Investors and analysts often use these metrics to assess the financial health and stability of Simmons First National Corporation, providing a clearer picture of its investment potential.

Simmons First National Corporation (SFNC) Debt vs. Equity Structure

Understanding how Simmons First National Corporation (SFNC) finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, its debt-to-equity ratio, and how it balances debt and equity financing.

As of the fiscal year 2024, Simmons First National Corporation exhibits a well-managed debt profile. A detailed look into their balance sheet reveals the following:

• Long-term Debt: Specific figures for long-term debt would be available in the company's financial statements for 2024.
• Short-term Debt: Similar to long-term debt, the exact amount of short-term debt is detailed in their financial reports.

The debt-to-equity ratio is a critical metric for evaluating a company's financial leverage. To calculate this ratio:

• Divide the company's total liabilities by total shareholders' equity.
• A ratio of less than 1.0 generally indicates that a company relies more on equity than debt.
• A higher ratio signals greater financial risk.

For Simmons First National Corporation, analyzing this ratio in comparison to industry standards provides insights into their financial strategy and risk profile. Industry averages can be sourced from financial data providers and market research reports.

Recent activities such as debt issuances, credit ratings, or refinancing can significantly impact a company's financial health. Investors should monitor these activities through:

• Company press releases
• SEC filings
• Credit rating agencies' reports

Balancing debt and equity is vital for sustainable growth. Simmons First National Corporation's approach can be assessed by reviewing their capital structure decisions over the past few years, as detailed in their annual reports and investor presentations.

Here is a sample table illustrating how debt and equity components might look based on a hypothetical scenario for the fiscal year 2024:

This table is for illustrative purposes only. The actual figures for Simmons First National Corporation can be found in their official financial statements.

For further insights into Simmons First National Corporation, consider reading: Exploring Simmons First National Corporation (SFNC) Investor Profile: Who’s Buying and Why?

Simmons First National Corporation (SFNC) Liquidity and Solvency

Liquidity and solvency are critical indicators of a financial institution's ability to meet its short-term and long-term obligations. For investors, understanding these metrics provides insights into the financial health and stability of Simmons First National Corporation (SFNC).

Here’s an overview of how to assess SFNC's liquidity:

Current and Quick Ratios:

The current and quick ratios are fundamental measures of a company's ability to cover its short-term liabilities with its short-term assets. A higher ratio generally indicates better liquidity.

• Current Ratio: This ratio is calculated by dividing current assets by current liabilities. It indicates whether a company has enough short-term assets to cover its short-term liabilities.
• Quick Ratio: Also known as the acid-test ratio, this is calculated by subtracting inventory from current assets and dividing the result by current liabilities. It is a more conservative measure than the current ratio because it excludes inventory, which may not be easily converted into cash.

Analysis of Working Capital Trends:

Working capital, which is the difference between a company's current assets and current liabilities, is a measure of its short-term financial health. Monitoring the trends in working capital can reveal important insights.

• Positive Working Capital: Indicates that a company has enough liquid assets to cover its short-term liabilities.
• Negative Working Capital: May indicate liquidity problems, especially if it is a recurring trend.

Cash Flow Statements Overview:

Cash flow statements provide a detailed look at how a company generates and uses cash through its operating, investing, and financing activities.

• Operating Cash Flow: Cash generated from the company's core business operations. A positive and stable operating cash flow is a good sign.
• Investing Cash Flow: Cash used for investments in assets, such as property, plant, and equipment (PP&E).
• Financing Cash Flow: Cash flow related to debt, equity, and dividends.

Potential Liquidity Concerns or Strengths:

When evaluating SFNC's liquidity, consider the following points:

• Consistent Profitability: Consistent profits typically lead to stronger cash flow from operations.
• Asset Quality: High-quality assets that can be easily converted to cash improve liquidity.
• Debt Management: Prudent debt management ensures that the company can meet its obligations without straining its resources.

For a deeper dive into investor behavior, check out: Exploring Simmons First National Corporation (SFNC) Investor Profile: Who’s Buying and Why?

Simmons First National Corporation (SFNC) Valuation Analysis

Assessing whether Simmons First National Corporation (SFNC) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst sentiment.

Here's a breakdown of essential valuation metrics:

• Price-to-Earnings (P/E) Ratio: This ratio indicates how much investors are willing to pay for each dollar of earnings. A lower P/E ratio might suggest undervaluation, while a higher P/E ratio could indicate overvaluation or high growth expectations.
• Price-to-Book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value of equity. A lower P/B ratio can suggest that the stock is undervalued.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio compares the total value of the company (equity plus debt) to its earnings before interest, taxes, depreciation, and amortization. It provides a more comprehensive valuation measure than P/E, especially when comparing companies with different capital structures.

Analyzing Simmons First National Corporation's (SFNC) stock price trends over the past 12 months, or longer, provides insight into market sentiment and company performance. Recent trends may reflect investor reactions to earnings reports, industry developments, and broader economic conditions.

For investors, dividend yield and payout ratios are critical, if applicable:

• Dividend Yield: The dividend yield is the annual dividend payment divided by the stock price, expressed as a percentage. It indicates the return on investment from dividends alone.
• Payout Ratios: This ratio indicates the proportion of earnings paid out as dividends. A sustainable payout ratio ensures the company can continue to pay dividends without straining its finances.

Analyst consensus plays a significant role in valuation assessment. Ratings such as buy, hold, or sell reflect the collective opinion of financial analysts regarding the stock's potential. These ratings often consider factors such as earnings forecasts, growth prospects, and industry trends.

To illustrate, let's consider a hypothetical scenario with sample data for Simmons First National Corporation (SFNC) based on the 2024 fiscal year. Please note that this data is purely illustrative and should not be considered actual financial data.

In this hypothetical scenario, Simmons First National Corporation (SFNC) shows signs of potential undervaluation based on its P/E and P/B ratios. A dividend yield of 3.2% with a 40% payout ratio suggests a sustainable return for investors. However, a 'Hold' consensus from analysts indicates a neutral outlook, suggesting that investors should conduct further research and consider multiple factors before making investment decisions.

For further insights into investor behavior and ownership trends, explore: Exploring Simmons First National Corporation (SFNC) Investor Profile: Who’s Buying and Why?

Simmons First National Corporation (SFNC) Risk Factors

Simmons First National Corporation (SFNC), like all financial institutions, faces a variety of internal and external risks that could significantly impact its financial health. These risks range from industry-specific challenges to broader economic and regulatory factors.

One of the primary external risks is industry competition. The financial services sector is highly competitive, with numerous banks, credit unions, and non-bank financial institutions vying for market share. Increased competition can put pressure on SFNC's net interest margins, as institutions compete on loan rates and deposit yields. Moreover, the rise of fintech companies introduces new competitive dynamics, requiring SFNC to invest in technology and innovation to remain competitive.

Regulatory changes also pose a significant risk. Banks are subject to extensive regulation at both the federal and state levels, and changes in these regulations can impact SFNC's operations and profitability. For instance, changes in capital requirements, lending regulations, or consumer protection laws can necessitate costly adjustments to compliance programs and business practices.

Market conditions represent another critical external risk. Economic downturns, changes in interest rates, and fluctuations in the housing market can all affect SFNC's financial performance. For example, rising interest rates can reduce demand for loans, while a weakening economy can lead to increased loan defaults. Furthermore, changes in investor sentiment and market volatility can impact SFNC's stock price and access to capital markets.

Internally, SFNC faces several operational, financial, and strategic risks. Operational risks include the potential for fraud, cybersecurity breaches, and failures in internal controls. These risks can result in financial losses, reputational damage, and regulatory penalties. To mitigate these risks, SFNC must invest in robust risk management systems and employee training.

Financial risks encompass credit risk, interest rate risk, and liquidity risk. Credit risk is the risk of loan defaults, while interest rate risk is the risk that changes in interest rates will negatively impact earnings. Liquidity risk is the risk that SFNC will be unable to meet its financial obligations as they come due. Effective management of these risks requires careful monitoring of loan portfolios, interest rate exposure, and cash flow projections.

Strategic risks relate to SFNC's business strategy and its ability to adapt to changing market conditions. These risks include the potential for unsuccessful acquisitions, failure to innovate, and loss of key personnel. To mitigate these risks, SFNC must have a clear strategic vision, a strong leadership team, and a culture of innovation.

While specific mitigation strategies or plans were not available in the provided search results, it is common for financial institutions like SFNC to employ a range of risk management techniques, including:

• Diversifying loan portfolios to reduce credit risk.
• Hedging interest rate exposure to manage interest rate risk.
• Maintaining adequate capital levels to absorb potential losses.
• Investing in cybersecurity and fraud prevention measures to mitigate operational risks.
• Regularly reviewing and updating strategic plans to adapt to changing market conditions.

For further insights into Simmons First National Corporation's (SFNC) financial health, you can explore: Breaking Down Simmons First National Corporation (SFNC) Financial Health: Key Insights for Investors

Simmons First National Corporation (SFNC) Growth Opportunities

For Simmons First National Corporation (SFNC), several factors point toward potential future growth. These include strategic initiatives, market conditions, and the company's competitive positioning.

Key growth drivers for SFNC may include:

• Product Innovations: Development and introduction of new financial products and services tailored to meet evolving customer needs.
• Market Expansions: Extending the company's footprint into new geographic markets or customer segments.
• Acquisitions: Strategic acquisitions of other financial institutions or businesses that complement SFNC's existing operations.

While specific revenue growth projections and earnings estimates for SFNC were not available in the provided search results, investors typically look at factors such as:

• Historical financial performance
• Industry trends
• Management guidance
• Analyst estimates

To get a sense of future growth, analyzing past performance and current strategies is essential. Keep in mind that these are all based on publicly available information and general investment principles.

Strategic initiatives and partnerships that may drive future growth could include:

• Technology investments to enhance digital banking capabilities
• Partnerships with fintech companies to offer innovative financial solutions
• Community development programs to strengthen local market presence

Competitive advantages that position SFNC for growth might stem from:

• Strong brand reputation
• Established customer relationships
• Efficient operations
• Effective risk management practices

Here is a look at the basic financials for 2024:

For further insights into the company's values and direction, see: Mission Statement, Vision, & Core Values of Simmons First National Corporation (SFNC).