Company: SFNC
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001628280-25-023690
Chunk: 6

Company: SIMMONS FIRST NATIONAL CORP
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 2
Chunk 6
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 was primarily the result of an $18.2 million decrease in fully tax equivalent interest income, partially offset by a $16.6 million decrease in interest expense.

The decrease in interest income on a fully taxable equivalent basis primarily resulted from a $15.0 million decrease in interest income on loans, coupled with a decrease of $2.9 million in interest income on investment securities. The decrease in interest income provided by loans reflects a decrease attributable to loan volume of $4.6 million, coupled with a $10.4 million decrease in interest income related to loan yield. The loan yield for the first quarter of 2025 was 6.20% compared to 6.32% from the preceding sequential quarter, representing a 12 basis point decrease. The decrease in interest income on investment securities was primarily related to a $2.0 million decrease in interest income on taxable investment securities due to yield decreases of 15 basis points, combined with an $862,000 decrease attributable to volume related to our taxable investment portfolio, as our portfolio experienced pay downs and maturities during the three months ended March 31, 2025. The decrease in earning asset yields on a linked quarter basis was primarily driven by interest rate cuts at the end of 2024.

The $16.6 million decrease in interest expense is mostly due to the $11.4 million decrease related to deposit rates, largely due to the 23 basis point decrease related to deposit accounts, corresponding with the rate cuts mentioned previously. Also contributing to the decrease in interest expense over the comparative quarters are reductions in the outstanding balances under and rates on wholesale borrowings sources, which led to a $3.7 million decrease in interest expense during the quarter.

Net Interest Income - Year-over-Year Analysis

Net interest income on a fully taxable equivalent basis for the three month period ended March 31, 2025 increased $11.5 million, or 7.3%, over the same period in 2024. The increase in net interest income on a fully taxable equivalent basis was the result of a $14.8 million decrease in fully tax equivalent interest income, more than offset by a $26.3 million decrease in interest expense.

The decrease in interest income during the three month period ended March 31, 2025 primarily resulted from decreases in interest income on loans and investments. The decrease in interest income on loans was largely attributable to a 4 basis point decline in loan yield that resulted in a decrease of $4.1 million. Loan