Company: SFNC
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001628280-25-037719
Chunk: 7

Company: SIMMONS FIRST NATIONAL CORP
Filing Date: 2025-08-05
Form: 10-Q
Item: Part I, Item 2
Chunk 7
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 million decrease in fully tax equivalent interest income, more than offset by a $58.4 million decrease in interest expense.

The decrease in interest income during the six month period ended June 30, 2025 primarily resulted from decreases in interest income on loans and investments. The decrease in interest income on loans was largely attributable to a 9 basis point decline in loan yield that resulted in a decrease of $8.8 million. Loan volume was relatively flat over the comparative periods. The decrease of $19.0 million in interest income on investment securities is primarily related to an $11.0 million decrease in interest income on taxable investment securities due to the decline in our taxable investment portfolio average balances which decreased by $587.0 million or 14.3%, as our portfolio experienced pay downs, maturities and a strategic sale of $251.5 million of lower-yielding available-for-sale (“AFS”) securities to pay off higher rate wholesale fundings consisting of Federal Home Loan Bank (“FHLB”) advances during the third quarter of 2024. A yield decrease in the taxable investment portfolio over the period of 39 basis points led to a decrease of $7.7 million in interest income on taxable investment securities.

The $58.4 million decrease in interest expense is mainly due to the decrease in our deposit account rates over the period. Interest expense decreased $40.2 million due to the decrease in rate of 49 basis points on interest-bearing deposit accounts and $7.9 million due to the decrease in deposit volume over the period. Further, a decrease of $8.3 million in interest expense was related to reductions in the amounts outstanding under and rates on wholesale borrowings sources over the comparative period. We continually monitor and look for opportunities to fairly reprice our deposits while remaining competitive in this current challenging rate environment.

53

Net Interest Margin

Our net interest margin on a fully tax equivalent basis was 3.06% and 3.01% for the three and six month periods ended June 30, 2025, as compared to 2.95% and 2.68% for the three months ended March 31, 2025 and the six months ended June 30, 2024, respectively. Net interest margin experienced an 11 basis point increase for the three months ended June 30, 2025 compared to the preceding sequential quarter, while net interest margin increased 33 basis points during the six months ended June 30, 2025 compared to the six months