Company: SFNC
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001628280-25-023690
Chunk: 233

Company: SIMMONS FIRST NATIONAL CORP
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 8
Chunk 233
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 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 46 basis points led to a decrease of $4.7 million in interest income on taxable investment securities.

50

The $26.3 million decrease in interest expense is mainly due to the decrease in our deposit account rates over the period. Interest expense decreased $18.6 million due to the decrease in rate of 43 basis points on interest-bearing deposit accounts and $2.8 million due to the decrease in deposit volume over the period. Further, a decrease of $3.9 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.

Net Interest Margin

Our net interest margin on a fully tax equivalent basis was 2.95% for the three month period ended March 31, 2025, as compared to 2.87% and 2.66% for the three months ended December 31, 2024 and the three months ended March 31, 2024, respectively. Net interest margin experienced an 8 basis point increase for the three months ended March 31, 2025 compared to the preceding sequential quarter, while net interest margin increased 29 basis points during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase over both comparative periods was primarily due to lower deposits costs, as well as the reduced rate and use of wholesale funding that more than offset a decline on the yield and volume of earning assets. The increase when compared to the same period in the prior year was also aided by the strategic sale of lower-yielding AFS investment securities during the third quarter of 2024.

Net Interest Income Tables

Tables 1 and 2 reflect an analysis of net interest income on a fully taxable equivalent basis for the three months ended March 31, 2025, December 31, 2024 and March 31, 2024, respectively.

Table 1: Analysis of Net Interest Margin

(FTE = Fully Taxable Equivalent using an effective tax rate of 26.135%)

 Three Months EndedMarch 31,December 31, March 31,(In thousands)202520242024Interest income$