Company: SFNC
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001628280-25-050112
Chunk: 263

Company: SIMMONS FIRST NATIONAL CORP
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 263
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 decrease of $13.8 million, while the incremental decrease in loan volume over the comparative periods led to a decrease of $4.2 million. The decrease of $37.4 million in interest income on investment securities is primarily related to a $33.6 million decrease in interest income on investment securities due to the decline in our investment portfolio average balances, which decreased by $1.24 billion or 18.6%, primarily related to the balance sheet repositioning previously discussed, coupled with pay downs, maturities and a strategic sale of $251.5 million of lower-yielding 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 18 basis points led to a decrease of $5.5 million in interest income on taxable investment securities.

The $108.2 million decrease in interest expense is mainly due to the decrease in our deposit account rates over the period. Interest expense decreased $64.1 million due to the decrease in rate of 55 basis points on interest-bearing deposit accounts. A $23.3 million decrease in interest income was related to the decrease in time deposit volume over the period. Further, a decrease of $22.5 million in interest expense was related to reductions in the amounts outstanding under and rates on wholesale borrowings sources over the comparative period. The decline in wholesale borrowings volume, including brokered time deposits, is largely due to the balance sheet repositioning. 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 3.50% and 3.17% for the three and nine month periods ended September 30, 2025, as compared to 3.06% and 2.70% for the three months ended June 30, 2025 and the nine months ended September 30, 2024, respectively. Net interest margin experienced a 44 basis point increase for the three months ended September 30, 2025 compared to the preceding sequential quarter, while net interest margin increased 47 basis points during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase on a linked quarter basis was primarily due to the balance sheet repositioning during the period. The increase