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Simmons First National NASDAQ: SFNC executives said the bank is seeing early progress from deposit, lending and efficiency initiatives, while cautioning that competition for deposits and loans remains intense across its markets.During the company’s second quarter 2026 earnings call, President and CEO Jay Brogdon and CFO Daniel Hobbs described a quarter marked by higher-quality deposit growth, strong loan production, continued expense discipline and ongoing investments in talent and technology. Management also said it remains comfortable with several full-year outlook items issued earlier in the year.
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Deposit growth remains a strategic focus Hobbs said deposits remain “one of our biggest focuses strategically” and will likely be an area of significant investment over the next 12 to 24 months. He pointed to 4% annualized growth in non-interest-bearing deposits during the second quarter, calling those balances the “highest quality” deposits. Hobbs also said average balances in interest-bearing money market and savings accounts grew, even though ending balances declined.
The bank is seeing early results from marketing campaigns, efforts to attract new customers, work to deepen existing relationships and initiatives to reduce attrition, Hobbs said. He added that Simmons had more inflows from new customer balances than outflows during the quarter. Checking accounts grew more than 1% both year over year and linked quarter, which Hobbs said was evidence that deposit initiatives are beginning to pay off.
Brogdon said the competitive environment remains challenging. “Deposit competition is very, very fierce,” he said, adding that he expects that backdrop to continue. He said the bank’s ability to grow in higher-quality funding categories despite that environment was encouraging.
Hobbs said Simmons is taking an opportunistic approach to wholesale funding, including brokered deposits and Federal Home Loan Bank borrowings. He said the company leaned more into FHLB funding during the quarter because pricing was more advantageous, while remaining short duration in both brokered deposits and borrowings.
Loan production strengthens, but management says it will not stretch for growth Brogdon said he remains encouraged by loan growth. Simmons previously provided a low- to mid-single-digit loan growth outlook for 2026, and Brogdon said the bank was at roughly 7% annualized loan growth year to date, placing it near the top end of that outlook halfway through the year.
Second-quarter loan growth was not as strong as the first quarter, but Brogdon said that was not due to weak production. He said quarterly committed production was near a four-year high and fit within the bank’s credit underwriting and pricing standards. Production was partially offset by an expected level of paydowns.
Brogdon said unfunded commitments increased due to recent production, and the loan pipeline remains healthy across the company’s footprint and asset classes. However, he emphasized that Simmons will remain disciplined. “We’re not going to stretch for growth right now,” he said.
On loan pricing, Brogdon said competition has been intense, with Simmons missing some opportunities because other banks were willing to price more aggressively. He said the bank will continue to focus on relationship profitability and returns on invested capital.
Management also highlighted a potential tailwind from fixed-rate loan repricing. Brogdon noted that Simmons has $1.8 billion of fixed-rate loans repricing over the next 12 months with an average yield below 4%, calling that “back book tailwind” meaningful.
Expense outlook improves as investments continue Brogdon said Simmons remains comfortable with its full-year guidance for net interest income growth of 9% to 11% and said the bank is “very comfortable” at the top end of that range. He also said Simmons remains comfortable with its fee and non-interest expense guidance, and expects to beat its earlier non-interest expense growth outlook of 2% to 3% for the year.
Overall, Brogdon said he expects the company to exceed its prior expectations for more than 5% positive operating leverage and strong year-over-year pre-provision net revenue growth in 2026.
Hobbs said the improved expense outlook includes significant investments. Simmons reduced square footage by another 2.5% during the quarter, bringing the total reduction to 8.5% since the start of the initiative. He said the company’s goal is to reduce square footage by 15%, with meaningful opportunities in corporate space as well as branches.
Management also cited process improvement opportunities across the front, middle and back office. Brogdon said Simmons is investing heavily in talent and technology while using internal savings to help fund those initiatives.
Credit trends remain in focus Asked about an increase in nonperforming assets related to a four-family construction borrower, Brogdon said the relationship “certainly sticks out” among the bank’s larger nonperforming loans. He said timing for resolution is difficult to predict and could extend into next year, but added that Simmons is devoting significant effort to resolving the matter.
Brogdon said the broader credit backdrop shows some healthy migration, including declining criticized and classified loans and past dues moderating toward historical norms. He said those trends should be a leading indicator for the credit outlook.
Simmons previously provided an outlook of approximately 25 basis points in annual net charge-offs for 2026. Brogdon said the company remains below that level through the first half of the year and does not currently know of anything that would cause it to change that outlook.
Capital, hiring and deposit costs Brogdon said Simmons will continue to be opportunistic with share repurchases, while prioritizing investments in the business and organic growth. An analyst referenced $161 million remaining under the company’s authorization, and Brogdon said management has put more “pencil to paper” on returning some excess capital through buybacks given its forward returns outlook.
Executives also discussed recent hiring. COO Chris Van Steenberg said teams and individuals brought into the company this year are already generating meaningful wins, including in wealth-related balances and deposits. Brogdon said he was excited about bringing Jim Recer into the business, in response to a question about the bank’s commercial and industrial opportunity.
On deposit costs, Hobbs said Simmons exited the quarter at about 1.90%, compared with a quarterly average of 1.93%. He said there may be one more quarter of benefit if rates remain flat, but a rate increase at the October 2026 Federal Reserve meeting would change that trajectory. If rates stay flat, he said deposit costs would likely hover around 1.90% to 1.95%, though investments in pricing and marketing could affect that range.
In closing remarks, Brogdon said Simmons has “significant untapped efficiency and potential” and is shifting from tactical cost efforts toward more strategic work around organizational structure, process engineering and technology. He said those investments are intended to help the bank deliver an operating model capable of reaching or exceeding its long-range return targets.
About Simmons First National (NASDAQ:SFNC)Simmons First National Corporation NASDAQ: SFNC is a bank holding company headquartered in Pine Bluff, Arkansas. Through its primary operating subsidiary, Simmons Bank, the company maintains a network of more than 200 branches across Arkansas, Tennessee, Missouri, Mississippi, Texas, Oklahoma and North Carolina. Simmons First National offers a full suite of financial services to individuals, small businesses and commercial clients, emphasizing relationship-driven community banking.
The company's core business activities span deposit-taking, lending and payment services.
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