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Simmons Reports First Quarter 2020 Earnings

PINE BLUFF, Ark., April 21, 2020 (GLOBE NEWSWIRE) -- Simmons First National Corporation (SFNC) (the “Company” or “Simmons”) today announced net income of $77.2 million for the quarter ended March 31, 2020, compared to $47.7 million for the same period in 2019, an increase of $29.5 million, or 61.9%. Diluted earnings per share were $0.68, an increase of $0.17, or 33.3%, compared to the same period in the prior year. Included in first quarter 2020 results were $965,000 in net after-tax merger-related and branch right-sizing costs as well as a $4.4 million after-tax gain associated with the sale of branches in south Texas.

Excluding the impact of these items, core earnings were $73.8 million for the quarter ended March 31, 2020, compared to $49.1 million for the quarter ended March 31, 2019, an increase of $24.8 million, or 50.5%. Core diluted earnings per share were $0.65, an increase of $0.12, or 22.6%, from the same period in 2019.

“I am very proud of our team and their demonstration of our community banking values during these trying times,” said George A. Makris, Jr., chairman and CEO of Simmons First National Corporation. “Many of our associates could not work from home because they were serving our customers who needed our help.”

Makris continued, “On behalf of Simmons Bank, our customers, and the communities we serve, I would like to thank our healthcare professionals and other front-line workers, along with our federal, state and local officials, who have all responded quickly and with great care to the challenges presented by the pandemic. We believe we are well positioned to help our customers and communities as we come out of these unprecedented times. We have very strong liquidity and capital that we believe should assist Simmons once again in weathering critical economic times. The diversification in our risk profile along with a conservative risk appetite has helped to accommodate the needs of the communities we serve while providing value to our shareholders.”

Selected Highlights:

1st Qtr 2020

4th Qtr 2019

1st Qtr 2019

Net income

$77.2 million

$52.7 million

$47.7 million

Diluted earnings per share

$0.68

$0.49

$0.51

Return on avg assets

1.48%

1.04%

1.19%

Return on avg common equity

10.83%

8.01%

8.60%

Return on tangible common equity (1)

19.00%

14.62%

15.34%

Core earnings (2)

$73.8 million

$71.1 million

$49.1 million

Core diluted earnings per share (2)

$0.65

$0.66

$0.53

Core return on avg assets (2)

1.42%

1.41%

1.22%

Core return on avg common equity (2)

10.35%

10.80%

8.85%

Core return on tangible common equity (1)(2)

18.19%

19.49%

15.76%

Efficiency ratio (3)

56.38%

52.63%

56.76%

  1. Return on tangible common equity excludes goodwill and other intangible assets and is a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.

  2. Core figures exclude non-core items and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.

  3. Efficiency ratio is noninterest expense before foreclosed property expense, amortization of intangibles as a percent of net interest income (fully taxable equivalent) and non-interest revenues, excluding gains and losses from securities transactions and non-core items, and is a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.

Loans

($ in billions)

1st Qtr 2020

4th Qtr 2019

1st Qtr 2019

Total loans

$14.37

$14.43

$11.74

Total loans were $14.4 billion at March 31, 2020, an increase of $2.6 billion, or 22.4%, compared to March 31, 2019, primarily due to the Reliance Bancshares, Inc. and The Landrum Company mergers completed during 2019 (“2019 mergers”). On a linked-quarter basis (March 31, 2020 compared to December 31, 2019), total loans decreased $51.4 million, or 0.4%. During the first quarter 2020, $115 million in loan balances were reclassified associated with the four branches held for sale in Colorado.

Deposits

($ in billions)

1st Qtr 2020

4th Qtr 2019

1st Qtr 2019

Total deposits

$15.6

$16.1

$12.0

Non-time deposits

$12.4

$12.8

$9.3

Time deposits

$3.2

$3.3

$2.7

Total deposits were $15.6 billion at March 31, 2020, an increase of $3.6 billion, or 29.8%, since March 31, 2019, primarily due to the 2019 mergers, but partially offset by the reclassification of $58.4 million of deposits associated with the Colorado branches held for sale.

Net Interest Income

1st Qtr
2020

4th Qtr
2019

3rd Qtr
2019

2nd Qtr
2019

1st Qtr
2019

Loan yield (1)

5.19%

5.43%

5.47%

5.58%

5.53%

Core loan yield (1) (2)

4.86%

5.00%

5.19%

5.26%

5.29%

Security yield (1)

2.63%

2.73%

2.87%

3.06%

3.11%

Cost of interest bearing deposits

1.03%

1.22%

1.40%

1.37%

1.31%

Cost of deposits (3)

0.80%

0.94%

1.09%

1.07%

1.02%

Cost of borrowed funds

2.06%

2.30%

2.52%

2.50%

2.73%

Net interest margin (1)

3.68%

3.78%

3.82%

3.94%

3.86%

Core net interest margin (1) (2)

3.42%

3.44%

3.59%

3.67%

3.68%

  1. Fully tax equivalent using an effective tax rate of 26.135%.

  2. Core loan yield and core net interest margin exclude accretion and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.

  3. Includes non-interest bearing deposits.

The Company’s net interest income for the first quarter of 2020 was $167.5 million, an increase of $31.5 million, or 23.2%, from the same period of 2019 as a result of the 2019 mergers. Included in interest income was the yield accretion recognized on loans acquired of $11.8 million and $6.7 million for the first quarters of 2020 and 2019, respectively.

Net interest margin (FTE) was 3.68% for the quarter ended March 31, 2020, while core net interest margin, which excludes the accretion, was 3.42% for the same period. The decrease in the net interest margin during the first quarter of 2020 was due to a timing difference between the Company’s ability to manage the rate decrease in its variable rate loan portfolio and its repricing of interest bearing deposits in response to the substantial interest rate cuts by the Federal Open Market Committee of the Federal Reserve in March.

Non-Interest Income

Non-interest income for the first quarter of 2020 was $82.4 million, an increase of $47.6 million compared to the same period in the previous year. During the first quarter 2020, the Company sold approximately $1.0 billion in securities resulting in a gain of $30.1 million. In addition, the Company recognized a $5.9 million gain associated with the sale of the branches in south Texas recorded in Other Income, which the Company considers a non-core item.

Selected Non-Interest Income Items
($ in millions)

1st Qtr
2020

4th Qtr
2019

3rd Qtr
2019

2nd Qtr
2019

1st Qtr
2019

Service charges on deposit accounts

$13.3

$13.3

$10.8

$10.6

$10.1

Mortgage lending income

$5.0

$4.0

$4.5

$3.7

$2.8

SBA lending income

$0.3

$0.3

$1.0

$0.9

$0.5

Debit and credit card fees

$7.9

$8.9

$7.1

$7.2

$6.1

Gain on sale of securities

$32.1

$0.4

$7.4

$2.8

$2.7

Other income

$12.8

$7.1

$44.7

$6.1

$4.2

Core other income(1)

$6.9

$7.1

$44.7

$6.1

$4.2

  1. Core figures exclude non-core items and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.

Non-Interest Expense

Non-interest expense for the first quarter of 2020 was $125.8 million, an increase of $24.4 million compared to the first quarter of 2019. Included in this quarter were $1.3 million of pre-tax non-core items for merger-related expenses and branch right-sizing costs. Excluding these expenses, core non-interest expense was $124.5 million for the first quarter of 2020, an increase of $25.0 million compared to the same period in 2019, primarily the result of the 2019 mergers and additional software and technology costs related to the Next Generation Banking (“NGB”) initiative.

The efficiency ratio for the first quarter of 2020 was 56.38% compared to 56.76% for the same period in 2019.

Selected Non-Interest Expense Items
($ in millions)

1st Qtr
2020

4th Qtr
2019

3rd Qtr
2019

2nd Qtr
2019

1st Qtr
2019

Salaries and employee benefits

$67.9

$63.2

$52.1

$56.1

$56.4

Merger related costs

$1.1

$24.8

$2.6

$7.5

$1.5

Other operating expenses

$38.8

$38.0

$37.9

$32.9

$30.1

Core salaries and employee benefits(1)

$67.9

$63.2

$51.9

$53.2

$56.0

Core merger related costs(1)

-

-

-

-

-

Core other operating expenses(1)

$38.6

$38.0

$37.8

$30.0

$30.1

  1. Core figures exclude non-core items and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.

Asset Quality

1st Qtr
2020

4th Qtr
2019

3rd Qtr
2019

2nd Qtr
2019

1st Qtr
2019

Allowance for credit losses to total loans

1.69%

0.47%

0.51%

0.49%

0.52%

Allowance for credit losses to non-performing loans

154%

74%

78%

60%

63%

Non-performing loans to total loans

1.10%

0.64%

0.65%

0.81%

0.81%

Net charge-off ratio (annualized)

0.07%

0.09%

0.59%

0.11%

0.19%

Net charge-off ratio YTD (annualized)

0.07%

0.24%

0.30%

0.15%

0.19%

At March 31, 2020, the allowance for credit losses was $243.2 million. Provision for credit losses for the first quarter of 2020 was $26.1 million.

Foreclosed Assets and Other Real Estate Owned

At March 31, 2020, foreclosed assets and other real estate owned were $20.8 million, an increase of $1.9 million, or 9.8%, compared to the same period in 2019 and an increase of $1.7 million, or 8.8% from December 31, 2019. The increase from year end was primarily due the closure of six branches in conjunction with the February 2020 system conversion of Landmark Bank into Simmons Bank. The composition of these assets is divided into three types:

($ in millions)

1st Qtr
2020

4th Qtr
2019

3rd Qtr
2019

2nd Qtr
2019

1st Qtr
2019

Closed bank branches, branch sites & associate relocation

$8.8

$5.7

$5.9

$6.5

$7.6

Foreclosed assets – acquired

$9.2

$10.3

$10.1

$13.3

$6.2

Foreclosed assets – legacy

$2.8

$3.1

$3.6

$5.0

$5.2

Capital

1st Qtr
2020

4th Qtr
2019

3rd Qtr
2019

2nd Qtr
2019

1st Qtr
2019

Stockholders’ equity to total assets

13.7%

14.1%

14.3%

13.8%

14.3%

Tangible common equity to tangible assets

8.4%

9.0%

9.1%

8.5%

9.0%

Regulatory tier 1 leverage ratio

9.0%

9.6%

9.1%

8.9%

9.1%

Regulatory total risk-based capital ratio

14.1%

13.7%

13.2%

12.7%

13.6%

At March 31, 2020, common stockholders' equity was $2.8 billion. Book value per share was $26.11 and tangible book value per share was $15.22 at March 31, 2020, compared to $26.30 and $15.89, respectively, at December 31, 2019. The ratio of stockholders’ equity to total assets was 13.7% at March 31, 2020, compared to 14.1% at December 31, 2019 while the tangible common equity to tangible assets was 8.4% at March 31, 2020, compared to 9.0% from the previous year-end.

Effective March 4, 2020, the Company’s board of directors approved an amendment to the Company’s stock repurchase program originally approved on October 17, 2019 to increase the amount of common stock that may be repurchased under the program from a maximum of $60 million to $180 million. During the first quarter of 2020, the Company repurchased approximately 4,900,000 shares of its commons stock at an average price of $18.94. No shares have been repurchased since March 31, 2020. Market conditions and our capital needs will drive the decisions regarding additional, future stock repurchases.

Current Expected Credit Losses (“CECL”)

In 2016, new accounting guidance was issued that introduced a new credit loss methodology, the CECL methodology, which requires earlier recognition of credit losses, while also providing additional transparency about credit risk.

The CECL methodology replaces the current incurred loss methodology with a lifetime “expected credit loss” measurement objective for loans, held-to-maturity debt securities and other receivables measured at amortized cost at the time the financial asset is originated or acquired. This standard requires the consideration of historical loss experience and current conditions adjusted for reasonable and supportable economic forecasts. The Company has elected to utilize a blended macroeconomic scenario using a one-year forecast horizon with a subsequent reversion to historical loss experience. Within the life cycle of a loan or other financial asset, this new guidance will generally result in the earlier recognition of the provision for credit losses and the related allowance for credit losses than previous practice. The CECL guidance was effective for the Company as of January 1, 2020. Upon adoption, the Company recorded an additional allowance for credit losses of approximately $151 million and an adjustment to the reserve for unfunded commitments of $24 million with a related $128 million as an adjustment to retained earnings, net of income taxes. The adjustment was based upon the Company’s analysis of current conditions, assumptions and economic forecasts.

COVID-19 Impact

In March 2020, Congress passed the Coronavirus Aid, Relief and Economic Security (“CARES”) Act, which is designed to provide comprehensive relief to individuals and businesses following the unprecedented impact of the COVID-19 pandemic. The CARES Act includes approximately $2 trillion in assistance and a key component is the Paycheck Protection Program (“PPP”), which provides 100% federally guaranteed loans for small businesses to cover up to eight weeks of payroll costs to retain their workforce and assist with mortgage interest, rent and utilities. Notably, these small business loans may be forgiven if borrowers maintain their payrolls and satisfy certain other conditions during the crisis.

In response to the economic hardships associated with the COVID-19 pandemic, as of April 16th, the Company has obtained approval from the SBA for over 3,100 PPP loans totaling over $745 million for existing and new customers. The Company is continually monitoring the PPP and making the necessary adjustments to its own operations.

In addition, the Company has completed or is in the process of modifying more than 3,600 loans totaling over $2.8 billion. The Company is dedicated to supporting its customers and communities throughout this period of uncertainty.

In March and in response to the pandemic, the Company announced temporary closure of 52 branches and has been focusing on the enhanced digital banking experience.

The Company has implemented business continuity plans to help ensure that customers have adequate access to banking services while at the same time working to protect associates through heightened safety procedures. As of March 31, 2020, the Company has approximately $4.7 billion in liquidity sources available and is well capitalized, which management believes should allow the Company to approach the crisis from a position of strength.

Simmons First National Corporation

Simmons First National Corporation is a financial holding company headquartered in Pine Bluff, Arkansas, with total consolidated assets of approximately $20.8 billion as of March 31, 2020, conducting financial operations in Arkansas, Colorado, Illinois, Kansas, Missouri, Oklahoma, Tennessee and Texas. The Company, through its subsidiaries, offers comprehensive financial solutions delivered with a client-centric approach. The Company’s common stock trades on the NASDAQ Market under the symbol “SFNC.”

Conference Call

Management will conduct a live conference call to review this information beginning at 9:00 a.m. CDT today, Tuesday, April 21, 2020. Interested persons can listen to this call by dialing toll-free 1-866-298-7926 (United States and Canada only) and asking for the Simmons First National Corporation conference call, conference ID 5979394. In addition, the call will be available live or in recorded version on the Company’s website at www.simmonsbank.com.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles (GAAP). The Company’s management uses these non-GAAP financial measures in their analysis of the Company’s performance. These measures adjust GAAP performance measures to, among other things, include the tax benefit associated with revenue items that are tax-exempt, as well as exclude from income available to common shareholders certain expenses related to significant non-core activities, including merger-related expenses, gain on sale of branches and branch right-sizing expenses. In addition, the Company also presents certain figures based on tangible common stockholders’ equity and tangible book value, which exclude goodwill and other intangible assets. The Company’s management believes that these non-GAAP financial measures are useful to investors because they present the results of the Company’s ongoing operations without the effect of mergers or other items not central to the Company’s ongoing business, as well as normalizing for tax effects. Management, therefore, believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the tables of this release.

Forward-Looking Statements

Some of the statements in this news release may not be based on historical facts and should be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by reference to future periods or by the use of forward-looking terminology, such as “believe,” “budget,” “expect,” “foresee,” “anticipate,” “intend,” “indicate,” “target,” “estimate,” “plan,” “project,” “continue,” “contemplate,” “positions,” “prospects,” “predict,” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could,” “might” or “may,” or by variations of such words or by similar expressions. These forward-looking statements include, without limitation, statements relating to Simmons’ future growth, revenue, assets, asset quality, profitability, net interest margin, non-interest revenue, share repurchase program, acquisition strategy, NGB initiative, the Company’s ability to recruit and retain key employees, the adequacy of the allowance for credit losses, and the ability of the Company to manage the impact of the COVID-19 pandemic. Any forward-looking statement speaks only as of the date of this news release, and Simmons undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release. By nature, forward-looking statements are based on various assumptions and involve inherent risk and uncertainties. Various factors, including, but not limited to, changes in economic conditions, credit quality, interest rates, loan demand, deposit flows, real estate values, the assumptions used in making the forward-looking statements, the securities markets generally or the price of Simmons common stock specifically, and information technology affecting the financial industry; the effects of the COVID-19 pandemic on, among other things, the Company’s operations, liquidity, and credit quality; general economic and market conditions; unemployment; potential claims, damages, and fines related to litigation or government actions, including litigation or actions arising from the Company’s participation in and administration of programs related to the COVID-19 pandemic (including, among other things, the CARES Act); changes in accounting principles relating to loan loss recognition (CECL); the Company’s ability to manage and successfully integrate its mergers and acquisitions; cyber threats, attacks or events; reliance on third parties for key services; and other factors, many of which are beyond the control of the Company, could cause actual results to differ materially from those contemplated by the forward-looking statements. Additional information on factors that might affect the Company’s financial results is included in its Form 10-K for the year ended December 31, 2019, which has been filed with, and is available from, the U.S. Securities and Exchange Commission.

FOR MORE INFORMATION CONTACT:
Stephen C. Massanelli
EVP, Chief Administrative Officer and Investor Relations Officer
Simmons First National Corporation
steve.massanelli@simmonsbank.com

Simmons First National Corporation

SFNC

Consolidated End of Period Balance Sheets

For the Quarters Ended

Mar 31

Dec 31

Sep 30

Jun 30

Mar 31

(Unaudited)

2020

2019

2019

2019

2019

($ in thousands)

ASSETS

Cash and non-interest bearing balances due from banks

$

244,123

$

277,208

$

161,440

$

145,491

$

151,112

Interest bearing balances due from banks and federal funds sold

1,493,076

719,415

368,530

509,765

340,049

Cash and cash equivalents

1,737,199

996,623

529,970

655,256

491,161

Interest bearing balances due from banks - time

4,309

4,554

5,041

5,041

4,684

Investment securities - held-to-maturity

53,968

40,927

42,237

47,455

61,435

Investment securities - available-for-sale

2,466,640

3,288,343

2,210,931

2,191,573

2,092,637

Mortgage loans held for sale

49,984

58,102

50,099

34,999

18,480

Other assets held for sale

115,315

260,332

383

397

397

Loans:

Loans

14,374,277

14,425,704

13,003,549

13,128,125

11,742,049

Allowance for credit losses on loans

(243,195

)

(68,244

)

(66,590

)

(64,179

)

(60,555

)

Net loans

14,131,082

14,357,460

12,936,959

13,063,946

11,681,494

Premises and equipment

484,990

492,384

378,678

370,551

333,740

Foreclosed assets and other real estate owned

20,805

19,121

19,576

24,761

18,952

Interest receivable

57,039

62,707

53,966

54,781

51,796

Bank owned life insurance

255,197

254,152

234,655

233,345

192,736

Goodwill

1,064,978

1,055,520

926,648

926,450

845,687

Other intangible assets

121,673

127,340

101,149

104,096

88,694

Other assets

278,173

241,578

268,219

224,784

209,746

Total assets

$

20,841,352

$

21,259,143

$

17,758,511

$

17,937,435

$

16,091,639

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:

Non-interest bearing transaction accounts

$

3,572,244

$

3,741,093

$

3,044,330

$

2,954,032

$

2,674,034

Interest bearing transaction accounts and savings deposits

8,840,678

9,090,878

7,337,571

7,258,005

6,666,823

Time deposits

3,146,811

3,276,969

3,086,108

3,304,176

2,648,674

Total deposits

15,559,733

16,108,940

13,468,009

13,516,213

11,989,531

Federal funds purchased and securities sold

under agreements to repurchase

377,859

150,145

116,536

130,470

120,213

Other borrowings

1,396,829

1,297,599

1,098,395

1,324,094

1,169,989

Subordinated notes and debentures

388,396

388,260

354,223

354,132

354,041

Other liabilities held for sale

58,405

159,853

-

162

162

Accrued interest and other liabilities

214,730

165,422

174,277

142,851

155,382

Total liabilities

17,995,952

18,270,219

15,211,440

15,467,922

13,789,318

Stockholders' equity:

Preferred stock

767

767

-

-

-

Common stock

1,090

1,136

966

966

926

Surplus

2,026,420

2,117,282

1,708,058

1,705,262

1,599,566

Undivided profits

778,893

848,848

814,338

747,969

707,829

Accumulated other comprehensive income (loss):

Unrealized accretion (depreciation) on AFS securities

38,230

20,891

23,709

15,316

(6,000

)

Total stockholders' equity

2,845,400

2,988,924

2,547,071

2,469,513

2,302,321

Total liabilities and stockholders' equity

$

20,841,352

$

21,259,143

$

17,758,511

$

17,937,435

$

16,091,639


Simmons First National Corporation

SFNC

Consolidated Statements of Income - Quarter-to-Date

For the Quarters Ended

Mar 31

Dec 31

Sep 30

Jun 30

Mar 31

(Unaudited)

2020

2019

2019

2019

2019

($ in thousands, except per share data)

INTEREST INCOME

Loans

$

187,566

$

193,402

$

179,971

$

178,122

$

159,440

Interest bearing balances due from banks and federal funds sold

2,441

2,625

1,586

1,121

2,154

Investment securities

18,943

16,962

14,467

15,666

16,281

Mortgage loans held for sale

281

402

382

332

210

TOTAL INTEREST INCOME

209,231

213,391

196,406

195,241

178,085

INTEREST EXPENSE

Time deposits

13,323

16,198

15,573

14,606

12,320

Other deposits

17,954

20,331

21,363

20,190

18,430

Federal funds purchased and securities

sold under agreements to repurchase

759

368

249

257

136

Other borrowings

4,877

4,615

5,381

6,219

6,793

Subordinated notes and debentures

4,835

4,813

4,576

4,541

4,411

TOTAL INTEREST EXPENSE

41,748

46,325

47,142

45,813

42,090

NET INTEREST INCOME

167,483

167,066

149,264

149,428

135,995

Provision for credit losses

26,134

4,903

21,973

7,079

9,285

NET INTEREST INCOME AFTER PROVISION

FOR CREDIT LOSSES

141,349

162,163

127,291

142,349

126,710

NON-INTEREST INCOME

Trust income

7,151

7,430

6,108

5,794

5,708

Service charges on deposit accounts

13,328

13,332

10,825

10,557

10,068

Other service charges and fees

1,588

1,915

1,308

1,312

1,289

Mortgage lending income

5,046

4,029

4,509

3,656

2,823

SBA lending income

296

321

956

895

497

Investment banking income

877

822

513

360

618

Debit and credit card fees

7,914

8,920

7,059

7,212

6,098

Bank owned life insurance income

1,298

1,411

1,302

1,260

795

Gain on sale of securities, net

32,095

377

7,374

2,823

2,740

Other income

12,801

7,073

44,721

6,065

4,156

TOTAL NON-INTEREST INCOME

82,394

45,630

84,675

39,934

34,792

NON-INTEREST EXPENSE

Salaries and employee benefits

67,924

63,235

52,065

56,128

56,367

Occupancy expense, net

9,510

9,272

8,342

6,919

7,475

Furniture and equipment expense

5,723

5,758

4,898

4,206

3,358

Other real estate and foreclosure expense

325

1,089

1,125

591

637

Deposit insurance

2,475

(134

)

-

2,510

2,040

Merger-related costs

1,068

24,831

2,556

7,522

1,470

Other operating expenses

38,788

38,044

37,879

32,867

30,062

TOTAL NON-INTEREST EXPENSE

125,813

142,095

106,865

110,743

101,409

NET INCOME BEFORE INCOME TAXES

97,930

65,698

105,101

71,540

60,093

Provision for income taxes

20,694

12,976

23,275

15,616

12,398

NET INCOME

77,236

52,722

81,826

55,924

47,695

Preferred stock dividends

13

13

-

326

-

NET INCOME AVAILABLE TO COMMON STOCKHOLDERS

$

77,223

$

52,709

$

81,826

$

55,598

$

47,695

BASIC EARNINGS PER SHARE

$

0.68

$

0.49

$

0.85

$

0.58

$

0.52

DILUTED EARNINGS PER SHARE

$

0.68

$

0.49

$

0.84

$

0.58

$

0.51


Simmons First National Corporation

SFNC

Consolidated Risk-Based Capital

For the Quarters Ended

Mar 31

Dec 31

Sep 30

Jun 30

Mar 31

(Unaudited)

2020

2019

2019

2019

2019

($ in thousands)

Tier 1 capital


Simmons First National Corporation

SFNC

Consolidated - Selected Financial Data

For the Quarters Ended

Mar 31

Dec 31

Sep 30

Jun 30

Mar 31

(Unaudited)

2020

2019

2019

2019

2019

($ in thousands, except share data)

QUARTER-TO-DATE

Financial Highlights - GAAP

Net Income

$

77,223

$

52,709

$

81,826

$

55,598

$

47,695

Diluted earnings per share

0.68

0.49

0.84

0.58

0.51

Return on average assets

1.48

%

1.04

%

1.83

%

1.28

%

1.19

%

Return on average common equity

10.83

%

8.01

%

13.70

%

9.48

%

8.60

%

Return on tangible common equity

19.00

%

14.62

%

24.89

%

17.40

%

15.34

%

Net interest margin (FTE)

3.68

%

3.78

%

3.82

%

3.94

%

3.86

%

FTE adjustment

2,305

2,172

1,843

1,706

1,601

Amortization of intangibles

3,413

3,270

2,947

2,947

2,641

Amortization of intangibles, net of taxes

2,521

2,416

2,176

2,177

1,951

Average diluted shares outstanding

113,136,995

108,472,559

96,968,775

96,367,857

92,870,813

Shares repurchased under plan

4,922,336

390,000

-

-

-

Average price of shares repurchased

18.95

25.95

-

-

-

Cash dividends declared per common share

0.17

0.16

0.16

0.16

0.16

Financial Highlights - Core (non-GAAP)

Core earnings (excludes non-core items) (1)

$

73,838

$

71,074

$

83,963

$

65,453

$

49,076

Core diluted earnings per share (1)

0.65

0.66

0.87

0.68

0.53

Core net interest margin (FTE) (2)

3.42

%

3.44

%

3.59

%

3.67

%

3.68

%

Accretable yield on acquired loans

11,837

15,100

9,322

10,162

6,660

Efficiency ratio (1)

56.38

%

52.63

%

43.77

%

49.88

%

56.76

%

Core return on average assets (1)

1.42

%

1.41

%

1.88

%

1.51

%

1.22

%

Core return on average common equity (1)

10.35

%

10.80

%

14.06

%

11.16

%

8.85

%

Core return on tangible common equity (1)

18.19

%

19.49

%

25.52

%

20.36

%

15.76

%

YEAR-TO-DATE

Financial Highlights - GAAP

Net Income

$

77,223

$

237,828

$

185,119

$

103,293

$

47,695

Diluted earnings per share

0.68

2.41

1.94

1.09

0.51

Return on average assets

1.48

%

1.33

%

1.44

%

1.24

%

1.19

%

Return on average common equity

10.83

%

9.93

%

10.65

%

9.05

%

8.60

%

Return on tangible common equity

19.00

%

17.99

%

19.27

%

16.38

%

15.34

%

Net interest margin (FTE)

3.68

%

3.85

%

3.88

%

3.90

%

3.86

%

FTE adjustment

2,305

7,322

5,150

3,307

1,601

Amortization of intangibles

3,413

11,805

8,535

5,588

2,641

Amortization of intangibles, net of taxes

2,521

8,720

6,304

4,128

1,951

Average diluted shares outstanding

113,136,995

98,796,628

95,450,732

94,588,739

92,870,813

Cash dividends declared per common share

0.17

0.64

0.48

0.32

0.16

Financial Highlights - Core (non-GAAP)

Core earnings (excludes non-core items) (1)

$

73,838

$

269,566

$

198,492

$

114,529

$

49,076

Core diluted earnings per share (1)

0.65

2.73

2.08

1.21

0.53

Core net interest margin (FTE) (2)

3.42

%

3.59

%

3.64

%

3.68

%

3.68

%

Accretable yield on acquired loans

11,837

41,244

26,144

16,822

6,660

Efficiency ratio (1)

56.38

%

50.33

%

49.49

%

53.14

%

56.76

%

Core return on average assets (1)

1.42

%

1.51

%

1.55

%

1.37

%

1.22

%

Core return on average common equity (1)

10.35

%

11.25

%

11.42

%

10.04

%

8.85

%

Core return on tangible common equity (1)

18.19

%

20.31

%

20.62

%

18.09

%

15.76

%

END OF PERIOD

Book value per share

$

26.11

$

26.30

$

26.36

$

25.57

$

24.87

Tangible book value per share

15.22

15.89

15.73

14.90

14.78

Shares outstanding

108,947,520

113,628,601

96,613,855

96,590,656

92,568,361

Full-time equivalent employees

3,079

3,270

2,701

2,700

2,602

Total number of financial centers

240

251

212

212

191

(1) Core earnings exclude non-core items, which is a non-GAAP measurement. Reconciliations to GAAP are included in the schedules accompanying this release.

(2) Excludes accretable yield adjustment on loans, which is a non-GAAP measurement. Reconciliations to GAAP are included in the schedules accompanying this release.


Simmons First National Corporation

SFNC

Consolidated - Reconciliation of Core Earnings (non-GAAP)

For the Quarters Ended

Mar 31

Dec 31

Sep 30

Jun 30

Mar 31

(Unaudited)

2020

2019

2019

2019

2019

($ in thousands, except per share data)

QUARTER-TO-DATE

Net Income

$

77,223

$

52,709

$

81,826

$

55,598

$

47,695

Non-core items

Gain on sale of branches

(5,889

)

-

-

-

-

Merger-related costs

1,068

24,831

2,556

7,522

1,470

Early retirement program

-

-

177

2,932

355

Branch right-sizing

238

37

160

2,887

45

Tax effect (1)

1,198

(6,503

)

(756

)

(3,486

)

(489

)

Net non-core items

(3,385

)

18,365

2,137

9,855

1,381

Core earnings (non-GAAP)

$

73,838

$

71,074

$

83,963

$

65,453

$

49,076

Diluted earnings per share

$

0.68

$

0.49

$

0.84

$

0.58

$

0.51

Non-core items

Gain on sale of branches

(0.05

)

-

-

-

-

Merger-related costs

0.01

0.23

0.04

0.08

0.02

Early retirement program

-

-

-

0.03

0.01

Branch right-sizing

-

-

-

0.03

-

Tax effect (1)

0.01

(0.06

)

(0.01

)

(0.04

)

(0.01

)

Net non-core items

(0.03

)

0.17

0.03

0.10

0.02

Core diluted earnings per share (non-GAAP)

$

0.65

$

0.66

$

0.87

$

0.68

$

0.53

YEAR-TO-DATE

Net Income

$

77,223

$

237,828

$

185,119

$

103,293

$

47,695

Non-core items

Gain on sale of branches

(5,889

)

-

-

-

-

Merger-related costs

1,068

36,379

11,548

8,992

1,470

Early retirement program

-

3,464

3,464

3,287

355

Branch right-sizing

238

3,129

3,092

2,932

45

Tax effect (1)

1,198

(11,234

)

(4,731

)

(3,975

)

(489

)

Net non-core items

(3,385

)

31,738

13,373

11,236

1,381

Core earnings (non-GAAP)

$

73,838

$

269,566

$

198,492

$

114,529

$

49,076

Diluted earnings per share

$

0.68

$

2.41

$

1.94

$

1.09

$

0.51

Non-core items

Gain on sale of branches

(0.05

)

-

-

-

-

Merger-related costs

0.01

0.37

0.12

0.10

0.02

Early retirement program

-

0.03

0.04

0.03

0.01

Branch right-sizing

-

0.03

0.03

0.03

-

Tax effect (1)

0.01

(0.11

)

(0.05

)

(0.04

)

(0.01

)

Net non-core items

(0.03

)

0.32

0.14

0.12

0.02

Core diluted earnings per share (non-GAAP)

$

0.65

$

2.73

$

2.08

$

1.21

$

0.53

(1) Effective tax rate of 26.135%.

Reconciliation of Selected Non-Core Non-Interest Expense Items (non-GAAP)

QUARTER-TO-DATE

Salaries and employee benefits

$

67,924

$

63,235

$

52,065

$

56,128

$

56,367

Non-core items (1)

-

-

(176

)

(2,937

)

(351

)

Core salaries and employee benefits (non-GAAP)

$

67,924

$

63,235

$

51,889

$

53,191

$

56,016

Merger related costs

$

1,068

$

24,831

$

2,556

$

7,522

$

1,470

Non-core items (1)

(1,068

)

(24,831

)

(2,556

)

(7,522

)

(1,470

)

Core merger related costs (non-GAAP)

$

-

$

-

$

-

$

-

$

-

Other operating expenses

$

38,788

$

38,044

$

37,881

$

32,867

$

30,062

Non-core items (1)

(212

)

(4

)

(90

)

(2,834

)

(10

)

Core other operating expenses (non-GAAP)

$

38,576

$

38,040

$

37,791

$

30,033

$

30,052

(1) Non-core expense items include merger related costs, early retirement program expenses and branch right sizing costs.


Simmons First National Corporation

SFNC

Reconciliation Of Non-GAAP Financial Measures - End of Period

For the Quarters Ended

(Unaudited)

Mar 31

Dec 31

Sept 30

Jun 30

Mar 31

2020

2019

2019

2019

2019

($ in thousands, except per share data)

Calculation of Tangible Common Equity and the Ratio of Tangible Common Equity to Tangible Assets

Total common stockholders' equity

$

2,844,633

$

2,988,157

$

2,547,071

$

2,469,513

$

2,302,321

Intangible assets:

Goodwill

(1,064,978

)

(1,055,520

)

(926,648

)

(926,450

)

(845,687

)

Other intangible assets

(121,673

)

(127,340

)

(101,149

)

(104,096

)

(88,694

)

Total intangibles

(1,186,651

)

(1,182,860

)

(1,027,797

)

(1,030,546

)

(934,381

)

Tangible common stockholders' equity

$

1,657,982

$

1,805,297

$

1,519,274

$

1,438,967

$

1,367,940

Total assets

$

20,841,352

$

21,259,143

$

17,758,511

$

17,937,435

$

16,091,639

Intangible assets:

Goodwill

(1,064,978

)

(1,055,520

)

(926,648

)

(926,450

)

(845,687

)

Other intangible assets

(121,673

)

(127,340

)

(101,149

)

(104,096

)

(88,694

)

Total intangibles

(1,186,651

)

(1,182,860

)

(1,027,797

)

(1,030,546

)

(934,381

)

Tangible assets

$

19,654,701

$

20,076,283

$

16,730,714

$

16,906,889

$

15,157,258

Ratio of equity to assets

13.65

%

14.06

%

14.34

%

13.77

%

14.31

%

Ratio of tangible common equity to tangible assets

8.44

%

8.99

%

9.08

%

8.51

%

9.02

%

Calculation of Tangible Book Value per Share

Total common stockholders' equity

$

2,844,633

$

2,988,157

$

2,547,071

$

2,469,513

$

2,302,321

Intangible assets:

Goodwill

(1,064,978

)

(1,055,520

)

(926,648

)

(926,450

)

(845,687

)

Other intangible assets

(121,673

)

(127,340

)

(101,149

)

(104,096

)

(88,694

)

Total intangibles

(1,186,651

)

(1,182,860

)

(1,027,797

)

(1,030,546

)

(934,381

)

Tangible common stockholders' equity

$

1,657,982

$

1,805,297

$

1,519,274

$

1,438,967

$

1,367,940

Shares of common stock outstanding

108,947,520

113,628,601

96,613,855

96,590,656

92,568,361

Book value per common share

$

26.11

$

26.30

$

26.36

$

25.57

$

24.87

Tangible book value per common share

$

15.22

$

15.89

$

15.73

$

14.90

$

14.78


Simmons First National Corporation

SFNC

Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date

For the Quarters Ended

(Unaudited)

Mar 31

Dec 31

Sept 30

Jun 30

Mar 31

2020

2019

2019

2019

2019

($ in thousands)

Calculation of Core Return on Average Assets

Net income

$

77,223

$

52,709

$

81,826

$

55,598

$

47,695

Net non-core items, net of taxes, adjustment

(3,385

)

18,365

2,137

9,855

1,381

Core earnings

$

73,838

$

71,074

$

83,963

$

65,453

$

49,076

Average total assets

$

20,920,223

$

20,041,890

$

17,720,598

$

17,382,872

$

16,302,197

Return on average assets

1.48

%

1.04

%

1.83

%

1.28

%

1.19

%

Core return on average assets

1.42

%

1.41

%

1.88

%

1.51

%

1.22

%

Calculation of Return on Tangible Common Equity

Net income

$

77,223

$

52,709

$

81,826

$

55,598

$

47,695

Amortization of intangibles, net of taxes

2,521

2,416

2,176

2,177

1,951

Total income available to common stockholders

$

79,744

$

55,125

$

84,002

$

57,775

$

49,646

Net non-core items, net of taxes

(3,385

)

18,365

2,137

9,855

1,381

Core earnings

73,838

71,074

83,963

65,453

49,076

Amortization of intangibles, net of taxes

2,521

2,416

2,176

2,177

1,951

Total core income available to common stockholders

$

76,359

$

73,490

$

86,139

$

67,630

$

51,027

Average common stockholders' equity

$

2,869,177

$

2,611,143

$

2,368,773

$

2,351,603

$

2,248,898

Average intangible assets:

Goodwill

(1,055,498

)

(997,004

)

(926,687

)

(915,445

)

(845,687

)

Other intangibles

(125,746

)

(118,311

)

(103,028

)

(104,050

)

(90,317

)

Total average intangibles

(1,181,244

)

(1,115,315

)

(1,029,715

)

(1,019,495

)

(936,004

)

Average tangible common stockholders' equity

$

1,687,933

$

1,495,828

$

1,339,058

$

1,332,108

$

1,312,894

Return on average common equity

10.83

%

8.01

%

13.70

%

9.48

%

8.60

%

Return on tangible common equity

19.00

%

14.62

%

24.89

%

17.40

%

15.34

%

Core return on average common equity

10.35

%

10.80

%

14.06

%

11.16

%

8.85

%

Core return on tangible common equity

18.19

%

19.49

%

25.52

%

20.36

%

15.76

%

Calculation of Efficiency Ratio (1)

Non-interest expense

$

125,813

$

142,095

$

106,865

$

110,743

$

101,409

Non-core non-interest expense adjustment

(1,306

)

(24,868

)

(2,893

)

(13,341

)

(1,870

)

Other real estate and foreclosure expense adjustment

(319

)

(1,063

)

(1,057

)

(563

)

(599

)

Amortization of intangibles adjustment

(3,413

)

(3,270

)

(2,947

)

(2,947

)

(2,641

)

Efficiency ratio numerator

$

120,775

$

112,894

$

99,968

$

93,892

$

96,299

Net-interest income

$

167,483

$

167,066

$

149,264

$

149,428

$

135,995

Non-interest income

82,394

45,630

84,675

39,934

34,792

Fully tax-equivalent adjustment

2,305

2,172

1,843

1,706

1,601

Gain on sale of securities

(32,095

)

(377

)

(7,374

)

(2,823

)

(2,740

)

Efficiency ratio denominator

$

214,198

$

214,491

$

228,408

$

188,245

$

169,648

Efficiency ratio (1)

56.38

%

52.63

%

43.77

%

49.88

%

56.76

%

Calculation of Core Net Interest Margin

Net interest income

$

167,483

$

167,066

$

149,264

$

149,428

$

135,995

Fully tax-equivalent adjustment

2,305

2,172

1,843

1,706

1,601

Fully tax-equivalent net interest income

169,788

169,238

151,107

151,134

137,596

Total accretable yield

(11,837

)

(15,100

)

(9,322

)

(10,162

)

(6,660

)

Core net interest income

$

157,951

$

154,138

$

141,785

$

140,972

$

130,936

Average earning assets

$

18,581,491

$

17,753,004

$

15,680,665

$

15,389,670

$

14,440,091

Net interest margin

3.68

%

3.78

%

3.82

%

3.94

%

3.86

%

Core net interest margin

3.42

%

3.44

%

3.59

%

3.67

%

3.68

%

Calculation of Core Loan Yield

Loan interest income

$

187,566

$

193,402

$

179,971

$

178,122

$

159,440

Total accretable yield

(11,837

)

(15,100

)

(9,322

)

(10,162

)

(6,660

)

Core loan interest income

$

175,729

$

178,302

$

170,649

$

167,960

$

152,780

Average loan balance

$

14,548,853

$

14,144,703

$

13,053,540

$

12,814,386

$

11,711,387

Core loan yield

4.86

%

5.00

%

5.19

%

5.26

%

5.29

%

(1) Efficiency ratio is non-interest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and non-interest revenues, excluding gains and losses from securities transactions and non-core items.


Simmons First National Corporation

SFNC

Reconciliation Of Non-GAAP Financial Measures - Year-to-Date

For the Quarters Ended

(Unaudited)

Mar 31

Dec 31

Sept 30

Jun 30

Mar 31

2020

2019

2019

2019

2019

($ in thousands)

Calculation of Core Return on Average Assets

Net income

$

77,223

$

237,828

$

185,119

$

103,293

$

47,695

Net non-core items, net of taxes, adjustment

(3,385

)

31,738

13,373

11,236

1,381

Core earnings

$

73,838

$

269,566

$

198,492

$

114,529

$

49,076

Average total assets

$

20,920,223

$

17,871,748

$

17,140,419

$

16,845,528

$

16,302,197

Return on average assets

1.48

%

1.33

%

1.44

%

1.24

%

1.19

%

Core return on average assets

1.42

%

1.51

%

1.55

%

1.37

%

1.22

%

Calculation of Return on Tangible Common Equity

Net income

$

77,223

$

237,828

$

185,119

$

103,293

$

47,695

Amortization of intangibles, net of taxes

2,521

8,720

6,304

4,128

1,951

Total income available to common stockholders

$

79,744

$

246,548

$

191,423

$

107,421

$

49,646

Net non-core items, net of taxes

(3,385

)

31,738

13,373

11,236

1,381

Core earnings

73,838

269,566

198,492

114,529

49,076

Amortization of intangibles, net of taxes

2,521

8,720

6,304

4,128

1,951

Total core income available to common stockholders

$

76,359

$

278,286

$

204,796

$

118,657

$

51,027

Average common stockholders' equity

$

2,869,177

$

2,396,024

$

2,323,530

$

2,300,535

$

2,248,898

Average intangible assets:

Goodwill

(1,055,498

)

(921,635

)

(896,236

)

(880,759

)

(845,688

)

Other intangibles

(125,746

)

(104,000

)

(99,178

)

(97,221

)

(90,316

)

Total average intangibles

(1,181,244

)

(1,025,635

)

(995,414

)

(977,980

)

(936,004

)

Average tangible common stockholders' equity

$

1,687,933

$

1,370,389

$

1,328,116

$

1,322,555

$

1,312,894

Return on average common equity

10.83

%

9.93

%

10.65

%

9.05

%

8.60

%

Return on tangible common equity

19.00

%

17.99

%

19.27

%

16.38

%

15.34

%

Core return on average common equity

10.35

%

11.25

%

11.42

%

10.04

%

8.85

%

Core return on tangible common equity

18.19

%

20.31

%

20.62

%

18.09

%

15.76

%

Calculation of Efficiency Ratio (1)

Non-interest expense

$

125,813

$

461,112

$

319,017

$

212,152

$

101,409

Non-core non-interest expense adjustment

(1,306

)

(42,972

)

(18,104

)

(15,211

)

(1,870

)

Other real estate and foreclosure expense adjustment

(319

)

(3,282

)

(2,219

)

(1,162

)

(599

)

Amortization of intangibles adjustment

(3,413

)

(11,805

)

(8,535

)

(5,588

)

(2,641

)

Efficiency ratio numerator

$

120,775

$

403,053

$

290,159

$

190,191

$

96,299

Net-interest income

$

167,483

$

601,753

$

434,687

$

285,423

$

135,995

Non-interest income

82,394

205,031

159,401

74,726

34,792

Fully tax-equivalent adjustment

2,305

7,322

5,150

3,307

1,601

Gain on sale of securities

(32,095

)

(13,314

)

(12,937

)

(5,563

)

(2,740

)

Efficiency ratio denominator

$

214,198

$

800,792

$

586,301

$

357,893

$

169,648

Efficiency ratio (1)

56.38

%

50.33

%

49.49

%

53.14

%

56.76

%

Calculation of Core Net Interest Margin

Net interest income

$

167,483

$

601,753

$

434,687

$

285,423

$

135,995

Fully tax-equivalent adjustment

2,305

7,322

5,150

3,307

1,601

Fully tax-equivalent net interest income

169,788

609,075

439,837

288,730

137,596

Total accretable yield

(11,837

)

(41,244

)

(26,144

)

(16,822

)

(6,660

)

Core net interest income

$

157,951

$

567,831

$

413,693

$

271,908

$

130,936

Average earning assets

$

18,581,491

$

15,824,571

$

15,174,671

$

14,917,493

$

14,440,091

Net interest margin

3.68

%

3.85

%

3.88

%

3.90

%

3.86

%

Core net interest margin

3.42

%

3.59

%

3.64

%

3.68

%

3.68

%

Calculation of Core Loan Yield

Loan interest income

$

187,566

$

710,935

$

517,533

$

337,562

$

159,440

Total accretable yield

(11,837

)

(41,244

)

(26,144

)

(16,822

)

(6,660

)

Core loan interest income

$

175,729

$

669,691

$

491,389

$

320,740

$

152,780

Average loan balance

$

14,548,853

$

12,938,013

$

12,531,355

$

12,265,936

$

11,711,387

Core loan yield

4.86

%

5.18

%

5.24

%

5.27

%

5.29

%

(1) Efficiency ratio is non-interest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and non-interest revenues, excluding gains and losses from securities transactions and non-core items.