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Simmons Reports Record 2019 Earnings

PINE BLUFF, Ark., Jan. 23, 2020 (GLOBE NEWSWIRE) -- Simmons First National Corporation (SFNC) today announced net income of $237.8 million for the year ended December 31, 2019, compared to $215.7 million for 2018, an increase of $22.1 million, or 10.3%. Diluted earnings per share were $2.41 for 2019, an increase of $0.09, or 3.9%, compared to prior year. Included in the 2019 results were $31.7 million in net after-tax merger-related, early retirement program and branch right-sizing costs. Excluding the impact of these items, core earnings were $269.6 million for the year ended December 31, 2019, compared to $220.2 million for 2018, an increase of $49.3 million, or 22.4%. Core diluted earnings per share were $2.73, an increase of $0.36, or 15.2%, from the same period in 2018.

Fourth quarter 2019 net income was $52.7 million, or $0.49 diluted earnings per share, compared to $55.6 million, or $0.60 diluted earnings per share, for the same period in 2018. Excluding $18.4 million in net after-tax merger-related and branch right-sizing costs, fourth quarter 2019 core earnings were $71.1 million, an increase of $14.6 million compared to the same period last year. Core diluted earnings per share were $0.66, an increase of $0.05, or 8.2%, from the same period in 2018.

“We are very proud of our results for 2019,” said George A. Makris, Jr., chairman and CEO of Simmons First National Corporation. “Not only did we produce excellent financial results, we welcomed new associates from Reliance Bank in St. Louis and Landmark Bank in Columbia, MO to the Simmons family.

“From time to time we tend to be focused more on specific metrics within our financial performance and lose sight of the bigger picture results. In retrospect, our performance in 2019 was remarkable. We achieved a return on assets of 1.33% and a core return on assets of 1.51%, which exceeded our target of 1.50%. We produced a 9.9% return on common equity with an 18.0% return on tangible common equity and a 20.3% core return on tangible common equity. We operated at an efficiency ratio of 50.3%, which is within our target range of 50-55%. Our construction and development concentration went from 105% at the end of the second quarter to 98% at year-end while our commercial real estate concentration was lowered from 333% at the end of the second quarter to 293% at year-end – both ratios now below the regulatory guidelines. And importantly, our book value per share rose 8.1% while our tangible book value per share rose 12.1% during a time when we completed two acquisitions – Reliance Bank in St. Louis and Landmark Bank in Columbia, MO – which added $4.9 billion in assets and we repurchased $10 million of our stock.”

Makris continued, “During 2020, we will continue to implement our technology initiatives, including the expansion of our digital offerings, and adjust our business strategy to take advantage of our successful growth over the past few years. I am extremely optimistic about the future of Simmons Bank.”

Selected Highlights:

YTD 2019

YTD 2018

4th Qtr 2019

4th Qtr 2018

Net income

$237.8 million

$215.7 million

$52.7 million

$55.6 million

Diluted earnings per share

$2.41

$2.32

$0.49

$0.60

Return on avg assets

1.33%

1.37%

1.04%

1.35%

Return on avg common equity

9.93%

10.00%

8.01%

9.98%

Return on tangible common equity (1)

17.99%

18.44%

14.62%

17.96%

Core earnings (2)

$269.6 million

$220.2 million

$71.1 million

$56.5 million

Core diluted earnings per share (2)

$2.73

$2.37

$0.66

$0.61

Core return on avg assets (2)

1.51%

1.40%

1.41%

1.37%

Core return on avg common equity (2)

11.25%

10.21%

10.80%

10.13%

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

20.31%

18.81%

19.50%

18.21%

Efficiency ratio (3)

50.33%

52.85%

52.63%

51.99%

  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 earnings excludes non-core items, and is a non-GAAP measurement. 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 noninterest 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)

4th Qtr 2019

3rd Qtr 2019

4th Qtr 2018

Total loans

$14.4

$13.0

$11.7

Legacy loans (excludes loans acquired)

$9.6

$9.6

$8.4

Loans acquired

$4.8

$3.4

$3.3

Total loans, including those acquired, were $14.4 billion at December 31, 2019, an increase of $2.7 billion, or 23.0%, compared to December 31, 2018, primarily due to The Landrum Company and Reliance Bank mergers completed during the fourth and second quarters of 2019, respectively. On a linked-quarter basis (December 31, 2019 compared to September 30, 2019), total loans increased $1.4 billion, or 10.9%, from the fourth quarter merger. The increase was partially offset by the reclassification of $260 million in loan balances associated with the branches held for sale in south Texas.

Deposits

($ in billions)

4th Qtr 2019

3rd Qtr 2019

4th Qtr 2018

Total deposits

$16.1

$13.5

$12.4

Non-time deposits

$12.8

$10.4

$9.5

Time deposits

$3.3

$3.1

$2.9

Total deposits were $16.1 billion at December 31, 2019, an increase of $3.7 billion, or 29.9%, since December 31, 2018, primarily due to the 2019 mergers partially offset by the reclassification of $160 million of deposits associated with the branches held for sale.

Net Interest Income

4th Qtr
2019

3rd Qtr
2019

2nd Qtr
2019

1st Qtr
2019

4th Qtr
2018

Loan yield (1)

5.43

%

5.47

%

5.58

%

5.53

%

5.39

%

Core loan yield (1) (2)

5.00

%

5.19

%

5.26

%

5.29

%

5.25

%

Security yield (1)

2.67

%

2.83

%

3.02

%

3.09

%

2.87

%

Cost of interest bearing deposits

1.22

%

1.40

%

1.37

%

1.31

%

1.20

%

Cost of deposits (3)

0.94

%

1.09

%

1.07

%

1.02

%

0.93

%

Cost of borrowed funds

2.30

%

2.52

%

2.50

%

2.73

%

2.64

%

Net interest margin (1)

3.76

%

3.81

%

3.92

%

3.85

%

3.76

%

Core net interest margin (1) (2)

3.43

%

3.58

%

3.66

%

3.67

%

3.66

%

  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 fourth quarter of 2019 was $167.7 million, an increase of $29.9 million, or 21.7%, from the same period of 2018. Included in interest income was the yield accretion recognized on loans acquired of $15.1 million and $3.9 million for the fourth quarters of 2019 and 2018, respectively. Of this quarter’s yield accretion, 52% was accretable credit mark related and 48% was interest mark related.

Net interest margin (FTE) was 3.76% for the quarter ended December 31, 2019, while core net interest margin, which excludes the accretion, was 3.43% for the same period.

Non-Interest Income

Non-interest income for 2019 was $201.5 million, an increase of $57.6 million compared to the previous year. The increase was primarily due to the gain on sale of the Visa Inc. class B common stock of $42.9 million that was completed during the third quarter 2019. Additionally, during 2019 the Company was focused on rebalancing its investment portfolio and consequently recognized additional gains on the sale of securities.

Non-interest income for the fourth quarter of 2019 was $45.0 million, an increase of $10.4 million compared to the same period in the previous year. The increase was due to additional income within most non-interest income categories as a result of The Landrum Company and Reliance Bank mergers completed during 2019.

Selected Non-Interest Income Items
($ in millions)


YTD 2019


YTD 2018


4th Qtr 2019


4th Qtr 2018

Service charges on deposit accounts

$44.8

$42.5

$13.3

$11.3

Mortgage lending income

$15.0

$9.2

$4.0

$1.5

SBA lending income

$2.7

$1.8

$0.3

$0.2

Debit and credit card fees

$29.3

$32.3

$8.9

$6.5

Gain on sale of securities

$13.3

$0.1

$0.4

-

Other income

$58.5

$19.9

$6.4

$5.7

Non-Interest Expense

Non-interest expense for 2019 was $461.1 million, an increase of $68.9 million compared to the previous year. Included in 2019 were $43.0 million of pre-tax non-core items, that mostly consisted of merger-related costs. Excluding these expenses, core non-interest expense was $418.1 million, an increase of $32.0 million compared to 2018 core non-interest expense. The increase was primarily due to the incremental costs associated with the 2019 mergers and the Next Generation Banking (“NGB”) technology initiative. The Company recognized an additional $11.4 million in software and technology expense related to its NGB initiative in 2019.

Non-interest expense for the fourth quarter of 2019 was $142.1 million, an increase of $46.7 million compared to the fourth quarter of 2018. Included in this quarter were $24.9 million of pre-tax non-core items. Excluding these expenses, core non-interest expense was $117.2 million for the fourth quarter of 2019, an increase of $22.9 million compared to the same period in 2018, primarily the result of the 2019 mergers and additional software and technology costs related to the NGB initiative.

The efficiency ratio for 2019 was 50.33% compared to 52.85% for 2018.

Selected Non-Interest Expense Items
($ in millions)


YTD 2019


YTD 2018


4th Qtr 2019


4th Qtr 2018

Salaries and employee benefits

$227.8

$216.7

$63.2

$49.2

Merger related costs

$36.4

$4.8

$24.8

$0.8

Other operating expenses

$138.9

$111.6

$38.0

$30.2

Core salaries and employee benefits(1)

$224.3

$216.6

$63.2

$49.1

Core merger related costs(1)

-

-

-

-

Core other operating expenses(1)

$135.9

$110.7

$38.0

$30.3

(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

4th Qtr
2019

3rd Qtr
2019

2nd Qtr
2019

1st Qtr
2019

4th Qtr
2018

Allowance for loan losses to total loans

0.70

%

0.68

%

0.68

%

0.68

%

0.67

%

Allowance for loan losses to non-performing loans

95

%

91

%

101

%

97

%

164

%

Non-performing loans to total loans

0.74

%

0.76

%

0.67

%

0.70

%

0.41

%

Net charge-off ratio (annualized)

0.12

%

0.78

%

0.14

%

0.20

%

0.35

%

Net charge-off ratio YTD (annualized)

0.31

%

0.38

%

0.17

%

0.20

%

0.28

%

All loans acquired are recorded at their discounted net present value; therefore, they are excluded from the computations of the asset quality ratios for the legacy loan portfolio, except for their inclusion in total assets.

At December 31, 2019, the allowance for loan losses for legacy loans was $67.8 million. The allowance for loan losses for loans acquired was $444,000 and the acquired loan discount mark was $87.3 million. The allowance for loan losses and discount mark provides a total of $155.5 million of coverage, which equates to a total coverage ratio of 1.07% of gross loans. The ratio of discount mark and related allowance to loans acquired was 1.80%.

Provision for loan losses for 2019 was $43.2 million, an increase of $5.1 million from 2018. Provision for loan losses for the fourth quarter 2019 was $4.9 million, a decrease of $4.7 million when compared to the same period of 2018.

Foreclosed Assets and Other Real Estate Owned

At December 31, 2019, foreclosed assets and other real estate owned were $19.1 million, a decrease of $6.4 million, or 25.2%, compared to year end 2018. The composition of these assets is divided into three types:



($ in millions)

4th Qtr
2019

3rd Qtr
2019

2nd Qtr
2019

1st Qtr
2019

4th Qtr
2018

Closed bank branches, branch sites & associate relocation

$5.7

$5.9

$6.5

$7.6

$8.0

Foreclosed assets - acquired

$10.3

$10.1

$13.3

$6.2

$11.5

Foreclosed assets – legacy

$3.1

$3.6

$5.0

$5.2

$6.1

Capital

4th Qtr
2019

3rd Qtr
2019

2nd Qtr
2019

1st Qtr
2019

4th Qtr
2018

Stockholders’ equity to total assets

14.1

%

14.3

%

13.8

%

14.3

%

13.6

%

Tangible common equity to tangible assets

9.0

%

9.1

%

8.5

%

9.0

%

8.4

%

Regulatory tier 1 leverage ratio

9.6

%

9.1

%

8.9

%

9.1

%

8.8

%

Regulatory total risk-based capital ratio

13.6

%

13.2

%

12.7

%

13.6

%

13.3

%

At December 31, 2019, common stockholders' equity was $3.0 billion. Book value per share was $26.30 and tangible book value per share was $15.89 at December 31, 2019, compared to $24.33 and $14.18, respectively, at December 31, 2018. The ratio of tangible common equity to tangible assets was 9.0% at December 31, 2019, compared to 8.4% from the previous year-end.

During the fourth quarter of 2019, the Company repurchased approximately 400,000 shares at an average price of $25.97.

Management Changes

The Company also announced today that Marty Casteel, a Company director and senior executive vice president, as well as the chairman, president, and chief executive officer of the Company’s subsidiary bank, Simmons Bank, will retire from his employment with the Company and Simmons Bank, effective March 31, 2020. Casteel will continue to serve as a director of both the Company and Simmons Bank. “For over thirty years, Marty has been a critical component of Simmons’ success,” said Makris. “With deep knowledge, experience, and integrity, Marty has provided incredible leadership to our organization and masterfully overseen its recent transformation through acquisitions with great care and compassion for all involved. I am personally extremely grateful for his presence and counsel during my tenure with this company, and I am thankful Marty has agreed to remain affiliated with it as a director. On behalf of everyone at Simmons, I’d like to congratulate Marty on a job very well done and wish him the best as he begins his next chapter.” Upon Casteel’s retirement, Makris will assume the role of chairman, president, and chief executive officer of Simmons Bank, in addition to his current role as chairman and chief executive officer of the Company.

In addition, the Company announced that Patrick Burrow, executive vice president and general counsel, will retire, effective March 31, 2020. “As the company’s first general counsel,” Makris noted, “and prior to that, its longtime outside counsel, Pat has been a steady source of legal advice for our organization and its associates. He has played a significant role in many of the company’s strategic transactions, and I am thankful for his service to Simmons. As with Marty, we wish him the best and congratulate him on his retirement.”

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 current practice. The CECL guidance was effective for the Company as of January 1, 2020.

The CECL methodology represents a significant change from existing guidance and is expected to result in material changes to the Company’s accounting for financial instruments. The Company is continuing to evaluate the effect that the new CECL methodology will have on its consolidated financial statements and related disclosures. Based on additional analysis performed during the fourth quarter of 2019, the Company currently estimates that the allowance for credit losses will be approximately 1.35% to 1.45% of total loans upon adoption. This estimate is based upon the Company’s analysis of current conditions, assumptions and economic forecasts at this point in time. The estimate is subject to change based on continuing review and challenge of the models, methodologies and judgements. The impact will be reflected as an adjustment to beginning retained earnings, net of income taxes. Federal banking regulatory agencies have provided relief for an initial regulatory capital decrease at adoption by allowing the impact to be phased-in over three years on a straight-line basis. The adoption of CECL in 2020 could also impact the Company’s ongoing earnings, perhaps materially.

Simmons First National Corporation

Simmons First National Corporation is a financial holding company headquartered in Pine Bluff, Arkansas, with total consolidated assets of approximately $21.3 billion as of December 31, 2019, 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. CST today, Thursday, January 23, 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 9397974. 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, expenses related to the Company’s early retirement program, 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, the Company’s ability to recruit and retain key employees, the adequacy of the allowance for loan losses, and the effect of certain new accounting standards (including, without limitation, the CECL methodology and its anticipated effect on the provision and allowance for credit losses) on the Company’s financial statements. 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, information technology affecting the financial industry, the assumptions, forecasts, models, and methodology used to calculate the expected impact of CECL on the Company’s financial statements, 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 Simmons First National Corporation’s financial results is included in its Form 10-K for the year ended December 31, 2018, which has been filed with, and is available from, the 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

Dec 31

Sep 30

Jun 30

Mar 31

Dec 31

(Unaudited)

2019

2019

2019

2019

2018

($ in thousands)

ASSETS

Cash and non-interest bearing balances due from banks

$

277,208

$

161,440

$

145,491

$

151,112

$

171,792

Interest bearing balances due from banks and federal funds sold

719,415

368,530

509,765

340,049

661,666

Cash and cash equivalents

996,623

529,970

655,256

491,161

833,458

Interest bearing balances due from banks - time

4,554

5,041

5,041

4,684

4,934

Investment securities - held-to-maturity

40,927

42,237

47,455

61,435

289,194

Investment securities - available-for-sale

3,453,338

2,356,134

2,342,387

2,240,111

2,151,752

Mortgage loans held for sale

58,102

50,099

34,999

18,480

26,799

Other assets held for sale

260,332

383

397

397

1,790

Loans:

Legacy loans

9,630,076

9,643,365

9,262,497

8,684,550

8,430,388

Allowance for loan losses

(67,800

)

(65,993

)

(63,067

)

(59,243

)

(56,599

)

Loans acquired, net of discount and allowance

4,795,184

3,359,587

3,864,516

3,056,187

3,292,783

Net loans

14,357,460

12,936,959

13,063,946

11,681,494

11,666,572

Premises and equipment

492,384

378,678

370,551

333,740

295,060

Foreclosed assets and other real estate owned

19,121

19,576

24,761

18,952

25,565

Interest receivable

62,707

53,966

54,781

51,796

49,938

Bank owned life insurance

254,152

234,655

233,345

192,736

193,170

Goodwill

1,055,520

926,648

926,450

845,687

845,687

Other intangible assets

127,340

101,149

104,096

88,694

91,334

Other assets

76,583

123,016

73,970

62,272

68,084

Total assets

$

21,259,143

$

17,758,511

$

17,937,435

$

16,091,639

$

16,543,337

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:

Non-interest bearing transaction accounts

$

3,741,093

$

3,044,330

$

2,954,032

$

2,674,034

$

2,672,405

Interest bearing transaction accounts and savings deposits

9,090,878

7,337,571

7,258,005

6,666,823

6,830,191

Time deposits

3,276,969

3,086,108

3,304,176

2,648,674

2,896,156

Total deposits

16,108,940

13,468,009

13,516,213

11,989,531

12,398,752

Federal funds purchased and securities sold

under agreements to repurchase

150,145

116,536

130,470

120,213

95,792

Other borrowings

1,297,599

1,098,395

1,324,094

1,169,989

1,345,450

Subordinated notes and debentures

388,260

354,223

354,132

354,041

353,950

Other liabilities held for sale

159,853

-

162

162

162

Accrued interest and other liabilities

165,409

174,277

142,851

155,382

102,797

Total liabilities

18,270,206

15,211,440

15,467,922

13,789,318

14,296,903

Stockholders' equity:

Preferred stock

767

-

-

-

-

Common stock

1,136

966

966

926

923

Surplus

2,117,282

1,708,058

1,705,262

1,599,566

1,597,944

Undivided profits

848,861

814,338

747,969

707,829

674,941

Accumulated other comprehensive income (loss):

Unrealized accretion (depreciation) on AFS securities

20,891

23,709

15,316

(6,000

)

(27,374

)

Total stockholders' equity

2,988,937

2,547,071

2,469,513

2,302,321

2,246,434

Total liabilities and stockholders' equity

$

21,259,143

$

17,758,511

$

17,937,435

$

16,091,639

$

16,543,337



Simmons First National Corporation

SFNC

Consolidated Statements of Income - Quarter-to-Date

For the Quarters Ended

Dec 31

Sep 30

Jun 30

Mar 31

Dec 31

(Unaudited)

2019

2019

2019

2019

2018

($ in thousands, except per share data)

INTEREST INCOME

Loans

$

193,402

$

179,971

$

178,122

$

159,440

$

159,996

Interest bearing balances due from banks and federal funds sold

2,625

1,586

1,121

2,154

2,168

Investment securities

17,625

15,367

16,594

17,312

15,760

Mortgage loans held for sale

402

382

332

210

372

TOTAL INTEREST INCOME

214,054

197,306

196,169

179,116

178,296

INTEREST EXPENSE

Time deposits

16,198

15,573

14,606

12,320

11,273

Other deposits

20,331

21,363

20,190

18,430

17,489

Federal funds purchased and securities

sold under agreements to repurchase

368

249

257

136

121

Other borrowings

4,615

5,381

6,219

6,793

7,134

Subordinated notes and debentures

4,813

4,576

4,541

4,411

4,498

TOTAL INTEREST EXPENSE

46,325

47,142

45,813

42,090

40,515

NET INTEREST INCOME

167,729

150,164

150,356

137,026

137,781

Provision for loan losses

4,903

21,973

7,079

9,285

9,620

NET INTEREST INCOME AFTER PROVISION

FOR LOAN LOSSES

162,826

128,191

143,277

127,741

128,161

NON-INTEREST INCOME

Trust income

7,430

6,108

5,794

5,708

5,980

Service charges on deposit accounts

13,332

10,825

10,557

10,068

11,263

Other service charges and fees

1,915

1,308

1,312

1,289

1,501

Mortgage lending income

4,029

4,509

3,656

2,823

1,457

SBA lending income

321

956

895

497

186

Investment banking income

822

513

360

618

829

Debit and credit card fees

8,920

7,059

7,212

6,098

6,547

Bank owned life insurance income

1,411

1,302

1,260

795

1,105

Gain on sale of securities, net

377

7,374

2,823

2,740

8

Other income

6,410

43,821

5,137

3,125

5,712

TOTAL NON-INTEREST INCOME

44,967

83,775

39,006

33,761

34,588

NON-INTEREST EXPENSE

Salaries and employee benefits

63,235

52,065

56,128

56,367

49,193

Occupancy expense, net

9,272

8,342

6,919

7,475

7,016

Furniture and equipment expense

5,758

4,898

4,206

3,358

4,139

Other real estate and foreclosure expense

1,089

1,125

591

637

1,540

Deposit insurance

(134

)

-

2,510

2,040

2,489

Merger-related costs

24,831

2,556

7,522

1,470

797

Other operating expenses

38,044

37,879

32,867

30,062

30,222

TOTAL NON-INTEREST EXPENSE

142,095

106,865

110,743

101,409

95,396

NET INCOME BEFORE INCOME TAXES

65,698

105,101

71,540

60,093

67,353

Provision for income taxes

12,976

23,275

15,616

12,398

11,707

NET INCOME

52,722

81,826

55,924

47,695

55,646

Preferred stock dividends

-

-

326

-

-

NET INCOME AVAILABLE TO COMMON STOCKHOLDERS

$

52,722

$

81,826

$

55,598

$

47,695

$

55,646

BASIC EARNINGS PER SHARE

$

0.49

$

0.85

$

0.58

$

0.52

$

0.60

DILUTED EARNINGS PER SHARE

$

0.49

$

0.84

$

0.58

$

0.51

$

0.60



Simmons First National Corporation

SFNC

Consolidated Risk-Based Capital

For the Quarters Ended

Dec 31

Sep 30

Jun 30

Mar 31

Dec 31

(Unaudited)

2019

2019

2019

2019

2018

($ in thousands)

Tier 1 capital

Stockholders' equity

$

2,988,937

$

2,547,071

$

2,469,513

$

2,302,321

$

2,246,434

Disallowed intangible assets, net of deferred tax

(1,155,405

)

(1,013,309

)

(1,001,676

)

(910,122

)

(912,428

)

Unrealized (gain) loss on AFS securities

(20,891

)

(23,709

)

(15,316

)

6,000

27,374

Total Tier 1 capital

1,812,641

1,510,053

1,452,521

1,398,199

1,361,380

Tier 2 capital

Qualifying unrealized gain on AFS equity securities

-

-



Simmons First National Corporation

SFNC

Consolidated - Selected Financial Data

For the Quarters Ended

Dec 31

Sep 30

Jun 30

Mar 31

Dec 31

(Unaudited)

2019

2019

2019

2019

2018

($ in thousands, except share data)

QUARTER-TO-DATE

Financial Highlights - GAAP

Net Income

$

52,722

$

81,826

$

55,598

$

47,695

$

55,646

Diluted earnings per share

0.49

0.84

0.58

0.51

0.60

Return on average assets

1.04

%

1.83

%

1.28

%

1.19

%

1.35

%

Return on average common equity

8.01

%

13.70

%

9.48

%

8.60

%

9.98

%

Return on tangible common equity

14.62

%

24.89

%

17.40

%

15.34

%

17.96

%

Net interest margin (FTE)

3.76

%

3.81

%

3.92

%

3.85

%

3.76

%

FTE adjustment

2,172

1,843

1,706

1,601

1,466

Amortization of intangibles

3,270

2,947

2,947

2,641

2,642

Amortization of intangibles, net of taxes

2,416

2,176

2,177

1,951

1,952

Average diluted shares outstanding

108,472,559

96,968,775

96,367,857

92,870,813

92,897,105

Shares repurchased

400,000

-

-

-

-

Average price of shares repurchased

25.97

-

-

-

-

Cash dividends declared per common share

0.16

0.16

0.16

0.16

0.15

Financial Highlights - Core (non-GAAP)

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

$

71,087

$

83,963

$

65,453

$

49,076

$

56,451

Core diluted earnings per share (1)

0.66

0.87

0.68

0.53

0.61

Core net interest margin (FTE) (2)

3.43

%

3.58

%

3.66

%

3.67

%

3.66

%

Accretable yield on acquired loans

15,100

9,322

10,162

6,660

3,850

Efficiency ratio (1)

52.63

%

43.77

%

49.88

%

56.76

%

51.99

%

Core return on average assets (1)

1.41

%

1.88

%

1.51

%

1.22

%

1.37

%

Core return on average common equity (1)

10.80

%

14.06

%

11.16

%

8.85

%

10.13

%

Core return on tangible common equity (1)

19.50

%

25.52

%

20.36

%

15.76

%

18.21

%

YEAR-TO-DATE

Financial Highlights - GAAP

Net Income

$

237,841

$

185,119

$

103,293

$

47,695

$

215,713

Diluted earnings per share

2.41

1.94

1.09

0.51

2.32

Return on average assets

1.33

%

1.44

%

1.24

%

1.19

%

1.37

%

Return on average common equity

9.93

%

10.65

%

9.05

%

8.60

%

10.00

%

Return on tangible common equity

17.99

%

19.27

%

16.38

%

15.34

%

18.44

%

Net interest margin (FTE)

3.83

%

3.86

%

3.89

%

3.85

%

3.97

%

FTE adjustment

7,322

5,150

3,307

1,601

5,297

Amortization of intangibles

11,805

8,535

5,588

2,641

11,009

Amortization of intangibles, net of taxes

8,720

6,304

4,128

1,951

8,132

Average diluted shares outstanding

98,796,628

95,450,732

94,588,739

92,870,813

92,830,485

Cash dividends declared per common share

0.64

0.48

0.32

0.16

0.60

Financial Highlights - Core (non-GAAP)

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

$

269,579

$

198,492

$

114,529

$

49,076

$

220,233

Diluted core earnings per share (1)

2.73

2.08

1.21

0.53

2.37

Core net interest margin (FTE) (2)

3.58

%

3.63

%

3.66

%

3.67

%

3.72

%

Accretable yield on acquired loans

41,244

26,144

16,822

6,660

35,263

Efficiency ratio (1)

50.33

%

49.49

%

53.14

%

56.76

%

52.85

%

Core return on average assets (1)

1.51

%

1.55

%

1.37

%

1.22

%

1.40

%

Core return on average common equity (1)

11.25

%

11.42

%

10.04

%

8.85

%

10.21

%

Core return on tangible common equity (1)

20.31

%

20.62

%

18.09

%

15.76

%

18.81

%

END OF PERIOD

Book value per share

$

26.30

$

26.36

$

25.57

$

24.87

$

24.33

Tangible book value per share

15.89

15.73

14.90

14.78

14.18

Shares outstanding

113,628,601

96,613,855

96,590,656

92,568,361

92,347,643

Full-time equivalent employees

3,270

2,701

2,700

2,602

2,654

Total number of financial centers

251

212

212

191

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

Reconciliation Of Non-GAAP Financial Measures - Core Earnings

For the Quarters Ended

Dec 31

Sep 30

Jun 30

Mar 31

Dec 31

(Unaudited)

2019

2019

2019

2019

2018

($ in thousands, except per share data)

QUARTER-TO-DATE

Net Income

$

52,722

$

81,826

$

55,598

$

47,695

$

55,646

Non-core items

Merger-related costs

24,831

2,556

7,522

1,470

797

Early retirement program

-

177

2,932

355

-

Branch right-sizing

37

160

2,887

45

292

Tax effect (1)

(6,503

)

(756

)

(3,486

)

(489

)

(284

)

Net non-core items

18,365

2,137

9,855

1,381

805

Core earnings (non-GAAP)

$

71,087

$

83,963

$

65,453

$

49,076

$

56,451

Diluted earnings per share

$

0.49

$

0.84

$

0.58

$

0.51

$

0.60

Non-core items

Merger-related costs

0.23

0.04

0.08

0.02

0.01

Early retirement program

-

-

0.03

0.01

-

Branch right-sizing

-

-

0.03

-

-

Tax effect (1)

(0.06

)

(0.01

)

(0.04

)

(0.01

)

-

Net non-core items

0.17

0.03

0.10

0.02

0.01

Core earnings (non-GAAP)

$

0.66

$

0.87

$

0.68

$

0.53

$

0.61

YEAR-TO-DATE

Net Income

$

237,841

$

185,119

$

103,293

$

47,695

$

215,713

Non-core items

Merger-related costs

36,379

11,548

8,992

1,470

4,777

Early retirement program

3,464

3,464

3,287

355

-

Branch right-sizing

3,129

3,092

2,932

45

1,341

Tax effect (1)

(11,234

)

(4,731

)

(3,975

)

(489

)

(1,598

)

Net non-core items

31,738

13,373

11,236

1,381

4,520

Core earnings (non-GAAP)

$

269,579

$

198,492

$

114,529

$

49,076

$

220,233

Diluted earnings per share

$

2.41

$

1.94

$

1.09

$

0.51

$

2.32

Non-core items

Merger-related costs

0.37

0.12

0.10

0.02

0.05

Early retirement program

0.03

0.04

0.03

0.01

-

Branch right-sizing

0.03

0.03

0.03

-

0.02

Tax effect (1)

(0.11

)

(0.05

)

(0.04

)

(0.01

)

(0.02

)

Net non-core items

0.32

0.14

0.12

0.02

0.05

Core earnings (non-GAAP)

$

2.73

$

2.08

$

1.21

$

0.53

$

2.37

(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

$

63,235

$

52,065

$

56,128

$

56,367

$

49,193

Non-core items (1)

-

(176

)

(2,937

)

(351

)

(118

)

Core salaries and employee benefits (non-GAAP)

$

63,235

$

51,889

$

53,191

$

56,016

$

49,075

Merger related costs

$

24,831

$

2,556

$

7,522

$

1,470

$

797

Non-core items (1)

(24,831

)

(2,556

)

(7,522

)

(1,470

)

(797

)

Core merger related costs (non-GAAP)

$

-

$

-

$

-

$

-

$

-

Other operating expenses

$

38,044

$

37,881

$

32,867

$

30,062

$

30,222

Non-core items (1)

(4

)

(90

)

(2,834

)

(10

)

70

Core other operating expenses (non-GAAP)

$

38,040

$

37,791

$

30,033

$

30,052

$

30,292

(1) Non-core 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)

Dec 31

Sept 30

Jun 30

Mar 31

Dec 31

2019

2019

2019

2019

2018

($ 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

$

2,988,170

$

2,547,071

$

2,469,513

$

2,302,321

$

2,246,434

Intangible assets:

Goodwill

(1,055,520

)

(926,648

)

(926,450

)

(845,687

)

(845,687

)

Other intangible assets

(127,340

)

(101,149

)

(104,096

)

(88,694

)

(91,334

)

Total intangibles

(1,182,860

)

(1,027,797

)

(1,030,546

)

(934,381

)

(937,021

)

Tangible common stockholders' equity

$

1,805,310

$

1,519,274

$

1,438,967

$

1,367,940

$

1,309,413

Total assets

$

21,259,143

$

17,758,511

$

17,937,435

$

16,091,639

$

16,543,337

Intangible assets:

Goodwill

(1,055,520

)

(926,648

)

(926,450

)

(845,687

)

(845,687

)

Other intangible assets

(127,340

)

(101,149

)

(104,096

)

(88,694

)

(91,334

)

Total intangibles

(1,182,860

)

(1,027,797

)

(1,030,546

)

(934,381

)

(937,021

)

Tangible assets

$

20,076,283

$

16,730,714

$

16,906,889

$

15,157,258

$

15,606,316

Ratio of equity to assets

14.06

%

14.34

%

13.77

%

14.31

%

13.58

%

Ratio of tangible common equity to tangible assets

8.99

%

9.08

%

8.51

%

9.02

%

8.39

%

Calculation of Discount for credit losses and allowance on loans acquired to total loans acquired plus

discount for credit losses and allowance on loans acquired

Credit discount on acquired loans

$

87,291

$

60,379

$

73,498

$

42,416

$

49,297

Allowance for loan losses on acquired loans

444

597

1,112

1,312

95

Total credit discount and ALLL on acquired loans

$

87,735

$

60,976

$

74,610

$

43,728

$

49,392

Total loans acquired

$

4,882,919

$

3,420,563

$

3,939,126

$

3,099,915

$

3,342,175

Discount and ALLL on acquired loans to acquired loans

1.80

%

1.78

%

1.89

%

1.41

%

1.48

%

Calculation of Total Allowance and Credit Coverage

Allowance for loan losses

$

67,800

$

65,993

$

63,067

$

59,243

$

56,599

Total credit discount and ALLL on acquired loans

87,735

60,976

74,610

43,728

49,392

Total allowance and credit discount

$

155,535

$

126,969

$

137,677

$

102,971

$

105,991

Total loans

$

14,512,995

$

13,063,928

$

13,201,623

$

11,784,465

$

11,772,563

Total allowance and credit coverage

1.07

%

0.97

%

1.04

%

0.87

%

0.90

%

Calculation of Tangible Book Value per Share

Total common stockholders' equity

$

2,988,170

$

2,547,071

$

2,469,513

$

2,302,321

$

2,246,434

Intangible assets:

Goodwill

(1,055,520

)

(926,648

)

(926,450

)

(845,687

)

(845,687

)

Other intangible assets

(127,340

)

(101,149

)

(104,096

)

(88,694

)

(91,334

)

Total intangibles

(1,182,860

)

(1,027,797

)

(1,030,546

)

(934,381

)

(937,021

)

Tangible common stockholders' equity

$

1,805,310

$

1,519,274

$

1,438,967

$

1,367,940

$

1,309,413

Shares of common stock outstanding

113,628,601

96,613,855

96,590,656

92,568,361

92,347,643

Book value per common share

$

26.30

$

26.36

$

25.57

$

24.87

$

24.33

Tangible book value per common share

$

15.89

$

15.73

$

14.90

$

14.78

$

14.18



Simmons First National Corporation

SFNC

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

For the Quarters Ended

(Unaudited)

Dec 31

Sept 30

Jun 30

Mar 31

Dec 31

2019

2019

2019

2019

2018

($ in thousands)

Calculation of Core Return on Average Assets

Net income

$

52,722

$

81,826

$

55,598

$

47,695

$

55,646

Net non-core items, net of taxes, adjustment

18,365

2,137

9,855

1,381

805

Core earnings

$

71,087

$

83,963

$

65,453

$

49,076

$

56,451

Average total assets

$

20,041,890

$

17,720,598

$

17,382,872

$

16,302,197

$

16,357,753

Return on average assets

1.04

%

1.83

%

1.28

%

1.19

%

1.35

%

Core return on average assets

1.41

%

1.88

%

1.51

%

1.22

%

1.37

%

Calculation of Return on Tangible Common Equity

Net income

$

52,722

$

81,826

$

55,598

$

47,695

$

55,646

Amortization of intangibles, net of taxes

2,416

2,176

2,177

1,951

1,952

Total income available to common stockholders

$

55,138

$

84,002

$

57,775

$

49,646

$

57,598

Net non-core items, net of taxes

18,365

2,137

9,855

1,381

805

Core earnings

71,087

83,963

65,453

49,076

56,451

Amortization of intangibles, net of taxes

2,416

2,176

2,177

1,951

1,952

Total core income available to common stockholders

$

73,503

$

86,139

$

67,630

$

51,027

$

58,403

Average common stockholders' equity

$

2,611,143

$

2,368,773

$

2,351,603

$

2,248,898

$

2,211,217

Average intangible assets:

Goodwill

(997,004

)

(926,687

)

(915,445

)

(845,687

)

(845,687

)

Other intangibles

(118,311

)

(103,028

)

(104,050

)

(90,317

)

(92,990

)

Total average intangibles

(1,115,315

)

(1,029,715

)

(1,019,495

)

(936,004

)

(938,677

)

Average tangible common stockholders' equity

$

1,495,828

$

1,339,058

$

1,332,108

$

1,312,894

$

1,272,540

Return on average common equity

8.01

%

13.70

%

9.48

%

8.60

%

9.98

%

Return on tangible common equity

14.62

%

24.89

%

17.40

%

15.34

%

17.96

%

Core return on average common equity

10.80

%

14.06

%

11.16

%

8.85

%

10.13

%

Core return on tangible common equity

19.50

%

25.52

%

20.36

%

15.76

%

18.21

%

Calculation of Efficiency Ratio (1)

Non-interest expense

$

142,095

$

106,865

$

110,743

$

101,409

$

95,396

Non-core non-interest expense adjustment

(24,868

)

(2,893

)

(13,341

)

(1,870

)

(1,089

)

Other real estate and foreclosure expense adjustment

(1,063

)

(1,057

)

(563

)

(599

)

(1,300

)

Amortization of intangibles adjustment

(3,270

)

(2,947

)

(2,947

)

(2,641

)

(2,642

)

Efficiency ratio numerator

$

112,894

$

99,968

$

93,892

$

96,299

$

90,365

Net-interest income

$

167,729

$

150,164

$

150,356

$

137,026

$

137,781

Non-interest income

44,967

83,775

39,006

33,761

34,588

Fully tax-equivalent adjustment

2,172

1,843

1,706

1,601

1,466

Gain on sale of securities

(377

)

(7,374

)

(2,823

)

(2,740

)

(8

)

Efficiency ratio denominator

$

214,491

$

228,408

$

188,245

$

169,648

$

173,827

Efficiency ratio (1)

52.63

%

43.77

%

49.88

%

56.76

%

51.99

%

Calculation of Core Net Interest Margin

Net interest income

$

167,729

$

150,164

$

150,356

$

137,026

$

137,781

Fully tax-equivalent adjustment

2,172

1,843

1,706

1,601

1,466

Fully tax-equivalent net interest income

169,901

152,007

152,062

138,627

139,247

Total accretable yield

(15,100

)

(9,322

)

(10,162

)

(6,660

)

(3,850

)

Core net interest income

$

154,801

$

142,685

$

141,900

$

131,967

$

135,397

Average earning assets

$

17,911,071

$

15,831,432

$

15,540,371

$

14,593,905

$

14,686,038

Net interest margin

3.76

%

3.81

%

3.92

%

3.85

%

3.76

%

Core net interest margin

3.43

%

3.58

%

3.66

%

3.67

%

3.66

%

Calculation of Core Loan Yield

Loan interest income

$

193,402

$

179,971

$

178,122

$

159,440

$

159,996

Total accretable yield

(15,100

)

(9,322

)

(10,162

)

(6,660

)

(3,850

)

Core loan interest income

$

178,302

$

170,649

$

167,960

$

152,780

$

156,146

Average loan balance

$

14,144,259

$

13,052,943

$

12,813,274

$

11,710,075

$

11,788,838

Core loan yield

5.00

%

5.19

%

5.26

%

5.29

%

5.25

%

(1) Efficiency ratio is noninterest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully

taxable equivalent) and noninterest 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)

Dec 31

Sept 30

Jun 30

Mar 31

Dec 31

2019

2019

2019

2019

2018

($ in thousands)

Calculation of Core Return on Average Assets

Net income

$

237,841

$

185,119

$

103,293

$

47,695

$

215,713

Net non-core items, net of taxes, adjustment

31,738

13,373

11,236

1,381

4,520

Core earnings

$

269,579

$

198,492

$

114,529

$

49,076

$

220,233

Average total assets

$

17,871,748

$

17,140,419

$

16,845,528

$

16,302,197

$

15,771,362

Return on average assets

1.33

%

1.44

%

1.24

%

1.19

%

1.37

%

Core return on average assets

1.51

%

1.55

%

1.37

%

1.22

%

1.40

%

Calculation of Return on Tangible Common Equity

Net income

$

237,841

$

185,119

$

103,293

$

47,695

$

215,713

Amortization of intangibles, net of taxes

8,720

6,304

4,128

1,951

8,132

Total income available to common stockholders

$

246,561

$

191,423

$

107,421

$

49,646

$

223,845

Net non-core items, net of taxes

31,738

13,373

11,236

1,381

4,520

Core earnings

269,579

198,492

114,529

49,076

220,233

Amortization of intangibles, net of taxes

8,720

6,304

4,128

1,951

8,132

Total core income available to common stockholders

$

278,299

$

204,796

$

118,657

$

51,027

$

228,365

Average common stockholders' equity

$

2,396,024

$

2,323,530

$

2,300,535

$

2,248,898

$

2,157,097

Average intangible assets:

Goodwill

(921,635

)

(896,236

)

(880,759

)

(845,688

)

(845,308

)

Other intangibles

(104,000

)

(99,178

)

(97,221

)

(90,316

)

(97,820

)

Total average intangibles

(1,025,635

)

(995,414

)

(977,980

)

(936,004

)

(943,128

)

Average tangible common stockholders' equity

$

1,370,389

$

1,328,116

$

1,322,555

$

1,312,894

$

1,213,969

Return on average common equity

9.93

%

10.65

%

9.05

%

8.60

%

10.00

%

Return on tangible common equity

17.99

%

19.27

%

16.38

%

15.34

%

18.44

%

Core return on average common equity

11.25

%

11.42

%

10.04

%

8.85

%

10.21

%

Core return on tangible common equity

20.31

%

20.62

%

18.09

%

15.76

%

18.81

%

Calculation of Efficiency Ratio (1)

Non-interest expense

$

461,112

$

319,017

$

212,152

$

101,409

$

392,229

Non-core non-interest expense adjustment

(42,972

)

(18,104

)

(15,211

)

(1,870

)

(6,118

)

Other real estate and foreclosure expense adjustment

(3,282

)

(2,219

)

(1,162

)

(599

)

(4,240

)

Amortization of intangibles adjustment

(11,805

)

(8,535

)

(5,588

)

(2,641

)

(11,009

)

Efficiency ratio numerator

$

403,053

$

290,159

$

190,191

$

96,299

$

370,862

Net-interest income

$

605,275

$

437,546

$

287,382

$

137,026

$

552,552

Non-interest income

201,509

156,542

72,767

33,761

143,896

Fully tax-equivalent adjustment

7,322

5,150

3,307

1,601

5,297

Gain on sale of securities

(13,314

)

(12,937

)

(5,563

)

(2,740

)

(61

)

Efficiency ratio denominator

$

800,792

$

586,301

$

357,893

$

169,648

$

701,684

Efficiency ratio (1)

50.33

%

49.49

%

53.14

%

56.76

%

52.85

%

Calculation of Core Net Interest Margin

Net interest income

$

605,275

$

437,546

$

287,382

$

137,026

$

552,552

Fully tax-equivalent adjustment

7,322

5,150

3,307

1,601

5,297

Fully tax-equivalent net interest income

612,597

442,696

290,689

138,627

557,849

Total accretable yield

(41,244

)

(26,144

)

(16,822

)

(6,660

)

(35,263

)

Core net interest income

$

571,353

$

416,552

$

273,867

$

131,967

$

522,586

Average earning assets

$

15,977,909

$

15,326,432

$

15,069,751

$

14,593,905

$

14,036,614

Net interest margin

3.83

%

3.86

%

3.89

%

3.85

%

3.97

%

Core net interest margin

3.58

%

3.63

%

3.66

%

3.67

%

3.72

%

Calculation of Core Loan Yield

Loan interest income

$

710,935

$

517,533

$

337,562

$

159,440

$

616,037

Total accretable yield

(41,244

)

(26,144

)

(16,822

)

(6,660

)

(35,263

)

Core loan interest income

$

669,691

$

491,389

$

320,740

$

152,780

$

580,774

Average loan balance

$

12,937,147

$

12,530,348

$

12,264,724

$

11,710,075

$

11,355,890

Core loan yield

5.18

%

5.24

%

5.27

%

5.29

%

5.11

%

(1) Efficiency ratio is noninterest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully

taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and non-core items.