Simmons Reports Second Quarter 2019 Earnings

PINE BLUFF, Ark., July 23, 2019 (GLOBE NEWSWIRE) -- Simmons First National Corporation (SFNC) today announced net income of $55.6 million for the quarter ended June 30, 2019, compared to $53.6 million for the same period in 2018, an increase of $2.0 million, or 3.8%. Diluted earnings per share were $0.58, equal to the same period in 2018. Included in second quarter 2019 results were $9.9 million in net after-tax merger-related, early retirement program and branch right-sizing costs. Excluding the impact of these items, core earnings were $65.5 million for the quarter ended June 30, 2019, compared to $54.7 million for the quarter ended June 30, 2018, an increase of $10.8 million, or 19.8%. Core diluted earnings per share were $0.68, an increase of $0.09, or 15.3%, from the same period in 2018.

Year-to-date net income for the first half of 2019 was $103.3 million, or $1.09 diluted earnings per share, compared to $104.9 million, or $1.13 diluted earnings per share, for the same period in 2018. Excluding $11.2 million in net after-tax merger-related, early retirement program and branch right-sizing costs, year-to-date core earnings for 2019 were $114.5 million, an increase of $7.3 million compared to the same period last year. Core diluted earnings per share were $1.21, an increase of $0.05, or 4.3%, from the same period in 2018.

“We are very pleased with the results of our second quarter operations. We closed our acquisition of Reliance Bank in St. Louis and converted systems on April 12th, finishing the quarter with just under $18 billion in assets,” said George A. Makris Jr., Chairman and CEO.

Makris continued, “We had very nice organic loan and core deposit growth during the quarter and our loan pipeline is still very strong with over $400 million approved and ready to close. We maintained a stable net interest margin and we improved our overall asset quality. We are very proud of our expense management demonstrated this quarter. We also completed the move to our new Little Rock corporate offices in the vibrant Rivermarket area of downtown. Additionally, on top of our recognition in many of our communities for our customer service, we were recently recognized as a Best Place to Work in Arkansas by Arkansas Business for a second year in a row.”

Selected Highlights:

2nd Qtr 2019

1st Qtr 2019

2nd Qtr 2018

Net income

$55.6 million

$47.7 million

$53.6 million

Diluted earnings per share

$0.58

$0.51

$0.58

Return on avg assets

1.28%

1.19%

1.38%

Return on avg common equity

9.48%

8.60%

10.05%

Return on tangible common equity

17.40%

15.34%

18.70%

Core earnings (1)

$65.5 million

$49.1 million

$54.7 million

Diluted core earnings per share (1)

$0.68

$0.53

$0.59

Core return on avg assets (1)

1.51%

1.22%

1.41%

Core return on avg common equity (1)

11.16%

8.85%

10.26%

Core return on tangible common equity (1)

20.36%

15.76%

19.06%

Efficiency ratio (2)

49.88%

56.76%

52.70%

  1. Core earnings excludes non-core items, and is a non-GAAP measurement.

  2. 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.

Loans

(In billions)

2nd Qtr 2019

1st Qtr 2019

2nd Qtr 2018

Total loans

$13.1

$11.7

$11.4

Legacy loans (excludes loans acquired)

$9.3

$8.7

$7.1

Loans acquired

$3.9

$3.0

$4.3

Total loans, including those acquired, were $13.1 billion at June 30, 2019, an increase of $1.8 billion, or 15.5%, compared to $11.4 billion at June 30, 2018. On a linked-quarter basis (June 30, 2019 compared to March 31, 2019), total loans increased $1.4 billion, or 11.8%. Included in the second quarter increase are loan balances of $1.0 billion related to the Reliance Bank merger during the quarter. Organic loan growth, primarily in the real estate portfolio, accounted for approximately $387 million of the increase.

Deposits

(In billions)

2nd Qtr 2019

1st Qtr 2019

2nd Qtr 2018

Total deposits

$13.5

$12.0

$12.0

Non-time deposits

$10.2

$9.3

$9.6

Time deposits

$3.3

$2.7

$2.4

Total deposits were $13.5 billion at June 30, 2019, an increase of $1.6 billion, or 13.1%, since June 30, 2018. Total deposits increased $1.5 billion, or 12.7%, compared to March 31, 2019. Of the deposit increase during the quarter ended June 30, 2019, $1.2 billion was due to the Reliance Bank merger and $322 million was from organic deposit growth.

Net Interest Income

2nd Qtr
2019

1st Qtr
2019

4th Qtr
2018

3rd Qtr
2018

2nd Qtr
2018

Loan yield (1)

5.58%

5.53%

5.39%

5.54%

5.40%

Core loan yield (1) (2)

5.26%

5.29%

5.25%

5.19%

5.04%

Security yield (1)

3.02%

3.09%

2.87%

2.74%

2.75%

Cost of interest bearing deposits

1.37%

1.31%

1.20%

1.05%

0.84%

Cost of deposits (3)

1.07%

1.02%

0.93%

0.81%

0.64%

Cost of borrowed funds

2.50%

2.73%

2.64%

2.48%

2.38%

Net interest margin (1)

3.92%

3.85%

3.76%

3.98%

3.99%

Core net interest margin (1) (2)

3.66%

3.67%

3.66%

3.71%

3.70%

  1. Fully tax equivalent.

  2. Core loan yield and core net interest margin exclude accretion, and are non-GAAP measurements.

  3. Includes non-interest bearing deposits.

The Company’s net interest income for the second quarter of 2019 was $150.4 million, an increase of $13.5 million, or 9.9%, from the same period of 2018. Included in interest income was the yield accretion recognized on loans acquired of $10.2 million and $10.1 million for the second quarters of 2019 and 2018, respectively. Of this quarter’s yield accretion, $4.9 million, or 48%, was accretable credit mark related and $5.3 million, or 52%, was interest mark related.

Net interest margin was 3.92% for the quarter ended June 30, 2019, a 7 basis point increase from the first quarter 2019. The Company’s core net interest margin, excluding the accretion, was 3.66% for the second quarter of 2019, a 1 basis point decrease from the first quarter of 2019. Cost of interest bearing deposits was 1.37% for the second quarter of 2019, a 6 basis point increase from the prior quarter.

Non-Interest Income

Non-interest income for the second quarter of 2019 was $39.0 million, an increase of $958,000 compared to the same period in the previous year. The increase was primarily due to $2.8 million gain on sale of securities and incremental increases in service charges, mortgage lending income and SBA lending income. These increases were offset by reductions in debit card fees. The interchange rate cap as established by the Durbin amendment became effective for the Company July 1, 2018, resulting in a $3.1 million reduction in debit card fees when compared to the second quarter of last year.

Selected Non-Interest Income Items
($ in millions)

2nd Qtr
2019

1st Qtr
2019

4th Qtr
2018

3rd Qtr
2018

2nd Qtr
2018

Service charges on deposit accounts

$10.6

$10.1

$11.3

$10.8

$10.1

Mortgage lending income

$3.7

$2.8

$1.5

$1.5

$2.8

SBA lending income

$0.9

$0.5

$0.2

$0.3

$0.4

Debit and credit card fees

$7.2

$6.1

$6.5

$6.8

$10.1

Gain (loss) on sale of securities

$2.8

$2.7

-

$0.1

-

Non-Interest Expense

Non-interest expense for the second quarter of 2019 was $110.7 million, an increase of $12.2 million compared to the second quarter of 2018. Included in this quarter were $13.3 million of pre-tax non-core items. Merger-related costs totaled $7.5 million, early retirement program expenses were $2.9 million and branch right-sizing costs, primarily related to the relocation of the Little Rock corporate offices, were $2.9 million, Excluding these expenses, core non-interest expense was $97.4 million for the second quarter of 2019, an increase of $378,000 compared to the same period in 2018.

Selected Non-Interest Expense Items
($ in millions)

2nd Qtr
2019

1st Qtr
2019

4th Qtr
2018

3rd Qtr
2018

2nd Qtr
2018

Salaries and employee benefits

$56.1

$56.4

$49.2

$55.5

$55.7

Merger related costs

$7.5

$1.5

$0.8

$0.8

$1.5

Other operating expenses

$32.9

$30.1

$30.2

$29.7

$26.2

Core salaries and employee benefits

$53.2

$56.0

$49.1

$55.5

$55.7

Core merger related costs

-

-

-

-

-

Core other operating expenses

$30.0

$30.1

$30.3

$28.7

$26.2

Software and technology costs increased approximately $2.2 million over the same period in the prior year. The Company’s Next Generation Banking technology initiative is progressing on schedule and the incremental IT expenditures were primarily related to this initiative.

Early in 2019, the Company offered qualifying associates an early retirement option resulting in $2.9 million of non-core expense during the second quarter. The Company expects ongoing net annualized savings of approximately $4.4 million.

The efficiency ratio for the second quarter of 2019 was 49.88% compared to 52.70% for the same period in 2018.

Asset Quality

2nd Qtr
2019

1st Qtr
2019

4th Qtr
2018

3rd Qtr
2018

2nd Qtr
2018

Allowance for loan losses to total loans

0.68%

0.68%

0.67%

0.68%

0.73%

Allowance for loan losses to non-performing loans

101%

97%

164%

136%

115%

Non-performing loans to total loans

0.67%

0.70%

0.41%

0.50%

0.63%

Net charge-off ratio (annualized)

0.14%

0.20%

0.35%

0.36%

0.17%

- Net charge-off ratio excluding loan sale

0.12%

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 June 30, 2019, the allowance for loan losses for legacy loans was $63.1 million. The allowance for loan losses for loans acquired was $1.1 million and the acquired loan discount mark was $73.5 million. The allowance for loan losses and discount mark provides a total of $137.7 million of coverage, which equates to a total coverage ratio of 1.04% of gross loans. The ratio of discount mark and related allowance to loans acquired was 1.89%.

Provision for loan losses for the second quarter of 2019 was $7.1 million, a decrease of $2.0 million when compared to June 30, 2018 and $2.2 million less than the first quarter of 2019.

Foreclosed Assets and Other Real Estate Owned

At June 30, 2019, foreclosed assets and other real estate owned were $24.8 million, a decrease of $5.7 million, or 18.8%, compared to the same period in 2018 and an increase of $5.8 million, or 30.7%, from March 31, 2019. The increase of $7.1 million in acquired foreclosed assets was due to the merger during the quarter. The composition of these assets is divided into three types:



($ in millions)

2nd Qtr
2019

1st Qtr
2019

4th Qtr
2018

3rd Qtr
2018

2nd Qtr
2018

Closed bank branches, branch sites & associate relocation

$6.5

$7.6

$8.0

$9.6

$7.2

Foreclosed assets - acquired

$13.3

$6.2

$11.5

$8.0

$13.2

Foreclosed assets - legacy

$5.0

$5.2

$6.1

$5.1

$10.1

Capital

2nd Qtr
2019

1st Qtr
2019

4th Qtr
2018

3rd Qtr
2018

2nd Qtr
2018

Stockholders’ equity to total assets

13.8%

14.3%

13.6%

13.4%

13.3%

Tangible common equity to tangible assets

8.5%

9.0%

8.4%

8.1%

7.9%

Regulatory tier 1 leverage ratio

8.9%

9.1%

8.8%

8.7%

8.6%

Regulatory total risk-based capital ratio

12.7%

13.6%

13.3%

13.1%

13.7%

At June 30, 2019, common stockholders' equity was $2.5 billion. Book value per share was $25.57 and tangible book value per share was $14.90 at June 30, 2019, compared to $23.26 and $13.05, respectively, at June 30, 2018.

Simmons First National Corporation

Simmons First National Corporation is a financial holding company headquartered in Pine Bluff, Arkansas, with total assets of approximately $17.9 billion as of June 30, 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. CDT today, Tuesday, July 23, 2019. 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 9976425. 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 typically adjust GAAP performance measures to include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant non-core activities or nonrecurring transactions. Since the presentation of these GAAP performance measures and their impact differ between companies, management 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, allowance for loan losses, and the effect of certain new accounting standards on Simmons’ 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, and the Company’s ability to manage and successfully integrate its mergers and acquisitions 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

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2019

2019

2018

2018

2018

($ in thousands)

ASSETS

Cash and non-interest bearing balances due from banks

$

145,491

$

151,112

$

171,792

$

125,231

$

162,567

Interest bearing balances due from banks and federal funds sold

509,765

340,049

661,666

388,573

781,279

Cash and cash equivalents

655,256

491,161

833,458

513,804

943,846

Interest bearing balances due from banks - time

5,041

4,684

4,934

3,954

2,974

Investment securities - held-to-maturity

47,455

61,435

289,194

323,306

333,503

Investment securities - available-for-sale

2,342,387

2,240,111

2,151,752

1,997,814

1,938,644

Mortgage loans held for sale

34,999

18,480

26,799

48,195

39,812

Other assets held for sale

397

397

1,790

5,136

14,898

Loans:

Legacy loans

9,262,497

8,684,550

8,430,388

8,123,274

7,133,461

Allowance for loan losses

(63,067

)

(59,243

)

(56,599

)

(55,358

)

(51,732

)

Loans acquired, net of discount and allowance

3,864,516

3,056,187

3,292,783

3,734,921

4,232,434

Net loans

13,063,946

11,681,494

11,666,572

11,802,837

11,314,163

Premises and equipment

370,551

333,740

295,060

287,246

288,777

Foreclosed assets and other real estate owned

24,761

18,952

25,565

22,664

30,503

Interest receivable

54,781

51,796

49,938

51,509

44,266

Bank owned life insurance

233,345

192,736

193,170

192,680

191,575

Goodwill

926,450

845,687

845,687

845,687

845,687

Other intangible assets

104,096

88,694

91,334

93,975

96,720

Other assets

73,970

62,272

68,084

92,457

80,165

Total assets

$

17,937,435

$

16,091,639

$

16,543,337

$

16,281,264

$

16,165,533

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:

Non-interest bearing transaction accounts

$

2,954,032

$

2,674,034

$

2,672,405

$

2,778,670

$

2,683,489

Interest bearing transaction accounts and savings deposits

7,258,005

6,666,823

6,830,191

6,776,330

6,916,520

Time deposits

3,304,176

2,648,674

2,896,156

2,533,506

2,353,439

Total deposits

13,516,213

11,989,531

12,398,752

12,088,506

11,953,448

Federal funds purchased and securities sold

under agreements to repurchase

130,470

120,213

95,792

109,213

99,801

Other borrowings

1,324,094

1,169,989

1,345,450

1,420,917

1,451,811

Subordinated notes and debentures

354,132

354,041

353,950

372,934

413,337

Other liabilities held for sale

162

162

162

424

1,840

Accrued interest and other liabilities

142,851

155,382

102,797

105,951

98,388

Total liabilities

15,467,922

13,789,318

14,296,903

14,097,945

14,018,625

Stockholders' equity:

Common stock

966

926

923

923

923

Surplus

1,705,262

1,599,566

1,597,944

1,597,261

1,594,342

Undivided profits

747,969

707,829

674,941

633,175

591,826

Accumulated other comprehensive income (loss):

Unrealized accretion (depreciation) on AFS securities

15,316

(6,000

)

(27,374

)

(48,040

)

(40,183

)

Total stockholders' equity

2,469,513

2,302,321

2,246,434

2,183,319

2,146,908

Total liabilities and stockholders' equity

$

17,937,435

$

16,091,639

$

16,543,337

$

16,281,264

$

16,165,533

Simmons First National Corporation

SFNC

Consolidated Statements of Income - Quarter-to-Date

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2019

2019

2018

2018

2018

($ in thousands, except per share data)

INTEREST INCOME

Loans

$

178,122

$

159,440

$

159,996

$

162,438

$

150,253

Interest bearing balances due from banks and federal funds sold

1,121

2,154

2,168

1,405

1,414

Investment securities

16,594

17,312

15,760

14,640

14,296

Mortgage loans held for sale

332

210

372

501

305

TOTAL INTEREST INCOME

196,169

179,116

178,296

178,984

166,268

INTEREST EXPENSE

Time deposits

14,606

12,320

11,273

8,017

6,175

Other deposits

20,190

18,430

17,489

16,373

12,286

Federal funds purchased and securities

sold under agreements to repurchase

257

136

121

104

88

Other borrowings

6,219

6,793

7,134

6,240

5,141

Subordinated notes and debentures

4,541

4,411

4,498

5,282

5,741

TOTAL INTEREST EXPENSE

45,813

42,090

40,515

36,016

29,431

NET INTEREST INCOME

150,356

137,026

137,781

142,968

136,837

Provision for loan losses

7,079

9,285

9,620

10,345

9,033

NET INTEREST INCOME AFTER PROVISION

FOR LOAN LOSSES

143,277

127,741

128,161

132,623

127,804

NON-INTEREST INCOME

Trust income

5,794

5,708

5,980

6,277

5,622

Service charges on deposit accounts

10,557

10,068

11,263

10,837

10,063

Other service charges and fees

1,312

1,289

1,501

1,201

2,017

Mortgage lending income

3,656

2,823

1,457

1,521

2,780

SBA lending income

895

497

186

304

350

Investment banking income

360

618

829

664

814

Debit and credit card fees

7,212

6,098

6,547

6,820

10,105

Bank owned life insurance income

1,260

795

1,105

1,105

1,102

Gain (loss) on sale of securities, net

2,823

2,740

8

54

(7

)

Other income

5,137

3,125

5,712

4,942

5,202

TOTAL NON-INTEREST INCOME

39,006

33,761

34,588

33,725

38,048

NON-INTEREST EXPENSE

Salaries and employee benefits

56,128

56,367

49,193

55,515

55,678

Occupancy expense, net

6,919

7,475

7,016

7,713

7,921

Furniture and equipment expense

4,206

3,358

4,139

3,761

4,020

Other real estate and foreclosure expense

591

637

1,540

538

1,382

Deposit insurance

2,510

2,040

2,489

2,248

1,856

Merger-related costs

7,522

1,470

797

804

1,465

Other operating expenses

32,867

30,062

30,222

29,674

26,185

TOTAL NON-INTEREST EXPENSE

110,743

101,409

95,396

100,253

98,507

NET INCOME BEFORE INCOME TAXES

71,540

60,093

67,353

66,095

67,345

Provision for income taxes

15,616

12,398

11,707

10,902

13,783

NET INCOME

55,924

47,695

55,646

55,193

53,562

Preferred stock dividends

326

-

-

-

-

NET INCOME AVAILABLE TO COMMON STOCKHOLDERS

$

55,598

$

47,695

$

55,646

$

55,193

$

53,562

BASIC EARNINGS PER SHARE

$

0.58

$

0.52

$

0.60

$

0.60

$

0.58

DILUTED EARNINGS PER SHARE

$

0.58

$

0.51

$

0.60

$

0.59

$

0.58

Simmons First National Corporation

SFNC

Consolidated Risk-Based Capital

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2019

2019

2018

2018

2018

($ in thousands)

Tier 1 capital

Stockholders' equity

$

2,469,513

$

2,302,321

$

2,246,434

$

2,183,319

$

2,146,908

Disallowed intangible assets, net of deferred tax

(1,001,676

)

(910,122

)

(912,428

)

(914,788

)

(917,050

)

Unrealized (gain) loss on AFS securities

(15,316

)

6,000

27,374

48,040

40,183

Total Tier 1 capital

1,452,521

1,398,199

1,361,380

1,316,571

1,270,041

Tier 2 capital

Qualifying unrealized gain on AFS equity securities

-

-

-

1

1

Trust preferred securities and subordinated debt

354,132

354,041

353,950

372,934

413,337

Qualifying allowance for loan losses and

reserve for unfunded commitments

72,044

67,771

63,608

63,618

60,691

Total Tier 2 capital

426,176

421,812

417,558

436,553

474,029

Total risk-based capital

$

1,878,697

$

1,820,011

$

1,778,938

$

1,753,124

$

1,744,070

Risk weighted assets

$

14,825,253

$

13,364,636

$

13,326,832

$

13,402,910

$

12,713,093

Adjusted average assets for leverage ratio

$

16,382,520

$

15,423,961

$

15,512,042

$

15,179,889

$

14,714,205

Ratios at end of quarter

Equity to assets

13.77

%

14.31

%

13.58

%

13.41

%

13.28

%

Tangible common equity to tangible assets (1)

8.51

%

9.02

%

8.39

%

8.11

%

7.91

%

Common equity Tier 1 ratio (CET1)

9.80

%

10.46

%

10.22

%

9.82

%

9.99

%

Tier 1 leverage ratio

8.87

%

9.07

%

8.78

%

8.67

%

8.63

%

Tier 1 risk-based capital ratio

9.80

%

10.46

%

10.22

%

9.82

%

9.99

%

Total risk-based capital ratio

12.67

%

13.62

%

13.35

%

13.08

%

13.72

%

(1) Calculations of tangible common equity to tangible assets and the reconciliations to GAAP are included in the schedules accompanying this release.

Simmons First National Corporation

SFNC

Consolidated Loans and Investments

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2019

2019

2018

2018

2018

($ in thousands)

Legacy Loan Portfolio - End of Period (1)

Consumer

Credit cards

$

187,919

$

181,549

$

204,173

$

182,137

$

180,352

Other consumer

207,445

213,659

201,297

259,581

277,330

Total consumer

395,364

395,208

405,470

441,718

457,682

Real Estate

Construction

1,540,352

1,376,162

1,300,723

1,229,888

967,720

Single-family residential

1,444,525

1,431,407

1,440,443

1,401,991

1,314,787

Other commercial

3,531,273

3,355,109

3,225,287

3,077,188

2,816,420

Total real estate

6,516,150

6,162,678

5,966,453

5,709,067

5,098,927

Commercial

Commercial

1,871,695

1,801,422

1,774,909

1,608,342

1,237,910

Agricultural

191,922

147,216

164,514

218,778

187,006

Total commercial

2,063,617

1,948,638

1,939,423

1,827,120

1,424,916

Other

287,366

178,026

119,042

145,369

151,936

Total Loans

$

9,262,497

$

8,684,550

$

8,430,388

$

8,123,274

$

7,133,461

(1) Excludes all acquired loans.

Investment Securities - End of Period

Held-to-Maturity

U.S. Government agencies

$

999

$

12,996

$

16,990

$

34,983

$

36,976

Mortgage-backed securities

12,225

12,847

13,346

13,933

14,645

State and political subdivisions

32,236

33,597

256,863

272,396

279,787

Other securities

1,995

1,995

1,995

1,994

2,095

Total held-to-maturity

47,455

61,435

289,194

323,306

333,503

Available-for-Sale

U.S. Government agencies

$

197,656

$

161,577

$

154,301

$

141,460

$

145,767

Mortgage-backed securities

1,345,760

1,345,677

1,522,900

1,419,626

1,395,231

State and political subdivisions

636,558

580,790

314,843

282,439

245,335

FHLB stock

66,588

65,220

73,105

72,579

72,042

Other securities

95,825

86,847

86,603

81,710

80,269

Total available-for-sale

2,342,387

2,240,111

2,151,752

1,997,814

1,938,644

Total investment securities

$

2,389,842

$

2,301,546

$

2,440,946

$

2,321,120

$

2,272,147

Fair value - HTM investment securities

$

48,640

$

61,956

$

290,830

$

322,838

$

334,857

Investment Securities - QTD Average

Taxable securities

$

1,793,799

$

1,880,694

$

1,815,203

$

1,775,193

$

1,750,172

Tax exempt securities

624,898

590,941

551,185

539,135

514,838

Total investment securities - QTD average

$

2,418,697

$

2,471,635

$

2,366,388

$

2,314,328

$

2,265,010

Simmons First National Corporation

SFNC

Consolidated Loans and Credit Coverage

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2019

2019

2018

2018

2018

($ in thousands)

LOANS

Legacy loans

$

9,262,497

$

8,684,550

$

8,430,388

$

8,123,274

$

7,133,461

Allowance for loan losses (legacy loans)

(63,067

)

(59,243

)

(56,599

)

(55,358

)

(51,732

)

Legacy loans (net of allowance)

9,199,430

8,625,307

8,373,789

8,067,916

7,081,729

Loans acquired

3,939,126

3,099,915

3,342,175

3,790,234

4,302,760

Credit discount

(73,498

)

(42,416

)

(49,297

)

(53,968

)

(68,282

)

Allowance for loan losses (loans acquired)

(1,112

)

(1,312

)

(95

)

(1,345

)

(2,044

)

Loans acquired (net of discount and allowance)

3,864,516

3,056,187

3,292,783

3,734,921

4,232,434

Net loans

$

13,063,946

$

11,681,494

$

11,666,572

$

11,802,837

$

11,314,163

Loan Coverage Ratios

Allowance for loan losses to legacy loans

0.68

%

0.68

%

0.67

%

0.68

%

0.73

%

Discount for credit losses and allowance on loans acquired

to total loans acquired plus discount for credit losses

and allowance on loans acquired (non-GAAP) (1)

1.89

%

1.41

%

1.48

%

1.46

%

1.63

%

Total allowance and credit coverage (non-GAAP) (1)

1.04

%

0.87

%

0.90

%

0.93

%

1.07

%

(1) Calculations of the non-GAAP loan coverage ratios and the reconciliations to GAAP are included in the schedules accompanying this release.

Simmons First National Corporation

SFNC

Consolidated Allowance and Asset Quality

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2019

2019

2018

2018

2018

($ in thousands)

Allowance for Loan Losses (Legacy Loans)

Balance, beginning of quarter

$

59,243

$

56,599

$

55,358

$

51,732

$

47,207

Loans charged off

Credit cards

1,039

1,142

1,121

919

1,012

Other consumer

905

1,533

2,894

1,321

1,366

Real estate

271

374

337

4,952

161

Commercial

1,867

1,968

3,480

592

790

Total loans charged off

4,082

5,017

7,832

7,784

3,329

Recoveries of loans previously charged off

Credit cards

271

240

227

229

286

Other consumer

331

300

154

176

133

Real estate

153

142

367

210

112

Commercial

72

158

167

450

59

Total recoveries

827

840

915

1,065

590

Net loans charged off

3,255

4,177

6,917

6,719

2,739

Provision for loan losses

7,079

6,821

8,158

10,345

7,264

Balance, end of quarter

$

63,067

$

59,243

$

56,599

$

55,358

$

51,732

Non-performing assets (1) (2)

Non-performing loans

Nonaccrual loans

$

61,956

$

60,925

$

34,201

$

40,505

$

44,548

Loans past due 90 days or more

267

281

224

281

303

Total non-performing loans

62,223

61,206

34,425

40,786

44,851

Other non-performing assets

Foreclosed assets and other real estate owned (2)

24,761

18,952

25,565

22,664

30,503

Other non-performing assets

613

505

553

524

573

Total other non-performing assets

25,374

19,457

26,118

23,188

31,076

Total non-performing assets

$

87,597

$

80,663

$

60,543

$

63,974

$

75,927

Performing TDRs (troubled debt restructurings)

$

6,246

$

6,297

$

6,369

$

8,413

$

6,367

Ratios (1) (2)

Allowance for loan losses to total loans

0.68

%

0.68

%

0.67

%

0.68

%

0.73

%

Allowance for loan losses to non-performing loans

101

%

97

%

164

%

136

%

115

%

Non-performing loans to total loans

0.67

%

0.70

%

0.41

%

0.50

%

0.63

%

Non-performing assets (including performing TDRs)

to total assets

0.52

%

0.54

%

0.40

%

0.44

%

0.51

%

Non-performing assets to total assets

0.49

%

0.50

%

0.37

%

0.39

%

0.47

%

Annualized net charge offs to total loans

0.14

%

0.20

%

0.35

%

0.36

%

0.17

%

Annualized net credit card charge offs to

total credit card loans

1.63

%

1.92

%

1.86

%

1.47

%

1.60

%

(1) Excludes all acquired loans, except for their inclusion in total assets.

(2) Includes acquired foreclosed assets and acquired other real estate owned.

Simmons First National Corporation

SFNC

Consolidated - Average Balance Sheet and Net Interest Income Analysis

For the Quarters Ended

(Unaudited)

Three Months Ended
Jun 2019

Three Months Ended
Mar 2019

Three Months Ended
Jun 2018

($ in thousands)

Average
Balance

Income/
Expense

Yield/
Rate

Average
Balance

Income/
Expense

Yield/
Rate

Average
Balance

Income/
Expense

Yield/
Rate

ASSETS

Earning assets:

Interest bearing balances due from banks

and federal funds sold

$

276,370

$

1,121

1.63

%

$

394,462

$

2,154

2.21

%

$

422,987

$

1,414

1.34

%

Investment securities - taxable

1,793,799

11,994

2.68

%

1,880,694

12,989

2.80

%

1,750,172

10,764

2.47

%

Investment securities - non-taxable (FTE)

624,898

6,209

3.99

%

590,941

5,834

4.00

%

514,838

4,771

3.72

%

Mortgage loans held for sale

32,030

332

4.16

%

17,733

210

4.80

%

28,688

305

4.26

%

Loans, including acquired loans

12,813,274

178,219

5.58

%

11,710,075

159,530

5.53

%

11,159,872

150,322

5.40

%

Total interest earning assets (FTE)

15,540,371

197,875

5.11

%

14,593,905

180,717

5.02

%

13,876,557

167,576

4.84

%

Non-earning assets

1,842,501

1,708,292

1,704,140

Total assets

$

17,382,872

$

16,302,197

$

15,580,697

LIABILITIES AND STOCKHOLDERS' EQUITY

Interest bearing liabilities:

Interest bearing transaction and

savings accounts

$

7,139,356

$

20,190

1.13

%

$

6,749,032

$

18,430

1.11

%

$

6,570,471

$

12,286

0.75

%

Time deposits

3,072,246

14,606

1.91

%

2,781,592

12,320

1.80

%

2,233,673

6,175

1.11

%

Total interest bearing deposits

10,211,602

34,796

1.37

%

9,530,624

30,750

1.31

%

8,804,144

18,461

0.84

%

Federal funds purchased and securities

sold under agreement to repurchase

133,242

257

0.77

%

109,302

136

0.50

%

107,205

88

0.33

%

Other borrowings

1,277,450

6,219

1.95

%

1,224,255

6,793

2.25

%

1,273,135

5,141

1.62

%

Subordinated notes and debentures

354,088

4,541

5.14

%

353,996

4,411

5.05

%

466,612

5,741

4.93

%

Total interest bearing liabilities

11,976,382

45,813

1.53

%

11,218,177

42,090

1.52

%

10,651,096

29,431

1.11

%

Non-interest bearing liabilities:

Non-interest bearing deposits

2,834,452

2,707,715

2,705,677

Other liabilities

207,500

127,407

86,827

Total liabilities

15,018,334

14,053,299

13,443,600

Stockholders' equity

2,364,538

2,248,898

2,137,097

Total liabilities and stockholders' equity

$

17,382,872

$

16,302,197

$

15,580,697

Net interest income (FTE)

$

152,062

$

138,627

$

138,145

Net interest spread (FTE)

3.58

%

3.50

%

3.73

%

Net interest margin (FTE) - quarter-to-date

3.92

%

3.85

%

3.99

%

Net interest margin (FTE) - year-to-date

3.89

%

3.85

%

4.08

%

Core net interest margin (FTE) - quarter-to-date (1)

3.66

%

3.67

%

3.70

%

Core loan yield (FTE) - quarter-to-date (1)

5.26

%

5.29

%

5.04

%

Core net interest margin (FTE) - year-to-date (1)

3.66

%

3.67

%

3.76

%

Core loan yield (FTE) - year-to-date (1)

5.27

%

5.29

%

4.99

%

(1) Calculations of core net interest margin and core loan yield and the reconciliations to GAAP are included in the schedules accompanying this release.

Simmons First National Corporation

SFNC

Consolidated - Selected Financial Data

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2019

2019

2018

2018

2018

($ in thousands, except share data)

QUARTER-TO-DATE

Financial Highlights - GAAP

Net Income

$

55,598

$

47,695

$

55,646

$

55,193

$

53,562

Diluted earnings per share

0.58

0.51

0.60

0.59

0.58

Return on average assets

1.28

%

1.19

%

1.35

%

1.37

%

1.38

%

Return on average common equity

9.48

%

8.60

%

9.98

%

10.06

%

10.05

%

Return on tangible common equity

17.40

%

15.34

%

17.96

%

18.38

%

18.70

%

Net interest margin (FTE)

3.92

%

3.85

%

3.76

%

3.98

%

3.99

%

FTE adjustment

1,706

1,601

1,466

1,393

1,308

Amortization of intangibles

2,947

2,641

2,642

2,745

2,785

Amortization of intangibles, net of taxes

2,177

1,951

1,952

2,027

2,057

Average diluted shares outstanding

96,367,857

92,870,813

92,897,105

92,840,851

92,733,140

Cash dividends declared per common share

0.16

0.16

0.15

0.15

0.15

Financial Highlights - Core (non-GAAP)

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

$

65,453

$

49,076

$

56,451

$

56,504

$

54,660

Diluted core earnings per share (1)

0.68

0.53

0.61

0.61

0.59

Core net interest margin (FTE) (2)

3.66

%

3.67

%

3.66

%

3.71

%

3.70

%

Accretable yield on acquired loans

10,162

6,660

3,850

10,006

10,113

Efficiency ratio (1)

49.88

%

56.76

%

51.99

%

53.47

%

52.70

%

Core return on average assets (1)

1.51

%

1.22

%

1.37

%

1.40

%

1.41

%

Core return on average common equity (1)

11.16

%

8.85

%

10.13

%

10.30

%

10.26

%

Core return on tangible common equity (1)

20.36

%

15.76

%

18.21

%

18.80

%

19.06

%

YEAR-TO-DATE

Financial Highlights - GAAP

Net Income

$

103,293

$

47,695

$

215,713

$

160,067

$

104,874

Diluted earnings per share

1.09

0.51

2.32

1.72

1.13

Return on average assets

1.24

%

1.19

%

1.37

%

1.37

%

1.38

%

Return on average common equity

9.05

%

8.60

%

10.00

%

10.01

%

9.98

%

Return on tangible common equity

16.38

%

15.34

%

18.44

%

18.61

%

18.73

%

Net interest margin (FTE)

3.89

%

3.85

%

3.97

%

4.04

%

4.08

%

FTE adjustment

3,307

1,601

5,297

3,831

2,438

Amortization of intangibles

5,588

2,641

11,009

8,367

5,622

Amortization of intangibles, net of taxes

4,128

1,951

8,132

6,180

4,153

Average diluted shares outstanding

94,588,739

92,870,813

92,830,485

92,796,860

92,692,234

Cash dividends declared per common share

0.32

0.16

0.60

0.45

0.30

Financial Highlights - Core (non-GAAP)

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

$

114,529

$

49,076

$

220,233

$

163,782

$

107,278

Diluted core earnings per share (1)

1.21

0.53

2.37

1.76

1.16

Core net interest margin (FTE) (2)

3.66

%

3.67

%

3.72

%

3.74

%

3.76

%

Accretable yield on acquired loans

16,822

6,660

35,263

31,413

21,407

Efficiency ratio (1)

53.14

%

56.76

%

52.85

%

53.14

%

52.97

%

Core return on average assets (1)

1.37

%

1.22

%

1.40

%

1.41

%

1.41

%

Core return on average common equity (1)

10.04

%

8.85

%

10.21

%

10.24

%

10.20

%

Core return on tangible common equity (1)

18.09

%

15.76

%

18.81

%

19.03

%

19.14

%

END OF PERIOD

Book value per share

$

25.57

$

24.87

$

24.33

$

23.66

$

23.26

Tangible book value per share

14.90

14.78

14.18

13.48

13.05

Shares outstanding

96,590,656

92,568,361

92,347,643

92,291,070

92,281,370

Full-time equivalent employees

2,700

2,602

2,654

2,635

2,659

Total number of financial centers

212

191

191

191

199

(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

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2019

2019

2018

2018

2018

($ in thousands, except per share data)

QUARTER-TO-DATE

Net Income

$

55,598

$

47,695

$

55,646

$

55,193

$

53,562

Non-core items

Merger-related costs

7,522

1,470

797

804

1,465

Early retirement program

2,932

355

-

-

-

Branch right-sizing

2,887

45

292

970

22

Tax effect (1)

(3,486

)

(489

)

(284

)

(463

)

(389

)

Net non-core items

9,855

1,381