Simmons Reports Second Quarter 2020 Earnings

·25 mins read

PINE BLUFF, Ark., July 21, 2020 (GLOBE NEWSWIRE) -- Simmons First National Corporation (NASDAQ: SFNC) (the Company or Simmons) today announced net income of $58.8 million for the quarter ended June 30, 2020, compared to $55.6 million for the same period in 2019, an increase of $3.2 million, or 5.7%. Diluted earnings per share were $0.54, a decrease of $0.04, or 6.9%, compared to the same period in the prior year. Included in second quarter 2020 results were $3.0 million in net after-tax merger-related, early retirement program and branch right-sizing costs as well as a $1.6 million after-tax gain associated with the sale of branches.

Excluding the impact of these items, core earnings were $60.1 million for the quarter ended June 30, 2020, compared to $65.5 million for the quarter ended June 30, 2019, a decrease of $5.3 million, or 8.1%. Core diluted earnings per share were $0.55, a decrease of $0.13, or 19.1%, from the same period in 2019.

Year-to-date net income for the first half of 2020 was $136.0 million, or $1.22 diluted earnings per share, compared to $103.3 million, or $1.09 diluted earnings per share, for the same period in 2019. Excluding $2.0 million in net after-tax merger-related, early retirement program and branch right-sizing costs and the gains on the sales of branches in south Texas and Colorado, year-to-date core earnings for 2020 were $134.0 million, an increase of $19.5 million compared to the same period last year. Core diluted earnings per share for the first half of 2020 were $1.21, equal to the same period in 2019.

Our associates at Simmons Bank have done an amazing job of adapting to the changes that have occurred over the past four months, said George A. Makris, Jr., chairman and CEO of Simmons First National Corporation. We continue to operate in an uncertain environment, and we will continue to adjust as necessary. We have consolidated various operations to provide capacity for continued service to our customers and communities. Our digital banking options have been very well received by our customers, and we expect to continue to see the trend toward more self-service. We need a sustainable plan for the opening of the economy, including public education across the country. We remain optimistic we will get one soon.

Selected Highlights:

 

2 nd Qtr 2020

 

 

1 st Qtr 2020

 

 

2 nd Qtr 2019

 

Net income

$

58.8 million

 

$

77.2 million

 

$

55.6 million

 

Diluted earnings per share

$

0.54

 

$

0.68

 

$

0.58

 

Return on avg assets

 

1.08

%

 

1.48

%

 

1.28

%

Return on avg common equity

 

8.21

%

 

10.83

%

 

9.48

%

Return on tangible common equity (1)

 

14.55

%

 

19.00

%

 

17.40

%

 

 

 

 

Core earnings (2)

$

60.1 million

 

$

73.8 million

 

$

65.5 million

 

Core diluted earnings per share (2)

$

0.55

 

$

0.65

 

$

0.68

 

Core return on avg assets (2)

 

1.11

%

 

1.42

%

 

1.51

%

Core return on avg common equity (2)

 

8.40

%

 

10.35

%

 

11.16

%

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

 

14.87

%

 

18.19

%

 

20.36

%

Efficiency ratio (3)

 

49.12

%

 

56.38

%

 

49.88

%

Pre-tax, pre-provision (PTPP) earnings (2)

$

97.7 million

 

$

84.4 million

 

$

88.8 million

 

 

 

 

 

 

 

 

 

 

 

  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)

2 nd Qtr 2020

1 st Qtr 2020

2 nd Qtr 2019

Total loans

$

14.61

$

14.37

$

13.13

 

 

 

 

 

 

 

Total loans were $14.6 billion at June 30, 2020, an increase of $1.5 billion, or 11.3%, compared to June 30, 2019, primarily due to The Landrum Company (Landrum) merger completed during the fourth quarter 2019. On a linked-quarter basis (June 30, 2020 compared to March 31, 2020), total loans increased $232.6 million, or 1.6%. During the second quarter of 2020, the Company had $963.7 million in loan originations under the Paycheck Protection Program (PPP) of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and an increase in agricultural loans of $26.2 million. These increases were partially offset by decreases in energy loan lending, commercial real estate and single-family real estate loan categories of $64.8 million, $149.7 million and $136.5 million, respectively. 

Deposits

($ in billions)

2 nd Qtr 2020

1 st Qtr 2020

2 nd Qtr 2019

Total deposits

$

16.6

$

15.6

$

13.5

Non-interest bearing deposits

$

4.6

$

3.6

$

2.9

Interest bearing deposits

$

9.0

$

8.8

$

7.3

Time deposits

$

3.0

$

3.2

$

3.3

 

 

 

 

 

 

 

Total deposits were $16.6 billion at June 30, 2020, an increase of $3.1 billion, or 22.9%, since June 30, 2019, primarily due to the Landrum merger. On a linked-quarter basis, total deposits increased $1.1 billion, or 6.8%, primarily due to the $1.0 billion increase in non-interest bearing deposits. This increase was partially offset by a decrease in brokered funds of $308.9 million during the second quarter.   

Net Interest Income

 

2 nd Qtr
2020

 

1 st Qtr
2020

 

4 th Qtr
2019

 

3 rd Qtr
2019

 

2 nd Qtr
2019

 

Loan yield (1)

4.84

%

5.19

%

5.43

%

5.47

%

5.58

%

Core loan yield (1) (2)

4.52

%

4.86

%

5.00

%

5.19

%

5.26

%

Security yield (1)

2.50

%

2.63

%

2.73

%

2.87

%

3.06

%

Cost of interest bearing deposits

0.59

%

1.03

%

1.22

%

1.40

%

1.37

%

Cost of deposits (3)

0.44

%

0.80

%

0.94

%

1.09

%

1.07

%

Cost of borrowed funds

1.84

%

2.06

%

2.30

%

2.52

%

2.50

%

Net interest margin (1)

3.42

%

3.68

%

3.78

%

3.82

%

3.94

%

Core net interest margin (1) (2)

3.18

%

3.42

%

3.44

%

3.59

%

3.67

%

 

 

 

 

 

 

 

 

 

 

 

  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 Companys net interest income for the second quarter of 2020 was $163.7 million, an increase of $14.3 million, or 9.5%, from the same period of 2019, primarily due to the 78 basis point decline in the cost of interest bearing deposits year over year. Included in interest income was the yield accretion recognized on loans acquired of $11.7 million and $10.2 million for the second quarters of 2020 and 2019, respectively.

The loan yield was 4.84% for the quarter ended June 30, 2020, while the core loan yield, which excludes the accretion, was 4.52% for the same period. The decrease in the loan yield during the second quarter of 2020 was primarily driven by the lower yielding PPP loans originated during the quarter. The PPP loan yield was approximately 2.33% (including accretion of net fees), which decreased the loan yield by approximately 10 basis points.

Net interest margin (FTE) was 3.42% for the quarter ended June 30, 2020, while the core net interest margin, which excludes the accretion, was 3.18% for the same period. The decrease in the net interest margin during the second quarter of 2020 was primarily driven by the additional liquidity and the lower yielding PPP loans, which decreased the net interest margin by approximately 25 basis points.

Non-Interest Income

Non-interest income for the second quarter of 2020 was $50.2 million, an increase of $10.3 million compared to the same period in the previous year. During the second quarter 2020, the Company recognized a $2.2 million gain associated with the sale of the branches recorded in other income, which the Company considers a non-core item.

The increase in non-interest income was primarily due to the increase in mortgage lending income driven by the current low mortgage interest rate environment. The decrease in service charges on deposit accounts was primarily attributable to a lower number of customer transactions, related to the impact of the COVID-19 pandemic.

Selected Non-Interest Income Items
($ in millions)

2 nd Qtr
2020

1 st Qtr
2020

4 th Qtr
2019

3 rd Qtr
2019

2 nd Qtr
2019

Service charges on deposit accounts

$

8.6

$

13.3

$

13.3

$

10.8

$

10.6

Mortgage lending income

$

12.5

$

5.0

$

4.0

$

4.5

$

3.7

SBA lending income

$

0.2

$

0.3

$

0.3

$

1.0

$

0.9

Debit and credit card fees

$

8.0

$

7.9

$

8.9

$

7.1

$

7.2

Gain on sale of securities

$

0.4

$

32.1

$

0.4

$

7.4

$

2.8

Other income

$

9.8

$

12.8

$

7.1

$

44.7

$

6.1

 

 

 

 

 

 

Core other income (1)

$

7.6

$

6.9

$

7.1

$

44.7

$

6.1

 

 

 

 

 

 

 

 

 

 

 

  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.

Non-Interest Expense

Non-interest expense for the second quarter of 2020 was $112.6 million, an increase of $1.9 million compared to the second quarter of 2019. Included in this quarter were $4.0 million of pre-tax non-core items for merger-related, early retirement program and branch right-sizing costs. Excluding these expenses, core non-interest expense was $108.6 million for the second quarter of 2020, an increase of $11.2 million compared to the same period in 2019, primarily the result of the Landrum merger and additional software and technology costs related to the Companys Next Generation Banking (NGB) initiative.

The efficiency ratio for the second quarter of 2020 was 49.12%, compared to 49.88% for the same period in 2019.

Selected Non-Interest Expense Items
($ in millions)

2 nd Qtr
2020

1 st Qtr
2020

4 th Qtr
2019

3 rd Qtr
2019

2 nd Qtr
2019

Salaries and employee benefits

$

57.6

$

67.9

$

63.2

$

52.1

$

56.1

Merger related costs

$

1.8

$

1.1

$

24.8

$

2.6

$

7.5

Other operating expenses

$

34.7

$

38.8

$

38.0

$

37.9

$

32.9

 

 

 

 

 

 

Core salaries and employee benefits (1)

$

57.2

$

67.9

$

63.2

$

51.9

$

53.2

Core merger related costs (1)

 

-

 

-

 

-

 

-

 

-

Core other operating expenses (1)

$

33.0

$

38.6

$

38.0

$

37.8

$

30.0

 

 

 

 

 

 

 

 

 

 

 

  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.

On a linked-quarter basis, salaries and employee benefits decreased by $10.3 million, which included the impact of cost savings from the Landrum merger.  The decrease was primarily driven by the following categories:

  • Employee benefits - $3.1 million decrease (payroll taxes, insurance utilization, and other employee benefits)

  • Salaries - $2.3 million decrease

  • Incentive based plans - $4.9 million decrease (executive, lender and retail incentive plans)

On a linked-quarter basis, other operating expenses decreased $4.1 million. The remaining decrease was primarily related to cost savings from the Landrum merger and lower operating expenses due to the impact of COVID-19.

Early in 2020, the Company offered qualifying associates an early retirement option resulting in $493,000 of non-core expense during the second quarter. The Company expects ongoing net annualized savings of approximately $2.9 million.

Management continuously evaluates the Companys branch network as part of its analysis of the profitability of the Companys operations and the efficiency with which it delivers banking services to its markets. As a result of this ongoing evaluation, the Company closed 11 branch locations during June 2020, with estimated net annual cost savings of approximately $2.4 million related to these locations. In addition, the Company expects to close an additional 23 branch locations and one loan production office during the fourth quarter of 2020, with an expected net annual cost savings of approximately $6.8 million.

Asset Quality

 

2 nd Qtr
2020

1 st Qtr
2020

4 th Qtr
2019

3 rd Qtr
2019

2 nd Qtr
2019

Allowance for credit losses to total loans

1.59

%

1.69

%

0.47

%

0.51

%

0.49

%

Allowance for credit losses to non-performing loans

175

%

154

%

74

%

78

%

60

%

Non-performing loans to total loans

0.91

%

1.10

%

0.64

%

0.65

%

0.81

%

Net charge-off ratio (annualized)

1.04

%

0.07

%

0.09

%

0.59

%

0.11

%

Net charge-off ratio YTD (annualized)

0.56

%

0.07

%

0.24

%

0.30

%

0.15

%

At June 30, 2020, the allowance for credit losses was $231.6 million. Provision for credit losses for the second quarter of 2020 was $26.9 million. Included in total loans was $963.7 million of government guaranteed PPP loans.  Excluding the PPP loans, the allowance for credit losses to total loans was 1.70%.

Net charge-offs for the second quarter of 2020 were $38.2 million, of which $32.6 million were from loans included in the energy lending portfolios acquired from Bank SNB and Southwest Bank in 2017.  Of the second quarter charge-offs, $27.8 million was specifically reserved for and included in the March 31, 2020 allowance for credit loss.  Therefore, additional provision related to these charges was not required.

Foreclosed Assets and Other Real Estate Owned

At June 30, 2020, foreclosed assets and other real estate owned were $14.1 million, decreases of $10.7 million, or 43.0%, compared to the same period in 2019 and $6.7 million, or 32.2% from March 31, 2020. The composition of these assets is divided into three types:      

  ($ in millions)

2 nd Qtr
2020

1 st Qtr
2020

4 th Qtr
2019

3 rd Qtr
2019

2 nd Qtr
2019

Closed bank branches and branch sites

$

2.7

$

8.8

$

5.7

$

5.9

$

6.5

Foreclosed assets acquired

$

9.2

$

9.2

$

10.3

$

10.1

$

13.3

Foreclosed assets legacy

$

2.2

$

2.8

$

3.1

$

3.6

$

5.0

 

 

 

 

 

 

 

 

 

 

 

Capital

 

2 nd Qtr
2020

1 st Qtr
2020

4 th Qtr
2019

3 rd Qtr
2019

2 nd Qtr
2019

Stockholders equity to total assets

13.3

%

13.7

%

14.1

%

14.3

%

13.8

%

Tangible common equity to tangible assets (1)

8.3

%

8.4

%

9.0

%

9.1

%

8.5

%

Regulatory common equity tier 1 ratio

11.9

%

11.1

%

10.9

%

10.3

%

9.8

%

Regulatory tier 1 leverage ratio

8.8

%

9.0

%

9.6

%

9.1

%

8.9

%

Regulatory tier 1 risk-based capital ratio

11.9

%

11.1

%

10.9

%

10.3

%

9.8

%

Regulatory total risk-based capital ratio

14.9

%

14.1

%

13.7

%

13.2

%

12.7

%

 

 

 

 

 

 

 

 

 

 

 

  1. Tangible common equity to tangible assets is a non-GAAP measurement. Please see Non-GAAP Financial Measures and Reconciliation of Non-GAAP Financial Measures below.

At June 30, 2020, common stockholders' equity was $2.9 billion. Book value per share was $26.64 and tangible book value per share was $15.79 at June 30, 2020. The ratio of stockholders equity to total assets was 13.3% at June 30, 2020 while the tangible common equity to tangible assets was 8.3% at June 30, 2020. As of June 30, 2020, PPP loans totaled $963.7 million, which are 100% federally guaranteed and have a zero percent risk-weight for regulatory capital ratios.  Excluding PPP loans from total assets, equity to total assets was 13.9%, tangible common equity to tangible assets was 8.7% and the regulatory tier 1 leverage ratio was 9.1%.

No shares have been repurchased under the Companys stock repurchase program since March 31, 2020. Market conditions and the Companys capital needs will drive the decisions regarding additional, future stock repurchases.

Digital Banking

Since the end of February 2020, the Company has added over 38,000 new digital banking users, a 23% increase.  More than 78% of deposit transaction accounts are now enrolled in digital banking.  For the first time, in March, the Company processed more weekly transactions using the digital channels than at the branches.  During May 2020, the Company completed the conversion of all consumer customers to the new online platform.  All consumer customers are now on the same online and mobile platforms, including acquired institutions.

COVID-19 Impact

Through June 30, 2020, the Company originated over 7,800 PPP loans with an average balance of $123,000 per loan.  Approximately 93% of the PPP loans had a balance less than $350,000.

PPP Loans
as of June 30, 2020

# of
Loans

 

Balance
($ in millions)

 

Loan balance less than $350,000

7,286

93

%

$

392.3

41

%

Loan balance $350,000 or less than $2 million

478

6

%

$

355.4

37

%

Loan balance $2 million to $10 million

62

1

%

$

216.0

22

%

Total

7,826

100

%

$

963.7

100

%

 

 

 

 

 

 

 

 

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.  While the majority of these branches have been reopened, the Company has continued to review its branch network.

Simmons First National Corporation

Simmons First National Corporation is a financial holding company headquartered in Pine Bluff, Arkansas, with total consolidated assets of approximately $21.9 billion as of June 30, 2020, conducting financial operations in Arkansas, Illinois, Kansas, Missouri, Oklahoma, Tennessee and Texas. The Company, through its subsidiaries, offers comprehensive financial solutions delivered with a client-centric approach. The Companys common stock is listed on the NASDAQ Global Select 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 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 9275743. In addition, the call will be available live or in recorded version on the Companys 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 Companys management uses these non-GAAP financial measures in their analysis of the Companys 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, early retirement program expenses 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 further presents certain figures that are exclusive of PPP loans.  The Companys management believes that these non-GAAP financial measures are useful to investors because they present the results of the Companys ongoing operations without the effect of mergers or other items not central to the Companys 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 Companys 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, including, without limitation, statements made in Mr. Makriss quotes, 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 and other digital banking initiatives, the Companys ability to recruit and retain key employees, the benefits associated with the Companys early retirement program and completed and future branch closures, 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 effect of steps the Company takes in response to COVID-19, the severity and duration of the pandemic, including whether there is a second wave as a result of the loosening of governmental restrictions, the pace of recovery when the pandemic subsides and the heightened impact it has on many of the risks described herein; the effects of the COVID-19 pandemic on, among other things, the Companys 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 Companys 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 (current expected credit losses, or CECL); the Companys 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 Companys 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

 

Jun 30

 

 

Mar 31

 

 

Dec 31

 

 

Sep 30

 

 

Jun 30

 

(Unaudited)

 

2020

 

 

2020

 

 

2019

 

 

2019

 

 

2019

 

($ in thousands)

 

 

 

 

 

ASSETS

 

 

 

 

 

Cash and non-interest bearing balances due from banks

$

234,998

 

$

244,123

 

$

277,208

 

$

161,440

 

$

145,491

 

Interest bearing balances due from banks and federal funds sold

 

2,310,162

 

 

1,493,076

 

 

719,415

 

 

368,530

 

 

509,765

 

Cash and cash equivalents

 

2,545,160

 

 

1,737,199

 

 

996,623

 

 

529,970

 

 

655,256

 

Interest bearing balances due from banks - time

 

4,561

 

 

4,309

 

 

4,554

 

 

5,041

 

 

5,041

 

Investment securities - held-to-maturity

 

51,720

 

 

53,968

 

 

40,927

 

 

42,237

 

 

47,455

 

Investment securities - available-for-sale

 

2,496,896

 

 

2,466,640

 

 

3,288,343

 

 

2,210,931

 

 

2,191,573

 

Mortgage loans held for sale

 

120,034

 

 

49,984

 

 

58,102

 

 

50,099

 

 

34,999

 

Other assets held for sale

 

399

 

 

115,315

 

 

260,332

 

 

383

 

 

397

 

Loans:

 

 

 

 

 

Loans

 

14,606,900

 

 

14,374,277

 

 

14,425,704

 

 

13,003,549

 

 

13,128,125

 

Allowance for credit losses on loans

 

(231,643

)

 

(243,195

)

 

(68,244

)

 

(66,590

)

 

(64,179

)

Net loans

 

14,375,257

 

 

14,131,082

 

 

14,357,460

 

 

12,936,959

 

 

13,063,946

 

Premises and equipment

 

478,896

 

 

484,990

 

 

492,384

 

 

378,678

 

 

370,551

 

Premises held for sale

 

4,576

 

 

-

 

 

-

 

 

-

 

 

-

 

Foreclosed assets and other real estate owned

 

14,111

 

 

20,805

 

 

19,121

 

 

19,576

 

 

24,761

 

Interest receivable

 

79,772

 

 

57,039

 

 

62,707

 

 

53,966

 

 

54,781

 

Bank owned life insurance

 

256,643

 

 

255,197

 

 

254,152

 

 

234,655

 

 

233,345

 

Goodwill

 

1,064,765

 

 

1,064,978

 

 

1,055,520

 

 

926,648

 

 

926,450

 

Other intangible assets

 

117,823

 

 

121,673

 

 

127,340

 

 

101,149

 

 

104,096

 

Other assets

 

293,071

 

 

278,173

 

 

241,578

 

 

268,219

 

 

224,784

 

Total assets

$

21,903,684

 

$

20,841,352

 

$

21,259,143

 

$

17,758,511

 

$

17,937,435

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

Deposits:

 

 

 

 

 

Non-interest bearing transaction accounts

$

4,608,098

 

$

3,572,244

 

$

3,741,093

 

$

3,044,330

 

$

2,954,032

 

Interest bearing transaction accounts and savings deposits

 

8,978,045

 

 

8,840,678

 

 

9,090,878

 

 

7,337,571

 

 

7,258,005

 

Time deposits

 

3,029,975

 

 

3,146,811

 

 

3,276,969

 

 

3,086,108

 

 

3,304,176

 

Total deposits

 

16,616,118

 

 

15,559,733

 

 

16,108,940

 

 

13,468,009

 

 

13,516,213

 

Federal funds purchased and securities sold under agreements to repurchase

 

387,025

 

 

377,859

 

 

150,145

 

 

116,536

 

 

130,470

 

Other borrowings

 

1,393,689

 

 

1,396,829

 

 

1,297,599

 

 

1,098,395

 

 

1,324,094

 

Subordinated notes and debentures

 

382,604

 

 

388,396

 

 

388,260

 

 

354,223

 

 

354,132

 

Other liabilities held for sale

 

-

 

 

58,405

 

 

159,853

 

 

-

 

 

162

 

Accrued interest and other liabilities

 

219,545

 

 

214,730

 

 

165,422

 

 

174,277

 

 

142,851

 

Total liabilities

 

18,998,981

 

 

17,995,952

 

 

18,270,219

 

 

15,211,440

 

 

15,467,922

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

767

 

 

767

 

 

767

 

 

-

 

 

-

 

Common stock

 

1,090

 

 

1,090

 

 

1,136

 

 

966

 

 

966

 

Surplus

 

2,029,383

 

 

2,026,420

 

 

2,117,282

 

 

1,708,058

 

 

1,705,262

 

Undivided profits

 

819,153

 

 

778,893

 

 

848,848

 

 

814,338

 

 

747,969

 

Accumulated other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized accretion (depreciation) on AFS securities

 

54,310

 

 

38,230

 

 

20,891

 

 

23,709

 

 

15,316

 

Total stockholders' equity

 

2,904,703

 

 

2,845,400

 

 

2,988,924

 

 

2,547,071

 

 

2,469,513

 

Total liabilities and stockholders' equity

$

21,903,684

 

$

20,841,352

 

$

21,259,143

 

$

17,758,511

 

$

17,937,435

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



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)

 

2020

 

2020

 

2019

 

 

2019

 

2019

($ in thousands, except per share data)

 

 

 

 

 

INTEREST INCOME

 

 

 

 

 

Loans

$

176,910

$

187,566

$

193,402

 

$

179,971

$

178,122

Interest bearing balances due from banks and federal funds sold

 

603

 

2,441

 

2,625

 

 

1,586

 

1,121

Investment securities

 

13,473

 

18,943

 

16,962

 

 

14,467

 

15,666

Mortgage loans held for sale

 

668

 

281

 

402

 

 

382

 

332

TOTAL INTEREST INCOME

 

191,654

 

209,231

 

213,391

 

 

196,406

 

195,241

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

Time deposits

 

10,803

 

13,323

 

16,198

 

 

15,573

 

14,606

Other deposits

 

7,203

 

17,954

 

20,331

 

 

21,363

 

20,190

Federal funds purchased and securities sold under agreements to repurchase

 

337

 

759

 

368

 

 

249

 

257

Other borrowings

 

4,963

 

4,877

 

4,615

 

 

5,381

 

6,219

Subordinated notes and debentures

 

4,667

 

4,835

 

4,813

 

 

4,576

 

4,541

TOTAL INTEREST EXPENSE

 

27,973

 

41,748

 

46,325

 

 

47,142

 

45,813

NET INTEREST INCOME

 

163,681

 

167,483

 

167,066

 

 

149,264

 

149,428

Provision for credit losses

 

26,915

 

26,134

 

4,903

 

 

21,973

 

7,079

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES

 

136,766

 

141,349

 

162,163

 

 

127,291

 

142,349

NON-INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

Trust income

 

7,253

 

7,151

 

7,430

 

 

6,108

 

5,794

Service charges on deposit accounts

 

8,570

 

13,328

 

13,332

 

 

10,825

 

10,557

Other service charges and fees

 

1,489

 

1,588

 

1,915

 

 

1,308

 

1,312

Mortgage lending income

 

12,459

 

5,046

 

4,029

 

 

4,509

 

3,656

SBA lending income

 

245

 

296

 

321

 

 

956

 

895

Investment banking income

 

571

 

877

 

822

 

 

513

 

360

Debit and credit card fees

 

7,996

 

7,914

 

8,920

 

 

7,059

 

7,212

Bank owned life insurance income

 

1,445

 

1,298

 

1,411

 

 

1,302

 

1,260

Gain on sale of securities, net

 

390

 

32,095

 

377

 

 

7,374

 

2,823

Other income

 

9,809

 

12,801

 

7,073

 

 

44,721

 

6,065

TOTAL NON-INTEREST INCOME

 

50,227

 

82,394

 

45,630

 

 

84,675

 

39,934

NON-INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

57,644

 

67,924

 

63,235

 

 

52,065

 

56,128

Occupancy expense, net

 

9,217

 

9,510

 

9,272

 

 

8,342

 

6,919

Furniture and equipment expense

 

6,144

 

5,723

 

5,758

 

 

4,898

 

4,206

Other real estate and foreclosure expense

 

274

 

325

 

1,089

 

 

1,125

 

591

Deposit insurance

 

2,838

 

2,475

 

(134

)

 

-

 

2,510

Merger-related costs

 

1,830

 

1,068

 

24,831

 

 

2,556

 

7,522

Other operating expenses

 

34,651

 

38,788

 

38,044

 

 

37,879

 

32,867

TOTAL NON-INTEREST EXPENSE

 

112,598

 

125,813 142,095 106,865 110,743NET INCOME BEFORE INCOME TAXES 74,395 97,930 65,698 105,101 71,540Provision for income taxes 15,593 20,694 12,976 23,275 15,616NET INCOME 58,802 77,236 52,722 81,826 55,924Preferred stock dividends 13 13 13 - 326NET INCOME AVAILABLE TO COMMON STOCKHOLDERS$58,789$77,223$52,709 $81,826$55,598BASIC EARNINGS PER SHARE$0.54$0.68$0.49 $0.85$0.58DILUTED EARNINGS PER SHARE$0.54$0.68$0.49 $0.84$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)

2020

2020

2019

2019

2019

($ in thousands)

Tier 1 capital

Stockholders' equity

$

2,904,703

$

2,845,400

$

2,988,924

$

2,547,071

$

2,469,513

CECL transition provision (1)

130,480

134,558

-

-

-

Disallowed intangible assets, net of deferred tax

(1,160,385

)

(1,164,038

)

(1,160,079

)

(1,013,309

)

(1,001,676

)

Unrealized (gain) loss on AFS securities

(54,310

)

(38,230

)

(20,891

)

(23,709

)

(15,316

)

Total Tier 1 capital

1,820,488

1,777,690

1,807,954

1,510,053

1,452,521

Tier 2 capital

Trust preferred securities and subordinated debt

382,604

388,396

388,260

354,223

354,132

Qualifying allowance for loan losses and reserve for unfunded commitments

83,780

96,015

76,644

74,455

72,044

Total Tier 2 capital

466,384

484,411

464,904

428,678

426,176

Total risk-based capital

$

2,286,872

$

2,262,101

$

2,272,858

$

1,938,731

$

1,878,697

Risk weighted assets

$

15,362,175

$

16,012,233

$

16,554,081

$

14,725,571

$

14,825,253

Adjusted average assets for leverage ratio

$

20,742,824

$

19,832,219

$

18,852,798

$

16,681,527

$

16,382,520

Ratios at end of quarter

Equity to assets

13.26

%

13.65

%

14.06

%

14.34

%

13.77

%

Tangible common equity to tangible assets (2)

8.31

%

8.44

%

8.99

%

9.08

%

8.51

%

Common equity Tier 1 ratio (CET1)

11.85

%

11.10

%

10.92

%

10.25

%

9.80

%

Tier 1 leverage ratio

8.78

%

8.96

%

9.59

%

9.05

%

8.87

%

Tier 1 risk-based capital ratio

11.85

%

11.10

%

10.92

%

10.25

%

9.80

%

Total risk-based capital ratio

14.89

%

14.13

%

13.73

%

13.17

%

12.67

%

(1) The Company has elected to use the CECL transition provision allowed for in the year of adopting ASC 326.

(2) 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 Investment Securities

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2020

2020

2019

2019

2019

($ in thousands)

Investment Securities - End of Period

Held-to-Maturity

U.S. Government agencies

$

-

$

-

$

-

$

-

$

999

Mortgage-backed securities

25,980

27,121

10,796

11,549

12,225

State and political subdivisions

24,777

25,985

27,082

28,692

32,236

Other securities

963

862

3,049

1,996

1,995

Total held-to-maturity (net of credit losses)

51,720

53,968

40,927

42,237

47,455

Available-for-Sale

U.S. Treasury

$

-

$

424,989

$

449,729

$

-

$

-

U.S. Government agencies

210,921

161,289

194,249

178,139

197,656

Mortgage-backed securities

1,154,086

1,179,837

1,742,945

1,337,794

1,345,760

State and political subdivisions

1,054,068

678,243

880,524

681,202

636,558

Other securities

77,821

22,282

20,896

13,796

11,599

Total available-for-sale (net of credit losses)

2,496,896

2,466,640

3,288,343

2,210,931

2,191,573

Total investment securities (net of credit losses)

$

2,548,616

$

2,520,608

$

3,329,270

$

2,253,168

$

2,239,028

Fair value - HTM investment securities

$

53,751

$

55,714

$

41,855

$

43,302

$

48,640

Investment Securities - QTD Average

Taxable securities

$

1,642,083

$

2,324,188

$

1,940,755

$

1,561,308

$

1,641,986

Tax exempt securities

866,944

900,223

825,000

681,505

624,898

Total investment securities - QTD average

$

2,509,027

$

3,224,411

$

2,765,755

$

2,242,813

$

2,266,884


Simmons First National Corporation

SFNC

Consolidated Loans

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2020

2020

2019

2019

2019

($ in thousands)

Loan Portfolio - End of Period

Consumer

Credit cards

$

184,348

$

188,596

$

204,802

$

195,083

$

187,919

Other consumer

214,024

267,870

249,195

215,283

216,144

Total consumer

398,372

456,466

453,997

410,366

404,063

Real Estate

Construction

2,010,256

2,024,118

2,248,673

2,081,595

1,975,179

Single-family residential

2,207,087

2,343,543

2,414,753

1,951,842

1,998,655

Other commercial real estate

6,316,444

6,466,104

6,358,514

5,758,511

5,983,488

Total real estate

10,533,787

10,833,765

11,021,940

9,791,948

9,957,322

Commercial

Commercial

3,038,216

2,314,472

2,451,119

2,215,539

2,249,078

Agricultural

217,715

191,535

191,525

214,610

192,988

Total commercial

3,255,931

2,506,007

2,642,644

2,430,149

2,442,066

Other

418,810

578,039

307,123

371,086

324,674

Total Loans

$

14,606,900

$

14,374,277

$

14,425,704

$

13,003,549

$

13,128,125


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)

2020

2020

2019

2019

2019

($ in thousands)

Allowance for Credit Losses on Loans

Beginning balance, prior to adoption of ASC 326

$

68,244

$

66,590

$

64,179

$

60,555

Impact of adopting ASC 326 (1)

151,377

Beginning balance, after adoption of ASC 326

$

243,195

$

219,621

Loans charged off

Credit cards

1,053

1,441

1,287

1,117

1,039

Other consumer

592

1,379

1,425

1,065

964

Real estate

1,824

396

892

1,367

1,216

Commercial

35,687

523

459

17,778

1,963

Total loans charged off

39,156

3,739

4,063

21,327

5,182

Recoveries of loans previously charged off

Credit cards

272

225

287

223

271

Other consumer

301

443

304

1,422

331

Real estate

253

101

146

55

158

Commercial

98

347

77

65

967

Total recoveries

924

1,116

814

1,765

1,727

Net loans charged off

38,232

2,623

3,249

19,562

3,455

Provision for credit losses on loans

26,678

26,197

4,903

21,973

7,079

Balance, end of quarter

$

231,641

$

243,195

$

68,244

$

66,590

$

64,179

Non-performing assets

Non-performing loans

Nonaccrual loans

$

131,888

$

156,746

$

91,723

$

84,660

$

106,670

Loans past due 90 days or more

537

1,305

855

177

277

Total non-performing loans

132,425

158,051

92,578

84,837

106,947

Other non-performing assets

Foreclosed assets and other real estate owned

14,111

20,805

19,121

19,576

24,761

Other non-performing assets

2,008

2,169

1,964

540

613

Total other non-performing assets

16,119

22,974

21,085

20,116

25,374

Total non-performing assets

$

148,544

$

181,025

$

113,663

$

104,953

$

132,321

Performing TDRs (troubled debt restructurings)

$

3,960

$

4,110

$

4,411

$

6,519

$

6,246

Ratios

Allowance for credit losses to total loans

1.59

%

1.69

%

0.47

%

0.51

%

0.49

%

Allowance for credit losses to non-performing loans

175

%

154

%

74

%

78

%

60

%

Non-performing loans to total loans

0.91

%

1.10

%

0.64

%

0.65

%

0.81

%

Non-performing assets (including performing TDRs) to total assets

0.70

%

0.89

%

0.56

%

0.63

%

0.77

%

Non-performing assets to total assets

0.68

%

0.87

%

0.53

%

0.59

%

0.74

%

Annualized net charge offs to total loans

1.04

%

0.07

%

0.09

%

0.59

%

0.11

%

Annualized net credit card charge offs to total credit card loans

1.67

%

2.29

%

1.99

%

1.82

%

1.63

%

(1) The Company adopted ASC 326.effective January 1, 2020.

.



Simmons First National Corporation

SFNC

Consolidated - Average Balance Sheet and Net Interest Income Analysis

For the Quarters Ended

(Unaudited)

Three Months Ended Jun 2020

Three Months Ended Mar 2020

Three Months Ended Jun 2019

($ 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

$

2,190,878

$

603

0.11

%

$

764,639

$

2,441

1.28

%

$

276,370

$

1,121

1.63

%

Investment securities - taxable

1,642,083

7,131

1.75

%

2,324,188

12,752

2.21

%

1,641,986

11,066

2.70

%

Investment securities - non-taxable (FTE)

866,944

8,434

3.91

%

900,223

8,315

3.71

%

624,898

6,209

3.99

%

Mortgage loans held for sale

86,264

668

3.11

%

43,588

281

2.59

%

32,030

332

4.16

%

Loans (FTE)

14,731,306

177,168

4.84

%

14,548,853

187,747

5.19

%

12,814,386

178,219

5.58

%

Total interest earning assets (FTE)

19,517,475

194,004

4.00

%

18,581,491

211,536

4.58

%

15,389,670

196,947

5.13

%

Non-earning assets

2,304,798

2,338,732

1,993,202

Total assets

$

21,822,273

$

20,920,223

$

17,382,872

LIABILITIES AND STOCKHOLDERS' EQUITY

Interest bearing liabilities:

Interest bearing transaction and savings accounts

$

9,138,563

$

7,203

0.32

%

$

9,005,701

$

17,954

0.80

%

$

7,139,356

$

20,190

1.13

%

Time deposits

3,057,153

10,803

1.42

%

3,150,909

13,323

1.70

%

3,072,246

14,606

1.91

%

Total interest bearing deposits

12,195,716

18,006

0.59

%

12,156,610

31,277

1.03

%

10,211,602

34,796

1.37

%

Federal funds purchased and securities sold under agreement to repurchase

392,633

337

0.35

%

330,902

759

0.92

%

133,242

257

0.77

%

Other borrowings

1,395,109

4,963

1.43

%

1,320,245

4,877

1.49

%

1,277,450

6,219

1.95

%

Subordinated notes and debentures

387,422

4,667

4.84

%

388,330

4,835

5.01

%

354,088

4,541

5.14

%

Total interest bearing liabilities

14,370,880

27,973

0.78

%

14,196,087

41,748

1.18

%

11,976,382

45,813

1.53

%

Non-interest bearing liabilities:

Non-interest bearing deposits

4,354,781

3,602,678

2,834,452

Other liabilities

216,508

251,514

207,500

Total liabilities

18,942,169

18,050,279

15,018,334

Stockholders' equity

2,880,104

2,869,944

2,364,538

Total liabilities and stockholders' equity

$

21,822,273

$

20,920,223

$

17,382,872

Net interest income (FTE)

$

166,031

$

169,788

$

151,134

Net interest spread (FTE)

3.22

%

3.40

%

3.60

%

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

3.42

%

3.68

%

3.94

%

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

3.55

%

3.68

%

3.90

%

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

3.18

%

3.42

%

3.67

%

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

4.52

%

4.86

%

5.26

%

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

3.30

%

3.42

%

3.68

%

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

4.69

%

4.86

%

5.27

%

(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)

2020

2020

2019

2019

2019

($ in thousands, except share data)

QUARTER-TO-DATE

Financial Highlights - GAAP

Net Income

$

58,789

$

77,223

$

52,709

$

81,826

$

55,598

Diluted earnings per share

0.54

0.68

0.49

0.84

0.58

Return on average assets

1.08

%

1.48

%

1.04

%

1.83

%

1.28

%

Return on average common equity

8.21

%

10.83

%

8.01

%

13.70

%

9.48

%

Return on tangible common equity

14.55

%

19.00

%

14.62

%

24.89

%

17.40

%

Net interest margin (FTE)

3.42

%

3.68

%

3.78

%

3.82

%

3.94

%

FTE adjustment

2,350

2,305

2,172

1,843

1,706

Amortization of intangibles

3,369

3,413

3,270

2,947

2,947

Amortization of intangibles, net of taxes

2,489

2,521

2,416

2,176

2,177

Average diluted shares outstanding

109,130,866

113,137,223

108,472,559

96,968,775

96,367,857

Shares repurchased under plan

-

4,922,336

390,000

-

-

Average price of shares repurchased

-

18.96

25.95

-

-

Cash dividends declared per common share

0.17

0.17

0.16

0.16

0.16

Financial Highlights - Core (non-GAAP)

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

$

60,147

$

73,838

$

71,074

$

83,963

$

65,453

Core diluted earnings per share (1)

0.55

0.65

0.66

0.87

0.68

Core net interest margin (FTE) (2)

3.18

%

3.42

%

3.44

%

3.59

%

3.67

%

Accretable yield on acquired loans

11,723

11,837

15,100

9,322

10,162

Efficiency ratio (1)

49.12

%

56.38

%

52.63

%

43.77

%

49.88

%

Core return on average assets (1)

1.11

%

1.42

%

1.41

%

1.88

%

1.51

%

Core return on average common equity (1)

8.40

%

10.35

%

10.80

%

14.06

%

11.16

%

Core return on tangible common equity (1)

14.87

%

18.19

%

19.49

%

25.52

%

20.36

%

YEAR-TO-DATE

Financial Highlights - GAAP

Net Income

$

136,012

$

77,223

$

237,828

$

185,119

$

103,293

Diluted earnings per share

1.22

0.68

2.41

1.94

1.09

Return on average assets

1.28

%

1.48

%

1.33

%

1.44

%

1.24

%

Return on average common equity

9.45

%

10.83

%

9.93

%

10.65

%

9.05

%

Return on tangible common equity

16.57

%

19.00

%

17.99

%

19.27

%

16.38

%

Net interest margin (FTE)

3.55

%

3.68

%

3.85

%

3.88

%

3.90

%

FTE adjustment

4,655

2,305

7,322

5,150

3,307

Amortization of intangibles

6,782

3,413

11,805

8,535

5,588

Amortization of intangibles, net of taxes

5,010

2,521

8,720

6,304

4,128

Average diluted shares outstanding

111,083,999

113,137,223

98,796,628

95,450,732

94,588,739

Cash dividends declared per common share

0.34

0.17

0.64

0.48

0.32

Financial Highlights - Core (non-GAAP)

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

$

133,985

$

73,838

$

269,566

$

198,492

$

114,529

Core diluted earnings per share (1)

1.21

0.65

2.73

2.08

1.21

Core net interest margin (FTE) (2)

3.30

%

3.42

%

3.59

%

3.64

%

3.68

%

Accretable yield on acquired loans

23,560

11,837

41,244

26,144

16,822

Efficiency ratio (1)

52.75

%

56.38

%

50.33

%

49.49

%

53.14

%

Core return on average assets (1)

1.26

%

1.42

%

1.51

%

1.55

%

1.37

%

Core return on average common equity (1)

9.31

%

10.35

%

11.25

%

11.42

%

10.04

%

Core return on tangible common equity (1)

16.33

%

18.19

%

20.31

%

20.62

%

18.09

%

END OF PERIOD

Book value per share

$

26.64

$

26.11

$

26.30

$

26.36

$

25.57

Tangible book value per share

15.79

15.22

15.89

15.73

14.90

Shares outstanding

108,994,389

108,966,331

113,628,601

96,613,855

96,590,656

Full-time equivalent employees

2,939

3,079

3,270

2,701

2,700

Total number of financial centers

226

240

251

212

212

(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)

2020

2020

2019

2019

2019

($ in thousands, except per share data)

QUARTER-TO-DATE

Net Income

$

58,789

$

77,223

$

52,709

$

81,826

$

55,598

Non-core items

Gain on sale of branches

(2,204

)

(5,889

)

-

-

-

Merger-related costs

1,830

1,068

24,831

2,556

7,522

Early retirement program

493

-

-

177

2,932

Branch right-sizing

1,721

238

37

160

2,887

Tax effect (1)

(482

)

1,198

(6,503

)

(756

)

(3,486

)

Net non-core items

1,358

(3,385

)

18,365

2,137

9,855

Core earnings (non-GAAP)

$

60,147

$

73,838

$

71,074

$

83,963

$

65,453

Diluted earnings per share

$

0.54

$

0.68

$

0.49

$

0.84

$

0.58

Non-core items

Gain on sale of branches

(0.02

)

(0.05

)

-

-

-

Merger-related costs

0.02

0.01

0.23

0.04

0.08

Early retirement program

-

-

-

-

0.03

Branch right-sizing

0.02

-

-

-

0.03

Tax effect (1)

(0.01

)

0.01

(0.06

)

(0.01

)

(0.04

)

Net non-core items

0.01

(0.03

)

0.17

0.03

0.10

Core diluted earnings per share (non-GAAP)

$

0.55

$

0.65

$

0.66

$

0.87

$

0.68

YEAR-TO-DATE

Net Income

$

136,012

$

77,223

$

237,828

$

185,119

$

103,293

Non-core items

Gain on sale of branches

(8,093

)

(5,889

)

-

-

-

Merger-related costs

2,898

1,068

36,379

11,548

8,992

Early retirement program

493

-

3,464

3,464

3,287

Branch right-sizing

1,959

238

3,129

3,092

2,932

Tax effect (1)

716

1,198

(11,234

)

(4,731

)

(3,975

)

Net non-core items

(2,027

)

(3,385

)

31,738

13,373

11,236

Core earnings (non-GAAP)

$

133,985

$

73,838

$

269,566

$

198,492

$

114,529

Diluted earnings per share

$

1.22

$

0.68

$

2.41

$

1.94

$

1.09

Non-core items

Gain on sale of branches

(0.07

)

(0.05

)

-

-

-

Merger-related costs

0.03

0.01

0.37

0.12

0.10

Early retirement program

-

-

0.03

0.04

0.03

Branch right-sizing

0.02

-

0.03

0.03

0.03

Tax effect (1)

0.01

0.01

(0.11

)

(0.05

)

(0.04

)

Net non-core items

(0.01

)

(0.03

)

0.32

0.14

0.12

Core diluted earnings per share (non-GAAP)

$

1.21

$

0.65

$

2.73

$

2.08

$

1.21

(1) Effective tax rate of 26.135%.

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

QUARTER-TO-DATE

Other income

$

9,809

$

12,801

$

7,073

$

44,721

$

6,065

Non-core items (1)

(2,204

)

(5,889

)

-

-

-

Core other income (non-GAAP)

$

7,605

$

6,912

$

7,073

$

44,721

$

6,065

Non-interest expense

$

112,598

$

125,813

$

142,095

$

106,865

$

110,743

Non-core items (1)

(4,044

)

(1,306

)

(24,868

)

(2,893

)

(13,341

)

Core non-interest expense (non-GAAP)

$

108,554

$

124,507

$

117,227

$

103,972

$

97,402

Salaries and employee benefits

$

57,644

$

67,924

$

63,235

$

52,065

$

56,128

Non-core items (1)

(493

)

-

-

(176

)

(2,937

)

Core salaries and employee benefits (non-GAAP)

$

57,151

$

67,924

$

63,235

$

51,889

$

53,191

Merger related costs

$

1,830

$

1,068

$

24,831

$

2,556

$

7,522

Non-core items (1)

(1,830

)

(1,068

)

(24,831

)

(2,556

)

(7,522

)

Core merger related costs (non-GAAP)

$

-

$

-

$

-

$

-

$

-

Other operating expenses

$

34,651

$

38,788

$

38,044

$

37,881

$

32,867

Non-core items (1)

(1,662

)

(212

)

(4

)

(90

)

(2,834

)

Core other operating expenses (non-GAAP)

$

32,989

$

38,576

$

38,040

$

37,791

$

30,033

(1) Non-core items include gain on sale of branches, 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

Jun 30

Mar 31

Dec 31

Sept 30

Jun 30

(Unaudited)

2020

2020

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

$

2,903,936

$

2,844,633

$

2,988,157

$

2,547,071

$

2,469,513

Intangible assets:

Goodwill

(1,064,765

)

(1,064,978

)

(1,055,520

)

(926,648

)

(926,450

)

Other intangible assets

(117,823

)

(121,673

)

(127,340

)

(101,149

)

(104,096

)

Total intangibles

(1,182,588

)

(1,186,651

)

(1,182,860

)

(1,027,797

)

(1,030,546

)

Tangible common stockholders' equity

$

1,721,348

$

1,657,982

$

1,805,297

$

1,519,274

$

1,438,967

Total assets

$

21,903,684

$

20,841,352

$

21,259,143

$

17,758,511

$

17,937,435

Intangible assets:

Goodwill

(1,064,765

)

(1,064,978

)

(1,055,520

)

(926,648

)

(926,450

)

Other intangible assets

(117,823

)

(121,673

)

(127,340

)

(101,149

)

(104,096

)

Total intangibles

(1,182,588

)

(1,186,651

)

(1,182,860

)

(1,027,797

)

(1,030,546

)

Tangible assets

$

20,721,096

$

19,654,701

$

20,076,283

$

16,730,714

$

16,906,889

Paycheck protection program ("PPP") loans

(963,712

)

Total assets less PPP loans

$

20,939,972

Tangible assets less PPP loans

$

19,757,384

Ratio of equity to assets

13.26

%

13.65

%

14.06

%

14.34

%

13.77

%

Ratio of equity to assets less PPP loans

13.87

%

Ratio of tangible common equity to tangible assets

8.31

%

8.44

%

8.99

%

9.08

%

8.51

%

Ratio of tangible common equity to tangible assets less PPP loans

8.71

%

Calculation of Tangible Book Value per Share

Total common stockholders' equity

$

2,903,936

$

2,844,633

$

2,988,157

$

2,547,071

$

2,469,513

Intangible assets:

Goodwill

(1,064,765

)

(1,064,978

)

(1,055,520

)

(926,648

)

(926,450

)

Other intangible assets

(117,823

)

(121,673

)

(127,340

)

(101,149

)

(104,096

)

Total intangibles

(1,182,588

)

(1,186,651

)

(1,182,860

)

(1,027,797

)

(1,030,546

)

Tangible common stockholders' equity

$

1,721,348

$

1,657,982

$

1,805,297

$

1,519,274

$

1,438,967

Shares of common stock outstanding

108,994,389

108,966,331

113,628,601

96,613,855

96,590,656

Book value per common share

$

26.64

$

26.11

$

26.30

$

26.36

$

25.57

Tangible book value per common share

$

15.79

$

15.22

$

15.89

$

15.73

$

14.90

Calculation of Regulatory Tier 1 Leverage Ratio Less Average PPP Loans

Total Tier 1 capital

$

1,820,488

Adjusted average assets for leverage ratio

$

20,742,824

Average PPP loans

(645,172

)

Adjusted average assets less average PPP loans

$

20,097,652

Tier 1 leverage ratio

8.78

%

Tier 1 leverage ratio less average PPP loans

9.06

%



Simmons First National Corporation

SFNC

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

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sept 30

Jun 30

(Unaudited)

2020

2020

2019

2019

2019

($ in thousands)

Calculation of Core Return on Average Assets

Net income

$

58,789

$

77,223

$

52,709

$

81,826

$

55,598

Net non-core items, net of taxes, adjustment

1,358

(3,385

)

18,365

2,137

9,855

Core earnings

$

60,147

$

73,838

$

71,074

$

83,963

$

65,453

Average total assets

$

21,822,273

$

20,920,223

$

20,041,890

$

17,720,598

$

17,382,872

Return on average assets

1.08

%

1.48

%

1.04

%

1.83

%

1.28

%

Core return on average assets

1.11

%

1.42

%

1.41

%

1.88

%

1.51

%

Calculation of Return on Tangible Common Equity

Net income

$

58,789

$

77,223

$

52,709

$

81,826

$

55,598

Amortization of intangibles, net of taxes

2,489

2,521

2,416

2,176

2,177

Total income available to common stockholders

$

61,278

$

79,744

$

55,125

$

84,002

$

57,775

Net non-core items, net of taxes

1,358

(3,385

)

18,365

2,137

9,855

Core earnings

60,147

73,838

71,074

83,963

65,453

Amortization of intangibles, net of taxes

2,489

2,521

2,416

2,176

2,177

Total core income available to common stockholders

$

62,636

$

76,359

$

73,490

$

86,139

$

67,630

Average common stockholders' equity

$

2,879,337

$

2,869,177

$

2,611,143

$

2,368,773

$

2,351,603

Average intangible assets:

Goodwill

(1,064,955

)

(1,055,498

)

(997,004

)

(926,687

)

(915,445

)

Other intangibles

(120,111

)

(125,746

)

(118,311

)

(103,028

)

(104,050

)

Total average intangibles

(1,185,066

)

(1,181,244

)

(1,115,315

)

(1,029,715

)

(1,019,495

)

Average tangible common stockholders' equity

$

1,694,271

$

1,687,933

$

1,495,828

$

1,339,058

$

1,332,108

Return on average common equity

8.21

%

10.83

%

8.01

%

13.70

%

9.48

%

Return on tangible common equity

14.55

%

19.00

%

14.62

%

24.89

%

17.40

%

Core return on average common equity

8.40

%

10.35

%

10.80

%

14.06

%

11.16

%

Core return on tangible common equity

14.87

%

18.19

%

19.49

%

25.52

%

20.36

%

Calculation of Efficiency Ratio (1)

Non-interest expense

$

112,598

$

125,813

$

142,095

$

106,865

$

110,743

Non-core non-interest expense adjustment

(4,044

)

(1,306

)

(24,868

)

(2,893

)

(13,341

)

Other real estate and foreclosure expense adjustment

(242

)

(319

)

(1,063

)

(1,057

)

(563

)

Amortization of intangibles adjustment

(3,369

)

(3,413

)

(3,270

)

(2,947

)

(2,947

)

Efficiency ratio numerator

$

104,943

$

120,775

$

112,894

$

99,968

$

93,892

Net-interest income

$

163,681

$

167,483

$

167,066

$

149,264

$

149,428

Non-interest income

50,227

82,394

45,630

84,675

39,934

Fully tax-equivalent adjustment

2,350

2,305

2,172

1,843

1,706

Gain on sale of securities

(390

)

(32,095

)

(377

)

(7,374

)

(2,823

)

Efficiency ratio denominator

$

213,664

$

214,198

$

214,491

$

228,408

$

188,245

Efficiency ratio (1)

49.12

%

56.38

%

52.63

%

43.77

%

49.88

%

(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 - Quarter-to-Date (continued)

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sept 30

Jun 30

(Unaudited)

2020

2020

2019

2019

2019

($ in thousands)

Calculation of Core Net Interest Margin

Net interest income

$

163,681

$

167,483

$

167,066

$

149,264

$

149,428

Fully tax-equivalent adjustment

2,350

2,305

2,172

1,843

1,706

Fully tax-equivalent net interest income

166,031

169,788

169,238

151,107

151,134

Total accretable yield

(11,723

)

(11,837

)

(15,100

)

(9,322

)

(10,162

)

Core net interest income

$

154,308

$

157,951

$

154,138

$

141,785

$

140,972

PPP loan and excess liquidity interest income

(5,623

)

Core net interest adjusted for PPP loans and liquidity

$

148,685

Average earning assets

$

19,517,475

$

18,581,491

$

17,753,004

$

15,680,665

$

15,389,670

Average PPP loan balance and excess liquidity

(2,071,411

)

Average earning assets adjusted for PPL loans and liquidity

$

17,446,064

Net interest margin

3.42

%

3.68

%

3.78

%

3.82

%

3.94

%

Core net interest margin

3.18

%

3.42

%

3.44

%

3.59

%

3.67

%

Core net interest margin adjusted for PPP loans and liquidity

3.43

%

Calculation of Core Loan Yield

Loan interest income

$

177,168

$

187,566

$

193,402

$

179,971

$

178,122

Total accretable yield

(11,723

)

(11,837

)

(15,100

)

(9,322

)

(10,162

)

Core loan interest income

$

165,445

$

175,729

$

178,302

$

170,649

$

167,960

PPP loan interest income

(3,733

)

Core loan interest income without PPP loans

$

161,712

Average loan balance

$

14,731,306

$

14,548,853

$

14,144,703

$

13,053,540

$

12,814,386

Average PPP loan balance

(645,172

)

Core loan interest income without PPP loans

$

14,086,134

Core loan yield

4.52

%

4.86

%

5.00

%

5.19

%

5.26

%

Core loan yield without PPP loans

4.62

%

Calculation of Pre-Tax, Pre-Provision (PTPP) Earnings

Net income available to common stockholders

$

58,789

$

77,223

$

52,709

$

81,826

$

55,598

Provision for income taxes

15,593

20,694

12,976

23,275

15,616

Provision for credit losses

26,915

26,134

4,903

21,973

7,079

Provision for unfunded commitments

(5,000

)

(3,000

)

-

-

-

(Gain) loss on sale of securities

(390

)

(32,095

)

(377

)

(7,374

)

(2,823

)

Net pre-tax non-core items

1,840

(4,583

)

24,868

2,893

13,341

Pre-tax, pre-provision (PTPP) earnings

$

97,747

$

84,373

$

95,079

$

122,593

$

88,811


Simmons First National Corporation

SFNC

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

For the Quarters Ended

(Unaudited)

Jun 30

Mar 31

Dec 31

Sept 30

Jun 30

2020

2020

2019

2019

2019

($ in thousands)

Calculation of Core Return on Average Assets

Net income

$

136,012

$

77,223

$

237,828

$

185,119

$

103,293

Net non-core items, net of taxes, adjustment

(2,027

)

(3,385

)

31,738

13,373

11,236

Core earnings

$

133,985

$

73,838

$

269,566

$

198,492

$

114,529

Average total assets

$

21,371,248

$

20,920,223

$

17,871,748

$

17,140,419

$

16,845,528

Return on average assets

1.28

%

1.48

%

1.33

%

1.44

%

1.24

%

Core return on average assets

1.26

%

1.42

%

1.51

%

1.55

%

1.37

%

Calculation of Return on Tangible Common Equity

Net income

$

136,012

$

77,223

$

237,828

$

185,119

$

103,293

Amortization of intangibles, net of taxes

5,010

2,521

8,720

6,304

4,128

Total income available to common stockholders

$

141,022

$

79,744

$

246,548

$

191,423

$

107,421

Net non-core items, net of taxes

(2,027

)

(3,385

)

31,738

13,373

11,236

Core earnings

133,985

73,838

269,566

198,492

114,529

Amortization of intangibles, net of taxes

5,010

2,521

8,720

6,304

4,128

Total core income available to common stockholders

$

138,995

$

76,359

$

278,286

$

204,796

$

118,657

Average common stockholders' equity

$

2,894,351

$

2,869,177

$

2,396,024