Simmons Reports Third Quarter 2019 Earnings and Announces Share Repurchase Program

PINE BLUFF, Ark., Oct. 22, 2019 (GLOBE NEWSWIRE) -- Simmons First National Corporation (SFNC) today announced net income of $81.8 million for the quarter ended September 30, 2019, compared to $55.2 million for the same period in 2018, an increase of $26.6 million, or 48.3%. Diluted earnings per share were $0.84, an increase of $0.25, or 42.4%, compared to the third quarter 2018. Included in third quarter 2019 results were $2.1 million in net after-tax merger-related, early retirement program and branch right-sizing costs. Excluding the impact of these items, core earnings were $84.0 million for the quarter ended September 30, 2019, compared to $56.5 million for the quarter ended September 30, 2018, an increase of $27.5 million, or 48.6%. Core diluted earnings per share were $0.87, an increase of $0.26, or 42.6%, from the same period in 2018.

Year-to-date net income for the first nine months of 2019 was $185.1 million, or $1.94 diluted earnings per share, compared to $160.1 million, or $1.72 diluted earnings per share, for the same period in 2018. Excluding $13.4 million in net after-tax merger-related, early retirement program and branch right-sizing costs, year-to-date core earnings for 2019 were $198.5 million, an increase of $34.7 million compared to the same period last year. Core diluted earnings per share were $2.08, an increase of $0.32, or 18.2%, from the same period in 2018.

The Company had several notable events that affected its operating results for the third quarter 2019:

  • Sale of $114 million of primarily CRE loans resulting in a net loss of $5.1 million.

  • Sale of Visa Inc. class B common stock resulting in a gain of $42.9 million.

  • Related to the Visa stock sale gain, contribution of $4 million to the Simmons First Foundation, so it may continue its work to provide community development grants throughout the Company’s footprint.

  • Provision expense increased $15 million primarily related to the charge-off of a participation interest in a shared national credit to White Star Petroleum, LLC (“White Star”) (discussed further below).

($ in millions)

Pre-tax

After-tax (1)

Income Statement Line
Item

Loss on sale of primarily CRE loans

($5.1)

($3.8)

Other income

Gain on sale of Visa Inc. class B common stock

$42.9

$31.7

Other income

Contribution to Simmons First Foundation

($4.0)

($3.0)

Other operating expenses

Additional provision for White Star charge-off

($15.0)

($11.1)

Provision for loan losses

(1) Effective tax rate of 26.135% used for after-tax calculations.

“We are very pleased with our operating results this quarter,” said George A. Makris, Jr., chairman and CEO of Simmons First National Corporation. “We continue to have very strong loan demand opportunities although our customers are displaying cautious optimism regarding the uncertainty in the world economy today and interest rate adjustments that may not appear to be related precisely to economic data.

“We are beginning to see significant results from our Next Generation Banking technology investment. We have successfully converted our system processing to a hosted environment increasing the security and reliability of our systems. Also, on October 16th, we launched our new mobile banking app. The customer response has been phenomenal. We will continue to expand our digital offerings over the coming months.”

Makris continued, “I have mentioned for some time now that asset quality is one of our top priorities, and the loss we experienced as a result of the White Star bankruptcy is certainly disappointing. In response to it, we have, among other things, made changes to our credit underwriting and approval processes that are consistent with the conservative credit culture at Simmons.

“We are on target to complete our previously announced acquisition of The Landrum Company on October 31 with an expected system conversion during the 1st quarter of 2020. We are excited about the expanded market presence in several states because of this merger.”

Selected Highlights:

3rd Qtr 2019

2nd Qtr 2019

3rd Qtr 2018

Net income

$81.8 million

$55.6 million

$55.2 million

Diluted earnings per share

$0.84

$0.58

$0.59

Return on avg assets

1.83%

1.28%

1.37%

Return on avg common equity

13.70%

9.48%

10.06%

Return on tangible common equity

24.89%

17.40%

18.38%

Core earnings (1)

$84.0 million

$65.5 million

$56.5 million

Diluted core earnings per share (1)

$0.87

$0.68

$0.61

Core return on avg assets (1)

1.88%

1.51%

1.40%

Core return on avg common equity (1)

14.06%

11.16%

10.30%

Core return on tangible common equity (1)

25.52%

20.36%

18.80%

Efficiency ratio (2)

43.77%

49.88%

53.47%

(1) Core earnings excludes non-core items, and is a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.
(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, and is a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.

Loans

($ in billions)

3rd Qtr 2019

2nd Qtr 2019

3rd Qtr 2018

Total loans

$13.0

$13.1

$11.9

Legacy loans (excludes loans acquired)

$9.6

$9.3

$8.1

Loans acquired

$3.4

$3.9

$3.8

Total loans, including those acquired, were $13.0 billion at September 30, 2019, an increase of $1.1 billion, or 9.7%, compared to $11.9 billion at September 30, 2018, primarily due to the Reliance Bank merger completed in the second quarter 2019. On a linked-quarter basis (September 30, 2019 compared to June 30, 2019), total loans decreased $124.1 million, or 0.9%, primarily due to a reduction in the CRE portfolio. During the third quarter 2019, the Company reduced its real estate portfolio by $165 million as part of an effort to manage its CRE concentration.

Deposits

($ in billions)

3rd Qtr 2019

2nd Qtr 2019

3rd Qtr 2018

Total deposits

$13.5

$13.5

$12.1

Non-time deposits

$10.4

$10.2

$9.6

Time deposits

$3.1

$3.3

$2.5

Total deposits were $13.5 billion at September 30, 2019, an increase of $1.4 billion, or 11.4%, since September 30, 2018, primarily due to the Reliance Bank merger completed during the second quarter 2019. Total deposits remained flat compared to June 30, 2019 as a result of the increase in non-time deposits being completely offset by a decrease in time deposits.

Net Interest Income

3rd Qtr
2019

2nd Qtr
2019

1st Qtr
2019

4th Qtr
2018

3rd Qtr
2018

Loan yield (1)

5.47%

5.58%

5.53%

5.39%

5.54%

Core loan yield (1) (2)

5.19%

5.26%

5.29%

5.25%

5.19%

Security yield (1)

2.83%

3.02%

3.09%

2.87%

2.74%

Cost of interest bearing deposits

1.40%

1.37%

1.31%

1.20%

1.05%

Cost of deposits (3)

1.09%

1.07%

1.02%

0.93%

0.81%

Cost of borrowed funds

2.52%

2.50%

2.73%

2.64%

2.48%

Net interest margin (1)

3.81%

3.92%

3.85%

3.76%

3.98%

Core net interest margin (1) (2)

3.58%

3.66%

3.67%

3.66%

3.71%

(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 third quarter of 2019 was $150.2 million, an increase of $7.2 million, or 5.0%, from the same period of 2018. Included in interest income was the yield accretion recognized on loans acquired of $9.3 million and $10.0 million for the third quarters of 2019 and 2018, respectively. Of this quarter’s yield accretion, $4.4 million, or 48%, was accretable credit mark related and $4.9 million, or 52%, was interest mark related.

Net interest margin (FTE) was 3.81% for the quarter ended September 30, 2019, an 11 basis point decrease from the second quarter of 2019. The Company’s core net interest margin, which excludes the accretion, was 3.58% for the third quarter of 2019, an 8 basis point decrease from the second quarter of 2019. The decrease in the net interest margin during the third quarter of 2019 was due to a timing difference between the Company’s ability to manage the rate decrease in its variable rate loan portfolio and its repricing of interest bearing deposits.

Non-Interest Income

Non-interest income for the third quarter of 2019 was $83.8 million, an increase of $50.1 million compared to the same period in the previous year. The majority of the increase was related to the gain on sale of the Visa Inc. class B common stock of $42.9 million recorded in Other Income. In addition, as part of a plan to rebalance its investment portfolio, the Company sold approximately $89 million of bonds during the quarter resulting in a gain on the sale of securities of $7.3 million.

Selected Non-Interest Income Items
($ in millions)

3rd Qtr
2019

2nd Qtr
2019

1st Qtr
2019

4th Qtr
2018

3rd Qtr
2018

Service charges on deposit accounts

$10.8

$10.6

$10.1

$11.3

$10.8

Mortgage lending income

$4.5

$3.7

$2.8

$1.5

$1.5

SBA lending income

$1.0

$0.9

$0.5

$0.2

$0.3

Debit and credit card fees

$7.1

$7.2

$6.1

$6.5

$6.8

Gain (loss) on sale of securities

$7.4

$2.8

$2.7

-

$0.1

Other income

$43.8

$5.1

$3.1

$5.7

$4.9

Non-Interest Expense

Non-interest expense for the third quarter of 2019 was $106.9 million, an increase of $6.6 million compared to the third quarter of 2018. Included in this quarter were $2.9 million of pre-tax non-core items, that mostly consisted of merger-related costs. Excluding these expenses, core non-interest expense was $104.0 million for the third quarter of 2019, an increase of $5.5 million compared to the same period in 2018. The increase is primarily due to the $4 million donation to the Simmons First Foundation and incremental software and technology costs of $2.2 million due to the Company’s Next Generation Banking technology initiative.

Selected Non-Interest Expense Items
($ in millions)

3rd Qtr
2019

2nd Qtr
2019

1st Qtr
2019

4th Qtr
2018

3rd Qtr
2018

Salaries and employee benefits

$52.1

$56.1

$56.4

$49.2

$55.5

Merger related costs

$2.6

$7.5

$1.5

$0.8

$0.8

Other operating expenses

$37.9

$32.9

$30.1

$30.2

$29.7

Core salaries and employee benefits

$51.9

$53.2

$56.0

$49.1

$55.5

Core merger related costs

-

-

-

-

-

Core other operating expenses

$37.8

$30.0

$30.1

$30.3

$28.7

The efficiency ratio for the third quarter of 2019 was 43.77% compared to 53.47% for the same period in 2018.

Asset Quality

3rd Qtr
2019

2nd Qtr
2019

1st Qtr
2019

4th Qtr
2018

3rd Qtr
2018

Allowance for loan losses to total loans

0.68%

0.68%

0.68%

0.67%

0.68%

Allowance for loan losses to non-performing loans

91%

101%

97%

164%

136%

Non-performing loans to total loans

0.76%

0.67%

0.70%

0.41%

0.50%

Net charge-off ratio (annualized)

0.78%

0.14%

0.20%

0.35%

0.36%

Net charge-off ratio YTD (annualized)

0.38%

0.17%

0.20%

0.28%

0.26%

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 September 30, 2019, the allowance for loan losses for legacy loans was $66.0 million. The allowance for loan losses for loans acquired was $597,000 and the acquired loan discount mark was $60.4 million. The allowance for loan losses and discount mark provides a total of $127.0 million of coverage, which equates to a total coverage ratio of 0.97% of gross loans. The ratio of discount mark and related allowance to loans acquired was 1.78%.

Provision for loan losses for the third quarter of 2019 was $22.0 million, increases of $11.6 million when compared to September 30, 2018 and $14.9 million when compared to the second quarter of 2019. The sequential increase in the provision for loan losses was due to recording a special provision of $15.0 million during the third quarter, specifically related to the White Star charge-off.

Simmons Bank was a participant in a shared national credit (“SNC”) to White Star. White Star became the subject of bankruptcy proceedings earlier this year, and on September 30, 2019, the bankruptcy court handling the matter authorized the sale of White Star assets through a proceeding under Section 363 of the U.S. Bankruptcy Code to a third party. Our portion of the SNC was $19.1 million. Based on the anticipated net proceeds from the pending bankruptcy sale, our loss recognized in the third quarter was $14.7 million.

Foreclosed Assets and Other Real Estate Owned

At September 30, 2019, foreclosed assets and other real estate owned were $19.6 million, a decrease of $3.1 million, or 13.6%, compared to the same period in 2018 and a decrease of $5.2 million, or 20.9%, from June 30, 2019. The composition of these assets is divided into three types:

($ in millions)

3rd Qtr
2019

2nd Qtr
2019

1st Qtr
2019

4th Qtr
2018

3rd Qtr
2018

Closed bank branches, branch sites & associate relocation

$5.9

$6.5

$7.6

$8.0

$9.6

Foreclosed assets - acquired

$10.1

$13.3

$6.2

$11.5

$8.0

Foreclosed assets - legacy

$3.6

$5.0

$5.2

$6.1

$5.1

Capital

3rd Qtr
2019

2nd Qtr
2019

1st Qtr
2019

4th Qtr
2018

3rd Qtr
2018

Stockholders’ equity to total assets

14.3%

13.8%

14.3%

13.6%

13.4%

Tangible common equity to tangible assets

9.1%

8.5%

9.0%

8.4%

8.1%

Regulatory tier 1 leverage ratio

9.1%

8.9%

9.1%

8.8%

8.7%

Regulatory total risk-based capital ratio

13.2%

12.7%

13.6%

13.3%

13.1%

At September 30, 2019, common stockholders' equity was $2.5 billion. Book value per share was $26.36 and tangible book value per share was $15.73 at September 30, 2019, compared to $23.66 and $13.48, respectively, at September 30, 2018.

Current Expected Credit Losses (“CECL”)

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

The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, held-to-maturity debt securities and other receivables measured at amortized cost at the time the financial asset is originated or acquired. The allowance for credit losses is adjusted each period for changes in expected lifetime credit losses. This methodology replaces the multiple existing impairment methods in current guidance, which generally require that a loss be incurred before it is recognized. Within the life cycle of a loan or other financial asset, this new guidance will generally result in the earlier recognition of the provision for credit losses and the related allowance for credit losses than current practice. For available-for-sale debt securities that the Company intends to hold and where fair value is less than cost, credit-related impairment, if any, will be recognized through an allowance for credit losses and adjusted each period for changes in credit risk. The CECL guidance will be effective for the Company as of January 1, 2020.

The CECL methodology represents a significant change from existing guidance and is expected to result in material changes to the Company’s accounting for financial instruments. The Company is continuing to evaluate the effect that the new CECL methodology will have on its consolidated financial statements and related disclosures. Based on a preliminary analysis performed, the Company estimates that the allowance for credit losses will increase by approximately 130% to 170% over the allowance based on June 30, 2019 loan balances. When purchase discounts are considered, the increase is expected to be 10% to 30% over the June 30, 2019 total credit coverage ratio. These estimates are based upon the Company’s analysis of current macroeconomic conditions, assumptions and forecasts at this point in time and do not include the impact of the Company’s pending merger with The Landrum Company. These estimates are subject to change based on continuing review and challenge of the models, methodologies and judgements. The impact at adoption will also be influenced by the loan portfolio composition and quality at the adoption date, as well as, macroeconomic conditions and forecast at that time. The impact will be reflected as an adjustment to beginning retained earnings, net of income taxes, at adoption. Federal banking regulatory agencies have provided relief for an initial capital decrease at adoption by allowing the impact to be phased-in over three years on a straight-line basis. The adoption of CECL in 2020 could also impact the Company’s ongoing earnings, perhaps materially.

Implementation efforts have been underway, including model development and validation, fulfillment of additional data needs for new disclosures and reporting requirements, and drafting of accounting policies. Model validations and user acceptance testing commenced in the first quarter of 2019, with loss forecast modeling taking place in the third quarter of 2019. The Company intends to utilize a single macroeconomic scenario in estimating expected credit losses. Reasonable and supportable forecast periods and methods to revert to historical averages to arrive at lifetime expected credit losses vary by product. The Company has completed decisions around model methodologies and relevant elections are being finalized.

Share Repurchase Program

The Company also announced today that its board of directors has authorized a new stock repurchase program (“Program”) under which the Company may repurchase up to $60,000,000 of its Class A common stock currently issued and outstanding. The Program will terminate on October 31, 2021 (unless terminated sooner). The new Program replaces the Company’s existing stock repurchase program, which was announced on July 23, 2012.

“By leveraging our strong balance sheet to responsibly reduce our number of outstanding shares, we expect to be able to both increase shareholder value and maintain sufficient resources to fund our operations and growth opportunities as they arise,” said George Makris, Jr., Simmons’ chairman and chief executive officer. “We believe our stock, particularly at current trading prices, continues to be an attractive investment, and the action of our board demonstrates our commitment to, and confidence in, the company’s future.”

Under the Program, the Company may repurchase shares of its common stock through open market and privately negotiated transactions or otherwise. The timing, pricing, and amount of any repurchases under the Program will be determined by the Company’s management at its discretion based on a variety of factors, including, but not limited to, trading volume and market price of the Company’s common stock, corporate considerations, the Company’s working capital and investment requirements, general market and economic conditions, and legal requirements. The Program does not obligate the Company to repurchase any common stock and may be modified, discontinued, or suspended at any time without prior notice. The Company anticipates funding for this Program to come from available sources of liquidity, including cash on hand and future cash flow.

Simmons First National Corporation

Simmons First National Corporation is a financial holding company headquartered in Pine Bluff, Arkansas, with total consolidated assets of approximately $17.8 billion as of September 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, October 22, 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 2285967. In addition, the call will be available live or in recorded version on the Company’s website at www.simmonsbank.com.

Non-GAAP Financial Measures

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

Forward-Looking Statements

Some of the statements in this news release may not be based on historical facts and should be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by reference to future periods or by the use of forward-looking terminology, such as “believe,” “budget,” “expect,” “foresee,” “anticipate,” “intend,” “indicate,” “target,” “estimate,” “plan,” “project,” “continue,” “contemplate,” “positions,” “prospects,” “predict,” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could,” “might” or “may,” or by variations of such words or by similar expressions. These forward-looking statements include, without limitation, statements relating to Simmons’ future growth, revenue, assets, asset quality, profitability, net interest margin, non-interest revenue, share repurchase program, the adequacy of the allowance for loan losses, and the effect of certain new accounting standards (including, without limitation, the CECL methodology and its anticipated effect on the provision and allowance for credit losses) on the Company’s financial statements. Any forward-looking statement speaks only as of the date of this news release, and Simmons undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release. By nature, forward-looking statements are based on various assumptions and involve inherent risk and uncertainties. Various factors, including, but not limited to, changes in economic conditions, credit quality, interest rates, loan demand, deposit flows, real estate values, the assumptions used in making the forward-looking statements, the securities markets generally or the price of Simmons common stock specifically, information technology affecting the financial industry, the assumptions, forecasts, models, and methodology used to calculate the expected impact of CECL on the Company’s financial statements, 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

Sep 30

Jun 30

Mar 31

Dec 31

Sep 30

(Unaudited)

2019

2019

2019

2018

2018

($ in thousands)

ASSETS

Cash and non-interest bearing balances due from banks

$

161,440

$

145,491

$

151,112

$

171,792

$

125,231

Interest bearing balances due from banks and federal funds sold

368,530

509,765

340,049

661,666

388,573

Cash and cash equivalents

529,970

655,256

491,161

833,458

513,804

Interest bearing balances due from banks - time

5,041

5,041

4,684

4,934

3,954

Investment securities - held-to-maturity

42,237

47,455

61,435

289,194

323,306

Investment securities - available-for-sale

2,356,134

2,342,387

2,240,111

2,151,752

1,997,814

Mortgage loans held for sale

50,099

34,999

18,480

26,799

48,195

Other assets held for sale

383

397

397

1,790

5,136

Loans:

Legacy loans

9,643,365

9,262,497

8,684,550

8,430,388

8,123,274

Allowance for loan losses

(65,993

)

(63,067

)

(59,243

)

(56,599

)

(55,358

)

Loans acquired, net of discount and allowance

3,359,587

3,864,516

3,056,187

3,292,783

3,734,921

Net loans

12,936,959

13,063,946

11,681,494

11,666,572

11,802,837

Premises and equipment

378,678

370,551

333,740

295,060

287,246

Foreclosed assets and other real estate owned

19,576

24,761

18,952

25,565

22,664

Interest receivable

53,966

54,781

51,796

49,938

51,509

Bank owned life insurance

234,655

233,345

192,736

193,170

192,680

Goodwill

926,648

926,450

845,687

845,687

845,687

Other intangible assets

101,149

104,096

88,694

91,334

93,975

Other assets

123,016

73,970

62,272

68,084

92,457

Total assets

$

17,758,511

$

17,937,435

$

16,091,639

$

16,543,337

$

16,281,264

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:

Non-interest bearing transaction accounts

$

3,044,330

$

2,954,032

$

2,674,034

$

2,672,405

$

2,778,670

Interest bearing transaction accounts and savings deposits

7,337,571

7,258,005

6,666,823

6,830,191

6,776,330

Time deposits

3,086,108

3,304,176

2,648,674

2,896,156

2,533,506

Total deposits

13,468,009

13,516,213

11,989,531

12,398,752

12,088,506

Federal funds purchased and securities sold

under agreements to repurchase

116,536

130,470

120,213

95,792

109,213

Other borrowings

1,098,395

1,324,094

1,169,989

1,345,450

1,420,917

Subordinated notes and debentures

354,223

354,132

354,041

353,950

372,934

Other liabilities held for sale

-

162

162

162

424

Accrued interest and other liabilities

174,277

142,851

155,382

102,797

105,951

Total liabilities

15,211,440

15,467,922

13,789,318

14,296,903

14,097,945

Stockholders' equity:

Common stock

966

966

926

923

923

Surplus

1,708,058

1,705,262

1,599,566

1,597,944

1,597,261

Undivided profits

814,338

747,969

707,829

674,941

633,175

Accumulated other comprehensive income (loss):

Unrealized accretion (depreciation) on AFS securities

23,709

15,316

(6,000

)

(27,374

)

(48,040

)

Total stockholders' equity

2,547,071

2,469,513

2,302,321

2,246,434

2,183,319

Total liabilities and stockholders' equity

$

17,758,511

$

17,937,435

$

16,091,639

$

16,543,337

$

16,281,264


Simmons First National Corporation

SFNC

Consolidated Statements of Income - Quarter-to-Date

For the Quarters Ended

Sep 30

Jun 30

Mar 31

Dec 31

Sep 30

(Unaudited)

2019

2019

2019

2018

2018

($ in thousands, except per share data)

INTEREST INCOME

Loans

$

179,971

$

178,122

$

159,440

$

159,996

$

162,438

Interest bearing balances due from banks and federal funds sold

1,586

1,121

2,154

2,168

1,405

Investment securities

15,367

16,594

17,312

15,760

14,640

Mortgage loans held for sale

382

332

210

372

501

TOTAL INTEREST INCOME

197,306

196,169

179,116

178,296

178,984

INTEREST EXPENSE

Time deposits

15,573

14,606

12,320

11,273

8,017

Other deposits

21,363

20,190

18,430

17,489

16,373

Federal funds purchased and securities

sold under agreements to repurchase

249

257

136

121

104

Other borrowings

5,381

6,219

6,793

7,134

6,240

Subordinated notes and debentures

4,576

4,541

4,411

4,498

5,282

TOTAL INTEREST EXPENSE

47,142

45,813

42,090

40,515

36,016

NET INTEREST INCOME

150,164

150,356

137,026

137,781

142,968

Provision for loan losses

21,973

7,079

9,285

9,620

10,345

NET INTEREST INCOME AFTER PROVISION

FOR LOAN LOSSES

128,191

143,277

127,741

128,161

132,623

NON-INTEREST INCOME

Trust income

6,108

5,794

5,708

5,980

6,277

Service charges on deposit accounts

10,825

10,557

10,068

11,263

10,837

Other service charges and fees

1,308

1,312

1,289

1,501

1,201

Mortgage lending income

4,509

3,656

2,823

1,457

1,521

SBA lending income

956

895

497

186

304

Investment banking income

513

360

618

829

664

Debit and credit card fees

7,059

7,212

6,098

6,547

6,820

Bank owned life insurance income

1,302

1,260

795

1,105

1,105

Gain on sale of securities, net

7,374

2,823

2,740

8

54

Other income

43,821

5,137

3,125

5,712

4,942

TOTAL NON-INTEREST INCOME

83,775

39,006

33,761

34,588

33,725

NON-INTEREST EXPENSE

Salaries and employee benefits

52,065

56,128

56,367

49,193

55,515

Occupancy expense, net

8,342

6,919

7,475

7,016

7,713

Furniture and equipment expense

4,898

4,206

3,358

4,139

3,761

Other real estate and foreclosure expense

1,125

591

637

1,540

538

Deposit insurance

(2

)

2,510

2,040

2,489

2,248

Merger-related costs

2,556

7,522

1,470

797

804

Other operating expenses

37,881

32,867

30,062

30,222

29,674

TOTAL NON-INTEREST EXPENSE

106,865

110,743

101,409

95,396

100,253

NET INCOME BEFORE INCOME TAXES

105,101

71,540

60,093

67,353

66,095

Provision for income taxes

23,275

15,616

12,398

11,707

10,902

NET INCOME

81,826

55,924

47,695

55,646

55,193

Preferred stock dividends

-

326

-

-

-

NET INCOME AVAILABLE TO COMMON STOCKHOLDERS

$

81,826

$

55,598

$

47,695

$

55,646

$

55,193

BASIC EARNINGS PER SHARE

$

0.85

$

0.58

$

0.52

$

0.60

$

0.60

DILUTED EARNINGS PER SHARE

$

0.84

$

0.58

$

0.51

$

0.60

$

0.59



Simmons First National Corporation

SFNC

Consolidated Risk-Based Capital

For the Quarters Ended

Sep 30

Jun 30

Mar 31

Dec 31

Sep 30

(Unaudited)

2019

2019

2019

2018

2018

($ in thousands)

Tier 1 capital

Stockholders' equity

$

2,547,071

$

2,469,513

$

2,302,321

$

2,246,434

$

2,183,319

Disallowed intangible assets, net of deferred tax

(1,013,309

)

(1,001,676

)

(910,122

)

(912,428

)

(914,788

)

Unrealized (gain) loss on AFS securities

(23,709

)

(15,316

)

6,000

27,374

48,040

Total Tier 1 capital

1,510,053

1,452,521

1,398,199

1,361,380

1,316,571

Tier 2 capital

Qualifying unrealized gain on AFS equity securities

-

-

-

-

1

Trust preferred securities and subordinated debt

354,223

354,132

354,041

353,950

372,934

Qualifying allowance for loan losses and

reserve for unfunded commitments

74,455

72,044

67,771

63,608

63,618

Total Tier 2 capital

428,678

426,176

421,812

417,558

436,553

Total risk-based capital

$

1,938,731

$

1,878,697

$

1,820,011

$

1,778,938

$

1,753,124

Risk weighted assets

$

14,725,571

$

14,825,253

$

13,364,636

$

13,326,832

$

13,402,910

Adjusted average assets for leverage ratio

$

16,681,527

$

16,382,520

$

15,423,961

$

15,512,042

$

15,179,889

Ratios at end of quarter

Equity to assets

14.34

%

13.77

%

14.31

%

13.58

%

13.41

%

Tangible common equity to tangible assets (1)

9.08

%

8.51

%

9.02

%

8.39

%

8.11

%

Common equity Tier 1 ratio (CET1)

10.25

%

9.80

%

10.46

%

10.22

%

9.82

%

Tier 1 leverage ratio

9.05

%

8.87

%

9.07

%

8.78

%

8.67

%

Tier 1 risk-based capital ratio

10.25

%

9.80

%

10.46

%

10.22

%

9.82

%

Total risk-based capital ratio

13.17

%

12.67

%

13.62

%

13.35

%

13.08

%

(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

Sep 30

Jun 30

Mar 31

Dec 31

Sep 30

(Unaudited)

2019

2019

2019

2018

2018

($ in thousands)

Legacy Loan Portfolio - End of Period (1)

Consumer

Credit cards

$

195,083

$

187,919

$

181,549

$

204,173

$

182,137

Other consumer

208,643

207,445

213,659

201,297

259,581

Total consumer

403,726

395,364

395,208

405,470

441,718

Real Estate

Construction

1,712,858

1,540,352

1,376,162

1,300,723

1,229,888

Single-family residential

1,448,455

1,444,525

1,431,407

1,440,443

1,401,991

Other commercial

3,630,708

3,531,273

3,355,109

3,225,287

3,077,188

Total real estate

6,792,021

6,516,150

6,162,678

5,966,453

5,709,067

Commercial

Commercial

1,894,819

1,871,695

1,801,422

1,774,909

1,608,342

Agricultural

213,753

191,922

147,216

164,514

218,778

Total commercial

2,108,572

2,063,617

1,948,638

1,939,423

1,827,120

Other

339,046

287,366

178,026

119,042

145,369

Total Loans

$

9,643,365

$

9,262,497

$

8,684,550

$

8,430,388

$

8,123,274

(1) Excludes all acquired loans.

Investment Securities - End of Period

Held-to-Maturity

U.S. Government agencies

$

-

$

999

$

12,996

$

16,990

$

34,983

Mortgage-backed securities

11,549

12,225

12,847

13,346

13,933

State and political subdivisions

28,692

32,236

33,597

256,863

272,396

Other securities

1,996

1,995

1,995

1,995

1,994

Total held-to-maturity

42,237

47,455

61,435

289,194

323,306

Available-for-Sale

U.S. Government agencies

$

178,139

$

197,656

$

161,577

$

154,301

$

141,460

Mortgage-backed securities

1,337,794

1,345,760

1,345,677

1,522,900

1,419,626

State and political subdivisions

681,202

636,558

580,790

314,843

282,439

FHLB stock

62,403

66,588

65,220

73,105

72,579

Other securities

96,596

95,825

86,847

86,603

81,710

Total available-for-sale

2,356,134

2,342,387

2,240,111

2,151,752

1,997,814

Total investment securities

$

2,398,371

$

2,389,842

$

2,301,546

$

2,440,946

$

2,321,120

Fair value - HTM investment securities

$

43,302

$

48,640

$

61,956

$

290,830

$

322,838

Investment Securities - QTD Average

Taxable securities

$

1,712,672

$

1,793,799

$

1,880,694

$

1,815,203

$

1,775,193

Tax exempt securities

681,505

624,898

590,941

551,185

539,135

Total investment securities - QTD average

$

2,394,177

$

2,418,697

$

2,471,635

$

2,366,388

$

2,314,328



Simmons First National Corporation

SFNC

Consolidated Loans and Credit Coverage

For the Quarters Ended

Sep 30

Jun 30

Mar 31

Dec 31

Sep 30

(Unaudited)

2019

2019

2019

2018

2018

($ in thousands)

LOANS

Legacy loans

$

9,643,365

$

9,262,497

$

8,684,550

$

8,430,388

$

8,123,274

Allowance for loan losses (legacy loans)

(65,993

)

(63,067

)

(59,243

)

(56,599

)

(55,358

)

Legacy loans (net of allowance)

9,577,372

9,199,430

8,625,307

8,373,789

8,067,916

Loans acquired

3,420,563

3,939,126

3,099,915

3,342,175

3,790,234

Credit discount

(60,379

)

(73,498

)

(42,416

)

(49,297

)

(53,968

)

Allowance for loan losses (loans acquired)

(597

)

(1,112

)

(1,312

)

(95

)

(1,345

)

Loans acquired (net of discount and allowance)

3,359,587

3,864,516

3,056,187

3,292,783

3,734,921

Net loans

$

12,936,959

$

13,063,946

$

11,681,494

$

11,666,572

$

11,802,837

Loan Coverage Ratios

Allowance for loan losses to legacy loans

0.68

%

0.68

%

0.68

%

0.67

%

0.68

%

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)

1.78

%

1.89

%

1.41

%

1.48

%

1.46

%

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

0.97

%

1.04

%

0.87

%

0.90

%

0.93

%

(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

Sep 30

Jun 30

Mar 31

Dec 31

Sep 30

(Unaudited)

2019

2019

2019

2018

2018

($ in thousands)

Allowance for Loan Losses (Legacy Loans)

Balance, beginning of quarter

$

63,067

$

59,243

$

56,599

$

55,358

$

51,732

Loans charged off

Credit cards

1,117

1,039

1,142

1,121

919

Other consumer

1,059

905

1,533

2,894

1,321

Real estate

907

271

374

337

4,952

Commercial

17,729

1,867

1,968

3,480

592

Total loans charged off

20,812

4,082

5,017

7,832

7,784

Recoveries of loans previously charged off

Credit cards

223

271

240

227

229

Other consumer

1,422

331

300

154

176

Real estate

55

153

142

367

210

Commercial

65

72

158

167

450

Total recoveries

1,765

827

840

915

1,065

Net loans charged off

19,047

3,255

4,177

6,917

6,719

Provision for loan losses

21,973

7,079

6,821

8,158

10,345

Balance, end of quarter

$

65,993

$

63,067

$

59,243

$

56,599

$

55,358

Non-performing assets (1) (2)

Non-performing loans

Nonaccrual loans

$

72,721

$

61,956

$

60,925

$

34,201

$

40,505

Loans past due 90 days or more

155

267

281

224

281

Total non-performing loans

72,876

62,223

61,206

34,425

40,786

Other non-performing assets

Foreclosed assets and other real estate owned (2)

19,576

24,761

18,952

25,565

22,664

Other non-performing assets

540

613

505

553

524

Total other non-performing assets

20,116

25,374

19,457

26,118

23,188

Total non-performing assets

$

92,992

$

87,597

$

80,663

$

60,543

$

63,974

Performing TDRs (troubled debt restructurings)

$

6,519

$

6,246

$

6,297

$

6,369

$

8,413

Ratios (1) (2)

Allowance for loan losses to total loans

0.68

%

0.68

%

0.68

%

0.67

%

0.68

%

Allowance for loan losses to non-performing loans

91

%

101

%

97

%

164

%

136

%

Non-performing loans to total loans

0.76

%

0.67

%

0.70

%

0.41

%

0.50

%

Non-performing assets (including performing TDRs)

to total assets

0.56

%

0.52

%

0.54

%

0.40

%

0.44

%

Non-performing assets to total assets

0.52

%

0.49

%

0.50

%

0.37

%

0.39

%

Annualized net charge offs to total loans

0.78

%

0.14

%

0.20

%

0.35

%

0.36

%

Annualized net credit card charge offs to

total credit card loans

1.82

%

1.63

%

1.92

%

1.86

%

1.47

%

(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
Sep 2019

Three Months Ended
Jun 2019

Three Months Ended
Sep 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

$

344,761

$

1,586

1.83

%

$

276,370

$

1,121

1.63

%

$

373,528

$

1,405

1.49

%

Investment securities - taxable

1,712,672

10,414

2.41

%

1,793,799

11,994

2.68

%

1,775,193

10,892

2.43

%

Investment securities - non-taxable (FTE)

681,505

6,687

3.89

%

624,898

6,209

3.99

%

539,135

5,064

3.73

%

Mortgage loans held for sale

39,551

382

3.83

%

32,030

332

4.16

%

43,554

501

4.56

%

Loans, including acquired loans

13,052,943

180,080

5.47

%

12,813,274

178,219

5.58

%

11,641,843

162,515

5.54

%

Total interest earning assets (FTE)

15,831,432

199,149

4.99

%

15,540,371

197,875

5.11

%

14,373,253

180,377

4.98

%

Non-earning assets

1,889,166

1,842,501

1,667,631

Total assets

$

17,720,598

$

17,382,872

$

16,040,884

LIABILITIES AND STOCKHOLDERS' EQUITY

Interest bearing liabilities:

Interest bearing transaction and

savings accounts

$

7,322,395

$

21,363

1.16

%

$

7,139,356

$

20,190

1.13

%

$

6,840,403

$

16,373

0.95

%

Time deposits

3,122,422

15,573

1.98

%

3,072,246

14,606

1.91

%

2,379,142

8,017

1.34

%

Total interest bearing deposits

10,444,817

36,936

1.40

%

10,211,602

34,796

1.37

%

9,219,545

24,390

1.05

%

Federal funds purchased and securities

sold under agreement to repurchase

123,883

249

0.80

%

133,242

257

0.77

%

107,770

104

0.38

%

Other borrowings

1,127,886

5,381

1.89

%

1,277,450

6,219

1.95

%

1,375,052

6,240

1.80

%

Subordinated notes and debentures

354,178

4,576

5.13

%

354,088

4,541

5.14

%

379,168

5,282

5.53

%

Total interest bearing liabilities

12,050,764

47,142

1.55

%

11,976,382

45,813

1.53

%

11,081,535

36,016

1.29

%

Non-interest bearing liabilities:

Non-interest bearing deposits

3,012,544

2,834,452

2,679,469

Other liabilities

288,517

207,500

103,315

Total liabilities

15,351,825

15,018,334

13,864,319

Stockholders' equity

2,368,773

2,364,538

2,176,565

Total liabilities and stockholders' equity

$

17,720,598

$

17,382,872

$

16,040,884

Net interest income (FTE)

$

152,007

$

152,062

$

144,361

Net interest spread (FTE)

3.44

%

3.58

%

3.69

%

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

3.81

%

3.92

%

3.98

%

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

3.86

%

3.89

%

4.04

%

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

3.58

%

3.66

%

3.71

%

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

5.19

%

5.26

%

5.19

%

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

3.63

%

3.66

%

3.74

%

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

5.24

%

5.27

%

5.06

%

(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

Sep 30

Jun 30

Mar 31

Dec 31

Sep 30

(Unaudited)

2019

2019

2019

2018

2018

($ in thousands, except share data)

QUARTER-TO-DATE

Financial Highlights - GAAP

Net Income

$

81,826

$

55,598

$

47,695

$

55,646

$

55,193

Diluted earnings per share

0.84

0.58

0.51

0.60

0.59

Return on average assets

1.83

%

1.28

%

1.19

%

1.35

%

1.37

%

Return on average common equity

13.70

%

9.48

%

8.60

%

9.98

%

10.06

%

Return on tangible common equity

24.89

%

17.40

%

15.34

%

17.96

%

18.38

%

Net interest margin (FTE)

3.81

%

3.92

%

3.85

%

3.76

%

3.98

%

FTE adjustment

1,843

1,706

1,601

1,466

1,393

Amortization of intangibles

2,947

2,947

2,641

2,642

2,745

Amortization of intangibles, net of taxes

2,176

2,177

1,951

1,952

2,027

Average diluted shares outstanding

96,968,775

96,367,857

92,870,813

92,897,105

92,840,851

Cash dividends declared per common share

0.16

0.16

0.16

0.15

0.15

Financial Highlights - Core (non-GAAP)

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

$

83,963

$

65,453

$

49,076

$

56,451

$

56,504

Diluted core earnings per share (1)

0.87

0.68

0.53

0.61

0.61

Core net interest margin (FTE) (2)

3.58

%

3.66

%

3.67

%

3.66

%

3.71

%

Accretable yield on acquired loans

9,322

10,162

6,660

3,850

10,006

Efficiency ratio (1)

43.77

%

49.88

%

56.76

%

51.99

%

53.47

%

Core return on average assets (1)

1.88

%

1.51

%

1.22

%

1.37

%

1.40

%

Core return on average common equity (1)

14.06

%

11.16

%

8.85

%

10.13

%

10.30

%

Core return on tangible common equity (1)

25.52

%

20.36

%

15.76

%

18.21

%

18.80

%

YEAR-TO-DATE

Financial Highlights - GAAP

Net Income

$

185,119

$

103,293

$

47,695

$

215,713

$

160,067

Diluted earnings per share

1.94

1.09

0.51

2.32

1.72

Return on average assets

1.44

%

1.24

%

1.19

%

1.37

%

1.37

%

Return on average common equity

10.65

%

9.05

%

8.60

%

10.00

%

10.01

%

Return on tangible common equity

19.27

%

16.38

%

15.34

%

18.44

%

18.61

%

Net interest margin (FTE)

3.86

%

3.89

%

3.85

%

3.97

%

4.04

%

FTE adjustment

5,150

3,307

1,601

5,297

3,831

Amortization of intangibles

8,535

5,588

2,641

11,009

8,367

Amortization of intangibles, net of taxes

6,304

4,128

1,951

8,132

6,180

Average diluted shares outstanding

95,450,732

94,588,739

92,870,813

92,830,485

92,796,860

Cash dividends declared per common share

0.48

0.32

0.16

0.60

0.45

Financial Highlights - Core (non-GAAP)

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

$

198,492

$

114,529

$

49,076

$

220,233

$

163,782

Diluted core earnings per share (1)

2.08

1.21

0.53

2.37

1.76

Core net interest margin (FTE) (2)

3.63

%

3.66

%

3.67

%

3.72

%

3.74

%

Accretable yield on acquired loans

26,144

16,822

6,660

35,263

31,413

Efficiency ratio (1)

49.49

%

53.14

%

56.76

%

52.85

%

53.14

%

Core return on average assets (1)

1.55

%

1.37

%

1.22

%

1.40

%

1.41

%

Core return on average common equity (1)

11.42

%

10.04

%

8.85

%

10.21

%

10.24

%

Core return on tangible common equity (1)

20.62

%

18.09

%

15.76

%

18.81

%

19.03

%

END OF PERIOD

Book value per share

$

26.36

$

25.57

$

24.87

$

24.33

$

23.66

Tangible book value per share

15.73

14.90

14.78

14.18

13.48

Shares outstanding

96,613,855

96,590,656

92,568,361

92,347,643

92,291,070

Full-time equivalent employees

2,701

2,700

2,602

2,654

2,635

Total number of financial centers

212

212

191

191

191

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

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



Simmons First National Corporation

SFNC

Consolidated - Reconciliation of Core Earnings (non-GAAP)

For the Quarters Ended

Sep 30

Jun 30

Mar 31

Dec 31

Sep 30

(Unaudited)

2019

2019

2019

2018

2018

($ in thousands, except per share data)

QUARTER-TO-DATE

Net Income

$

81,826

$

55,598

$

47,695

$

55,646

$

55,193

Non-core items

Merger-related costs

2,556

7,522

1,470

797

804

Early retirement program

177

2,932

355

-

-

Branch right-sizing

160

2,887

45

292

970

Tax effect (1)

(756

)

(3,486

)

(489

)

(284

)

(463

)

Net non-core items

2,137

9,855

1,381

805

1,311

Core earnings (non-GAAP)

$

83,963

$

65,453

$

49,076

$

56,451

$

56,504

Diluted earnings per share

$

0.84

$

0.58

$

0.51

$

0.60

$

0.59

Non-core items

Merger-related costs

0.04

0.08

0.02

0.01

0.01

Early retirement program

-

0.03

0.01

-

-

Branch right-sizing

-

0.03

-

-

0.01

Tax effect (1)

(0.01

)

(0.04

)

(0.01

)

-

-

Net non-core items

0.03

0.10

0.02

0.01

0.02

Core earnings (non-GAAP)

$

0.87

$

0.68

$

0.53

$

0.61

$

0.61

YEAR-TO-DATE

Net Income

$

185,119

$

103,293

$

47,695

$

215,713

$

160,067

Non-core items

Merger-related costs

11,548

8,992

1,470

4,777

3,980

Early retirement program

3,464

3,287

355

-

-

Branch right-sizing

3,092

2,932

45

1,341

1,049

Tax effect (1)

(4,731

)

(3,975

)

(489

)

(1,598

)

(1,314

)

Net non-core items

13,373

11,236

1,381

4,520

3,715

Core earnings (non-GAAP)

$

198,492

$

114,529

$

49,076

$

220,233

$

163,782

Diluted earnings per share

$

1.94

$

1.09

$

0.51

$

2.32

$

1.72

Non-core items

Merger-related costs

0.12

0.10

0.02

0.05

0.04

Early retirement program

0.04

0.03

0.01

-

-

Branch right-sizing

0.03

0.03

-

0.02

0.01

Tax effect (1)

(0.05

)

(0.04

)

(0.01

)

(0.02

)

(0.01

)

Net non-core items

0.14

0.12

0.02

0.05

0.04

Core earnings (non-GAAP)

$

2.08

$

1.21

$

0.53

$

2.37

$

1.76

(1) Effective tax rate of 26.135%.

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

QUARTER-TO-DATE

Salaries and employee benefits

$

52,065

$

56,128

$

56,367

$

49,193

$

55,515

Non-core items (1)

(176

)

(2,937

)

(351

)

(118

)

-

Core salaries and employee benefits (non-GAAP)

$

51,889

$

53,191

$

56,016

$

49,075

$

55,515

Merger related costs

$

2,556

$

7,522

$

1,470

$

797

$

804

Non-core items (1)

(2,556

)

(7,522

)

(1,470

)

(797

)

(804

)

Core merger related costs (non-GAAP)

$

-

$

-

$

-

$

-

$

-

Other operating expenses

$

37,881

$

32,867

$

30,062

$

30,222

$

29,674

Non-core items (1)

(90

)

(2,834

)

(10

)

70

(957

)

Core other operating expenses (non-GAAP)

$

37,791

$

30,033

$

30,052

$

30,292

$

28,717

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



Simmons First National Corporation

SFNC

Reconciliation Of Non-GAAP Financial Measures - End of Period

For the Quarters Ended

(Unaudited)

Sept 30

Jun 30

Mar 31

Dec 31

Sept 30

2019

2019

2019

2018

2018

($ in thousands, except per share data)

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

Total common stockholders' equity

$

2,547,071

$

2,469,513

$

2,302,321

$

2,246,434

$

2,183,319

Intangible assets:

Goodwill

(926,648

)

(926,450

)

(845,687

)

(845,687

)

(845,687

)

Other intangible assets

(101,149

)

(104,096

)

(88,694

)

(91,334

)

(93,975

)

Total intangibles

(1,027,797

)

(1,030,546

)

(934,381

)

(937,021

)

(939,662

)

Tangible common stockholders' equity

$

1,519,274

$

1,438,967

$

1,367,940

$

1,309,413

$

1,243,657

Total assets

$

17,758,511

$

17,937,435

$

16,091,639

$

16,543,337

$

16,281,264

Intangible assets:

Goodwill

(926,648

)

(926,450

)

(845,687

)

(845,687

)

(845,687

)

Other intangible assets

(101,149

)

(104,096

)

(88,694

)

(91,334

)

(93,975

)

Total intangibles

(1,027,797

)

(1,030,546

)

(934,381

)

(937,021

)

(939,662

)

Tangible assets

$

16,730,714

$

16,906,889

$

15,157,258

$

15,606,316

$

15,341,602

Ratio of equity to assets

14.34

%

13.77

%

14.31

%

13.58

%

13.41

%

Ratio of tangible common equity to tangible assets

9.08

%

8.51

%

9.02

%

8.39

%

8.11

%

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

discount for credit losses and allowance on loans acquired

Credit discount on acquired loans

$

60,379

$

73,498

$

42,416

$

49,297

$

53,968

Allowance for loan losses on acquired loans

597

1,112

1,312

95

1,345

Total credit discount and ALLL on acquired loans

$

60,976

$

74,610

$

43,728

$

49,392

$

55,313

Total loans acquired

$

3,420,563

$

3,939,126

$

3,099,915

$

3,342,175

$

3,790,234

Discount and ALLL on acquired loans to acquired loans

1.78

%

1.89

%

1.41

%

1.48

%

1.46

%

Calculation of Total Allowance and Credit Coverage

Allowance for loan losses

$

65,993

$

63,067

$

59,243

$

56,599

$

55,358

Total credit discount and ALLL on acquired loans

60,976

74,610

43,728

49,392

55,313

Total allowance and credit discount

$

126,969

$

137,677

$

102,971

$

105,991

$

110,671

Total loans

$

13,063,928

$

13,201,623

$

11,784,465

$

11,772,563

$

11,913,508

Total allowance and credit coverage

0.97

%

1.04

%

0.87

%

0.90

%

0.93

%

Calculation of Tangible Book Value per Share

Total common stockholders' equity

$

2,547,071

$

2,469,513

$

2,302,321

$

2,246,434

$

2,183,319

Intangible assets:

Goodwill

(926,648

)

(926,450

)

(845,687

)

(845,687

)

(845,687

)

Other intangible assets

(101,149

)

(104,096

)

(88,694

)

(91,334

)

(93,975

)

Total intangibles

(1,027,797

)

(1,030,546

)

(934,381

)

(937,021

)

(939,662

)

Tangible common stockholders' equity

$

1,519,274

$

1,438,967

$

1,367,940

$

1,309,413

$

1,243,657

Shares of common stock outstanding

96,613,855

96,590,656

92,568,361

92,347,643

92,291,070

Book value per common share

$

26.36

$

25.57

$

24.87

$

24.33

$

23.66

Tangible book value per common share

$

15.73

$

14.90

$

14.78

$

14.18

$

13.48



Simmons First National Corporation

SFNC

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

For the Quarters Ended

(Unaudited)

Sept 30

Jun 30

Mar 31

Dec 31

Sept 30

2019

2019

2019

2018

2018

($ in thousands)

Calculation of Core Return on Average Assets

Net income

$

81,826

$

55,598

$

47,695

$

55,646

$

55,193

Net non-core items, net of taxes, adjustment

2,137

9,855

1,381

805

1,311

Core earnings

$

83,963

$

65,453

$

49,076

$

56,451

$

56,504

Average total assets

$

17,720,598

$

17,382,872

$

16,302,197

$

16,357,753

$

16,040,884

Return on average assets

1.83

%

1.28

%

1.19

%

1.35

%

1.37

%

Core return on average assets

1.88

%

1.51

%

1.22

%

1.37

%

1.40

%

Calculation of Return on Tangible Common Equity

Net income

$

81,826

$

55,598

$

47,695

$

55,646

$

55,193

Amortization of intangibles, net of taxes

2,176

2,177

1,951

1,952

2,027

Total income available to common stockholders

$

84,002

$

57,775

$

49,646

$

57,598

$

57,220

Net non-core items, net of taxes

2,137

9,855

1,381

805

1,311

Core earnings

83,963

65,453

49,076

56,451

56,504

Amortization of intangibles, net of taxes

2,176

2,177

1,951

1,952

2,027

Total core income available to common stockholders

$

86,139

$

67,630

$

51,027

$

58,403

$

58,531

Average common stockholders' equity

$

2,368,773

$

2,351,603

$

2,248,898

$

2,211,217

$

2,176,565

Average intangible assets:

Goodwill

(926,687

)

(915,445

)

(845,687

)

(845,687

)

(845,687

)

Other intangibles

(103,028

)

(104,050

)

(90,317

)

(92,990

)

(95,576

)

Total average intangibles

(1,029,715

)

(1,019,495

)

(936,004

)

(938,677

)

(941,263

)

Average tangible common stockholders' equity

$

1,339,058

$

1,332,108

$

1,312,894

$

1,272,540

$

1,235,302

Return on average common equity

13.70

%

9.48

%

8.60

%

9.98

%

10.06

%

Return on tangible common equity

24.89

%

17.40

%

15.34

%

17.96

%

18.38

%

Core return on average common equity

14.06

%

11.16

%

8.85

%

10.13

%

10.30

%

Core return on tangible common equity

25.52

%

20.36

%

15.76

%

18.21

%

18.80

%

Calculation of Efficiency Ratio (1)

Non-interest expense

$

106,865

$

110,743

$

101,409

$

95,396

$

100,253

Non-core non-interest expense adjustment

(2,893

)

(13,341

)

(1,870

)

(1,089

)

(1,774

)

Other real estate and foreclosure expense adjustment

(1,057

)

(563

)

(599

)

(1,300

)

(538

)

Amortization of intangibles adjustment

(2,947

)

(2,947

)

(2,641

)

(2,642

)

(2,745

)

Efficiency ratio numerator

$

99,968

$

93,892

$

96,299

$

90,365

$

95,196

Net-interest income

$

150,164

$

150,356

$

137,026

$

137,781

$

142,968

Non-interest income

83,775

39,006

33,761

34,588

33,725

Fully tax-equivalent adjustment

1,843

1,706

1,601

1,466

1,393

Gain on sale of securities

(7,374

)

(2,823

)

(2,740

)

(8

)

(54

)

Efficiency ratio denominator

$

228,408

$

188,245

$

169,648

$

173,827

$

178,032