Simmons First Announces Fourth Quarter Earnings

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| Source: Simmons First National Corporation

PINE BLUFF, Ark., Jan. 23, 2014 (GLOBE NEWSWIRE) -- Simmons First National Corporation (Nasdaq:SFNC) today announced 2013 fourth quarter core earnings of $7.7 million, an increase of $345,000, or 4.7%, compared to the same quarter last year. Diluted core earnings per share were $0.48, a $0.04, or 9.1%, increase. Core earnings exclude $4.0 million in after-tax non-interest expenses related to merger costs and branch right sizing initiatives. Including the non-core expenses, net income was $3.8 million and diluted earnings per share were $0.23.

For the year ended December 31, 2013, core earnings were $27.6 million, or $1.69 diluted core earnings per share, a $0.10, or 6.3%, increase from 2012. Year-to-date net income was $23.2 million, or $1.42 diluted earnings per share.

"We are pleased with the core earnings results for the fourth quarter and for the year. As a result of our fourth quarter acquisition of Metropolitan National Bank, other recent acquisitions and efficiency initiatives, we have and will continue to recognize one-time revenue and expense items which may skew our short-term business results but provide long-term performance benefits. Our focus continues to be improvement in core operating income," commented George A. Makris, Jr., Chairman and CEO.

Loans

Total loans, including those acquired, were $2.4 billion at December 31, 2013, an increase of $483 million, or 25.1%, compared to the same period in 2012. Acquired loans increased by $369 million, net of discounts, while legacy loans (all loans excluding acquired loans) grew $114 million, or 7.0%. "We are encouraged by the continued growth in our legacy loan portfolio during the fourth quarter. We have had nice loan growth this year, particularly from the new lenders we have attracted in our targeted growth markets. Their production has exceeded our expectations through the end of the year," added Makris.

Deposits

At December 31, 2013, total deposits were $3.7 billion, an increase of $823 million, or 28.7%, compared to the same period in 2012. Total non-time deposits were $2.6 billion, or 70% of total deposits. Included in total deposits were $850 million from the Metropolitan transaction.

Net Interest Income

The Company's net interest income for the fourth quarter of 2013 was $39.6 million, an increase of $9.0 million, or 29.5%, from the same period of 2012. This increase was driven by growth in the legacy loan portfolio, earning assets acquired through the Metropolitan transaction and an increase in accretable yield on acquired loans. Net interest margin was 4.70% for the quarter ended December 31, 2013, a 71 basis point increase from the same quarter of 2012. Included in interest income for both periods was the additional yield accretion recognized as a result of updated estimates of the cash flows of the loan pools acquired in the Company's FDIC-assisted transactions. Each quarter, the Company estimates the cash flows expected to be collected from the acquired loan pools, and adjustments may or may not be required. The cash flows estimate has increased based on payment histories and reduced loss expectations of the loan pools. This resulted in increased interest income that is spread on a level-yield basis over the remaining expected lives of the loan pools. The increases in expected cash flows also reduce the amount of expected reimbursements under the loss sharing agreements with the FDIC, which are recorded as indemnification assets.

The impact of the adjustments on the Company's financial results for the current reporting period is shown below:

 
  Three Months Ended Twelve Months Ended
(In thousands) December 31 December 31
  2013 2012 2013 2012
Impact on net interest income $ 8,802 $ 2,647 $ 18,905 $ 11,751
Non-interest income (8,371) (2,510) (18,106) (10,755)
Net impact to pre-tax income $ 431 $ 137 $ 799 $ 996

Because these adjustments will be recognized over the remaining lives of the loan pools and the remainder of the loss sharing agreements, respectively, they will impact future periods as well. The current estimate of the remaining accretable yield adjustment that will positively impact interest income is $33.0 million and the remaining adjustment to the indemnification assets that will reduce non-interest income is $25.6 million. Of the remaining adjustments, we expect to recognize $21.4 million of interest income and a $20.6 million reduction of non-interest income during 2014, resulting in a $0.8 million positive impact to pre-tax income. The accretable yield adjustments recorded in future periods will change as the Company continues to evaluate expected cash flows from the acquired loan pools.

Non-Interest Income

Non-interest income for the fourth quarter was $7.7 million, a decrease of $7.0 million, compared to the third quarter of 2012. The reduction in non-interest income was primarily due to the $5.9 million incremental reduction in non-interest income from the adjustment to the indemnification assets. Also, included in non-interest income during the fourth quarter of 2012 was a $2.3 million bargain purchase gain on the Company's FDIC-assisted acquisition of Excel Bank in Sedalia, Missouri.

Non-Interest Expense

Non-interest expense for the fourth quarter of 2013 was $41.7 million, an increase of $9.5 million compared to the same period in 2012. Included in the quarter were $6.4 million of various merger related costs for the Company's acquisition of Metropolitan National Bank. During the fourth quarter of 2012, the Company recorded $1.1 million in merger related costs for its FDIC-assisted acquisitions, resulting in an increase in merger related expenses of $5.3 million in the fourth quarter of 2013. "During the fourth quarter there were $3.7 million in incremental normal operating expenses attributable to our acquisition of Metropolitan National Bank. We also closed one underperforming branch during the quarter, incurring one-time costs of $108,000. Excluding the acquisition related costs and the nonrecurring branch right sizing expenses, non-interest expense for the quarter increased by only 1.1%. Expense control remains a focus as we continue to search for additional efficiency opportunities," added Makris.

Asset Quality

Beginning in 2010, the Company has acquired loans and foreclosed real estate ("OREO") through FDIC-assisted acquisitions. Through the loss share provisions of the purchase and assumption agreements, the FDIC agreed to reimburse the Company for 80% of the losses incurred on the disposition of covered loans and OREO. The acquired loans and OREO and any related FDIC loss share indemnification asset were presented in the Company's financial reports with a carrying value equal to the discounted net present value of expected future proceeds. At December 31, 2013, acquired loans covered by loss share were carried at $147 million, OREO covered by loss share was carried at $21 million and the FDIC loss share indemnification asset was carried at $49 million. Acquired loans and OREO not covered by loss share were carried at $516 million and $45 million, respectively. As a result of  using the discounted net present value method of valuing these assets, and due to the significant protection against possible losses provided by the FDIC loss share indemnification, all acquired assets, with the exception of OREO not covered by loss share, are excluded from the computations of the asset quality ratios for the legacy loan portfolio, except for their inclusion in total assets.

"It is important to remember that the acquired non-covered loans are protected by a credit mark and the acquired covered loans are protected by a credit mark and 80% loss coverage by the FDIC," explained Makris. "At December 31, 2013, the allowance for loan losses was $27.4 million and the loan credit mark was $101.4 million, for a total of $128.8 million of coverage. This equates to a total coverage ratio of 5.1% of gross loans. The ratio of credit mark to acquired loans was 13.3%." The Company's allowance for loan losses at December 31, 2013, was 1.57% of total loans and 298% of non-performing loans. Non-performing loans as a percent of total loans were 0.53% as of December 31, 2013. Non-performing assets increased $38.2 million from the previous quarter, to $74.1 million. Included in this quarter was $42.1 million of acquired OREO not covered by loss share, net of the credit mark, from the Metropolitan acquisition. For the full year of 2013, the annualized net charge-off ratio, excluding credit cards, was 0.15%, and the annualized credit card charge-off ratio was 1.33%.

Capital

At December 31, 2013, stockholders' equity was $404 million, book value per share was $24.89 and tangible book value per share was $19.10. The Company's ratio of stockholders' equity to total assets was 9.2% and its ratio of tangible common equity to tangible assets was 7.2%, as of December 31, 2013.

Stock Repurchase Program

During 2013, the Company repurchased approximately 420,000 shares at an average price of $25.89. During the third quarter, the Company suspended its stock repurchase program.

Simmons First National Corporation

Simmons First National Corporation is a seven bank financial holding company with community banks in Pine Bluff, Lake Village, Jonesboro, Searcy, Russellville, El Dorado and Hot Springs, Arkansas and conducts banking operations in Arkansas, Missouri and Kansas. The Company's common stock trades on the NASDAQ Global Select Market under the symbol "SFNC".

Conference Call

Management will conduct a conference call to review this information beginning at 3:00 p.m. Central Time on Thursday, January 23, 2014. Interested persons can listen to this call by dialing toll-free 1-888-481-2844 (United States and Canada only) and asking for the Simmons First National Corporation conference call, conference ID 2687609. In addition, the call will be available live or in recorded version on the Company's website at www.simmonsfirst.com.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles (GAAP). The Company's management uses these non-GAAP financial measures in their analysis of the Company's performance. These measures typically adjust GAAP performance measures to include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant activities or nonrecurring transactions. Since the presentation of these GAAP performance measures and their impact differ between companies, management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company's core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Forward Looking Statements

Statements in this press release that are not historical facts should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements of this type speak only as of the date of this news release. By nature, forward-looking statements involve inherent risk and uncertainties. Various factors, including, but not limited to, economic conditions, credit quality, interest rates, loan demand and changes in the assumptions used in making the forward-looking statements, 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 filing with the Securities and Exchange Commission.

 

           
 Simmons First National Corporation           SFNC 
 Consolidated End of Period Balance Sheets           
 For the Quarters Ended   Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
 (Unaudited)   2013   2013   2013   2013   2012 
(in thousands)          
ASSETS           
Cash and non-interest bearing balances due from banks   $ 69,827  $ 37,752  $ 38,494  $ 40,006  $ 47,470
Interest bearing balances due from banks   469,553  320,368  420,740  602,992  467,984
Federal funds sold   --   18,365  --   --   22,343
Cash and cash equivalents   539,380  376,485  459,234  642,998  537,797
Investment securities - held-to-maturity   745,688  581,768  555,464  488,513  496,141
Investment securities - available-for-sale   212,277  179,937  177,531  192,165  191,342
Mortgage loans held for sale   9,494  10,605  14,454  19,100  25,367
Assets held in trading accounts   8,978  8,744  8,739  8,368  6,224
Loans:           
Legacy loans   1,742,638  1,741,161  1,650,395  1,589,077  1,628,513
Allowance for loan losses   (27,442)  (27,533)  (27,398)  (27,735)  (27,882)
Loans acquired, not covered by FDIC loss share           
(net of discount)   515,644  68,133  63,500  78,745  82,764
Loans acquired, covered by FDIC loss share (net of discount)   146,653  148,884  163,736  181,537  210,842
Net loans   2,377,493  1,930,645  1,850,233  1,821,624  1,894,237
FDIC indemnification asset   48,791  61,500  67,744  71,002  75,286
Premises and equipment   119,614  87,065  88,164  87,934  87,557
Premises held for sale   19,466  --   --   --   -- 
Foreclosed assets not covered by FDIC loss share   64,820  26,203  30,390  30,714  33,352
Foreclosed assets covered by FDIC loss share   20,585  23,260  22,990  28,003  27,620
Interest receivable   15,654  15,635  12,637  13,027  14,530
Bank owned life insurance   60,384  60,040  59,710  59,344  52,066
Goodwill   78,906  60,605  60,605  60,605  60,605
Other intangible assets   14,972  5,420  3,487  3,624  3,760
Other assets   46,598  13,797  10,387  16,540  21,605
Total assets   $ 4,383,100  $ 3,441,709  $ 3,421,769  $ 3,543,561  $ 3,527,489
           
LIABILITIES AND STOCKHOLDERS' EQUITY           
Deposits:           
Non-interest bearing transaction accounts   $ 718,438  $ 580,063  $ 565,433  $ 592,442  $ 576,655
Interest bearing transaction accounts and savings deposits   1,862,618  1,453,139  1,428,422  1,456,005  1,421,137
Time deposits less than $100,000   611,729  454,325  467,778  482,688  505,773
Time deposits greater than $100,000   504,782  351,271  351,486  361,529  370,598
Total deposits   3,697,567  2,838,798  2,813,119  2,892,664  2,874,163
Federal funds purchased and securities sold under agreements to repurchase   107,887  62,311  79,063  108,227  104,078
Other borrowings   117,090  75,987  77,659  81,646  89,441
Subordinated debentures   20,620  20,620  20,620  20,620  20,620
Accrued interest and other liabilities   36,104  40,959  29,458  33,950  33,125
Total liabilities   3,979,268  3,038,675  3,019,919  3,137,107  3,121,427
           
Stockholders' equity:           
Common stock   162  162  163  165  165
Surplus   88,095  87,279  89,434  94,723  96,587
Undivided profits   318,577  318,194  314,663  311,521  309,053
Accumulated other comprehensive income           
Unrealized appreciation on AFS securities   (3,002)  (2,601)  (2,410)  45  257
Total stockholders' equity   403,832  403,034  401,850  406,454  406,062
Total liabilities and stockholders' equity   $ 4,383,100  $ 3,441,709  $ 3,421,769  $ 3,543,561  $ 3,527,489
           
           
Simmons First National Corporation           SFNC 
Consolidated Average Quarter-to-Date Balance Sheets         
For the Quarters Ended   Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
(Unaudited)   2013   2013   2013   2013   2012 
(in thousands)          
ASSETS           
Cash and non-interest bearing balances due from banks   $ 50,473  $ 39,067  $ 41,030  $ 42,334  $ 43,691
Interest bearing balances due from banks   428,551  365,504  527,787  560,759  490,532
Federal funds sold   2,616  3,719  1,922  8,487  8,931
Cash and cash equivalents   481,640  408,290  570,739  611,580  543,154
Investment securities - held-to-maturity   657,736  567,579  511,008  497,152  511,203
Investment securities - available-for-sale   220,292  178,351  182,227  191,981  194,815
Mortgage loans held for sale   6,666  12,171  14,154  19,442  17,804
Assets held in trading accounts   8,881  8,731  8,292  8,525  7,701
Loans:           
Legacy loans   1,734,469  1,705,204  1,616,036  1,588,299  1,633,710
Allowance for loan losses   (27,806)  (27,735)  (28,219)  (27,999)  (28,660)
Loans acquired, not covered by FDIC loss share           
(net of discount)   261,577  61,372  72,663  80,755  82,764
Loans acquired, covered by FDIC loss share (net of discount)   145,742  156,392  172,415  196,190  218,135
Net loans   2,113,982  1,895,233  1,832,895  1,837,245  1,905,949
FDIC indemnification asset   57,587  65,478  70,442  74,205  66,994
Premises and equipment   87,310  88,044  88,210  87,571  87,784
Premises held for sale   212  --   --   --   -- 
Foreclosed assets not covered by FDIC loss share   50,680  27,368  29,399  32,102  34,883
Foreclosed assets covered by FDIC loss share   22,529  22,392  25,603  27,812  29,779
Interest receivable   15,707  13,739  12,524  13,370  15,154
Bank owned life insurance   60,209  59,878  59,523  52,706  51,864
Goodwill   60,804  60,605  60,605  60,605  60,605
Other intangible assets   5,526  3,439  3,554  3,693  2,955
Other assets   33,324  12,122  13,435  20,827  3,574
Total assets   $ 3,883,085  $ 3,423,420  $ 3,482,610  $ 3,538,816  $ 3,534,218
           
LIABILITIES AND STOCKHOLDERS' EQUITY           
Deposits:           
Non-interest bearing transaction accounts   $ 665,644  $ 559,461  $ 560,804  $ 567,588  $ 570,800
Interest bearing transaction accounts and savings deposits   1,620,244  1,444,058  1,456,258  1,446,533  1,405,956
Time deposits less than $100,000   517,603  461,101  475,428  494,196  523,050
Time deposits greater than $100,000   409,361  358,307  359,155  364,496  380,843
Total deposits   3,212,852  2,822,927  2,851,645  2,872,813  2,880,649
Federal funds purchased and securities sold under agreements to repurchase   98,359  67,924  89,879  118,131  101,815
Other borrowings   108,693  75,704  80,090  83,872  89,617
Subordinated debentures   20,620  20,620  20,620  20,620  20,620
Accrued interest and other liabilities   33,117  31,867  32,146  34,486  33,227
Total liabilities   3,473,641  3,019,042  3,074,380  3,129,922  3,125,928
Total stockholders' equity   409,444  404,378  408,230  408,894  408,290
Total liabilities and stockholders' equity   $ 3,883,085  $ 3,423,420  $ 3,482,610  $ 3,538,816  $ 3,534,218
           
           
Simmons First National Corporation           SFNC 
Consolidated Statements of Income - Quarter-to-Date           
For the Quarters Ended  Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
(Unaudited)   2013   2013   2013   2013   2012 
(in thousands, except per share data)          
INTEREST INCOME           
Legacy loans   $ 22,463  $ 22,332  $ 21,207  $ 22,590  $ 23,231
Loans acquired   16,151  8,283  7,864  7,281  7,440
Federal funds sold   5  6  5  3  4
Investment securities   3,951  3,428  3,019  2,902  3,106
Mortgage loans held for sale   72  122  118  155  149
Assets held in trading accounts   6  6  6  11  11
Interest bearing balances due from banks   251  234  352  290  301
TOTAL INTEREST INCOME   42,899  34,411  32,571  33,232  34,242
INTEREST EXPENSE           
Time deposits   1,479  1,392  1,479  1,588  1,807
Other deposits   646  601  603  611  652
Federal funds purchased and securities sold under agreements to repurchase   55  46  53  65  65
Other borrowings   929  646  692  734  948
Subordinated debentures   161  162  162  159  163
TOTAL INTEREST EXPENSE   3,270  2,847  2,989  3,157  3,635
NET INTEREST INCOME   39,629  31,564  29,582  30,075  30,607
Provision for loan losses   1,084  1,081  1,034  919  1,295
NET INTEREST INCOME AFTER PROVISION           
FOR LOAN LOSSES   38,545  30,483  28,548  29,156  29,312
NON-INTEREST INCOME           
Trust income   1,608  1,448  1,342  1,444  1,484
Service charges on deposit accounts   5,497  4,603  4,474  4,241  4,645
Other service charges and fees   1,164  728  791  775  747
Mortgage lending income   916  1,122  1,338  1,216  1,553
Investment banking income   421  240  696  454  337
Credit card fees   4,592  4,400  4,341  4,039  4,655
Bank owned life insurance income   347  328  366  278  385
Gain on sale of securities, net   42  --   (193)  --   2
Gain on FDIC-assisted transactions   --   --   --   --   2,291
Net (loss) gain on assets covered by FDIC loss share agreements   (7,988)  (3,443)  (2,615)  (2,142)  (2,286)
Other income   1,118  887  733  1,008  930
TOTAL NON-INTEREST INCOME   7,717  10,313  11,273  11,313  14,743
NON-INTEREST EXPENSE           
Salaries and employee benefits   19,933  17,701  17,937  18,507  17,674
Occupancy expense, net   2,544  2,485  2,450  2,555  2,311
Furniture and equipment expense   2,257  1,613  2,030  1,723  1,835
Other real estate and foreclosure expense   562  385  59  331  311
Deposit insurance   620  595  492  775  614
Merger related costs   6,413  190  (467)  240  1,081
Other operating expenses   9,349  7,934  7,818  7,781  8,340
TOTAL NON-INTEREST EXPENSE   41,678  30,903  30,319  31,912  32,166
NET INCOME BEFORE INCOME TAXES   4,584  9,893  9,502  8,557  11,889
Provision for income taxes   798  2,961  2,926  2,620  3,856
NET INCOME   $ 3,786  $ 6,932  $ 6,576  $ 5,937  $ 8,033
BASIC EARNINGS PER SHARE   $ 0.23  $ 0.43  $ 0.40  $ 0.36  $ 0.48
DILUTED EARNINGS PER SHARE   $ 0.23  $ 0.43  $ 0.40  $ 0.36  $ 0.48
           
           
Simmons First National Corporation           SFNC 
Consolidated Statements of Income - Year-to-Date           
For the Quarters Ended  Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
(Unaudited)   2013   2013   2013   2013   2012 
(in thousands, except per share data)          
INTEREST INCOME           
Legacy loans   $ 88,594  $ 66,129  $ 43,797  $ 22,590  $ 91,053
Loans acquired   39,577  23,428  15,145  7,281  23,448
Federal funds sold   19  14  8  3  7
Investment securities   13,300  9,349  5,921  2,902  12,721
Mortgage loans held for sale   467  395  273  155  637
Assets held in trading accounts   29  23  17  11  48
Interest bearing balances due from banks   1,127  875  642  290  1,220
TOTAL INTEREST INCOME   143,113  100,213  65,803  33,232  129,134
INTEREST EXPENSE           
Time deposits   5,938  4,460  3,067  1,588  7,943
Other deposits   2,461  1,814  1,214  611  2,682
Federal funds purchased and securities sold under agreements to repurchase   219  165  118  65  310
Other borrowings   3,001  2,072  1,426  734  3,354
Subordinated debentures   644  483  321  159  1,328
TOTAL INTEREST EXPENSE   12,263  8,994  6,146  3,157  15,617
NET INTEREST INCOME   130,850  91,219  59,657  30,075  113,517
Provision for loan losses   4,118  3,034  1,953  919  4,140
NET INTEREST INCOME AFTER PROVISION           
FOR LOAN LOSSES   126,732  88,185  57,704  29,156  109,377
NON-INTEREST INCOME           
Trust income   5,842  4,234  2,786  1,444  5,473
Service charges on deposit accounts   18,815  13,318  8,715  4,241  16,808
Other service charges and fees   3,458  2,294  1,566  775  2,961
Mortgage lending income   4,592  3,677  2,554  1,216  5,997
Investment banking income   1,811  1,390  1,150  454  2,038
Credit card fees   17,372  12,779  8,380  4,039  17,045
Bank owned life insurance income   1,319  974  644  278  1,463
Gain on sale of securities, net   (151)  (193)  (193)  --   2
Gain on FDIC-assisted transactions   --   --   --   --   3,411
Net (loss) gain on assets covered by FDIC loss share agreements   (16,188)  (8,200)  (4,757)  (2,142)  (9,793)
Other income   3,746  2,626  1,741  1,008  2,966
TOTAL NON-INTEREST INCOME   40,616  32,899  22,586  11,313  48,371
NON-INTEREST EXPENSE           
Salaries and employee benefits   74,078  54,146  36,444  18,507  66,999
Occupancy expense, net   10,034  7,490  5,005  2,555  8,603
Furniture and equipment expense   7,623  5,367  3,753  1,723  6,882
Other real estate and foreclosure expense   1,337  775  390  331  992
Deposit insurance   2,482  1,862  1,267  775  2,086
Merger related costs   6,376  (37)  (227)  240  1,896
Other operating expenses   32,882  23,529  15,599  7,781  30,275
TOTAL NON-INTEREST EXPENSE   134,812  93,132  62,231  31,912  117,733
NET INCOME BEFORE INCOME TAXES   32,536  27,952  18,059  8,557  40,015
Provision for income taxes   9,305  8,507  5,546  2,620  12,331
NET INCOME   $ 23,231  $ 19,445  $ 12,513  $ 5,937  $ 27,684
BASIC EARNINGS PER SHARE   $ 1.42  $ 1.19  $ 0.76  $ 0.36  $ 1.64
DILUTED EARNINGS PER SHARE   $ 1.42  $ 1.19  $ 0.76  $ 0.36  $ 1.64
           
           
Simmons First National Corporation           SFNC 
Consolidated Risk-Based Capital           
For the Quarters Ended   Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
(Unaudited)   2013   2013   2013   2013   2012 
(in thousands)          
Tier 1 capital          
Stockholders' equity   $ 403,832  $ 403,034  $ 401,850  $ 406,454  $ 406,062
Trust preferred securities, net allowable   20,000  20,000  20,000  20,000  20,000
Disallowed intangible assets, net of deferred tax   (75,501)  (49,727)  (48,091)  (48,529)  (48,966)
Unrealized gain on AFS securities   3,002  2,601  2,410  (45)  (257)
           
Total Tier 1 capital   351,333  375,908  376,169  377,880  376,839
           
Tier 2 capital          
Qualifying unrealized gain on AFS equity securities   45  40  35  28  19
Qualifying allowance for loan losses   28,967  25,633  24,818  24,129  24,743
           
Total Tier 2 capital   29,012  25,673  24,853  24,157  24,762
           
Total risk-based capital   $ 380,345  $ 401,581  $ 401,022  $ 402,037  $ 401,601
           
Risk weighted assets   $ 2,697,630  $ 2,047,198  $ 1,981,341  $ 1,925,199  $ 1,974,800
           
Adjusted average assets for leverage ratio   $ 3,811,793  $ 3,378,676  $ 3,434,844  $ 3,490,102  $ 3,484,504
           
Ratios at end of quarter          
Equity to assets  9.21% 11.71% 11.74% 11.47% 11.51%
Tangible common equity to tangible assets  7.23% 9.98% 10.06% 9.84% 9.87%
Tier 1 leverage ratio  9.22% 11.13% 10.95% 10.83% 10.81%
Tier 1 risk-based capital ratio  13.02% 18.36% 18.99% 19.63% 19.08%
Total risk-based capital ratio  14.10% 19.62% 20.24% 20.88% 20.34%
         
         
Simmons First National Corporation         SFNC 
Consolidated Loans and Investments           
For the Quarters Ended   Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
(Unaudited)   2013   2013   2013   2013   2012 
(in thousands)          
Legacy Loan Portfolio - End of Period (1)          
Consumer           
Credit cards   $ 184,935  $ 177,463  $ 173,536  $ 171,599  $ 185,536
Student loans   25,906  28,392  30,106  31,835  34,145
Other consumer   98,851  101,399  103,765  102,297  105,319
Total consumer   309,692  307,254  307,407  305,731  325,000
Real Estate           
Construction   146,458  161,024  142,902  136,099  138,132
Single-family residential   392,285  375,703  364,239  355,479  356,907
Other commercial   626,333  602,463  572,110  569,686  568,166
Total real estate   1,165,076  1,139,190  1,079,251  1,061,264  1,063,205
Commercial           
Commercial   164,329  154,508  152,122  150,427  141,336
Agricultural   98,886  135,633  107,113  68,028  93,805
Total commercial   263,215  290,141  259,235  218,455  235,141
Other   4,655  4,576  4,502  3,627  5,167
Total Loans   $ 1,742,638  $ 1,741,161  $ 1,650,395  $ 1,589,077  $ 1,628,513
           
(1) Excludes all acquired loans, including those covered by FDIC loss share agreements. 
           
Investment Securities - End of Period          
Held-to-Maturity           
U.S. Government agencies   $ 395,198  $ 313,052  $ 313,050  $ 288,480  $ 288,098
Mortgage-backed securities   34,425  41  43  45  49
State and political subdivisions   315,445  268,055  241,751  199,368  207,374
Other securities   620  620  620  620  620
Total held-to-maturity   745,688  581,768  555,464  488,513  496,141
Available-for-Sale           
U.S. Treasury   3,985  --   --   --   -- 
U.S. Government agencies   178,217  163,127  159,390  159,846  152,481
Mortgage-backed securities   1,891  1,994  2,078  15,891  20,634
State and political subdivisions   7,861  1,263  1,262  1,417  2,988
FHLB stock   6,002  5,085  5,353  5,325  5,498
Other securities   14,321  8,468  9,448  9,686  9,741
Total available-for-sale   212,277  179,937  177,531  192,165  191,342
Total investment securities   $ 957,965  $ 761,705  $ 732,995  $ 680,678  $ 687,483
Fair value - HTM investment securities   $ 731,705  $ 570,703  $ 543,154  $ 491,556  $ 500,578
           
Investment Securities - QTD Average          
Taxable securities   $ 583,389  $ 490,801  $ 478,946  $ 485,711  $ 495,917
Tax exempt securities   294,639  255,129  214,289  203,422  210,101
Total investment securities - QTD average   $ 878,028  $ 745,930  $ 693,235  $ 689,133  $ 706,018
         
         
Simmons First National Corporation         SFNC 
Consolidated Allowance and Asset Quality           
For the Quarters Ended   Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
(Unaudited)   2013   2013   2013   2013   2012 
(in thousands)          
Allowance for Loan Losses          
Balance, beginning of quarter   $ 27,533  $ 27,398  $ 27,735  $ 27,882  $ 28,145
Loans charged off           
Credit cards   841  770  743  909  884
Other consumer   428  449  310  374  362
Real estate   255  247  887  239  705
Commercial   133  20  133  96  163
Total loans charged off   1,657  1,486  2,073  1,618  2,114
           
Recoveries of loans previously charged off           
Credit cards   226  235  204  236  194
Other consumer   166  114  116  195  177
Real estate   78  151  295  68  144
Commercial   12  40  87  53  41
Total recoveries   482  540  702  552  556
Net loans charged off   1,175  946  1,371  1,066  1,558
Provision for loan losses   1,084  1,081  1,034  919  1,295
Balance, end of quarter   $ 27,442  $ 27,533  $ 27,398  $ 27,735  $ 27,882
           
Non-performing assets (1) (2)          
Non-performing loans           
Nonaccrual loans           
Real estate   $ 4,799  $ 4,157  $ 4,327  $ 6,963  $ 7,135
Commercial   495  525  526  602  618
Consumer   967  1,293  1,410  1,203  1,370
Total nonaccrual loans   6,261  5,975  6,263  8,768  9,123
Loans past due 90 days or more           
Government guaranteed student loans   2,264  2,966  2,254  2,283  2,234
Other loans   687  725  879  661  681
Total loans past due 90 days or more   2,951  3,691  3,133  2,944  2,915
Total non-performing loans   9,212  9,666  9,396  11,712  12,038
Other non-performing assets           
Foreclosed assets held for sale   19,361  20,493  21,804  21,253  21,556
Acquired foreclosed assets held for sale, not covered by FDIC loss share agreements   45,459  5,710  8,586  9,461  11,796
Other non-performing assets   75  60  80  238  221
Total other non-performing assets   64,895  26,263  30,470  30,952  33,573
Total non-performing assets   $ 74,107  $ 35,929  $ 39,866  $ 42,664  $ 45,611
Performing TDRs (troubled debt restructurings)   $ 9,497  $ 9,584  $ 10,473  $ 10,745  $ 11,015
           
Ratios (1) (2)          
Allowance for loan losses to total loans  1.57% 1.58% 1.66% 1.75% 1.71%
Allowance for loan losses to non-performing loans  298% 285% 292% 237% 232%
Non-performing loans to total loans  0.53% 0.56% 0.57% 0.74% 0.74%
Non-performing assets (including performing TDRs) to total assets  1.91% 1.32% 1.47% 1.51% 1.61%
Non-performing assets to total assets  1.69% 1.04% 1.17% 1.20% 1.29%
Non-performing assets to total assets           
(excluding Gov't guaranteed student loans)  1.64% 0.96% 1.10% 1.14% 1.23%
Annualized net charge offs to total loans  0.27% 0.22% 0.34% 0.27% 0.38%
Annualized net credit card charge offs to total credit card loans  1.31% 1.21% 1.25% 1.53% 1.54%
Annualized net charge offs to total loans           
(excluding credit cards)  0.14% 0.11% 0.23% 0.11% 0.24%
Past due loans > 30 days (excluding nonaccrual)  0.57% 0.62% 0.54% 0.64% 0.63%
Past due loans > 30 days (excluding nonaccrual)           
(excluding Gov't guaranteed student loans)  0.41% 0.36% 0.35% 0.40% 0.44%
           
(1) Excludes all acquired loans, including those covered by FDIC loss share agreements, except for their inclusion in total assets. 
(2) Excludes acquired foreclosed assets covered by FDIC loss share agreements, except for their inclusion in total assets. 
     
     
 Simmons First National Corporation     SFNC 
 Consolidated Loans and Credit Coverage (non-GAAP)   
 For the Quarters Ended   Dec 31   Dec 31 
 (Unaudited)   2013   2012 
 (in thousands)     
LOANS     
Legacy loans   $ 1,742,638  $ 1,628,513
Allowance for loan losses   (27,442)  (27,882)
Legacy loans (net of allowance)   1,715,196  1,600,631
Loans acquired, not covered by FDIC loss share   554,242  101,713
Credit discount   (38,598)  (18,949)
Loans acquired, not covered (net of discount)   515,644  82,764
Loans acquired, covered by FDIC loss share   209,459  303,932
Credit discount   (62,806)  (93,090)
Loans acquired, covered (net of discount)   146,653  210,842
Net loans   $ 2,377,493  $ 1,894,237
     
Loan Coverage Ratios     
Allowance for loan losses to legacy loans  1.57% 1.71%
     
Discount for credit losses on loans acquired, not covered, to total loans acquired, not covered, plus discount for credit losses on loans acquired, not covered (non-GAAP)  6.96% 18.63%
     
Discount for credit losses on loans acquired, covered, to total loans acquired, covered, plus discount for credit losses on loans acquired, covered (non-GAAP)  29.98% 30.63%
     
Total allowance and credit coverage (non-GAAP)  5.14% 6.88%
         
         
Simmons First National Corporation         SFNC 
Consolidated - Net Interest Income Analysis         
For the Quarters Ended   Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
(Unaudited)   2013   2013   2013   2013   2012 
           
ASSETS          
           
Earning Assets          
Interest bearing balances due from banks 0.23% 0.25% 0.27% 0.21% 0.24%
Investment securities 2.44% 2.52% 2.37% 2.33% 2.39%
Mortgage loans held for sale 4.29% 3.98% 3.34% 3.23% 3.33%
Assets held in trading accounts 0.27% 0.27% 0.29% 0.52% 0.57%
Loans, including acquired loans 7.16% 6.32% 6.27% 6.50% 6.31%
Total interest earning assets 5.08% 4.63% 4.35% 4.41% 4.45%
           
LIABILITIES          
           
Interest bearing liabilities          
Interest bearing transaction and savings accounts 0.16% 0.17% 0.17% 0.17% 0.18%
Time deposits 0.63% 0.67% 0.71% 0.75% 0.80%
Total interest bearing deposits 0.33% 0.35% 0.36% 0.39% 0.42%
Federal funds purchased and securities sold under agreement to repurchase 0.22% 0.27% 0.24% 0.22% 0.25%
Other borrowings 3.39% 3.39% 3.47% 3.55% 4.21%
Subordinated debentures 3.10% 3.12% 3.15% 3.13% 3.14%
Total interest bearing liabilities 0.47% 0.47% 0.48% 0.51% 0.57%
           
NET INTEREST MARGIN/SPREAD          
           
Net interest spread 4.61% 4.16% 3.87% 3.90% 3.88%
Net interest margin - quarter-to-date 4.70% 4.27% 3.96% 4.01% 3.99%
Net interest margin - year-to-date 4.21% 4.08% 3.98% 4.01% 3.93%
         
         
Simmons First National Corporation         SFNC 
Consolidated - Selected Financial Data           
For the Quarters Ended   Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
(Unaudited)   2013   2013   2013   2013   2012 
($ in thousands, except share data)          
QUARTER-TO-DATE          
Diluted earnings per share   $ 0.23  $ 0.43  $ 0.40  $ 0.36  $ 0.48
Core earnings (excludes nonrecurring items) (non-GAAP)   7,749  7,371  6,409  6,083  7,404
Diluted core earnings per share (non-GAAP)   0.48  0.45  0.39  0.37  0.44
Cash dividends declared per common share   0.21  0.21  0.21  0.21  0.20
Cash dividends declared - amount   3,403  3,401  3,434  3,469  3,323
Return on average stockholders' equity  3.67% 6.80% 6.46% 5.89% 7.83%
Return on tangible equity  4.51% 8.18% 7.76% 7.09% 9.36%
Return on average assets  0.39% 0.80% 0.76% 0.68% 0.90%
Net interest margin (FTE)  4.70% 4.27% 3.96% 4.01% 3.99%
FTE adjustment - investments   1,442  1,313  1,083  1,062  1,134
FTE adjustment - loans   17  11  12  11  11
Amortization of intangibles   192  135  137  137  126
Amortization of intangibles, net of taxes   117  82  83  83  77
Average shares outstanding   16,210,480  16,220,199  16,414,893  16,516,438  16,624,637
Average earning assets   3,466,530  3,059,023  3,106,504  3,151,590  3,165,595
Average interest bearing liabilities   2,774,880  2,427,714  2,481,430  2,527,848  2,521,901
           
YEAR-TO-DATE          
Diluted earnings per share   $ 1.42  $ 1.19  $ 0.76  $ 0.36  $ 1.64
Core earnings (excludes nonrecurring items) (non-GAAP)   27,612  19,863  12,492  6,083  26,870
Diluted core earnings per share (non-GAAP)   1.69  1.21  0.76  0.37  1.59
Cash dividends declared per common share   0.84  0.63  0.42  0.21  0.80
Cash dividends declared - amount   13,707  10,304  6,903  3,469  13,496
Return on average stockholders' equity  5.33% 6.39% 6.18% 5.89% 6.77%
Return on tangible equity  6.36% 7.68% 7.43% 7.09% 8.05%
Return on average assets  0.64% 0.75% 0.72% 0.68% 0.83%
Net interest margin (FTE)  4.21% 4.08% 3.98% 4.01% 3.93%
FTE adjustment - investments   4,900  3,458  2,145  1,062  4,660
FTE adjustment - loans   51  34  23  11  45
Amortization of intangibles   601  409  274  137  348
Amortization of intangibles, net of taxes   365  248  166  83  212
Average shares outstanding   16,339,335  16,382,758  16,465,385  16,516,438  16,908,904
Average diluted shares outstanding   16,352,167  16,388,393  16,468,814  16,520,398  16,911,363
Average earning assets   3,224,094  3,105,706  3,129,048  3,151,590  3,008,840
Average interest bearing liabilities   2,551,653  2,477,899  2,503,992  2,527,848  2,378,748
           
END OF PERIOD          
Book value per share   $ 24.89  $ 24.88  $ 24.67  $ 24.62  $ 24.55
Tangible book value per share   19.10  20.80  20.74  20.73  20.66
Shares outstanding   16,226,256  16,198,964  16,289,239  16,509,666  16,542,778
Full-time equivalent employees   1,343  1,097  1,114  1,112  1,068
Total number of ATM's   157  106  110  110  110
Total number of financial centers   131  87  92  92  92
Parent company only - investment in subsidiaries   452,688  371,531  369,965  370,728  368,847
Parent company only - intangible assets   133  133  133  133  133
         
         
Simmons First National Corporation         SFNC 
Consolidated - Reconciliation of Core Earnings (non-GAAP)       
For the Quarters Ended   Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
(Unaudited)   2013   2013   2013   2013   2012 
(in thousands, except per share data)          
QUARTER-TO-DATE          
Net Income   $ 3,786  $ 6,932  $ 6,576  $ 5,937  $ 8,033
Nonrecurring items           
Gain on FDIC assisted transactions  --   --   --   --   (2,291)
Merger related costs  6,413  190  (467)  240  1,081
Loss on sale of securities  --   --   193  --   -- 
FHLB prepayment penalties  --   --   --   --   175
Branch right sizing  108  533  --   --   -- 
Tax effect  (2,558)  (284)  107  (94)  406
 Net nonrecurring items   3,963  439  (167)  146  (629)
Core earnings (non-GAAP)   $ 7,749  $ 7,371  $ 6,409  $ 6,083  $ 7,404
           
Diluted earnings per share   $ 0.23  $ 0.43  $ 0.40  $ 0.36  $ 0.48
Nonrecurring items           
Gain on FDIC assisted transactions  --   --   --   --   (0.14)
Merger related costs  0.40  0.01  (0.03)  0.01  0.07
Loss on sale of securities  --   --   0.01  --   -- 
FHLB prepayment penalties  --   --   --   --   0.01
Branch right sizing  0.01  0.03  --   --   -- 
Tax effect  (0.16)  (0.02)  0.01  --   0.02
Net nonrecurring items   0.25  0.02  (0.01)  0.01  (0.04)
Diluted core earnings per share (non-GAAP)   $ 0.48  $ 0.45  $ 0.39  $ 0.37  $ 0.44
           
YEAR-TO-DATE          
Net Income   $ 23,231  $ 19,445  $ 12,513  $ 5,937  $ 27,684
Nonrecurring items           
Gain on FDIC assisted transactions  --   --   --   --   (3,411)
Merger related costs  6,376  (37)  (227)  240  1,896
Loss on sale of securities  193  193  193  --   -- 
FHLB prepayment penalties  --   --   --   --   175
Branch right sizing  641  533  --   --   -- 
Tax effect  (2,829)  (271)  13  (94)  526
Net nonrecurring items   4,381  418  (21)  146  (814)
Core earnings (non-GAAP)   $ 27,612  $ 19,863  $ 12,492  $ 6,083  $ 26,870
           
Diluted earnings per share   $ 1.42  $ 1.19  $ 0.76  $ 0.36  $ 1.64
Nonrecurring items           
Gain on FDIC assisted transactions  --   --   --   --   (0.21)
Merger related costs  0.39  (0.01)  (0.02)  0.01  0.12
Loss on sale of securities  0.01  0.01  0.01  --   -- 
FHLB prepayment penalties  --   --   --   --   0.01
Branch right sizing  0.04  0.03  --   --   -- 
Tax effect  (0.17)  (0.01)  0.01  --   0.03
Net nonrecurring items   0.27  0.02  --   0.01  (0.05)
Diluted core earnings per share (non-GAAP)   $ 1.69  $ 1.21  $ 0.76  $ 0.37  $ 1.59
DAVID W. GARNER
Executive Vice President and Investor Relations Officer
Simmons First National Corporation
(870) 541-1000