PINE BLUFF, Ark., Oct. 22, 2019 (GLOBE NEWSWIRE) -- Simmons First National Corporation (NASDAQ: 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 20192nd Qtr 20193rd 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 assets1.83% 1.28% 1.37% 
Return on avg common equity13.70% 9.48% 10.06% 
Return on tangible common equity24.89% 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 20192nd Qtr 20193rd 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 20192nd Qtr 20193rd 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 deposits1.40%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 funds2.52%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 loans0.68%0.68%0.68%0.67%0.68%
Allowance for loan losses to non-performing loans91%101%97%164%136%
Non-performing loans to total loans0.76%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 assets14.3%13.8%14.3%13.6%13.4%
Tangible common equity to tangible assets9.1%8.5%9.0%8.4%8.1%
Regulatory tier 1 leverage ratio9.1%8.9%9.1%8.8%8.7%
Regulatory total risk-based capital ratio13.2%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 EndedSep 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 EndedSep 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 EndedSep 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 EndedSep 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 EndedSep 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 EndedSep 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 EndedSep 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 EndedSep 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 
                
Efficiency ratio (1) 43.77% 49.88% 56.76% 51.99% 53.47%
                
Calculation of Core Net Interest Margin               
                
Net interest income$150,164 $150,356 $137,026 $137,781 $142,968 
Fully tax-equivalent adjustment 1,843  1,706  1,601  1,466  1,393 
Fully tax-equivalent net interest income 152,007  152,062  138,627  139,247  144,361 
                
Total accretable yield (9,322) (10,162) (6,660) (3,850) (10,006)
Core net interest income$142,685 $141,900 $131,967 $135,397 $134,355 
Average earning assets$15,831,432 $15,540,371 $14,593,905 $14,686,038 $14,373,253 
                
Net interest margin 3.81% 3.92% 3.85% 3.76% 3.98%
Core net interest margin 3.58% 3.66% 3.67% 3.66% 3.71%
                
Calculation of Core Loan Yield               
                
Loan interest income$179,971 $178,122 $159,440 $159,996 $162,438 
Total accretable yield (9,322) (10,162) (6,660) (3,850) (10,006)
Core loan interest income$170,649 $167,960 $152,780 $156,146 $152,432 
Average loan balance$13,052,943 $12,813,274 $11,710,075 $11,788,838 $11,641,843 
                
Core loan yield 5.19% 5.26% 5.29% 5.25% 5.19%
                
(1) Efficiency ratio is noninterest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and non-core items.
      



Simmons First National Corporation    SFNC
 
Reconciliation Of Non-GAAP Financial Measures - Year-to-Date     
For the Quarters Ended       
(Unaudited)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$185,119 $103,293 $47,695 $215,713 $160,067 
Net non-core items, net of taxes, adjustment 13,373  11,236  1,381  4,520  3,715 
Core earnings$198,492 $114,529 $49,076 $220,233 $163,782 
                
Average total assets$17,140,419 $16,845,528 $16,302,197 $15,771,362 $15,573,762 
                
Return on average assets 1.44% 1.24% 1.19% 1.37% 1.37%
Core return on average assets 1.55% 1.37% 1.22% 1.40% 1.41%
                
Calculation of Return on Tangible Common Equity               
                
Net income$185,119 $103,293 $47,695 $215,713 $160,067 
Amortization of intangibles, net of taxes 6,304  4,128  1,951  8,132  6,180 
Total income available to common stockholders$191,423 $107,421 $49,646 $223,845 $166,247 
                
Net non-core items, net of taxes 13,373  11,236  1,381  4,520  3,715 
Core earnings 198,492  114,529  49,076  220,233  163,782 
Amortization of intangibles, net of taxes 6,304  4,128  1,951  8,132  6,180 
Total core income available to common stockholders$204,796 $118,657 $51,027 $228,365 $169,962 
                
Average common stockholders' equity$2,323,530 $2,300,535 $2,248,898 $2,157,097 $2,138,818 
Average intangible assets:               
Goodwill (896,236) (880,759) (845,688) (845,308) (845,180)
Other intangibles (99,178) (97,221) (90,316) (97,820) (99,448)
Total average intangibles (995,414) (977,980) (936,004) (943,128) (944,628)
Average tangible common stockholders' equity$1,328,116 $1,322,555 $1,312,894 $1,213,969 $1,194,190 
                
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%
Core return on average common equity 11.42% 10.04% 8.85% 10.21% 10.24%
Core return on tangible common equity 20.62% 18.09% 15.76% 18.81% 19.03%
                
Calculation of Efficiency Ratio (1)               
                
Non-interest expense$319,017 $212,152 $101,409 $392,229 $296,833 
Non-core non-interest expense adjustment (18,104) (15,211) (1,870) (6,118) (5,029)
Other real estate and foreclosure expense adjustment (2,219) (1,162) (599) (4,240) (2,940)
Amortization of intangibles adjustment (8,535) (5,588) (2,641) (11,009) (8,367)
Efficiency ratio numerator$290,159 $190,191 $96,299 $370,862 $280,497 
                
Net-interest income$437,546 $287,382 $137,026 $552,552 $414,771 
Non-interest income 156,542  72,767  33,761  143,896  109,308 
Fully tax-equivalent adjustment 5,150  3,307  1,601  5,297  3,831 
Gain on sale of securities (12,937) (5,563) (2,740) (61) (53)
Efficiency ratio denominator$586,301 $357,893 $169,648 $701,684 $527,857 
                
Efficiency ratio (1) 49.49% 53.14% 56.76% 52.85% 53.14%
                
Calculation of Core Net Interest Margin               
                
Net interest income$437,546 $287,382 $137,026 $552,552 $414,771 
Fully tax-equivalent adjustment 5,150  3,307  1,601  5,297  3,831 
Fully tax-equivalent net interest income 442,696  290,689  138,627  557,849  418,602 
                
Total accretable yield (26,144) (16,822) (6,660) (35,263) (31,413)
Core net interest income$416,552 $273,867 $131,967 $522,586 $387,189 
Average earning assets$15,326,432 $15,069,751 $14,593,905 $14,036,614 $13,837,639 
                
Net interest margin 3.86% 3.89% 3.85% 3.97% 4.04%
Core net interest margin 3.63% 3.66% 3.67% 3.72% 3.74%
                
Calculation of Core Loan Yield               
                
Loan interest income$517,533 $337,562 $159,440 $616,037 $456,041 
Total accretable yield (26,144) (16,822) (6,660) (35,263) (31,413)
Core loan interest income$491,389 $320,740 $152,780 $580,774 $424,628 
Average loan balance$12,530,348 $12,264,724 $11,710,075 $11,355,890 $11,209,992 
                
Core loan yield 5.24% 5.27% 5.29% 5.11% 5.06%
                
(1) Efficiency ratio is noninterest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and non-core items.