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CST: 18/11/2019 17:52:26   

Simmons Reports Second Quarter 2019 Earnings

118 Days ago

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

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

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

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

       
Selected Highlights: 2nd Qtr 2019 1st Qtr 2019 2nd Qtr 2018
Net income $55.6 million $47.7 million $53.6 million
Diluted earnings per share $0.58 $0.51 $0.58
Return on avg assets 1.28% 1.19% 1.38%
Return on avg common equity 9.48% 8.60% 10.05%
Return on tangible common equity 17.40% 15.34% 18.70%
       
Core earnings (1) $65.5 million $49.1 million $54.7 million
Diluted core earnings per share (1) $0.68 $0.53 $0.59
Core return on avg assets (1) 1.51% 1.22% 1.41%
Core return on avg common equity (1) 11.16% 8.85% 10.26%
Core return on tangible common equity (1) 20.36% 15.76% 19.06%
       
Efficiency ratio (2) 49.88% 56.76% 52.70%
  1. Core earnings excludes non-core items, and is a non-GAAP measurement.
  2. Efficiency ratio is noninterest expense before foreclosed property expense, amortization of intangibles as a percent of net interest income (fully taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and non-core items.

Loans

(In billions) 2nd Qtr 2019 1st Qtr 2019 2nd Qtr 2018
Total loans $13.1 $11.7 $11.4
Legacy loans (excludes loans acquired) $9.3 $8.7 $7.1
Loans acquired $3.9 $3.0 $4.3
       

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

Deposits

(In billions) 2nd Qtr 2019 1st Qtr 2019 2nd Qtr 2018
Total deposits $13.5 $12.0 $12.0
Non-time deposits $10.2 $9.3 $9.6
Time deposits $3.3 $2.7 $2.4
       

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

Net Interest Income

  2nd Qtr
2019
1st Qtr
2019
4th Qtr
2018
3rd Qtr
2018
2nd Qtr
2018
Loan yield (1) 5.58% 5.53% 5.39% 5.54% 5.40%
Core loan yield (1) (2) 5.26% 5.29% 5.25% 5.19% 5.04%
Security yield (1) 3.02% 3.09% 2.87% 2.74% 2.75%
Cost of interest bearing deposits 1.37% 1.31% 1.20% 1.05% 0.84%
Cost of deposits (3) 1.07% 1.02% 0.93% 0.81% 0.64%
Cost of borrowed funds 2.50% 2.73% 2.64% 2.48% 2.38%
Net interest margin (1) 3.92% 3.85% 3.76% 3.98% 3.99%
Core net interest margin (1) (2) 3.66% 3.67% 3.66% 3.71% 3.70%
  1. Fully tax equivalent.
  2. Core loan yield and core net interest margin exclude accretion, and are non-GAAP measurements.
  3. Includes non-interest bearing deposits.

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

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

Non-Interest Income

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

Selected Non-Interest Income Items
($ in millions)
2nd Qtr
2019
1st Qtr
2019
4th Qtr
2018
3rd Qtr
2018
2nd Qtr
2018
Service charges on deposit accounts $10.6 $10.1 $11.3 $10.8 $10.1
Mortgage lending income $3.7 $2.8 $1.5 $1.5 $2.8
SBA lending income $0.9 $0.5 $0.2 $0.3 $0.4
Debit and credit card fees $7.2 $6.1 $6.5 $6.8 $10.1
Gain (loss) on sale of securities $2.8 $2.7 - $0.1 -
           

Non-Interest Expense

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

Selected Non-Interest Expense Items
($ in millions)
2nd Qtr
2019
1st Qtr
2019
4th Qtr
2018
3rd Qtr
2018
2nd Qtr
2018
Salaries and employee benefits $56.1 $56.4 $49.2 $55.5 $55.7
Merger related costs $7.5 $1.5 $0.8 $0.8 $1.5
Other operating expenses $32.9 $30.1 $30.2 $29.7 $26.2
           
Core salaries and employee benefits $53.2 $56.0 $49.1 $55.5 $55.7
Core merger related costs - - - - -
Core other operating expenses $30.0 $30.1 $30.3 $28.7 $26.2
           

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

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

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

Asset Quality

  2nd Qtr
2019
1st Qtr
2019
4th Qtr
2018
3rd Qtr
2018
2nd Qtr
2018
Allowance for loan losses to total loans 0.68% 0.68% 0.67% 0.68% 0.73%
Allowance for loan losses to non-performing loans 101% 97% 164% 136% 115%
Non-performing loans to total loans 0.67% 0.70% 0.41% 0.50% 0.63%
Net charge-off ratio (annualized) 0.14% 0.20% 0.35% 0.36% 0.17%
 -  Net charge-off ratio excluding loan sale       0.12 %  
           

All loans acquired are recorded at their discounted net present value; therefore, they are excluded from the computations of the asset quality ratios for the legacy loan portfolio, except for their inclusion in total assets.

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

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

Foreclosed Assets and Other Real Estate Owned

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

 

($ in millions)
2nd Qtr
2019
1st Qtr
2019
4th Qtr
2018
3rd Qtr
2018
2nd Qtr
2018
Closed bank branches, branch sites & associate relocation $6.5 $7.6 $8.0 $9.6 $7.2
Foreclosed assets - acquired $13.3 $6.2 $11.5 $8.0 $13.2
Foreclosed assets - legacy $5.0 $5.2 $6.1 $5.1 $10.1
           

Capital

  2nd Qtr
2019
1st Qtr
2019
4th Qtr
2018
3rd Qtr
2018
2nd Qtr
2018
           
           
           
           
Stockholders’ equity to total assets 13.8% 14.3% 13.6% 13.4% 13.3%
           
           
           
           
Tangible common equity to tangible assets 8.5% 9.0% 8.4% 8.1% 7.9%
           
           
           
           
Regulatory tier 1 leverage ratio 8.9% 9.1% 8.8% 8.7% 8.6%
           
           
           
           
Regulatory total risk-based capital ratio 12.7% 13.6% 13.3% 13.1% 13.7%
           

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

Simmons First National Corporation

Simmons First National Corporation is a financial holding company headquartered in Pine Bluff, Arkansas, with total assets of approximately $17.9 billion as of June 30, 2019, conducting financial operations in Arkansas, Colorado, Illinois, Kansas, Missouri, Oklahoma, Tennessee and Texas. The Company, through its subsidiaries, offers comprehensive financial solutions delivered with a client-centric approach. The Company’s common stock trades on the NASDAQ Market under the symbol “SFNC.”

Conference Call

Management will conduct a live conference call to review this information beginning at 9:00 a.m. CDT today, Tuesday, July 23, 2019. Interested persons can listen to this call by dialing toll-free 1-866-298-7926 (United States and Canada only) and asking for the Simmons First National Corporation conference call, conference ID 9976425. In addition, the call will be available live or in recorded version on the Company’s website at www.simmonsbank.com.

Non-GAAP Financial Measures

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

Forward-Looking Statements

Some of the statements in this news release may not be based on historical facts and should be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by reference to future periods or by the use of forward-looking terminology, such as “believe,” “budget,” “expect,” “foresee,” “anticipate,” “intend,” “indicate,” “target,” “estimate,” “plan,” “project,” “continue,” “contemplate,” “positions,” “prospects,” “predict,” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could,” “might” or “may,” or by variations of such words or by similar expressions. These forward-looking statements include, without limitation, statements relating to Simmons’ future growth, revenue, assets, asset quality, profitability, net interest margin, non-interest revenue, allowance for loan losses, and the effect of certain new accounting standards on Simmons’ financial statements. Any forward-looking statement speaks only as of the date of this news release, and Simmons undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release. By nature, forward-looking statements are based on various assumptions and involve inherent risk and uncertainties. Various factors, including, but not limited to, changes in economic conditions, credit quality, interest rates, loan demand, deposit flows, real estate values, the assumptions used in making the forward-looking statements, the securities markets generally or the price of Simmons common stock specifically, information technology affecting the financial industry, and the Company’s ability to manage and successfully integrate its mergers and acquisitions could cause actual results to differ materially from those contemplated by the forward-looking statements. Additional information on factors that might affect Simmons First National Corporation’s financial results is included in its Form 10-K for the year ended December 31, 2018, which has been filed with, and is available from, the Securities and Exchange Commission.

FOR MORE INFORMATION CONTACT:
Stephen C. Massanelli
EVP, Chief Administrative Officer and Investor Relations Officer
Simmons First National Corporation
steve.massanelli@simmonsbank.com 

           
Simmons First National Corporation             SFNC  
Consolidated End of Period Balance Sheets            
For the Quarters Ended     Jun 30  
    Mar 31  
    Dec 31  
    Sep 30  
    Jun 30  
(Unaudited)     2019       2019       2018       2018       2018  
($ in thousands)          
ASSETS            
Cash and non-interest bearing balances due from banks $ 145,491     $ 151,112     $ 171,792     $ 125,231     $ 162,567  
Interest bearing balances due from banks and federal funds sold     509,765         340,049         661,666         388,573         781,279  
Cash and cash equivalents   655,256       491,161       833,458       513,804       943,846  
Interest bearing balances due from banks - time   5,041       4,684       4,934       3,954       2,974  
Investment securities - held-to-maturity   47,455       61,435       289,194       323,306       333,503  
Investment securities - available-for-sale   2,342,387       2,240,111       2,151,752       1,997,814       1,938,644  
Mortgage loans held for sale   34,999       18,480       26,799       48,195       39,812  
Other assets held for sale   397       397       1,790       5,136       14,898  
Loans:          
Legacy loans   9,262,497       8,684,550       8,430,388       8,123,274       7,133,461  
Allowance for loan losses   (63,067 )     (59,243 )     (56,599 )     (55,358 )     (51,732 )
Loans acquired, net of discount and allowance     3,864,516         3,056,187         3,292,783         3,734,921         4,232,434  
Net loans   13,063,946       11,681,494       11,666,572       11,802,837       11,314,163  
Premises and equipment   370,551       333,740       295,060       287,246       288,777  
Foreclosed assets and other real estate owned   24,761       18,952       25,565       22,664       30,503  
Interest receivable   54,781       51,796       49,938       51,509       44,266  
Bank owned life insurance   233,345       192,736       193,170       192,680       191,575  
Goodwill   926,450       845,687       845,687       845,687       845,687  
Other intangible assets   104,096       88,694       91,334       93,975       96,720  
Other assets     73,970         62,272         68,084         92,457         80,165  
Total assets $   17,937,435     $   16,091,639     $   16,543,337     $   16,281,264     $   16,165,533  
                                       
  LIABILITIES AND STOCKHOLDERS' EQUITY            
Deposits:          
Non-interest bearing transaction accounts $ 2,954,032     $ 2,674,034     $ 2,672,405     $ 2,778,670     $ 2,683,489  
Interest bearing transaction accounts and savings deposits   7,258,005       6,666,823       6,830,191       6,776,330       6,916,520  
Time deposits     3,304,176         2,648,674         2,896,156         2,533,506         2,353,439  
Total deposits   13,516,213       11,989,531       12,398,752       12,088,506       11,953,448  
Federal funds purchased and securities sold          
under agreements to repurchase   130,470       120,213       95,792       109,213       99,801  
Other borrowings   1,324,094       1,169,989       1,345,450       1,420,917       1,451,811  
Subordinated notes and debentures   354,132       354,041       353,950       372,934       413,337  
Other liabilities held for sale   162       162       162       424       1,840  
Accrued interest and other liabilities     142,851         155,382         102,797         105,951         98,388  
Total liabilities     15,467,922         13,789,318         14,296,903         14,097,945         14,018,625  
                                       
Stockholders' equity:                                      
Common stock   966       926       923       923       923  
Surplus   1,705,262       1,599,566       1,597,944       1,597,261       1,594,342  
Undivided profits   747,969       707,829       674,941       633,175       591,826  
Accumulated other comprehensive income (loss):          
Unrealized accretion (depreciation) on AFS securities     15,316         (6,000 )       (27,374 )       (48,040 )       (40,183 )
Total stockholders' equity     2,469,513         2,302,321         2,246,434         2,183,319         2,146,908  
Total liabilities and stockholders' equity $   17,937,435     $   16,091,639     $   16,543,337     $   16,281,264     $   16,165,533  
                                       

 

           
Simmons First National Corporation             SFNC  
Consolidated Statements of Income - Quarter-to-Date            
For the Quarters Ended   Jun 30
  Mar 31
  Dec 31
  Sep 30
  Jun 30
(Unaudited)     2019  
    2019  
    2018  
    2018  
    2018  
($ in thousands, except per share data)          
INTEREST INCOME            
Loans $ 178,122     $ 159,440     $ 159,996     $ 162,438     $ 150,253  
Interest bearing balances due from banks and federal funds sold   1,121       2,154       2,168       1,405       1,414  
Investment securities   16,594       17,312       15,760       14,640       14,296  
Mortgage loans held for sale   332       210       372       501       305  
TOTAL INTEREST INCOME   196,169       179,116       178,296       178,984       166,268  
INTEREST EXPENSE                                        
Time deposits   14,606       12,320       11,273       8,017       6,175  
Other deposits   20,190       18,430       17,489       16,373       12,286  
Federal funds purchased and securities          
sold under agreements to repurchase   257       136       121       104       88  
Other borrowings   6,219       6,793       7,134       6,240       5,141  
Subordinated notes and debentures   4,541       4,411       4,498       5,282       5,741  
TOTAL INTEREST EXPENSE   45,813       42,090       40,515       36,016       29,431  
NET INTEREST INCOME     150,356       137,026       137,781       142,968       136,837  
Provision for loan losses   7,079       9,285       9,620       10,345       9,033  
NET INTEREST INCOME AFTER PROVISION                                        
FOR LOAN LOSSES     143,277       127,741       128,161       132,623       127,804  
NON-INTEREST INCOME                                        
Trust income   5,794       5,708       5,980       6,277       5,622  
Service charges on deposit accounts   10,557       10,068       11,263       10,837       10,063  
Other service charges and fees   1,312       1,289       1,501       1,201       2,017  
Mortgage lending income   3,656       2,823       1,457       1,521       2,780  
SBA lending income   895       497       186       304       350  
Investment banking income   360       618       829       664       814  
Debit and credit card fees   7,212       6,098       6,547       6,820       10,105  
Bank owned life insurance income   1,260       795       1,105       1,105       1,102  
Gain (loss) on sale of securities, net   2,823       2,740       8       54       (7 )
Other income   5,137       3,125       5,712       4,942       5,202  
TOTAL NON-INTEREST INCOME   39,006       33,761       34,588       33,725       38,048  
NON-INTEREST EXPENSE                                        
Salaries and employee benefits   56,128       56,367       49,193       55,515       55,678  
Occupancy expense, net   6,919       7,475       7,016       7,713       7,921  
Furniture and equipment expense   4,206       3,358       4,139       3,761       4,020  
Other real estate and foreclosure expense   591       637       1,540       538       1,382  
Deposit insurance   2,510       2,040       2,489       2,248       1,856  
Merger-related costs   7,522       1,470       797       804       1,465  
Other operating expenses   32,867       30,062       30,222       29,674       26,185  
TOTAL NON-INTEREST EXPENSE   110,743       101,409       95,396       100,253       98,507  
NET INCOME BEFORE INCOME TAXES     71,540       60,093       67,353       66,095       67,345  
Provision for income taxes   15,616       12,398       11,707       10,902       13,783  
NET INCOME     55,924       47,695       55,646       55,193       53,562  
Preferred stock dividends   326       -       -       -       -  
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS   $ 55,598     $ 47,695     $ 55,646     $ 55,193     $ 53,562  
BASIC EARNINGS PER SHARE   $ 0.58     $ 0.52     $ 0.60     $ 0.60     $ 0.58  
DILUTED EARNINGS PER SHARE   $ 0.58     $ 0.51     $ 0.60     $ 0.59     $ 0.58  
                                       

 

         
Simmons First National Corporation           SFNC  
Consolidated Risk-Based Capital            
For the Quarters Ended     Jun 30  
    Mar 31  
    Dec 31  
    Sep 30  
    Jun 30  
(Unaudited)     2019       2019       2018       2018       2018  
($ in thousands)                                      
Tier 1 capital          
Stockholders' equity $ 2,469,513     $ 2,302,321     $ 2,246,434     $ 2,183,319     $ 2,146,908  
Disallowed intangible assets, net of deferred tax   (1,001,676 )     (910,122 )     (912,428 )     (914,788 )     (917,050 )
Unrealized (gain) loss on AFS securities   (15,316 )     6,000       27,374       48,040       40,183  
Total Tier 1 capital   1,452,521       1,398,199       1,361,380       1,316,571       1,270,041  
                                       
Tier 2 capital                                      
Qualifying unrealized gain on AFS equity securities   -       -       -       1       1  
Trust preferred securities and subordinated debt   354,132       354,041       353,950       372,934       413,337  
Qualifying allowance for loan losses and          
reserve for unfunded commitments   72,044       67,771       63,608       63,618       60,691  
Total Tier 2 capital   426,176       421,812       417,558       436,553       474,029  
Total risk-based capital $ 1,878,697     $ 1,820,011     $ 1,778,938     $ 1,753,124     $ 1,744,070  
                                       
Risk weighted assets $ 14,825,253     $ 13,364,636     $ 13,326,832     $ 13,402,910     $ 12,713,093  
                                       
Adjusted average assets for leverage ratio $ 16,382,520     $ 15,423,961     $ 15,512,042     $ 15,179,889     $ 14,714,205  
                                       
Ratios at end of quarter                                      
Equity to assets   13.77 %     14.31 %     13.58 %     13.41 %     13.28 %
Tangible common equity to tangible assets (1)   8.51 %     9.02 %     8.39 %     8.11 %     7.91 %
Common equity Tier 1 ratio (CET1)   9.80 %     10.46 %     10.22 %     9.82 %     9.99 %
Tier 1 leverage ratio   8.87 %     9.07 %     8.78 %     8.67 %     8.63 %
Tier 1 risk-based capital ratio   9.80 %     10.46 %     10.22 %     9.82 %     9.99 %
Total risk-based capital ratio   12.67 %     13.62 %     13.35 %     13.08 %     13.72 %
           
(1) Calculations of tangible common equity to tangible assets and the reconciliations to GAAP are included in the schedules accompanying this release.
           

 

           
Simmons First National Corporation           SFNC    
Consolidated Loans and Investments              
For the Quarters Ended     Jun 30  
    Mar 31  
    Dec 31  
    Sep 30  
    Jun 30  
(Unaudited)     2019  
    2019  
    2018  
    2018  
    2018  
($ in thousands)                                      
Legacy Loan Portfolio - End of Period (1)                                      
Consumer                                      
Credit cards $ 187,919     $ 181,549     $ 204,173     $ 182,137     $ 180,352  
Other consumer   207,445       213,659       201,297       259,581       277,330  
Total consumer   395,364       395,208       405,470       441,718       457,682  
Real Estate            
Construction   1,540,352       1,376,162       1,300,723       1,229,888       967,720  
Single-family residential   1,444,525       1,431,407       1,440,443       1,401,991       1,314,787  
Other commercial   3,531,273       3,355,109       3,225,287       3,077,188       2,816,420  
Total real estate   6,516,150       6,162,678       5,966,453       5,709,067       5,098,927  
Commercial            
Commercial   1,871,695       1,801,422       1,774,909       1,608,342       1,237,910  
Agricultural   191,922       147,216       164,514       218,778       187,006  
Total commercial   2,063,617       1,948,638       1,939,423       1,827,120       1,424,916  
Other   287,366       178,026       119,042       145,369       151,936  
Total Loans $ 9,262,497     $ 8,684,550     $ 8,430,388     $ 8,123,274     $ 7,133,461  
                                       
  (1) Excludes all acquired loans.                                        
                                       
Investment Securities - End of Period                                      
Held-to-Maturity                                        
U.S. Government agencies $ 999     $ 12,996     $ 16,990     $ 34,983     $ 36,976  
Mortgage-backed securities   12,225       12,847       13,346       13,933       14,645  
State and political subdivisions   32,236       33,597       256,863       272,396       279,787  
Other securities   1,995       1,995       1,995       1,994       2,095  
Total held-to-maturity   47,455       61,435       289,194       323,306       333,503  
Available-for-Sale                                        
U.S. Government agencies $ 197,656     $ 161,577     $ 154,301     $ 141,460     $ 145,767  
Mortgage-backed securities   1,345,760       1,345,677       1,522,900       1,419,626       1,395,231  
State and political subdivisions   636,558       580,790       314,843       282,439       245,335  
FHLB stock   66,588       65,220       73,105       72,579       72,042  
Other securities   95,825       86,847       86,603       81,710       80,269  
Total available-for-sale   2,342,387       2,240,111       2,151,752       1,997,814       1,938,644  
Total investment securities $ 2,389,842     $ 2,301,546     $ 2,440,946     $ 2,321,120     $ 2,272,147  
Fair value - HTM investment securities $ 48,640     $ 61,956     $ 290,830     $ 322,838     $ 334,857  
                                       
Investment Securities - QTD Average                                      
Taxable securities $ 1,793,799     $ 1,880,694     $ 1,815,203     $ 1,775,193     $ 1,750,172  
Tax exempt securities   624,898       590,941       551,185       539,135       514,838  
Total investment securities - QTD average $ 2,418,697     $ 2,471,635     $ 2,366,388     $ 2,314,328     $ 2,265,010  
                                       

 

           
Simmons First National Corporation             SFNC  
Consolidated Loans and Credit Coverage            
For the Quarters Ended     Jun 30  
    Mar 31  
    Dec 31  
    Sep 30  
    Jun 30  
(Unaudited)     2019       2019       2018       2018       2018  
  ($ in thousands)                                        
LOANS                                      
Legacy loans $ 9,262,497     $ 8,684,550     $ 8,430,388     $ 8,123,274     $ 7,133,461  
Allowance for loan losses (legacy loans)   (63,067 )     (59,243 )     (56,599 )     (55,358 )     (51,732 )
Legacy loans (net of allowance)   9,199,430       8,625,307       8,373,789       8,067,916       7,081,729  
Loans acquired   3,939,126       3,099,915       3,342,175       3,790,234       4,302,760  
Credit discount   (73,498 )     (42,416 )     (49,297 )     (53,968 )     (68,282 )
Allowance for loan losses (loans acquired)   (1,112 )     (1,312 )     (95 )     (1,345 )     (2,044 )
Loans acquired (net of discount and allowance)   3,864,516       3,056,187       3,292,783       3,734,921       4,232,434  
Net loans $ 13,063,946     $ 11,681,494     $ 11,666,572     $ 11,802,837     $ 11,314,163  
                                       
                                       
Loan Coverage Ratios                                        
Allowance for loan losses to legacy loans   0.68 %     0.68 %     0.67 %     0.68 %     0.73 %
           
Discount for credit losses and allowance on loans acquired          
to total loans acquired plus discount for credit losses          
and allowance on loans acquired (non-GAAP) (1)   1.89 %     1.41 %     1.48 %     1.46 %     1.63 %
           
Total allowance and credit coverage (non-GAAP) (1)   1.04 %     0.87 %     0.90 %     0.93 %     1.07 %
           
(1) Calculations of the non-GAAP loan coverage ratios and the reconciliations to GAAP are included in the schedules accompanying this release.
           

 

         
Simmons First National Corporation           SFNC  
Consolidated Allowance and Asset Quality            
For the Quarters Ended     Jun 30  
    Mar 31  
    Dec 31  
    Sep 30  
    Jun 30  
(Unaudited)     2019       2019       2018       2018       2018  
($ in thousands)                                      
Allowance for Loan Losses (Legacy Loans)                                      
Balance, beginning of quarter $ 59,243     $ 56,599     $ 55,358     $ 51,732     $ 47,207  
Loans charged off                                      
Credit cards   1,039       1,142       1,121       919       1,012  
Other consumer   905       1,533       2,894       1,321       1,366  
Real estate   271       374       337       4,952       161  
Commercial   1,867       1,968       3,480       592       790  
Total loans charged off   4,082       5,017       7,832       7,784       3,329  
                                       
Recoveries of loans previously charged off                                      
Credit cards   271       240       227       229       286  
Other consumer   331       300       154       176       133  
Real estate   153       142       367       210       112  
Commercial   72       158       167       450       59  
Total recoveries   827       840       915       1,065       590  
Net loans charged off   3,255       4,177       6,917       6,719       2,739  
Provision for loan losses   7,079       6,821       8,158       10,345       7,264  
Balance, end of quarter $ 63,067     $ 59,243     $ 56,599     $ 55,358     $ 51,732  
                                       
Non-performing assets (1) (2)                                      
Non-performing loans                                      
Nonaccrual loans $ 61,956     $ 60,925     $ 34,201     $ 40,505     $ 44,548  
Loans past due 90 days or more   267       281       224       281       303  
Total non-performing loans   62,223       61,206       34,425       40,786       44,851  
Other non-performing assets                                      
Foreclosed assets and other real estate owned (2)   24,761       18,952       25,565       22,664       30,503  
Other non-performing assets   613       505       553       524       573  
Total other non-performing assets   25,374       19,457       26,118       23,188       31,076  
Total non-performing assets $ 87,597     $ 80,663     $ 60,543     $ 63,974     $ 75,927  
Performing TDRs (troubled debt restructurings) $ 6,246     $ 6,297     $ 6,369     $ 8,413     $ 6,367  
           
Ratios (1) (2)          
Allowance for loan losses to total loans   0.68 %     0.68 %     0.67 %     0.68 %     0.73 %
Allowance for loan losses to non-performing loans   101 %     97 %     164 %     136 %     115 %
Non-performing loans to total loans   0.67 %     0.70 %     0.41 %     0.50 %     0.63 %
Non-performing assets (including performing TDRs)          
to total assets   0.52 %     0.54 %     0.40 %     0.44 %     0.51 %
Non-performing assets to total assets   0.49 %     0.50 %     0.37 %     0.39 %     0.47 %
Annualized net charge offs to total loans   0.14 %     0.20 %     0.35 %     0.36 %     0.17 %
Annualized net credit card charge offs to          
total credit card loans   1.63 %     1.92 %     1.86 %     1.47 %     1.60 %
           
  (1) Excludes all acquired loans, except for their inclusion in total assets.        
  (2) Includes acquired foreclosed assets and acquired other real estate owned.        
           

 

                     
Simmons First National Corporation                       SFNC  
Consolidated - Average Balance Sheet and Net Interest Income Analysis                
For the Quarters Ended                        
(Unaudited)                        
    Three Months Ended
Jun 2019  
    Three Months Ended
Mar 2019  
    Three Months Ended
Jun 2018  
  ($ in thousands)   Average
Balance
  Income/
Expense
  Yield/
Rate
  Average
Balance
  Income/
Expense
  Yield/
Rate
  Average
Balance
  Income/
Expense
  Yield/
Rate
ASSETS                                                                
Earning assets:                                                                
Interest bearing balances due from banks                                                                
and federal funds sold $ 276,370     $ 1,121     1.63 %   $ 394,462     $ 2,154     2.21 %   $ 422,987     $ 1,414     1.34 %
Investment securities - taxable   1,793,799       11,994     2.68 %     1,880,694       12,989     2.80 %     1,750,172       10,764     2.47 %
Investment securities - non-taxable (FTE)   624,898       6,209     3.99 %     590,941       5,834     4.00 %     514,838       4,771     3.72 %
Mortgage loans held for sale   32,030       332     4.16 %     17,733       210     4.80 %     28,688       305     4.26 %
Loans, including acquired loans   12,813,274       178,219     5.58 %     11,710,075       159,530     5.53 %     11,159,872       150,322     5.40 %
Total interest earning assets (FTE)   15,540,371       197,875     5.11 %     14,593,905       180,717     5.02 %     13,876,557       167,576     4.84 %
Non-earning assets   1,842,501                     1,708,292                     1,704,140                
Total assets $ 17,382,872           $ 16,302,197           $ 15,580,697        
                                         
LIABILITIES AND STOCKHOLDERS' EQUITY                    
Interest bearing liabilities:                      
Interest bearing transaction and                      
savings accounts $ 7,139,356     $ 20,190     1.13 %   $ 6,749,032     $ 18,430     1.11 %   $ 6,570,471     $ 12,286     0.75 %
Time deposits   3,072,246       14,606     1.91 %     2,781,592       12,320     1.80 %     2,233,673       6,175     1.11 %
Total interest bearing deposits   10,211,602       34,796     1.37 %     9,530,624       30,750     1.31 %     8,804,144       18,461     0.84 %
Federal funds purchased and securities                      
sold under agreement to repurchase   133,242       257     0.77 %     109,302       136     0.50 %     107,205       88     0.33 %
Other borrowings   1,277,450       6,219     1.95 %     1,224,255       6,793     2.25 %     1,273,135       5,141     1.62 %
Subordinated notes and debentures   354,088       4,541     5.14 %     353,996       4,411     5.05 %     466,612       5,741     4.93 %
Total interest bearing liabilities   11,976,382       45,813     1.53 %     11,218,177       42,090     1.52 %     10,651,096       29,431     1.11 %
Non-interest bearing liabilities:                                              
Non-interest bearing deposits   2,834,452             2,707,715             2,705,677        
Other liabilities   207,500             127,407             86,827        
Total liabilities   15,018,334             14,053,299             13,443,600        
Stockholders' equity   2,364,538             2,248,898             2,137,097        
Total liabilities and stockholders' equity $ 17,382,872           $ 16,302,197           $ 15,580,697        
Net interest income (FTE)         $ 152,062                 $ 138,627                 $ 138,145      
Net interest spread (FTE)           3.58 %             3.50 %             3.73 %
Net interest margin (FTE) - quarter-to-date     3.92 %       3.85 %       3.99 %
                       
Net interest margin (FTE) - year-to-date     3.89 %       3.85 %       4.08 %
                       
Core net interest margin (FTE) - quarter-to-date (1)     3.66 %       3.67 %       3.70 %
Core loan yield (FTE) - quarter-to-date (1)     5.26 %       5.29 %       5.04 %
                       
Core net interest margin (FTE) - year-to-date (1)     3.66 %       3.67 %       3.76 %
Core loan yield (FTE) - year-to-date (1)     5.27 %       5.29 %       4.99 %
                       
(1) Calculations of core net interest margin and core loan yield and the reconciliations to GAAP are included in the schedules accompanying this release.
                       

 

         
  Simmons First National Corporation           SFNC  
  Consolidated - Selected Financial Data            
  For the Quarters Ended     Jun 30  
    Mar 31  
    Dec 31  
    Sep 30  
    Jun 30  
  (Unaudited)   2019
  2019
  2018
  2018
  2018
($ in thousands, except share data)                                      
QUARTER-TO-DATE          
Financial Highlights - GAAP          
Net Income $ 55,598     $ 47,695     $ 55,646     $ 55,193     $ 53,562  
Diluted earnings per share   0.58       0.51       0.60       0.59       0.58  
Return on average assets   1.28 %     1.19 %     1.35 %     1.37 %     1.38 %
Return on average common equity   9.48 %     8.60 %     9.98 %     10.06 %     10.05 %
Return on tangible common equity   17.40 %     15.34 %     17.96 %     18.38 %     18.70 %
Net interest margin (FTE)   3.92 %     3.85 %     3.76 %     3.98 %     3.99 %
FTE adjustment   1,706       1,601       1,466       1,393       1,308  
Amortization of intangibles   2,947       2,641       2,642       2,745       2,785  
Amortization of intangibles, net of taxes   2,177       1,951       1,952       2,027       2,057  
Average diluted shares outstanding   96,367,857       92,870,813       92,897,105       92,840,851       92,733,140  
Cash dividends declared per common share   0.16       0.16       0.15       0.15       0.15  
Financial Highlights - Core (non-GAAP)          
Core earnings (excludes non-core items) (1) $ 65,453     $ 49,076     $ 56,451     $ 56,504     $ 54,660  
Diluted core earnings per share (1)   0.68       0.53       0.61       0.61       0.59  
Core net interest margin (FTE) (2)   3.66 %     3.67 %     3.66 %     3.71 %     3.70 %
Accretable yield on acquired loans   10,162       6,660       3,850       10,006       10,113  
Efficiency ratio (1)   49.88 %     56.76 %     51.99 %     53.47 %     52.70 %
Core return on average assets (1)   1.51 %     1.22 %     1.37 %     1.40 %     1.41 %
Core return on average common equity (1)   11.16 %     8.85 %     10.13 %     10.30 %     10.26 %
Core return on tangible common equity (1)   20.36 %     15.76 %     18.21 %     18.80 %     19.06 %
YEAR-TO-DATE          
Financial Highlights - GAAP          
Net Income $ 103,293     $ 47,695     $ 215,713     $ 160,067     $ 104,874  
Diluted earnings per share   1.09       0.51       2.32       1.72       1.13  
Return on average assets   1.24 %     1.19 %     1.37 %     1.37 %     1.38 %
Return on average common equity   9.05 %     8.60 %     10.00 %     10.01 %     9.98 %
Return on tangible common equity   16.38 %     15.34 %     18.44 %     18.61 %     18.73 %
Net interest margin (FTE)   3.89 %     3.85 %     3.97 %     4.04 %     4.08 %
FTE adjustment   3,307       1,601       5,297       3,831       2,438  
Amortization of intangibles   5,588       2,641       11,009       8,367       5,622  
Amortization of intangibles, net of taxes   4,128       1,951       8,132       6,180       4,153  
Average diluted shares outstanding   94,588,739       92,870,813       92,830,485       92,796,860       92,692,234  
Cash dividends declared per common share   0.32       0.16       0.60       0.45       0.30  
Financial Highlights - Core (non-GAAP)          
Core earnings (excludes non-core items) (1) $ 114,529     $ 49,076     $ 220,233     $ 163,782     $ 107,278  
Diluted core earnings per share (1)   1.21       0.53       2.37       1.76       1.16  
Core net interest margin (FTE) (2)   3.66 %     3.67 %     3.72 %     3.74 %     3.76 %
Accretable yield on acquired loans   16,822       6,660       35,263       31,413       21,407  
Efficiency ratio (1)   53.14 %     56.76 %     52.85 %     53.14 %     52.97 %
Core return on average assets (1)   1.37 %     1.22 %     1.40 %     1.41 %     1.41 %
Core return on average common equity (1)   10.04 %     8.85 %     10.21 %     10.24 %     10.20 %
Core return on tangible common equity (1)   18.09 %     15.76 %     18.81 %     19.03 %     19.14 %
END OF PERIOD          
Book value per share $ 25.57     $ 24.87     $ 24.33     $ 23.66     $ 23.26  
Tangible book value per share   14.90       14.78       14.18       13.48       13.05  
Shares outstanding   96,590,656       92,568,361       92,347,643       92,291,070       92,281,370  
Full-time equivalent employees   2,700       2,602       2,654       2,635       2,659  
Total number of financial centers   212       191       191       191       199  
           
  (1) Core earnings exclude non-core items, which is a non-GAAP measurement. Reconciliations to GAAP are included in the  schedules accompanying this release. 
  (2) Excludes accretable yield adjustment on loans, which is a non-GAAP measurement. Reconciliations to GAAP are included in  the schedules accompanying this release. 
           

 

         
Simmons First National Corporation           SFNC  
Consolidated - Reconciliation of Core Earnings (non-GAAP)        
For the Quarters Ended     Jun 30  
    Mar 31  
    Dec 31  
    Sep 30  
    Jun 30  
(Unaudited)     2019       2019       2018       2018       2018  
($ in thousands, except per share data)                                      
QUARTER-TO-DATE          
Net Income $ 55,598     $ 47,695     $ 55,646     $ 55,193     $ 53,562  
Non-core items          
Merger-related costs   7,522       1,470       797       804       1,465  
Early retirement program   2,932       355       -       -       -  
Branch right-sizing   2,887       45       292       970       22  
Tax effect (1)   (3,486 )     (489 )     (284 )     (463 )     (389 )
Net non-core items   9,855       1,381       805       1,311       1,098  
Core earnings (non-GAAP) $ 65,453     $ 49,076     $ 56,451     $ 56,504     $ 54,660  
                                       
Diluted earnings per share $ 0.58     $ 0.51     $ 0.60     $ 0.59     $ 0.58  
Non-core items          
Merger-related costs   0.08       0.02       0.01       0.01       0.02  
Early retirement program   0.03       0.01       -       -       -  
Branch right-sizing   0.03       -       -       0.01       -  
Tax effect (1)   (0.04 )     (0.01 )     -       -       (0.01 )
Net non-core items   0.10       0.02       0.01       0.02       0.01  
Core earnings (non-GAAP) $ 0.68     $ 0.53     $ 0.61     $ 0.61     $ 0.59  
                                       
YEAR-TO-DATE                                      
Net Income $ 103,293     $ 47,695     $ 215,713     $ 160,067     $ 104,874  
Non-core items          
Merger-related costs   8,992       1,470       4,777       3,980       3,176  
Early retirement program   3,287       355       -       -       -  
Branch right-sizing   2,932       45       1,341       1,049       79  
Tax effect (1)   (3,975 )     (489 )     (1,598 )     (1,314 )     (851 )
Net non-core items   11,236       1,381       4,520       3,715       2,404  
Core earnings (non-GAAP) $ 114,529     $ 49,076     $ 220,233     $ 163,782     $ 107,278  
                                       
Diluted earnings per share $ 1.09     $ 0.51     $ 2.32     $ 1.72     $ 1.13  
Non-core items          
Merger-related costs   0.10       0.02       0.05       0.04       0.04  
Early retirement program   0.03       0.01       -       -       -  
Branch right-sizing   0.03       -       0.02       0.01       -  
Tax effect (1)   (0.04 )     (0.01 )     (0.02