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CST: 20/11/2019 16:18:05   

Simmons Reports Third Quarter 2019 Earnings and Announces Share Repurchase Program

29 Days ago

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 2019 2nd Qtr 2019 3rd Qtr 2018
Net income $81.8 million $55.6 million $55.2 million
Diluted earnings per share $0.84   $0.58   $0.59  
Return on avg assets 1.83%   1.28%   1.37%  
Return on avg common equity 13.70%   9.48%   10.06%  
Return on tangible common equity 24.89%   17.40%   18.38%  
       
Core earnings (1) $84.0 million $65.5 million $56.5 million
Diluted core earnings per share (1) $0.87   $0.68   $0.61  
Core return on avg assets (1) 1.88%   1.51%   1.40%  
Core return on avg common equity (1) 14.06%   11.16%   10.30%  
Core return on tangible common equity (1) 25.52%   20.36%   18.80%  
       
Efficiency ratio (2) 43.77%   49.88%   53.47%  

(1) Core earnings excludes non-core items, and is a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.
(2) Efficiency ratio is noninterest expense before foreclosed property expense, amortization of intangibles as a percent of net interest income (fully taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and non-core items, and is a non-GAAP measurement.  Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.

Loans

($ in billions) 3rd Qtr 2019 2nd Qtr 2019 3rd Qtr 2018
Total loans $13.0 $13.1 $11.9
Legacy loans (excludes loans acquired) $9.6 $9.3 $8.1
Loans acquired $3.4 $3.9 $3.8

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

Deposits

($ in billions) 3rd Qtr 2019 2nd Qtr 2019 3rd Qtr 2018
Total deposits $13.5 $13.5 $12.1
Non-time deposits $10.4 $10.2 $9.6
Time deposits $3.1 $3.3 $2.5

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

Net Interest Income

  3rd Qtr
2019
2nd Qtr
2019
1st Qtr
2019
4th Qtr
2018
3rd Qtr
2018
Loan yield (1) 5.47% 5.58% 5.53% 5.39% 5.54%
Core loan yield (1) (2) 5.19% 5.26% 5.29% 5.25% 5.19%
Security yield (1) 2.83% 3.02% 3.09% 2.87% 2.74%
Cost of interest bearing deposits 1.40% 1.37% 1.31% 1.20% 1.05%
Cost of deposits (3) 1.09% 1.07% 1.02% 0.93% 0.81%
Cost of borrowed funds 2.52% 2.50% 2.73% 2.64% 2.48%
Net interest margin (1) 3.81% 3.92% 3.85% 3.76% 3.98%
Core net interest margin (1) (2) 3.58% 3.66% 3.67% 3.66% 3.71%

(1) Fully tax equivalent.
(2) Core loan yield and core net interest margin exclude accretion, and are non-GAAP measurements.
(3) Includes non-interest bearing deposits.

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

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

Non-Interest Income

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

Selected Non-Interest Income Items
($ in millions)
3rd Qtr
2019
2nd Qtr
2019
1st Qtr
2019
4th Qtr
2018
3rd Qtr
2018
Service charges on deposit accounts $10.8 $10.6 $10.1 $11.3 $10.8
Mortgage lending income $4.5 $3.7 $2.8 $1.5 $1.5
SBA lending income $1.0 $0.9 $0.5 $0.2 $0.3
Debit and credit card fees $7.1 $7.2 $6.1 $6.5 $6.8
Gain (loss) on sale of securities $7.4 $2.8 $2.7 - $0.1
Other income $43.8 $5.1 $3.1 $5.7 $4.9

Non-Interest Expense

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

Selected Non-Interest Expense Items
($ in millions)
3rd Qtr
2019
2nd Qtr
2019
1st Qtr
2019
4th Qtr
2018
3rd Qtr
2018
Salaries and employee benefits $52.1 $56.1 $56.4 $49.2 $55.5
Merger related costs $2.6 $7.5 $1.5 $0.8 $0.8
Other operating expenses $37.9 $32.9 $30.1 $30.2 $29.7
           
Core salaries and employee benefits $51.9 $53.2 $56.0 $49.1 $55.5
Core merger related costs - - - - -
Core other operating expenses $37.8 $30.0 $30.1 $30.3 $28.7

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

Asset Quality

  3rd Qtr
2019
2nd Qtr
2019
1st Qtr
2019
4th Qtr
2018
3rd Qtr
2018
Allowance for loan losses to total loans 0.68% 0.68% 0.68% 0.67% 0.68%
Allowance for loan losses to non-performing loans 91% 101% 97% 164% 136%
Non-performing loans to total loans 0.76% 0.67% 0.70% 0.41% 0.50%
Net charge-off ratio (annualized) 0.78% 0.14% 0.20% 0.35% 0.36%
Net charge-off ratio YTD (annualized) 0.38% 0.17% 0.20% 0.28% 0.26%

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

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

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

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

Foreclosed Assets and Other Real Estate Owned

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

($ in millions) 3rd Qtr
2019
2nd Qtr
2019
1st Qtr
2019
4th Qtr
2018
3rd Qtr
2018
Closed bank branches, branch sites & associate relocation $5.9 $6.5 $7.6 $8.0 $9.6
Foreclosed assets - acquired $10.1 $13.3 $6.2 $11.5 $8.0
Foreclosed assets - legacy $3.6 $5.0 $5.2 $6.1 $5.1

Capital

  3rd Qtr
2019
2nd Qtr
2019
1st Qtr
2019
4th Qtr
2018
3rd Qtr
2018
Stockholders’ equity to total assets 14.3% 13.8% 14.3% 13.6% 13.4%
Tangible common equity to tangible assets 9.1% 8.5% 9.0% 8.4% 8.1%
Regulatory tier 1 leverage ratio 9.1% 8.9% 9.1% 8.8% 8.7%
Regulatory total risk-based capital ratio 13.2% 12.7% 13.6% 13.3% 13.1%

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

Current Expected Credit Losses (“CECL”)

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

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

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

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

Share Repurchase Program

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

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

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

Simmons First National Corporation

Simmons First National Corporation is a financial holding company headquartered in Pine Bluff, Arkansas, with total consolidated assets of approximately $17.8 billion as of September 30, 2019, conducting financial operations in Arkansas, Colorado, Illinois, Kansas, Missouri, Oklahoma, Tennessee and Texas. The Company, through its subsidiaries, offers comprehensive financial solutions delivered with a client-centric approach. The Company’s common stock trades on the NASDAQ Market under the symbol “SFNC.”

Conference Call

Management will conduct a live conference call to review this information beginning at 9:00 a.m. CDT today, Tuesday, October 22, 2019. Interested persons can listen to this call by dialing toll-free 1-866-298-7926 (United States and Canada only) and asking for the Simmons First National Corporation conference call, conference ID 2285967. In addition, the call will be available live or in recorded version on the Company’s website at www.simmonsbank.com.

Non-GAAP Financial Measures

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

Forward-Looking Statements

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

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

           
Simmons First National Corporation         SFNC
 
Consolidated End of Period Balance Sheets          
For the Quarters Ended Sep 30
  Jun 30
  Mar 31
  Dec 31
  Sep 30
 
(Unaudited) 2019   2019   2019   2018   2018  
                     
($ in thousands)          
ASSETS          
Cash and non-interest bearing balances due from banks $ 161,440   $ 145,491   $ 151,112   $ 171,792   $ 125,231  
Interest bearing balances due from banks and federal funds sold   368,530     509,765     340,049     661,666     388,573  
Cash and cash equivalents   529,970     655,256     491,161     833,458     513,804  
Interest bearing balances due from banks - time   5,041     5,041     4,684     4,934     3,954  
Investment securities - held-to-maturity   42,237     47,455     61,435     289,194     323,306  
Investment securities - available-for-sale   2,356,134     2,342,387     2,240,111     2,151,752     1,997,814  
Mortgage loans held for sale   50,099     34,999     18,480     26,799     48,195  
Other assets held for sale   383     397     397     1,790     5,136  
Loans:          
Legacy loans   9,643,365     9,262,497     8,684,550     8,430,388     8,123,274  
Allowance for loan losses   (65,993 )   (63,067 )   (59,243 )   (56,599 )   (55,358 )
Loans acquired, net of discount and allowance   3,359,587     3,864,516     3,056,187     3,292,783     3,734,921  
Net loans   12,936,959     13,063,946     11,681,494     11,666,572     11,802,837  
Premises and equipment   378,678     370,551     333,740     295,060     287,246  
Foreclosed assets and other real estate owned   19,576     24,761     18,952     25,565     22,664  
Interest receivable   53,966     54,781     51,796     49,938     51,509  
Bank owned life insurance   234,655     233,345     192,736     193,170     192,680  
Goodwill   926,648     926,450     845,687     845,687     845,687  
Other intangible assets   101,149     104,096     88,694     91,334     93,975  
Other assets   123,016     73,970     62,272     68,084     92,457  
Total assets $ 17,758,511   $ 17,937,435   $ 16,091,639   $ 16,543,337   $ 16,281,264  
                               
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
Deposits:          
Non-interest bearing transaction accounts $ 3,044,330   $ 2,954,032   $ 2,674,034   $ 2,672,405   $ 2,778,670  
Interest bearing transaction accounts and savings deposits   7,337,571     7,258,005     6,666,823     6,830,191     6,776,330  
Time deposits   3,086,108     3,304,176     2,648,674     2,896,156     2,533,506  
Total deposits   13,468,009     13,516,213     11,989,531     12,398,752     12,088,506  
Federal funds purchased and securities sold          
under agreements to repurchase   116,536     130,470     120,213     95,792     109,213  
Other borrowings   1,098,395     1,324,094     1,169,989     1,345,450     1,420,917  
Subordinated notes and debentures   354,223     354,132     354,041     353,950     372,934  
Other liabilities held for sale   -     162     162     162     424  
Accrued interest and other liabilities   174,277     142,851     155,382     102,797     105,951  
Total liabilities   15,211,440     15,467,922     13,789,318     14,296,903     14,097,945  
                               
Stockholders' equity:                              
Common stock   966     966     926     923     923  
Surplus   1,708,058     1,705,262     1,599,566     1,597,944     1,597,261  
Undivided profits   814,338     747,969     707,829     674,941     633,175  
Accumulated other comprehensive income (loss):          
Unrealized accretion (depreciation) on AFS securities   23,709     15,316     (6,000 )   (27,374 )   (48,040 )
Total stockholders' equity   2,547,071     2,469,513     2,302,321     2,246,434     2,183,319  
Total liabilities and stockholders' equity $ 17,758,511   $ 17,937,435   $ 16,091,639   $ 16,543,337   $ 16,281,264  
                               
           
           


Simmons First National Corporation         SFNC
Consolidated Statements of Income - Quarter-to-Date        
For the Quarters Ended Sep 30
  Jun 30
  Mar 31
  Dec 31
  Sep 30
(Unaudited) 2019   2019
  2019
  2018   2018
                   
($ in thousands, except per share data)          
INTEREST INCOME          
Loans $ 179,971   $ 178,122   $ 159,440   $ 159,996   $ 162,438
Interest bearing balances due from banks and federal funds sold   1,586     1,121     2,154     2,168     1,405
Investment securities   15,367     16,594     17,312     15,760     14,640
Mortgage loans held for sale   382     332     210     372     501
TOTAL INTEREST INCOME   197,306     196,169     179,116     178,296     178,984
                             
INTEREST EXPENSE          
Time deposits   15,573     14,606     12,320     11,273     8,017
Other deposits   21,363     20,190     18,430     17,489     16,373
Federal funds purchased and securities          
sold under agreements to repurchase   249     257     136     121     104
Other borrowings   5,381     6,219     6,793     7,134     6,240
Subordinated notes and debentures   4,576     4,541     4,411     4,498     5,282
TOTAL INTEREST EXPENSE   47,142     45,813     42,090     40,515     36,016
NET INTEREST INCOME   150,164     150,356     137,026     137,781     142,968
Provision for loan losses   21,973     7,079     9,285     9,620     10,345
                             
NET INTEREST INCOME AFTER PROVISION          
FOR LOAN LOSSES   128,191     143,277     127,741     128,161     132,623
                             
NON-INTEREST INCOME          
Trust income   6,108     5,794     5,708     5,980     6,277
Service charges on deposit accounts   10,825     10,557     10,068     11,263     10,837
Other service charges and fees   1,308     1,312     1,289     1,501     1,201
Mortgage lending income   4,509     3,656     2,823     1,457     1,521
SBA lending income   956     895     497     186     304
Investment banking income   513     360     618     829     664
Debit and credit card fees   7,059     7,212     6,098     6,547     6,820
Bank owned life insurance income   1,302     1,260     795     1,105     1,105
Gain on sale of securities, net   7,374     2,823     2,740     8     54
Other income   43,821     5,137     3,125     5,712     4,942
TOTAL NON-INTEREST INCOME   83,775     39,006     33,761     34,588     33,725
                             
NON-INTEREST EXPENSE          
Salaries and employee benefits   52,065     56,128     56,367     49,193     55,515
Occupancy expense, net   8,342     6,919     7,475     7,016     7,713
Furniture and equipment expense   4,898     4,206     3,358     4,139     3,761
Other real estate and foreclosure expense   1,125     591     637     1,540     538
Deposit insurance   (2 )   2,510     2,040     2,489     2,248
Merger-related costs   2,556     7,522     1,470     797     804
Other operating expenses   37,881     32,867     30,062     30,222     29,674
TOTAL NON-INTEREST EXPENSE   106,865     110,743     101,409     95,396     100,253
NET INCOME BEFORE INCOME TAXES   105,101     71,540     60,093     67,353     66,095
Provision for income taxes   23,275     15,616     12,398     11,707     10,902
NET INCOME   81,826     55,924     47,695     55,646     55,193
Preferred stock dividends   -     326     -     -     -
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 81,826   $ 55,598   $ 47,695   $ 55,646   $ 55,193
BASIC EARNINGS PER SHARE $ 0.85   $ 0.58   $ 0.52   $ 0.60   $ 0.60
DILUTED EARNINGS PER SHARE $ 0.84   $ 0.58   $ 0.51   $ 0.60   $ 0.59
                             
           
           



Simmons First National Corporation       SFNC
 
Consolidated Risk-Based Capital          
For the Quarters Ended Sep 30
  Jun 30
  Mar 31
  Dec 31
  Sep 30
 
(Unaudited) 2019   2019   2019   2018   2018  
                     
($ in thousands)          
Tier 1 capital          
Stockholders' equity $ 2,547,071   $ 2,469,513   $ 2,302,321   $ 2,246,434   $ 2,183,319  
Disallowed intangible assets, net of deferred tax   (1,013,309 )   (1,001,676 )   (910,122 )   (912,428 )   (914,788 )
Unrealized (gain) loss on AFS securities   (23,709 )   (15,316 )   6,000     27,374     48,040  
Total Tier 1 capital   1,510,053     1,452,521     1,398,199     1,361,380     1,316,571  
                               
           
Tier 2 capital          
Qualifying unrealized gain on AFS equity securities   -     -     -     -     1  
Trust preferred securities and subordinated debt   354,223     354,132     354,041     353,950     372,934  
Qualifying allowance for loan losses and          
reserve for unfunded commitments   74,455     72,044     67,771     63,608     63,618  
Total Tier 2 capital   428,678     426,176     421,812     417,558     436,553  
Total risk-based capital $ 1,938,731   $ 1,878,697   $ 1,820,011   $ 1,778,938   $ 1,753,124  
                               
Risk weighted assets $ 14,725,571   $ 14,825,253   $ 13,364,636   $ 13,326,832   $ 13,402,910  
                               
Adjusted average assets for leverage ratio $ 16,681,527   $ 16,382,520   $ 15,423,961   $ 15,512,042   $ 15,179,889  
                               
Ratios at end of quarter          
Equity to assets   14.34 %   13.77 %   14.31 %   13.58 %   13.41 %
Tangible common equity to tangible assets (1)   9.08 %   8.51 %   9.02 %   8.39 %   8.11 %
Common equity Tier 1 ratio (CET1)   10.25 %   9.80 %   10.46 %   10.22 %   9.82 %
Tier 1 leverage ratio   9.05 %   8.87 %   9.07 %   8.78 %   8.67 %
Tier 1 risk-based capital ratio   10.25 %   9.80 %   10.46 %   10.22 %   9.82 %
Total risk-based capital ratio   13.17 %   12.67 %   13.62 %   13.35 %   13.08 %
           
(1) Calculations of tangible common equity to tangible assets and the reconciliations to GAAP are included in the schedules accompanying this release.
           



Simmons First National Corporation       SFNC
Consolidated Loans and Investments          
For the Quarters Ended Sep 30
  Jun 30
  Mar 31
  Dec 31
  Sep 30
(Unaudited) 2019   2019   2019   2018   2018
                   
($ in thousands)          
Legacy Loan Portfolio - End of Period (1)          
Consumer          
Credit cards $ 195,083   $ 187,919   $ 181,549   $ 204,173   $ 182,137
Other consumer   208,643     207,445     213,659     201,297     259,581
Total consumer   403,726     395,364     395,208     405,470     441,718
Real Estate          
Construction   1,712,858     1,540,352     1,376,162     1,300,723     1,229,888
Single-family residential   1,448,455     1,444,525     1,431,407     1,440,443     1,401,991
Other commercial   3,630,708     3,531,273     3,355,109     3,225,287     3,077,188
Total real estate   6,792,021     6,516,150     6,162,678     5,966,453     5,709,067
Commercial          
Commercial   1,894,819     1,871,695     1,801,422     1,774,909     1,608,342
Agricultural   213,753     191,922     147,216     164,514     218,778
Total commercial   2,108,572     2,063,617     1,948,638     1,939,423     1,827,120
Other   339,046     287,366     178,026     119,042     145,369
Total Loans $ 9,643,365   $ 9,262,497   $ 8,684,550   $ 8,430,388   $ 8,123,274
                             
           
(1) Excludes all acquired loans.          
           
Investment Securities - End of Period          
Held-to-Maturity          
U.S. Government agencies $ -   $ 999   $ 12,996   $ 16,990   $ 34,983
Mortgage-backed securities   11,549     12,225     12,847     13,346     13,933
State and political subdivisions   28,692     32,236     33,597     256,863     272,396
Other securities   1,996     1,995     1,995     1,995     1,994
Total held-to-maturity   42,237     47,455     61,435     289,194     323,306
                             
Available-for-Sale          
U.S. Government agencies $ 178,139   $ 197,656   $ 161,577   $ 154,301   $ 141,460
Mortgage-backed securities   1,337,794     1,345,760     1,345,677     1,522,900     1,419,626
State and political subdivisions   681,202     636,558     580,790     314,843     282,439
FHLB stock   62,403     66,588     65,220     73,105     72,579
Other securities   96,596     95,825     86,847     86,603     81,710
Total available-for-sale   2,356,134     2,342,387     2,240,111     2,151,752     1,997,814
Total investment securities $ 2,398,371   $ 2,389,842   $ 2,301,546   $ 2,440,946   $ 2,321,120
Fair value - HTM investment securities $ 43,302   $ 48,640   $ 61,956   $ 290,830   $ 322,838
                             
           
Investment Securities - QTD Average          
Taxable securities $ 1,712,672   $ 1,793,799   $ 1,880,694   $ 1,815,203   $ 1,775,193
Tax exempt securities   681,505     624,898     590,941     551,185     539,135
Total investment securities - QTD average $ 2,394,177   $ 2,418,697   $ 2,471,635   $ 2,366,388   $ 2,314,328
                             
           



Simmons First National Corporation         SFNC
 
Consolidated Loans and Credit Coverage          
For the Quarters Ended Sep 30
  Jun 30
  Mar 31
  Dec 31
  Sep 30
 
(Unaudited) 2019   2019   2019   2018   2018  
($ in thousands)                              
LOANS          
Legacy loans $ 9,643,365   $ 9,262,497   $ 8,684,550   $ 8,430,388   $ 8,123,274  
Allowance for loan losses (legacy loans)   (65,993 )   (63,067 )   (59,243 )   (56,599 )   (55,358 )
Legacy loans (net of allowance)   9,577,372     9,199,430     8,625,307     8,373,789     8,067,916  
Loans acquired   3,420,563     3,939,126     3,099,915     3,342,175     3,790,234  
Credit discount   (60,379 )   (73,498 )   (42,416 )   (49,297 )   (53,968 )
Allowance for loan losses (loans acquired)   (597 )   (1,112 )   (1,312 )   (95 )   (1,345 )
Loans acquired (net of discount and allowance)   3,359,587     3,864,516     3,056,187     3,292,783     3,734,921  
Net loans $ 12,936,959   $ 13,063,946   $ 11,681,494   $ 11,666,572   $ 11,802,837  
                               
           
Loan Coverage Ratios          
Allowance for loan losses to legacy loans   0.68 %   0.68 %   0.68 %   0.67 %   0.68 %
           
Discount for credit losses and allowance on loans acquired          
to total loans acquired plus discount for credit losses          
and allowance on loans acquired (non-GAAP) (1)   1.78 %   1.89 %   1.41 %   1.48 %   1.46 %
           
Total allowance and credit coverage (non-GAAP) (1)   0.97 %   1.04 %   0.87 %   0.90 %   0.93 %
           
(1) Calculations of the non-GAAP loan coverage ratios and the reconciliations to GAAP are included in the schedules accompanying this release.
           
           



Simmons First National Corporation       SFNC
 
Consolidated Allowance and Asset Quality          
For the Quarters Ended Sep 30
  Jun 30
  Mar 31
  Dec 31
  Sep 30
 
(Unaudited) 2019   2019   2019   2018   2018  
($ in thousands)                              
Allowance for Loan Losses (Legacy Loans)          
Balance, beginning of quarter $ 63,067   $ 59,243   $ 56,599   $ 55,358   $ 51,732  
Loans charged off                              
Credit cards   1,117     1,039     1,142     1,121     919  
Other consumer   1,059     905     1,533     2,894     1,321  
Real estate   907     271     374     337     4,952  
Commercial   17,729     1,867     1,968     3,480     592  
Total loans charged off   20,812     4,082     5,017     7,832     7,784  
                               
Recoveries of loans previously charged off                              
Credit cards   223     271     240     227     229  
Other consumer   1,422     331     300     154     176  
Real estate   55     153     142     367     210  
Commercial   65     72     158     167     450  
Total recoveries   1,765     827     840     915     1,065  
Net loans charged off   19,047     3,255     4,177     6,917     6,719  
Provision for loan losses   21,973     7,079     6,821     8,158     10,345  
Balance, end of quarter $ 65,993   $ 63,067   $ 59,243   $ 56,599   $ 55,358  
                               
Non-performing assets (1) (2)                              
Non-performing loans          
Nonaccrual loans $ 72,721   $ 61,956   $ 60,925   $ 34,201   $ 40,505  
Loans past due 90 days or more   155     267     281     224     281  
Total non-performing loans   72,876     62,223     61,206     34,425     40,786  
Other non-performing assets                              
Foreclosed assets and other real estate owned (2)   19,576     24,761     18,952     25,565     22,664  
Other non-performing assets   540     613     505     553     524  
Total other non-performing assets   20,116     25,374     19,457     26,118     23,188  
Total non-performing assets $ 92,992   $ 87,597   $ 80,663   $ 60,543   $ 63,974  
Performing TDRs (troubled debt restructurings) $ 6,519   $ 6,246   $ 6,297   $ 6,369   $ 8,413  
           
Ratios (1) (2)          
Allowance for loan losses to total loans   0.68 %   0.68 %   0.68 %   0.67 %   0.68 %
Allowance for loan losses to non-performing loans   91 %   101 %   97 %   164 %   136 %
Non-performing loans to total loans   0.76 %   0.67 %   0.70 %   0.41 %   0.50 %
Non-performing assets (including performing TDRs)          
to total assets   0.56 %   0.52 %   0.54 %   0.40 %   0.44 %
Non-performing assets to total assets   0.52 %   0.49 %   0.50 %   0.37 %   0.39 %
Annualized net charge offs to total loans   0.78 %   0.14 %   0.20 %   0.35 %   0.36 %
Annualized net credit card charge offs to          
total credit card loans   1.82 %   1.63 %   1.92 %   1.86 %   1.47 %
           
(1) Excludes all acquired loans, except for their inclusion in total assets.      
(2) Includes acquired foreclosed assets and acquired other real estate owned.      
           



Simmons First National Corporation                   SFNC  
Consolidated - Average Balance Sheet and Net Interest Income Analysis              
For the Quarters Ended                      
(Unaudited)                      
  Three Months Ended
Sep 2019

    Three Months Ended
Jun 2019

    Three Months Ended
Sep 2018

 
($ in thousands) Average
Balance

  Income/
Expense

  Yield/
Rate
    Average
Balance

  Income/
Expense

  Yield/
Rate
    Average
Balance

  Income/
Expense

  Yield/
Rate
 
ASSETS                                                    
Earning assets:                      
Interest bearing balances due from banks                      
and federal funds sold $ 344,761   $ 1,586   1.83 %   $ 276,370   $ 1,121   1.63 %   $ 373,528   $ 1,405   1.49 %
Investment securities - taxable   1,712,672     10,414   2.41 %     1,793,799     11,994   2.68 %     1,775,193     10,892   2.43 %
Investment securities - non-taxable (FTE)   681,505     6,687   3.89 %     624,898     6,209   3.99 %     539,135     5,064   3.73 %
Mortgage loans held for sale   39,551     382   3.83 %     32,030     332   4.16 %     43,554     501   4.56 %
Loans, including acquired loans   13,052,943     180,080   5.47 %     12,813,274     178,219   5.58 %     11,641,843     162,515   5.54 %
Total interest earning assets (FTE)   15,831,432     199,149   4.99 %     15,540,371     197,875   5.11 %     14,373,253     180,377   4.98 %
Non-earning assets   1,889,166                 1,842,501                 1,667,631            
Total assets $ 17,720,598               $ 17,382,872               $ 16,040,884          
                                                     
LIABILITIES AND STOCKHOLDERS' EQUITY                    
Interest bearing liabilities:                      
Interest bearing transaction and                      
savings accounts $ 7,322,395   $ 21,363   1.16 %   $ 7,139,356   $ 20,190   1.13 %   $ 6,840,403   $ 16,373   0.95 %
Time deposits   3,122,422     15,573   1.98 %     3,072,246     14,606   1.91 %     2,379,142     8,017   1.34 %
Total interest bearing deposits   10,444,817     36,936   1.40 %     10,211,602     34,796   1.37 %     9,219,545     24,390   1.05 %
Federal funds purchased and securities                      
sold under agreement to repurchase   123,883     249   0.80 %     133,242     257   0.77 %     107,770     104   0.38 %
Other borrowings   1,127,886     5,381   1.89 %     1,277,450     6,219   1.95 %     1,375,052     6,240   1.80 %
Subordinated notes and debentures   354,178     4,576   5.13 %     354,088     4,541   5.14 %     379,168     5,282   5.53 %
Total interest bearing liabilities   12,050,764     47,142   1.55 %     11,976,382     45,813   1.53 %     11,081,535     36,016   1.29 %
Non-interest bearing liabilities:                                                    
Non-interest bearing deposits   3,012,544           2,834,452           2,679,469      
Other liabilities   288,517           207,500           103,315      
Total liabilities   15,351,825           15,018,334           13,864,319      
Stockholders' equity   2,368,773           2,364,538           2,176,565      
Total liabilities and stockholders' equity $ 17,720,598             $ 17,382,872             $ 16,040,884          
Net interest income (FTE)       $ 152,007               $ 152,062               $ 144,361      
Net interest spread (FTE)             3.44 %               3.58 %               3.69 %
Net interest margin (FTE) - quarter-to-date     3.81 %       3.92 %       3.98 %
                       
Net interest margin (FTE) - year-to-date     3.86 %       3.89 %       4.04 %
                       
Core net interest margin (FTE) - quarter-to-date (1)   3.58 %       3.66 %       3.71 %
Core loan yield (FTE) - quarter-to-date (1)     5.19 %       5.26 %       5.19 %
                       
Core net interest margin (FTE) - year-to-date (1)     3.63 %       3.66 %       3.74 %
Core loan yield (FTE) - year-to-date (1)     5.24 %       5.27 %       5.06 %
                       
(1) Calculations of core net interest margin and core loan yield and the reconciliations to GAAP are included in the schedules accompanying this release.
                       



Simmons First National Corporation       SFNC
Consolidated - Selected Financial Data          
For the Quarters Ended Sep 30
  Jun 30
  Mar 31
  Dec 31
  Sep 30
 
(Unaudited) 2019   2019   2019   2018   2018  
($ in thousands, except share data)                              
QUARTER-TO-DATE          
Financial Highlights - GAAP          
Net Income $ 81,826   $ 55,598   $ 47,695   $ 55,646   $ 55,193  
Diluted earnings per share   0.84     0.58     0.51     0.60     0.59  
Return on average assets   1.83 %   1.28 %   1.19 %   1.35 %   1.37 %
Return on average common equity   13.70 %   9.48 %   8.60 %   9.98 %   10.06 %
Return on tangible common equity   24.89 %   17.40 %   15.34 %   17.96 %   18.38 %
Net interest margin (FTE)   3.81 %   3.92 %   3.85 %   3.76 %   3.98 %
FTE adjustment   1,843     1,706     1,601     1,466     1,393  
Amortization of intangibles   2,947     2,947     2,641     2,642     2,745  
Amortization of intangibles, net of taxes   2,176     2,177     1,951     1,952     2,027  
Average diluted shares outstanding   96,968,775     96,367,857     92,870,813     92,897,105     92,840,851  
Cash dividends declared per common share   0.16     0.16     0.16     0.15     0.15  
Financial Highlights - Core (non-GAAP)          
Core earnings (excludes non-core items) (1) $ 83,963   $ 65,453   $ 49,076   $ 56,451   $ 56,504  
Diluted core earnings per share (1)   0.87     0.68     0.53     0.61     0.61  
Core net interest margin (FTE) (2)   3.58 %   3.66 %   3.67 %   3.66 %   3.71 %
Accretable yield on acquired loans   9,322     10,162     6,660     3,850     10,006  
Efficiency ratio (1)   43.77 %   49.88 %   56.76 %   51.99 %   53.47 %
Core return on average assets (1)   1.88 %   1.51 %   1.22 %   1.37 %   1.40 %
Core return on average common equity (1)   14.06 %   11.16 %   8.85 %   10.13 %   10.30 %
Core return on tangible common equity (1)   25.52 %   20.36 %   15.76 %   18.21 %   18.80 %
YEAR-TO-DATE          
Financial Highlights - GAAP          
Net Income $ 185,119   $ 103,293   $ 47,695   $ 215,713   $ 160,067  
Diluted earnings per share   1.94     1.09     0.51     2.32     1.72  
Return on average assets   1.44 %   1.24 %   1.19 %   1.37 %   1.37 %
Return on average common equity   10.65 %   9.05 %   8.60 %   10.00 %   10.01 %
Return on tangible common equity   19.27 %   16.38 %   15.34 %   18.44 %   18.61 %
Net interest margin (FTE)   3.86 %   3.89 %   3.85 %   3.97 %   4.04 %
FTE adjustment   5,150     3,307     1,601     5,297     3,831  
Amortization of intangibles   8,535     5,588     2,641     11,009     8,367  
Amortization of intangibles, net of taxes   6,304     4,128     1,951     8,132     6,180  
Average diluted shares outstanding   95,450,732     94,588,739     92,870,813     92,830,485     92,796,860  
Cash dividends declared per common share   0.48     0.32     0.16     0.60     0.45  
Financial Highlights - Core (non-GAAP)          
Core earnings (excludes non-core items) (1) $ 198,492   $ 114,529   $ 49,076   $ 220,233   $ 163,782  
Diluted core earnings per share (1)   2.08     1.21     0.53     2.37     1.76  
Core net interest margin (FTE) (2)   3.63 %   3.66 %   3.67 %   3.72 %   3.74 %
Accretable yield on acquired loans   26,144     16,822     6,660     35,263     31,413  
Efficiency ratio (1)   49.49 %   53.14 %   56.76 %   52.85 %   53.14 %
Core return on average assets (1)   1.55 %   1.37 %   1.22 %   1.40 %   1.41 %
Core return on average common equity (1)   11.42 %   10.04 %   8.85 %   10.21 %   10.24 %
Core return on tangible common equity (1)   20.62 %   18.09 %   15.76 %   18.81 %   19.03 %
END OF PERIOD          
Book value per share $ 26.36   $ 25.57   $ 24.87   $ 24.33   $ 23.66  
Tangible book value per share   15.73     14.90     14.78     14.18     13.48  
Shares outstanding   96,613,855     96,590,656     92,568,361     92,347,643     92,291,070  
Full-time equivalent employees   2,701     2,700     2,602     2,654     2,635  
Total number of financial centers   212     212     191     191     191  
           
(1) Core earnings exclude non-core items, which is a non-GAAP measurement. Reconciliations to GAAP are included in the schedules accompanying this release.
(2) Excludes accretable yield adjustment on loans, which is a non-GAAP measurement. Reconciliations to GAAP are included in the schedules accompanying this release.
   



Simmons First National Corporation       SFNC
Consolidated - Reconciliation of Core Earnings (non-GAAP)      
For the Quarters Ended Sep 30
  Jun 30
  Mar 31
  Dec 31
  Sep 30
 
(Unaudited) 2019   2019   2019   2018   2018  
($ in thousands, except per share data)                              
QUARTER-TO-DATE          
Net Income $ 81,826   $ 55,598   $ 47,695   $ 55,646   $ 55,193  
Non-core items          
Merger-related costs   2,556     7,522     1,470     797     804  
Early retirement program   177     2,932     355     -     -  
Branch right-sizing   160     2,887     45     292     970  
Tax effect (1)   (756 )   (3,486 )   (489 )   (284 )   (463 )
Net non-core items   2,137     9,855     1,381     805     1,311  
Core earnings (non-GAAP) $ 83,963   $ 65,453   $ 49,076   $ 56,451   $ 56,504  
                               
Diluted earnings per share $ 0.84   $ 0.58   $ 0.51   $ 0.60   $ 0.59  
Non-core items          
Merger-related costs   0.04     0.08     0.02     0.01     0.01  
Early retirement program   -     0.03     0.01     -     -  
Branch right-sizing   -     0.03     -     -     0.01  
Tax effect (1)   (0.01 )   (0.04 )   (0.01 )   -     -  
Net non-core items   0.03     0.10     0.02     0.01     0.02  
Core earnings (non-GAAP) $ 0.87   $ 0.68   $ 0.53   $ 0.61   $ 0.61  
                               
YEAR-TO-DATE                              
Net Income $ 185,119   $ 103,293   $ 47,695   $ 215,713   $ 160,067  
Non-core items                              
Merger-related costs   11,548     8,992     1,470     4,777     3,980  
Early retirement program   3,464     3,287     355     -     -  
Branch right-sizing   3,092     2,932     45     1,341     1,049  
Tax effect (1)   (4,731 )   (3,975 )   (489 )   (1,598 )   (1,314 )
Net non-core items   13,373     11,236     1,381     4,520     3,715  
Core earnings (non-GAAP) $ 198,492   $ 114,529   $ 49,076   $ 220,233   $ 163,782  
                               
Diluted earnings per share $ 1.94   $ 1.09   $ 0.51   $ 2.32   $ 1.72  
Non-core items                              
Merger-related costs   0.12     0.10     0.02     0.05     0.04  
Early retirement program   0.04     0.03     0.01     -     -  
Branch right-sizing   0.03     0.03     -     0.02     0.01  
Tax effect (1)   (0.05 )   (0.04 )   (0.01 )   (0.02 )   (0.01 )
Net non-core items   0.14     0.12     0.02     0.05     0.04  
Core earnings (non-GAAP) $ 2.08   $ 1.21   $ 0.53   $ 2.37   $ 1.76  
                               
(1) Effective tax rate of 26.135%.                              
                               
Reconciliation of Selected Non-Core Non-Interest Expense Items (non-GAAP)    
           
QUARTER-TO-DATE          
Salaries and employee benefits $ 52,065   $ 56,128   $ 56,367   $ 49,193   $ 55,515  
Non-core items (1)   (176 )   (2,937 )   (351 )   (118 )   -  
Core salaries and employee benefits (non-GAAP) $ 51,889   $ 53,191   $ 56,016   $ 49,075   $ 55,515  
                               
Merger related costs $ 2,556   $ 7,522   $ 1,470   $ 797   $ 804  
Non-core items (1)   (2,556 )   (7,522 )   (1,470 )   (797 )   (804 )
Core merger related costs (non-GAAP) $ -   $ -   $ -   $ -   $ -  
                               
Other operating expenses $ 37,881   $ 32,867   $ 30,062   $ 30,222   $ 29,674  
Non-core items (1)   (90 )   (2,834 )   (10 )   70     (957 )
Core other operating expenses (non-GAAP) $ 37,791   $ 30,033   $ 30,052   $ 30,292   $ 28,717  
                               
(1) Non-core items include merger related costs, early retirement program expenses and branch right sizing costs.
           



Simmons First National Corporation         SFNC
Reconciliation Of Non-GAAP Financial Measures - End of Period      
For the Quarters Ended          
(Unaudited) Sept 30
  Jun 30
  Mar 31
  Dec 31
  Sept 30
 
  2019   2019   2019   2018   2018  
($ in thousands, except per share data)                              
                               
Calculation of Tangible Common Equity and the Ratio of Tangible Common Equity to Tangible Assets  
           
Total common stockholders' equity $ 2,547,071   $ 2,469,513   $ 2,302,321   $ 2,246,434   $ 2,183,319  
Intangible assets:          
Goodwill   (926,648 )   (926,450 )   (845,687 )   (845,687 )   (845,687 )
Other intangible assets   (101,149 )   (104,096 )   (88,694 )   (91,334 )   (93,975 )
Total intangibles   (1,027,797 )   (1,030,546 )   (934,381 )   (937,021 )   (939,662 )
Tangible common stockholders' equity $ 1,519,274   $ 1,438,967   $ 1,367,940   $ 1,309,413   $ 1,243,657  
                               
Total assets $ 17,758,511   $ 17,937,435   $ 16,091,639   $ 16,543,337   $ 16,281,264  
Intangible assets:                              
Goodwill   (926,648 )   (926,450 )   (845,687 )   (845,687 )   (845,687 )
Other intangible assets   (101,149 )   (104,096 )   (88,694 )   (91,334 )   (93,975 )
Total intangibles   (1,027,797 )   (1,030,546 )   (934,381 )   (937,021 )   (939,662 )
Tangible assets $ 16,730,714   $ 16,906,889   $ 15,157,258   $ 15,606,316   $ 15,341,602  
                               
Ratio of equity to assets   14.34 %   13.77 %   14.31 %   13.58 %   13.41 %
Ratio of tangible common equity to tangible assets   9.08 %   8.51 %   9.02 %   8.39 %   8.11 %
                               
Calculation of Discount for credit losses and allowance on loans acquired to total loans acquired plus  
  discount for credit losses and allowance on loans acquired        
           
Credit discount on acquired loans $ 60,379   $ 73,498   $ 42,416   $ 49,297   $ 53,968  
Allowance for loan losses on acquired loans   597     1,112     1,312     95     1,345  
Total credit discount and ALLL on acquired loans $ 60,976   $ 74,610   $ 43,728   $ 49,392   $ 55,313  
Total loans acquired $ 3,420,563   $ 3,939,126   $ 3,099,915   $ 3,342,175   $ 3,790,234  
Discount and ALLL on acquired loans to acquired loans   1.78 %   1.89 %   1.41 %   1.48 %   1.46 %
                               
Calculation of Total Allowance and Credit Coverage                              
                               
Allowance for loan losses $ 65,993   $ 63,067   $ 59,243   $ 56,599   $ 55,358  
Total credit discount and ALLL on acquired loans   60,976     74,610     43,728     49,392     55,313  
Total allowance and credit discount $ 126,969   $ 137,677   $ 102,971   $ 105,991   $ 110,671  
Total loans $ 13,063,928   $ 13,201,623   $ 11,784,465   $ 11,772,563   $ 11,913,508  
Total allowance and credit coverage   0.97 %   1.04 %   0.87 %   0.90 %   0.93 %
                               
Calculation of Tangible Book Value per Share                              
                               
Total common stockholders' equity $ 2,547,071   $ 2,469,513   $ 2,302,321   $ 2,246,434   $ 2,183,319  
Intangible assets:                              
Goodwill   (926,648 )   (926,450 )   (845,687 )   (845,687 )   (845,687 )
Other intangible assets   (101,149 )   (104,096 )   (88,694 )   (91,334 )   (93,975 )
Total intangibles   (1,027,797 )   (1,030,546 )   (934,381 )   (937,021 )   (939,662 )
Tangible common stockholders' equity $ 1,519,274   $ 1,438,967   $ 1,367,940   $ 1,309,413   $ 1,243,657  
Shares of common stock outstanding   96,613,855     96,590,656     92,568,361     92,347,643     92,291,070  
Book value per common share $ 26.36   $ 25.57   $ 24.87   $ 24.33   $ 23.66  
Tangible book value per common share $ 15.73   $ 14.90   $ 14.78   $ 14.18   $ 13.48  
                               



Simmons First National Corporation         SFNC
Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date      
For the Quarters Ended          
(Unaudited) Sept 30
  Jun 30
  Mar 31
  Dec 31
  Sept 30
 
  2019   2019   2019   2018   2018  
($ in thousands)                              
Calculation of Core Return on Average Assets          
           
Net income $ 81,826   $ 55,598   $ 47,695   $ 55,646   $ 55,193  
Net non-core items, net of taxes, adjustment   2,137     9,855     1,381     805     1,311  
Core earnings $ 83,963   $ 65,453   $ 49,076   $ 56,451   $ 56,504  
                               
Average total assets $ 17,720,598   $ 17,382,872   $ 16,302,197   $ 16,357,753   $ 16,040,884  
                               
Return on average assets   1.83 %   1.28 %   1.19 %   1.35 %   1.37 %
Core return on average assets   1.88 %   1.51 %   1.22 %   1.37 %   1.40 %
                               
Calculation of Return on Tangible Common Equity                              
                               
Net income $ 81,826   $ 55,598   $ 47,695   $ 55,646   $ 55,193  
Amortization of intangibles, net of taxes   2,176     2,177     1,951     1,952     2,027  
Total income available to common stockholders $ 84,002   $ 57,775   $ 49,646   $ 57,598   $ 57,220  
                               
Net non-core items, net of taxes   2,137     9,855     1,381     805     1,311  
Core earnings   83,963     65,453     49,076     56,451     56,504  
Amortization of intangibles, net of taxes   2,176     2,177     1,951     1,952     2,027  
Total core income available to common stockholders $ 86,139   $ 67,630   $ 51,027   $ 58,403   $ 58,531  
                               
Average common stockholders' equity $ 2,368,773   $ 2,351,603   $ 2,248,898   $ 2,211,217   $ 2,176,565  
Average intangible assets:                              
Goodwill   (926,687 )   (915,445 )   (845,687 )   (845,687 )   (845,687 )
Other intangibles   (103,028 )   (104,050 )   (90,317 )   (92,990 )   (95,576 )
Total average intangibles   (1,029,715 )   (1,019,495 )   (936,004 )   (938,677 )   (941,263 )
Average tangible common stockholders' equity $ 1,339,058   $ 1,332,108   $ 1,312,894   $ 1,272,540   $ 1,235,302  
                               
Return on average common equity   13.70 %   9.48 %   8.60 %   9.98 %   10.06 %
Return on tangible common equity   24.89 %   17.40 %   15.34 %   17.96 %   18.38 %
Core return on average common equity   14.06 %   11.16 %   8.85 %   10.13 %   10.30 %
Core return on tangible common equity   25.52 %   20.36 %   15.76 %   18.21 %   18.80 %
                               
Calculation of Efficiency Ratio (1)                              
                               
Non-interest expense $ 106,865   $ 110,743   $ 101,409   $ 95,396   $ 100,253  
Non-core non-interest expense adjustment   (2,893 )   (13,341 )   (1,870 )   (1,089 )   (1,774 )
Other real estate and foreclosure expense adjustment   (1,057 )   (563 )   (599 )   (1,300 )   (538 )
Amortization of intangibles adjustment   (2,947 )   (2,947 )   (2,641 )   (2,642 )   (2,745 )
Efficiency ratio numerator $ 99,968   $ 93,892   $ 96,299   $ 90,365   $ 95,196  
                               
Net-interest income $ 150,164   $ 150,356   $ 137,026   $ 137,781   $ 142,968  
Non-interest income   83,775     39,006     33,761     34,588     33,725  
Fully tax-equivalent adjustment   1,843     1,706     1,601     1,466     1,393  
Gain on sale of securities   (7,374 )   (2,823 )   (2,740 )   (8 )   (54 )
Efficiency ratio denominator $ 228,408   $ 188,245   $ 169,648   $ 173,827   $ 178,032  
                               
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