Exhibit 99.1

 

 

For Immediate Release  January 26, 2021

 

SIMMONS FIRST NATIONAL CORPORATION REPORTS 2020 EARNINGS

 

Pine Bluff, AR – Simmons First National Corporation (NASDAQ: SFNC) (the “Company” or “Simmons”), parent company of Simmons Bank, today announced net income of $254.9 million for the year ended December 31, 2020, compared to $237.8 million for 2019, an increase of $17.0 million, or 7.2%. Diluted earnings per share were $2.31 for 2020, a decrease of $0.10 or 4.2%, compared to the prior year. Included in the 2020 results were $9.4 million in net after-tax merger-related, early retirement program and net branch right-sizing costs and the gains on the sales of branches in Texas and Colorado. Excluding the impact of these items, core earnings were $264.3 million for the year ended December 31, 2020, compared to $269.6 million for 2019, a decrease of $5.3 million, or 2.0%. Core diluted earnings per share were $2.40, a decrease of $0.33 or 12.1%, from 2019.

 

Fourth quarter 2020 net income was $53.0 million compared to $52.7 million for the same period in 2019. Diluted earnings per share were $0.49 for the fourth quarters of both 2020 and 2019. Excluding $9.0 million in net after-tax merger-related, early retirement program and net branch right-sizing costs, fourth quarter 2020 core earnings were $62.0 million, a decrease of $9.1 million, or 12.8%, compared to the fourth quarter of 2019. Core diluted earnings per share were $0.57, a decrease of $0.09, or 13.6%, from the same period in 2019.

 

“As we look back on a very challenging year, we are very proud of the teamwork and results we achieved,” said George A. Makris, Jr., chairman and CEO of Simmons First National Corporation. “We mobilized over 1,500 associates to work from home at times during the year while maintaining our ability to serve our customers. We provided over 8,000 PPP loans totaling almost $1 billion to businesses that faced extraordinary uncertainty and helped support over 100,000 jobs. We integrated Landmark Bank into Simmons Bank, not without some obstacles due to COVID-19 restrictions, but our associates persevered to get the job done. We contributed $3 million to the Simmons First Foundation to support conservation projects throughout our service area. We enhanced our digital banking offerings, and our customers have benefitted from their ability to conduct their business when they want, where they want. We worked diligently to position ourselves with less risk and with the capacity to help the economy recover from the economic crisis caused by COVID-19. We increased our dividend to our shareholders, and our profitability was excellent, especially under the circumstances. Also during 2020, we successfully completed our regulatory exam cycle, including our first CFPB exam. I, personally, could not be prouder of our team.”

 

 

Selected Highlights: FY 2020 FY 2019 4th Qtr 2020 4th Qtr 2019
Net income $254.9 million $237.8 million $53.0 million $52.7 million
Diluted earnings per share $2.31 $2.41 $0.49 $0.49
Return on avg assets 1.18% 1.33% 0.96% 1.04%
Return on avg common equity 8.72% 9.93% 7.13% 8.01%
Return on tangible common equity (1) 15.25% 17.99% 12.48% 14.62%
         
Core earnings (2) $264.3 million $269.6 million $62.0 million $71.1 million
Core diluted earnings per share (2) $2.40 $2.73 $0.57 $0.66
Core return on avg assets (2) 1.22% 1.51% 1.13% 1.41%
Core return on avg common equity (2) 9.05% 11.25% 8.34% 10.80%
Core return on tangible common equity (1)(2) 15.79% 20.31% 14.51% 19.49%
Efficiency ratio (3) 54.66% 50.33% 55.27% 52.63%
Adjusted pre-tax, pre-provision earnings (2) $352.7 million $375.0 million $83.1 million $95.1 million

 

(1)Return on tangible common equity excludes goodwill and other intangible assets and is a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.
(2)Core figures exclude non-core items and are non-GAAP measurements. Adjusted pre-tax, pre-provision earnings excludes provision for income taxes, provisions for credit losses and unfunded commitments, gains on sales of securities, and other pre-tax, non-core items, and is also a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.
(3)Efficiency ratio is core non-interest expense before foreclosed property expense and amortization of intangibles, as a percent of net interest income (fully taxable equivalent) and non-interest 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.

 

P.O. BOX 7009 501 MAIN STREET PINE BLUFF, ARKANSAS 71611-7009 (870) 541-1000 www.simmonsbank.com

 

 

Loans

 

($ in billions) 4th Qtr 2020 3rd Qtr 2020 4th Qtr 2019
Total loans $12.90 $14.02 $14.43

 

Total loans were $12.9 billion at December 31, 2020, a decrease of $1.5 billion, or 10.6%, compared to December 31, 2019. On a linked-quarter basis (December 31, 2020 compared to September 30, 2020), total loans decreased $1.1 billion, or 8.0%. “The decline in the loan balance reflects the tepid loan demand during 2020. Approximately $375 million of the decrease was due to the sale of loans associated with branch sales in South Texas and Colorado during the year. Our total loan pipeline consisting of all loan opportunities, which was a robust $1.7 billion at December 31, 2019 fell to $374 million at September 30, 2020. The pipeline is starting to rebuild and ended 2020 at $674 million, including $177 million in loans approved and ready to close. On a positive note, our concentration levels in commercial real estate are now well below regulatory guidelines and we have substantial capacity to make additional loans, help borrowers in our markets and help the economy recover,” said Makris.

 

Through December 31, 2020, the Company originated approximately 8,200 loans under the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, with an average balance of $119,000 per loan. Approximately 93% of the PPP loans had a balance less than $350,000 as of December 31, 2020.

 

PPP Loans

Balance as of December 31, 2020

# of

Loans

 

Original Balance

($ in millions)

 

Balance

December 31, 2020

($ in millions)

 
Less than $50,000 5,220 63% $94.5 10% $90.8 10%
$50,000 to $350,000 2,445 30% $305.2 31% $285.2 31%
More than $350,000 to less than $2 million 481 6% $357.9 37% $315.4 35%
$2 million to $10 million 62 1% $217.9 22% $213.3 24%
Total 8,208 100% $975.6 100% $904.7 100%

 

Deposits

 

($ in billions) 4th Qtr 2020 3rd Qtr 2020 4th Qtr 2019
Total deposits $17.0 $16.2 $16.1
Non-interest bearing deposits $4.5 $4.4 $3.7
Interest bearing deposits $9.7 $9.0 $9.1
Time deposits $2.8 $2.8 $3.3

 

Total deposits were $17.0 billion at December 31, 2020, an increase of $878.1 million, or 5.5%, since December 31, 2019. On a linked-quarter basis, total deposits increased $740.4 million, or 4.6%, primarily due to increases in interest bearing accounts. Both consumer and commercial deposit balances have grown since the economic stimulus legislation, including legislation that established the PPP program, was implemented in mid-2020. Trends affected by the increasing cash balances are paydowns on loans, reduced credit card balances and fewer overdraft activities.

 

Net Interest Income

 

  4th Qtr
2020
3rd Qtr
2020
2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
Loan yield (1) 4.74% 4.54% 4.84% 5.19% 5.43%
Core loan yield (1) (2) 4.47% 4.29% 4.52% 4.86% 5.00%
Security yield (1) 2.48% 2.60% 2.50% 2.63% 2.73%
Cost of interest bearing deposits 0.47% 0.54% 0.59% 1.03% 1.22%
Cost of deposits (3) 0.34% 0.39% 0.44% 0.80% 0.94%
Cost of borrowed funds 1.88% 1.85% 1.84% 2.06% 2.30%
Net interest margin (1) 3.22% 3.21% 3.42% 3.68% 3.78%
Core net interest margin (1) (2) 3.04% 3.02% 3.18% 3.42% 3.44%

 

(1)Fully tax equivalent using an effective tax rate of 26.135%.
(2)Core loan yield and core net interest margin exclude accretion and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.
(3)Includes non-interest bearing deposits.

 

 

 

 

The Company’s net interest income for the fourth quarter of 2020 was $155.0 million, a decrease of $12.1 million, or 7.3%, from the same period in 2019. The decrease in net interest income was primarily due to the decline in the loan yield of 69 basis points and the lower average loan balance during the period. Included in interest income was the yield accretion recognized on loans acquired of $9.0 million and $15.1 million for the fourth quarters of 2020 and 2019, respectively.

 

The loan yield was 4.74% for the quarter ended December 31, 2020, a 20 basis point increase from the third quarter of 2020. The core loan yield, which excludes the accretion, was 4.47% for the same period. The PPP loan yield was approximately 2.42% during the fourth quarter of 2020 (including accretion of net fees), which decreased the Company’s overall loan yield by approximately 13 basis points.

 

Net interest margin (FTE) was 3.22% for the quarter ended December 31, 2020, while the core net interest margin, which excludes the accretion, was 3.04% for the same period. The net interest margin during the fourth quarter of 2020 was affected by additional liquidity and the lower yielding PPP loans originated during the second and third quarters of 2020, which decreased the net interest margin by approximately 38 basis points.

 

Non-Interest Income

 

Non-interest income for 2020 was $248.5 million, an increase of $43.5 million compared to the previous year. The increase was primarily due to a $19.5 million increase in mortgage lending income and a $41.5 million increase in gains on sale of securities recognized on the rebalancing of the investment portfolio during 2020. These increases were partially offset by the one-time gain on sale of the Visa Inc. class B common stock of $42.9 million that was completed during the third quarter of 2019.

 

Non-interest income for the fourth quarter of 2020 was $44.1 million, a decrease of $1.6 million compared to the same period in the previous year.

 

Selected Non-Interest Income Items

($ in millions)

 

FY 2020

 

FY 2019

 

4th Qtr 2020

 

4th Qtr 2019

Service charges on deposit accounts $43.1 $44.8 $10.8 $13.3
Mortgage lending income $34.5 $15.0 $3.0 $4.0
SBA lending income $1.3 $2.7 $0.5 $0.3
Debit and credit card fees $33.5 $29.3 $8.7 $8.9
Gain on sale of securities $54.8 $13.3 - $0.4
Other income $38.5 $62.0 $10.6 $7.1
         
Core other income (1)(2) $29.8 $62.0 $10.3 $7.1

 

(1)Core figures exclude non-core items and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.
(2)Core other income includes the gain on sale of Visa Inc. class B common stock in 2019.

 

Non-Interest Expense

 

Non-interest expense for 2020 was $493.5 million, an increase of $32.4 million compared to the previous year. Included in 2020 were $21.5 million of pre-tax non-core items, which mostly consisted of branch right sizing costs. Excluding these expenses, core non-interest expense for 2020 was $472.0 million, an increase of $53.8 million compared to 2019 core non-interest expense. The increase was primarily due to the incremental costs associated with the 2019 mergers and the Next Generation Banking (“NGB”) technology initiative. The Company recognized an additional $14.8 million in software and technology expense related to its NGB initiative in 2020.

 

Non-interest expense for the fourth quarter of 2020 was $128.1 million, a decrease of $14.0 million compared to the fourth quarter of 2019. Included in this quarter were $12.5 million of pre-tax non-core items for merger-related, early retirement program and branch right-sizing costs. Excluding these expenses, core non-interest expense was $115.6 million for the fourth quarter of 2020, a decrease of $1.6 million compared to the same period in 2019.

 

Also included during the fourth quarter of 2020 was a $3 million contribution to the Simmons First Foundation for grants to support conservation projects throughout the Simmons Bank footprint.

 

The efficiency ratio for 2020 was 54.66% while the efficiency ratio for the fourth quarter of 2020 was 55.27%.

 

 

 

Selected Non-Interest Expense Items

($ in millions)

 

FY 2020

 

FY 2019

 

4th Qtr 2020

 

4th Qtr 2019

Salaries and employee benefits $242.5 $227.8 $55.8 $63.2
Merger related costs $4.5 $36.4 $0.7 $24.8
Other operating expenses $174.0 $138.9 $54.3 $38.0
         
Core salaries and employee benefits (1) $239.4 $224.3 $55.6 $63.2
Core merger related costs (1) - - - -
Core other operating expenses (1) $161.8 $135.9 $44.1 $38.0

 

(1)Core figures exclude non-core items and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.

 

Early in 2020, the Company offered qualifying associates an early retirement option resulting in $2.9 million of non-core expense during 2020. The Company expects ongoing net annualized savings of approximately $2.9 million.

 

Management continuously evaluates the Company’s branch network as part of its analysis of the profitability of the Company’s operations and the efficiency with which it delivers banking services to its markets. As a result of this ongoing evaluation, the Company closed 11 branch locations during the second quarter of 2020, with estimated net annual cost savings of approximately $2.4 million related to these locations. The Company closed 23 branch locations on October 9, 2020, with an expected net annual cost savings of approximately $6.7 million. Also during 2020, nine branches were sold in South Texas and Colorado.

 

Asset Quality

 

  4th Qtr
2020
3rd Qtr
2020
2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
Allowance for credit losses on loans to total loans 1.85% 1.77% 1.59% 1.69% 0.47%
Allowance for credit losses on loans to non-performing loans 193% 147% 175% 154% 74%
Non-performing loans to total loans 0.96% 1.20% 0.91% 1.10% 0.64%
Net charge-off ratio (annualized) 0.52% 0.16% 1.04% 0.07% 0.09%
Net charge-off ratio YTD (annualized) 0.45% 0.43% 0.56% 0.07% 0.24%

 

At December 31, 2020, the allowance for credit losses on loans was $238.1 million. Included in total loans was $904.7 million of government guaranteed PPP loans. Non-performing loans decreased $45.2 million during the fourth quarter of 2020, which contributed to the decrease in provision for credit losses for the quarter when compared to the third quarter of 2020.

 

Provision for credit losses for 2020 was $75.0 million, an increase of $31.7 million from 2019. Provision for credit losses for the fourth quarter of 2020 was $6.9 million, an increase of $2.0 million when compared to the same period of 2019. Makris stated, “Due to the uncertainty in the economy during 2020, we were quick to offer loan modifications to our customers to help them through the uncertain times. The majority of modified loans are projected to return to regular payments prior to the end of the third quarter of 2021. We feel we have made adequate provision for potential risk in our credit portfolio and have reviewed and adjusted the risk rating of all modified loans.” Makris continued, “The hospitality industry, particularly hotels, continues to struggle with a return to normal.”

 

Foreclosed Assets and Other Real Estate Owned

 

At December 31, 2020, foreclosed assets and other real estate owned were $18.4 million, a decrease of $728,000, or 3.8%, compared to the same period in 2019. The composition of these assets is divided into three types:

 

 

($ in millions)

4th Qtr
2020
3rd Qtr
2020
2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
Closed bank branches and branch sites $0.6 $0.6 $2.7 $8.8 $5.7
Foreclosed assets – acquired $15.3 $9.3 $9.2 $9.2 $10.3
Foreclosed assets – legacy $2.5 $2.7 $2.2 $2.8 $3.1

 

 

 

 

Capital

 

  4th Qtr
2020
3rd Qtr
2020
2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
Stockholders’ equity to total assets 13.3% 13.7% 13.3% 13.7% 14.1%
Tangible common equity to tangible assets (1) 8.5% 8.7% 8.3% 8.4% 9.0%
Regulatory common equity tier 1 ratio 13.4% 12.6% 11.9% 11.1% 10.9%
Regulatory tier 1 leverage ratio 9.1% 9.1% 8.8% 9.0% 9.6%
Regulatory tier 1 risk-based capital ratio 13.4% 12.6% 11.9% 11.1% 10.9%
Regulatory total risk-based capital ratio 16.8% 15.8% 14.9% 14.1% 13.7%

 

(1)Tangible common equity to tangible assets is a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.

 

At December 31, 2020, common stockholders' equity was $3.0 billion. Book value per share was $27.53 and tangible book value per share was $16.56 at December 31, 2020. The ratio of stockholders’ equity to total assets was 13.3% at December 31, 2020, while the ratio of tangible common equity to tangible assets was 8.5%. As of December 31, 2020, PPP loans totaled $904.7 million, which are 100% federally guaranteed and have a zero percent risk-weight for regulatory capital ratios. Excluding PPP loans from total assets, equity to total assets was 13.9%, tangible common equity to tangible assets was 8.8% and the regulatory tier 1 leverage ratio was 9.5%.

 

Simmons First National Corporation

 

Simmons First National Corporation is a financial holding company headquartered in Pine Bluff, Arkansas, with total consolidated assets of approximately $22.4 billion as of December 31, 2020. The Company, through its subsidiaries, conducts financial operations in Arkansas, Illinois, Kansas, Missouri, Oklahoma, Tennessee and Texas and offers comprehensive financial solutions delivered with a client-centric approach. The Company’s common stock is listed on the NASDAQ Global Select Market under the symbol “SFNC.”

 

Conference Call

 

Management will conduct a live conference call to review this information beginning at 9:00 a.m. CST today, Tuesday, January 26, 2021. 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 3994603. In addition, the call will be available live or in recorded version on the Company’s website at www.simmonsbank.com for at least 60 days.

 

Non-GAAP Financial Measures

 

This press release contains financial information determined by methods other than in accordance with U.S. 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, non-interest income, and non-interest expense certain income and expenses related to significant non-core activities, including merger-related expenses, gain on sale of branches, early retirement program expenses and net branch right-sizing expenses. In addition, the Company also presents certain figures based on tangible common stockholders’ equity, tangible assets and tangible book value, which exclude goodwill and other intangible assets. The Company further presents certain figures that are exclusive of the impact of PPP loans. The Company’s management believes that these non-GAAP financial measures are useful to investors because they, among other things, 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 normalize 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, including, without limitation, statements made in Mr. Makris’s quotes, 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, acquisition strategy, NGB and other digital banking initiatives, the Company’s ability to recruit and retain key employees, the benefits associated with the Company’s early retirement program, branch closures and branch sales, the adequacy of the allowance for credit losses, the ability of the Company to manage the impact of the COVID-19 pandemic, expectations and projections regarding the Company’s COVID-19 loan modification program, and the impacts of the Company’s and its customers participation in the PPP. 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, and information technology affecting the financial industry; the effect of steps the Company takes and has taken in response to COVID-19; the severity and duration of the pandemic, including the effectiveness of vaccination efforts; the pace of recovery when the pandemic subsides and the heightened impact it has on many of the risks described herein; the effects of the COVID-19 pandemic on, among other things, the Company’s operations, liquidity, and credit quality; general economic and market conditions; unemployment; claims, damages, and fines related to litigation or government actions, including litigation or actions arising from the Company’s participation in and administration of programs related to the COVID-19 pandemic (including, among other things, the PPP loan program authorized by the CARES Act); changes in accounting principles relating to loan loss recognition (current expected credit losses, or CECL); the Company’s ability to manage and successfully integrate its mergers and acquisitions; cyber threats, attacks or events; reliance on third parties for key services; government legislation; and other factors, many of which are beyond the control of the Company, could cause actual results to differ materially from those contemplated by the forward-looking statements. Additional information on factors that might affect the Company’s financial results is included in the Company’s Form 10-K for the year ended December 31, 2019, and its Form 10-Q for the quarter ended June 30, 2020, which have been filed with, and are available from, the U.S. 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  Dec 31  Sep 30  Jun 30  Mar 31  Dec 31
(Unaudited)  2020  2020  2020  2020  2019
($ in thousands)               
ASSETS               
Cash and non-interest bearing balances due from banks  $217,499   $382,691   $234,998   $244,123   $277,208 
Interest bearing balances due from banks and federal funds sold   3,254,653    2,139,440    2,310,162    1,493,076    719,415 
Cash and cash equivalents   3,472,152    2,522,131    2,545,160    1,737,199    996,623 
Interest bearing balances due from banks - time   1,579    4,061    4,561    4,309    4,554 
Investment securities - held-to-maturity   333,031    47,102    51,720    53,968    40,927 
Investment securities - available-for-sale   3,473,598    2,607,288    2,496,896    2,466,640    3,288,343 
Mortgage loans held for sale   137,378    192,729    120,034    49,984    58,102 
Other assets held for sale   100    389    399    115,315    260,332 
Loans:                         
Loans   12,900,897    14,017,442    14,606,900    14,374,277    14,425,704 
Allowance for credit losses on loans   (238,050)   (248,251)   (231,643)   (243,195)   (68,244)
Net loans   12,662,847    13,769,191    14,375,257    14,131,082    14,357,460 
Premises and equipment   441,692    470,491    478,896    484,990    492,384 
Premises held for sale   15,008    4,486    4,576    -    - 
Foreclosed assets and other real estate owned   18,393    12,590    14,111    20,805    19,121 
Interest receivable   72,597    77,352    79,772    57,039    62,707 
Bank owned life insurance   255,630    257,718    256,643    255,197    254,152 
Goodwill   1,075,305    1,075,305    1,064,765    1,064,978    1,055,520 
Other intangible assets   111,110    114,460    117,823    121,673    127,340 
Other assets   289,332    282,102    293,071    278,173    241,578 
Total assets  $22,359,752   $21,437,395   $21,903,684   $20,841,352   $21,259,143 
                          
LIABILITIES AND STOCKHOLDERS' EQUITY                         
Deposits:                         
Non-interest bearing transaction accounts  $4,482,091   $4,451,385   $4,608,098   $3,572,244   $3,741,093 
Interest bearing transaction accounts and savings deposits   9,672,608    8,993,255    8,978,045    8,840,678    9,090,878 
Time deposits   2,832,327    2,802,007    3,029,975    3,146,811    3,276,969 
Total deposits   16,987,026    16,246,647    16,616,118    15,559,733    16,108,940 
Federal funds purchased and securities sold                         
under agreements to repurchase   299,111    313,694    387,025    377,859    150,145 
Other borrowings   1,342,067    1,342,769    1,393,689    1,396,829    1,297,599 
Subordinated notes and debentures   382,874    382,739    382,604    388,396    388,260 
Other liabilities held for sale   154,620    -    -    58,405    159,853 
Accrued interest and other liabilities   217,398    209,305    219,545    214,730    165,422 
Total liabilities   19,383,096    18,495,154    18,998,981    17,995,952    18,270,219 
                          
Stockholders' equity:                         
Preferred stock   767    767    767    767    767 
Common stock   1,081    1,090    1,090    1,090    1,136 
Surplus   2,014,076    2,032,372    2,029,383    2,026,420    2,117,282 
Undivided profits   901,006    866,503    819,153    778,893    848,848 
Accumulated other comprehensive income (loss):                         
Unrealized accretion (depreciation) on AFS securities   59,726    41,509    54,310    38,230    20,891 
Total stockholders' equity   2,976,656    2,942,241    2,904,703    2,845,400    2,988,924 
Total liabilities and stockholders' equity  $22,359,752   $21,437,395   $21,903,684   $20,841,352   $21,259,143 

 

 Page 1 

 

 

 

Simmons First National Corporation              SFNC
Consolidated Statements of Income - Quarter-to-Date               
For the Quarters Ended  Dec 31  Sep 30  Jun 30  Mar 31  Dec 31
(Unaudited)  2020  2020  2020  2020  2019
($ in thousands, except per share data)               
INTEREST INCOME                         
Loans  $160,115   $163,180   $176,910   $187,566   $193,402 
Interest bearing balances due from banks and federal funds sold   716    623    603    2,441    2,625 
Investment securities   17,207    14,910    13,473    18,943    16,962 
Mortgage loans held for sale   1,070    1,012    668    281    402 
TOTAL INTEREST INCOME   179,108    179,725    191,654    209,231    213,391 
INTEREST EXPENSE                         
Time deposits   7,835    9,437    10,803    13,323    16,198 
Other deposits   6,536    6,769    7,203    17,954    20,331 
Federal funds purchased and securities                         
sold under agreements to repurchase   284    335    337    759    368 
Other borrowings   4,869    4,943    4,963    4,877    4,615 
Subordinated notes and debentures   4,624    4,631    4,667    4,835    4,813 
TOTAL INTEREST EXPENSE   24,148    26,115    27,973    41,748    46,325 
NET INTEREST INCOME   154,960    153,610    163,681    167,483    167,066 
Provision for credit losses   6,943    22,981    21,915    23,134    4,903 
NET INTEREST INCOME AFTER PROVISION                         
FOR CREDIT LOSSES   148,017    130,629    141,766    144,349    162,163 
NON-INTEREST INCOME                         
Trust income   6,557    6,744    7,253    7,151    7,430 
Service charges on deposit accounts   10,799    10,385    8,570    13,328    13,332 
Other service charges and fees   1,783    1,764    1,489    1,588    1,915 
Mortgage lending income   2,993    13,971    12,459    5,046    4,029 
SBA lending income   484    304    245    296    321 
Investment banking income   676    557    571    877    822 
Debit and credit card fees   8,710    8,850    7,996    7,914    8,920 
Bank owned life insurance income   1,481    1,591    1,445    1,298    1,411 
Gain on sale of securities, net   16    22,305    390    32,095    377 
Other income   10,557    5,380    9,809    12,801    7,073 
TOTAL NON-INTEREST INCOME   44,056    71,851    50,227    82,394    45,630 
NON-INTEREST EXPENSE                         
Salaries and employee benefits   55,762    61,144    57,644    67,924    63,235 
Occupancy expense, net   9,182    9,647    9,217    9,510    9,272 
Furniture and equipment expense   5,940    6,231    6,144    5,723    5,758 
Other real estate and foreclosure expense   551    602    274    325    1,089 
Deposit insurance   1,627    2,244    2,838    2,475    (134)
Merger-related costs   731    902    1,830    1,068    24,831 
Other operating expenses   54,342    38,179    39,651    41,788    38,044 
TOTAL NON-INTEREST EXPENSE   128,135    118,949    117,598    128,813    142,095 
NET INCOME BEFORE INCOME TAXES   63,938    83,531    74,395    97,930    65,698 
Provision for income taxes   10,970    17,633    15,593    20,694    12,976 
NET INCOME   52,968    65,898    58,802    77,236    52,722 
Preferred stock dividends   13    13    13    13    13 
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS  $52,955   $65,885   $58,789   $77,223   $52,709 
BASIC EARNINGS PER SHARE  $0.49   $0.60   $0.54   $0.68   $0.49 
DILUTED EARNINGS PER SHARE  $0.49   $0.60   $0.54   $0.68   $0.49 

 

 Page 2

 

 

 

Simmons First National Corporation           SFNC
Consolidated Risk-Based Capital               
For the Quarters Ended  Dec 31  Sep 30  Jun 30  Mar 31  Dec 31
(Unaudited)  2020  2020  2020  2020  2019
($ in thousands)               
Tier 1 capital                         
Stockholders' equity  $2,976,656   $2,942,241   $2,904,703   $2,845,400   $2,988,924 
CECL transition provision (1)   131,430    134,798    130,480    134,558    - 
Disallowed intangible assets, net of deferred tax   (1,163,797)   (1,167,357)   (1,160,385)   (1,164,038)   (1,160,079)
Unrealized (gain) loss on AFS securities   (59,726)   (41,509)   (54,310)   (38,230)   (20,891)
Total Tier 1 capital   1,884,563    1,868,173    1,820,488    1,777,690    1,807,954 
                          
Tier 2 capital                         
Trust preferred securities and subordinated debt   382,874    382,739    382,604    388,396    388,260 
Qualifying allowance for loan losses and                         
reserve for unfunded commitments   89,546    96,734    83,780    96,015    76,644 
Total Tier 2 capital   472,420    479,473    466,384    484,411    464,904 
Total risk-based capital  $2,356,983   $2,347,646   $2,286,872   $2,262,101   $2,272,858 
                          
Risk weighted assets  $14,034,563   $14,878,932   $15,362,175   $16,012,233   $16,554,081 
                          
Adjusted average assets for leverage ratio  $20,765,127   $20,652,454   $20,742,824   $19,832,219   $18,852,798 
                          
Ratios at end of quarter                         
Equity to assets   13.31%   13.72%   13.26%   13.65%   14.06%
Tangible common equity to tangible assets (2)   8.45%   8.65%   8.31%   8.44%   8.99%
Common equity Tier 1 ratio (CET1)   13.42%   12.55%   11.85%   11.10%   10.92%
Tier 1 leverage ratio   9.08%   9.05%   8.78%   8.96%   9.59%
Tier 1 risk-based capital ratio   13.43%   12.56%   11.85%   11.10%   10.92%
Total risk-based capital ratio   16.79%   15.78%   14.89%   14.13%   13.73%

 

(1) The Company has elected to use the CECL transition provision allowed for in the year of adopting ASC 326.

(2) Calculations of tangible common equity to tangible assets and the reconciliations to GAAP are included in the schedules accompanying this release.

 

 

 

 

 

 

 Page 3 

 

 

 

Simmons First National Corporation           SFNC
Consolidated Investment Securities               
For the Quarters Ended  Dec 31  Sep 30  Jun 30  Mar 31  Dec 31
(Unaudited)  2020  2020  2020  2020  2019
($ in thousands)               
Investment Securities - End of Period                         
Held-to-Maturity                         
Mortgage-backed securities  $22,354   $24,297   $25,980   $27,121   $10,796 
State and political subdivisions   310,109    21,930    24,777    25,985    27,082 
Other securities   568    875    963    862    3,049 
Total held-to-maturity (net of credit losses)   333,031    47,102    51,720    53,968    40,927 
Available-for-Sale                         
U.S. Treasury  $-   $-   $-   $424,989   $449,729 
U.S. Government agencies   477,237    471,973    210,921    161,289    194,249 
Mortgage-backed securities   1,394,936    903,687    1,154,086    1,179,837    1,742,945 
State and political subdivisions   1,470,723    1,133,006    1,054,068    678,243    880,524 
Other securities   130,702    98,622    77,821    22,282    20,896 
Total available-for-sale (net of credit losses)   3,473,598    2,607,288    2,496,896    2,466,640    3,288,343 
Total investment securities (net of credit losses)  $3,806,629   $2,654,390   $2,548,616   $2,520,608   $3,329,270 
Fair value - HTM investment securities  $341,925   $49,064   $53,751   $55,714   $41,855 
                          
Investment Securities - QTD Average                         
Taxable securities  $1,757,234   $1,534,742   $1,642,083   $2,324,188   $1,940,755 
Tax exempt securities   1,528,127    1,155,099    866,944    900,223    825,000 
Total investment securities - QTD average  $3,285,361   $2,689,841   $2,509,027   $3,224,411   $2,765,755 

 

 

 

 

 

 

 Page 4 

 

 

 

Simmons First National Corporation           SFNC
Consolidated Loans               
For the Quarters Ended  Dec 31  Sep 30  Jun 30  Mar 31  Dec 31
(Unaudited)  2020  2020  2020  2020  2019
($ in thousands)               
Loan Portfolio - End of Period                         
Consumer                         
Credit cards  $180,354   $172,880   $184,348   $188,596   $204,802 
Other consumer   210,870    190,736    214,024    267,870    249,694 
Total consumer   391,224    363,616    398,372    456,466    454,496 
Real Estate                         
Construction   1,596,255    1,853,360    2,010,256    2,024,118    2,236,861 
Single-family residential   1,880,673    1,997,070    2,207,087    2,343,543    2,442,064 
Other commercial real estate   5,746,863    6,132,823    6,316,444    6,466,104    6,205,599 
Total real estate   9,223,791    9,983,253    10,533,787    10,833,765    10,884,524 
Commercial                         
Commercial   2,574,386    2,907,798    3,038,216    2,314,472    2,495,516 
Agricultural   175,905    241,687    217,715    191,535    315,454 
Total commercial   2,750,291    3,149,485    3,255,931    2,506,007    2,810,970 
Other   535,591    521,088    418,810    578,039    275,714 
Total Loans  $12,900,897   $14,017,442   $14,606,900   $14,374,277   $14,425,704 

 

 

 

 

 

 

 Page 5 

 

 

 

Simmons First National Corporation           SFNC
Consolidated Allowance and Asset Quality               
For the Quarters Ended  Dec 31  Sep 30  Jun 30  Mar 31  Dec 31
(Unaudited)  2020  2020  2020  2020  2019
($ in thousands)               
Allowance for Credit Losses on Loans                         
Beginning balance, prior to adoption of ASC 326                 $68,244   $66,590 
Impact of adopting ASC 326 (1)                 $151,377      
Beginning balance, after adoption of ASC 326  $248,251   $231,641   $243,195   $219,621      
                          
Loans charged off                         
Credit cards   787    832    1,053    1,441    1,287 
Other consumer   960    1,091    592    1,379    1,425 
Real estate   10,415    1,153    1,824    396    892 
Commercial   8,199    4,327    35,687    523    459 
Total loans charged off   20,361    7,403    39,156    3,739    4,063 
                          
Recoveries of loans previously charged off                         
Credit cards   241    276    272    225    287 
Other consumer   355    366    301    443    304 
Real estate   431    120    253    101    146 
Commercial   1,835    936    98    347    77 
Total recoveries   2,862    1,698    924    1,116    814 
Net loans charged off   17,499    5,705    38,232    2,623    3,249 
Provision for credit losses on loans   7,298    22,315    26,678    26,197    4,903 
Balance, end of quarter  $238,050   $248,251   $231,641   $243,195   $68,244 
                          
Non-performing assets                         
Non-performing loans                         
Nonaccrual loans  $122,968   $168,349   $131,888   $156,746   $91,723 
Loans past due 90 days or more   322    156    537    1,305    855 
Total non-performing loans   123,290    168,505    132,425    158,051    92,578 
Other non-performing assets                         
Foreclosed assets and other real estate owned   18,393    12,590    14,111    20,805    19,121 
Other non-performing assets   2,016    1,983    2,008    2,169    1,964 
Total other non-performing assets   20,409    14,573    16,119    22,974    21,085 
Total non-performing assets  $143,699   $183,078   $148,544   $181,025   $113,663 
Performing TDRs (troubled debt restructurings)  $3,138   $3,379   $3,960   $4,110   $4,411 
                          
Ratios                         
Allowance for credit losses on loans to total loans   1.85%   1.77%   1.59%   1.69%   0.47%
Allowance for credit losses to non-performing loans   193%   147%   175%   154%   74%
Non-performing loans to total loans   0.96%   1.20%   0.91%   1.10%   0.64%
Non-performing assets (including performing TDRs)                         
  to total assets   0.66%   0.86%   0.70%   0.89%   0.56%
Non-performing assets to total assets   0.64%   0.85%   0.68%   0.87%   0.53%
Annualized net charge offs to total loans   0.52%   0.16%   1.04%   0.07%   0.09%
Annualized net credit card charge offs to                         
  total credit card loans   1.20%   1.26%   1.67%   2.29%   1.99%

 

(1) The Company adopted ASC 326.effective January 1, 2020.

 

 Page 6 

 

 

 

Simmons First National Corporation                       SFNC
Consolidated - Average Balance Sheet and Net Interest Income Analysis               
For the Quarters Ended                           
(Unaudited)                           
   Three Months Ended
Dec 2020
  Three Months Ended
Sep 2020
  Three Months Ended
Dec 2019
($ 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  $2,651,938   $716    0.11%  $2,265,233   $623    0.11%  $789,035   $2,625    1.32%
Investment securities - taxable   1,757,234    7,720    1.75%   1,534,742    7,193    1.86%   1,940,755    11,080    2.27%
Investment securities - non-taxable (FTE)   1,528,127    12,778    3.33%   1,155,099    10,382    3.58%   825,000    7,945    3.82%
Mortgage loans held for sale   179,275    1,070    2.37%   145,226    1,012    2.77%   53,511    402    2.98%
Loans (FTE)   13,457,077    160,306    4.74%   14,315,014    163,379    4.54%   14,144,703    193,511    5.43%
Total interest earning assets (FTE)   19,573,651    182,590    3.71%   19,415,314    182,589    3.74%   17,753,004    215,563    4.82%
Non-earning assets   2,278,443              2,350,007              2,288,886           
Total assets  $21,852,094             $21,765,321             $20,041,890           
                                              
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
Interest bearing liabilities:                                             
Interest bearing transaction and                                             
savings accounts  $9,389,570   $6,536    0.28%  $8,977,886   $6,769    0.30%  $8,440,090   $20,331    0.96%
Time deposits   2,823,166    7,835    1.10%   2,998,091    9,437    1.25%   3,393,089    16,198    1.89%
Total interest bearing deposits   12,212,736    14,371    0.47%   11,975,977    16,206    0.54%   11,833,179    36,529    1.22%
Federal funds purchased and securities                                             
sold under agreement to repurchase   340,333    284    0.33%   386,631    335    0.34%   147,395    368    0.99%
Other borrowings   1,342,403    4,869    1.44%   1,357,278    4,943    1.45%   1,168,897    4,615    1.57%
Subordinated notes and debentures   382,808    4,624    4.81%   382,672    4,631    4.81%   376,766    4,813    5.07%
Total interest bearing liabilities   14,278,280    24,148    0.67%   14,102,558    26,115    0.74%   13,526,237    46,325    1.36%
Non-interest bearing liabilities:                                             
Non-interest bearing deposits   4,413,168              4,529,782              3,524,092           
Other liabilities   204,014              190,169              379,909           
Total liabilities   18,895,462              18,822,509              17,430,238           
Stockholders' equity   2,956,632              2,942,812              2,611,652           
Total liabilities and stockholders' equity  $21,852,094             $21,765,321             $20,041,890           
Net interest income (FTE)       $158,442             $156,474             $169,238      
Net interest spread (FTE)             3.04%             3.00%             3.46%
Net interest margin (FTE) - quarter-to-date             3.22%             3.21%             3.78%
                                              
Net interest margin (FTE) - year-to-date             3.38%             3.43%             3.85%
                                              
Core net interest margin (FTE) - quarter-to-date (1)             3.04%             3.02%             3.44%
Core loan yield (FTE) - quarter-to-date (1)             4.47%             4.29%             5.00%
                                              
Core net interest margin (FTE) - year-to-date (1)             3.16%             3.20%             3.59%
Core loan yield (FTE) - year-to-date (1)             4.54%             4.56%             5.18%

 

(1) Calculations of core net interest margin and core loan yield and the reconciliations to GAAP are included in the schedules accompanying this release.

 

Page 7

 

 

 

Simmons First National Corporation           SFNC
Consolidated - Selected Financial Data               
For the Quarters Ended  Dec 31  Sep 30  Jun 30  Mar 31  Dec 31
(Unaudited)  2020  2020  2020  2020  2019
($ in thousands, except share data)               
QUARTER-TO-DATE                         
Financial Highlights - GAAP                         
Net Income  $52,955   $65,885   $58,789   $77,223   $52,709 
Diluted earnings per share   0.49    0.60    0.54    0.68    0.49 
Return on average assets   0.96%   1.20%   1.08%   1.48%   1.04%
Return on average common equity   7.13%   8.91%   8.21%   10.83%   8.01%
Return on tangible common equity   12.48%   15.45%   14.55%   19.00%   14.62%
Net interest margin (FTE)   3.22%   3.21%   3.42%   3.68%   3.78%
FTE adjustment   3,482    2,864    2,350    2,305    2,172 
Amortization of intangibles   3,351    3,362    3,369    3,413    3,270 
Amortization of intangibles, net of taxes   2,475    2,483    2,489    2,521    2,416 
Average diluted shares outstanding   108,888,264    109,207,294    109,130,866    113,137,223    108,472,559 
Shares repurchased under plan   1,034,364    -    -    4,922,336    390,000 
Average price of shares repurchased   19.36    -    -    18.96    25.95 
Cash dividends declared per common share   0.17    0.17    0.17    0.17    0.16 
Financial Highlights - Core (non-GAAP)                         
Core earnings (excludes non-core items) (1)  $61,977   $68,338   $60,147   $73,838   $71,074 
Core diluted earnings per share (1)   0.57    0.63    0.55    0.65    0.66 
Core net interest margin (FTE) (2)   3.04%   3.02%   3.18%   3.42%   3.44%
Accretable yield on acquired loans   8,999    8,948    11,723    11,837    15,100 
Efficiency ratio (1)   55.27%   54.12%   51.46%   57.79%   52.63%
Core return on average assets (1)   1.13%   1.25%   1.11%   1.42%   1.41%
Core return on average common equity (1)   8.34%   9.24%   8.40%   10.35%   10.80%
Core return on tangible common equity (1)   14.51%   16.00%   14.87%   18.19%   19.49%
YEAR-TO-DATE                         
Financial Highlights - GAAP                         
Net Income  $254,852   $201,897   $136,012   $77,223   $237,828 
Diluted earnings per share   2.31    1.83    1.22    0.68    2.41 
Return on average assets   1.18%   1.25%   1.28%   1.48%   1.33%
Return on average common equity   8.72%   9.27%   9.45%   10.83%   9.93%
Return on tangible common equity   15.25%   16.19%   16.57%   19.00%   17.99%
Net interest margin (FTE)   3.38%   3.43%   3.55%   3.68%   3.85%
FTE adjustment   11,001    7,519    4,655    2,305    7,322 
Amortization of intangibles   13,495    10,144    6,782    3,413    11,805 
Amortization of intangibles, net of taxes   9,968    7,493    5,010    2,521    8,720 
Average diluted shares outstanding   110,173,661    110,480,508    111,083,999    113,137,223    98,796,628 
Cash dividends declared per common share   0.68    0.51    0.34    0.17    0.64 
Financial Highlights - Core (non-GAAP)                         
Core earnings (excludes non-core items) (1)  $264,300   $202,323   $133,985   $73,838   $269,566 
Core diluted earnings per share (1)   2.40    1.83    1.21    0.65    2.73 
Core net interest margin (FTE) (2)   3.16%   3.20%   3.30%   3.42%   3.59%
Accretable yield on acquired loans   41,507    32,508    23,560    11,837    41,244 
Efficiency ratio (1)   54.66%   54.46%   54.62%   57.79%   50.33%
Core return on average assets (1)   1.22%   1.26%   1.26%   1.42%   1.51%
Core return on average common equity (1)   9.05%   9.29%   9.31%   10.35%   11.25%
Core return on tangible common equity (1)   15.79%   16.22%   16.33%   18.19%   20.31%
END OF PERIOD                         
Book value per share  $27.53   $26.98   $26.64   $26.11   $26.30 
Tangible book value per share   16.56    16.07    15.79    15.22    15.89 
Shares outstanding   108,077,662    109,023,781    108,994,389    108,966,331    113,628,601 
Full-time equivalent employees   2,923    2,904    2,939    3,079    3,270 
Total number of financial centers   204    226    226    240    251 

 

(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.

 

 Page 8 

 

 

 

Simmons First National Corporation           SFNC
Reconciliation Of Non-GAAP Financial Measures - Core Earnings - Quarter-to-Date   
For the Quarters Ended  Dec 31  Sep 30  Jun 30  Mar 31  Dec 31
(Unaudited)  2020  2020  2020  2020  2019
($ in thousands, except per share data)               
QUARTER-TO-DATE                         
Net Income  $52,955   $65,885   $58,789   $77,223   $52,709 
Non-core items                         
Gain on sale of branches   (275)   -    (2,204)   (5,889)   - 
Merger-related costs   731    902    1,830    1,068    24,831 
Early retirement program   62    2,346    493    -    - 
Branch right-sizing (net)   11,696    72    1,721    238    37 
Tax effect (1)   (3,192)   (867)   (482)   1,198    (6,503)
Net non-core items   9,022    2,453    1,358    (3,385)   18,365 
Core earnings (non-GAAP)  $61,977   $68,338   $60,147   $73,838   $71,074 
                          
Diluted earnings per share  $0.49   $0.60   $0.54   $0.68   $0.49 
Non-core items                         
Gain on sale of branches   -    -    (0.02)   (0.05)   - 
Merger-related costs   -    0.01    0.02    0.01    0.23 
Early retirement program   -    0.02    -    -    - 
Branch right-sizing (net)   0.11    -    0.02    -    - 
Tax effect (1)   (0.03)   -    (0.01)   0.01    (0.06)
Net non-core items   0.08    0.03    0.01    (0.03)   0.17 
Core diluted earnings per share (non-GAAP)  $0.57   $0.63   $0.55   $0.65   $0.66 
(1) Effective tax rate of 26.135%.                         
                          
Reconciliation of Selected Non-Core Non-Interest Income and Expense Items (non-GAAP)
                          
QUARTER-TO-DATE                         
Other income  $10,557   $5,380   $9,809   $12,801   $7,073 
Non-core items (1)   (275)   (370)   (2,204)   (5,889)   - 
Core other income (non-GAAP)  $10,282   $5,010   $7,605   $6,912   $7,073 
                          
Non-interest expense  $128,135   $118,949   $117,598   $128,813   $142,095 
Non-core items (1)   (12,489)   (3,690)   (4,044)   (1,306)   (24,868)
Core non-interest expense (non-GAAP)  $115,646   $115,259   $113,554   $127,507   $117,227 
                          
Salaries and employee benefits  $55,762   $61,144   $57,644   $67,924   $63,235 
Non-core items (1)   (144)   (2,448)   (493)   -    - 
Core salaries and employee benefits (non-GAAP)  $55,618   $58,696   $57,151   $67,924   $63,235 
                          
Merger related costs  $731   $902   $1,830   $1,068   $24,831 
Non-core items (1)   (731)   (902)   (1,830)   (1,068)   (24,831)
Core merger related costs (non-GAAP)  $-   $-   $-   $-   $- 
                          
Other operating expenses  $54,342   $38,179   $39,651   $41,788   $38,044 
Non-core items (1)   (10,270)   (11)   (1,662)   (212)   (4)
Core other operating expenses (non-GAAP)  $44,072   $38,168   $37,989   $41,576   $38,040 

 

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

 

 Page 9

 

 

 

Simmons First National Corporation           SFNC
Reconciliation Of Non-GAAP Financial Measures - Core Earnings - Year-to-Date   
For the Quarters Ended  Dec 31  Sep 30  Jun 30  Mar 31  Dec 31
(Unaudited)  2020  2020  2020  2020  2019
($ in thousands, except per share data)               
YEAR-TO-DATE                         
Net Income  $254,852   $201,897   $136,012   $77,223   $237,828 
Non-core items                         
Gain on sale of branches   (8,368)   (8,093)   (8,093)   (5,889)   - 
Merger-related costs   4,531    3,800    2,898    1,068    36,379 
Early retirement program   2,901    2,839    493    -    3,464 
Branch right-sizing (net)   13,727    2,031    1,959    238    3,129 
Tax effect (1)   (3,343)   (151)   716    1,198    (11,234)
Net non-core items   9,448    426    (2,027)   (3,385)   31,738 
Core earnings (non-GAAP)  $264,300   $202,323   $133,985   $73,838   $269,566 
                          
Diluted earnings per share  $2.31   $1.83   $1.22   $0.68   $2.41 
Non-core items                         
Gain on sale of branches   (0.07)   (0.07)   (0.07)   (0.05)   - 
Merger-related costs   0.04    0.03    0.03    0.01    0.37 
Early retirement program   0.03    0.02    -    -    0.03 
Branch right-sizing (net)   0.12    0.02    0.02    -    0.03 
Tax effect (1)   (0.03)   -    0.01    0.01    (0.11)
Net non-core items   0.09    -    (0.01)   (0.03)   0.32 
Core diluted earnings per share (non-GAAP)  $2.40   $1.83   $1.21   $0.65   $2.73 
                          
(1) Effective tax rate of 26.135%.                         
                          
Reconciliation of Selected Non-Core Non-Interest Income and Expense Items (non-GAAP)
                          
YEAR-TO-DATE                         
Other income  $38,547   $27,990   $22,610   $12,801   $62,015 
Non-core items (1)   (8,738)   (8,463)   (8,093)   (5,889)   - 
Core other income (non-GAAP)  $29,809   $19,527   $14,517   $6,912   $62,015 
                          
Non-interest expense  $493,495   $365,360   $246,411   $128,813   $461,112 
Non-core items (1)   (21,529)   (9,040)   (5,350)   (1,306)   (42,972)
Core non-interest expense (non-GAAP)  $471,966   $356,320   $241,061   $127,507   $418,140 
                          
Salaries and employee benefits  $242,474   $186,712   $125,568   $67,924   $227,795 
Non-core items (1)   (3,085)   (2,941)   (493)   -    (3,464)
Core salaries and employee benefits (non-GAAP)  $239,389   $183,771   $125,075   $67,924   $224,331 
                          
Merger related costs  $4,531   $3,800   $2,898   $1,068   $36,379 
Non-core items (1)   (4,531)   (3,800)   (2,898)   (1,068)   (36,379)
Core merger related costs (non-GAAP)  $-   $-   $-   $-   $- 
                          
Other operating expenses  $173,960   $119,618   $81,439   $41,788   $138,852 
Non-core items (1)   (12,155)   (1,885)   (1,874)   (212)   (2,938)
Core other operating expenses (non-GAAP)  $161,805   $117,733   $79,565   $41,576   $135,914 

 

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

 

 Page 10

 

 

 

Simmons First National Corporation              SFNC
Reconciliation Of Non-GAAP Financial Measures - End of Period            
For the Quarters Ended  Dec 31  Sep 30  Jun 30  Mar 31  Dec 31
(Unaudited)  2020  2020  2020  2020  2019
($ 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  $2,975,889   $2,941,474   $2,903,936   $2,844,633   $2,988,157 
Intangible assets:                         
Goodwill   (1,075,305)   (1,075,305)   (1,064,765)   (1,064,978)   (1,055,520)
Other intangible assets   (111,110)   (114,460)   (117,823)   (121,673)   (127,340)
Total intangibles   (1,186,415)   (1,189,765)   (1,182,588)   (1,186,651)   (1,182,860)
Tangible common stockholders' equity  $1,789,474   $1,751,709   $1,721,348   $1,657,982   $1,805,297 
                          
Total assets  $22,359,752   $21,437,395   $21,903,684   $20,841,352   $21,259,143 
Intangible assets:                         
Goodwill   (1,075,305)   (1,075,305)   (1,064,765)   (1,064,978)   (1,055,520)
Other intangible assets   (111,110)   (114,460)   (117,823)   (121,673)   (127,340)
Total intangibles   (1,186,415)   (1,189,765)   (1,182,588)   (1,186,651)   (1,182,860)
Tangible assets  $21,173,337   $20,247,630   $20,721,096   $19,654,701   $20,076,283 
                          
Paycheck protection program ("PPP") loans   (904,673)   (970,488)   (963,712)          
Total assets excluding PPP loans  $21,455,079   $20,466,907   $20,939,972           
Tangible assets excluding PPP loans  $20,268,664   $19,277,142   $19,757,384           
                          
Ratio of equity to assets   13.31%   13.72%   13.26%   13.65%   14.06%
Ratio of equity to assets excluding PPP loans   13.87%   14.38%   13.87%          
Ratio of tangible common equity to tangible assets   8.45%   8.65%   8.31%   8.44%   8.99%
Ratio of tangible common equity to tangible assets excluding PPP loans   8.83%   9.09%   8.71%          
                          
Calculation of Tangible Book Value per Share                         
                          
Total common stockholders' equity  $2,975,889   $2,941,474   $2,903,936   $2,844,633   $2,988,157 
Intangible assets:                         
Goodwill   (1,075,305)   (1,075,305)   (1,064,765)   (1,064,978)   (1,055,520)
Other intangible assets   (111,110)   (114,460)   (117,823)   (121,673)   (127,340)
Total intangibles   (1,186,415)   (1,189,765)   (1,182,588)   (1,186,651)   (1,182,860)
Tangible common stockholders' equity  $1,789,474   $1,751,709   $1,721,348   $1,657,982   $1,805,297 
Shares of common stock outstanding   108,077,662    109,023,781    108,994,389    108,966,331    113,628,601 
Book value per common share  $27.53   $26.98   $26.64   $26.11   $26.30 
Tangible book value per common share  $16.56   $16.07   $15.79   $15.22   $15.89 
                          
Calculation of Regulatory Tier 1 Leverage Ratio Excluding Average PPP Loans                         
                          
Total Tier 1 capital  $1,884,563   $1,868,173   $1,820,488           
                          
Adjusted average assets for leverage ratio  $20,765,127   $20,652,454   $20,742,824           
Average PPP loans   (937,544)   (967,152)   (645,172)          
Adjusted average assets excluding average PPP loans  $19,827,583   $19,685,302   $20,097,652           
                          
Tier 1 leverage ratio   9.08%   9.05%   8.78%          
Tier 1 leverage ratio excluding average PPP loans   9.50%   9.49%   9.06%          

 

 Page 11 

 

 

 

Simmons First National Corporation              SFNC
Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date         
For the Quarters Ended  Dec 31  Sep 30  Jun 30  Mar 31  Dec 31
(Unaudited)  2020  2020  2020  2020  2019
($ in thousands)               
Calculation of Core Return on Average Assets               
                
Net income  $52,955   $65,885   $58,789   $77,223   $52,709 
Net non-core items, net of taxes, adjustment   9,022    2,453    1,358    (3,385)   18,365 
Core earnings  $61,977   $68,338   $60,147   $73,838   $71,074 
                          
Average total assets  $21,852,094   $21,765,321   $21,822,273   $20,920,223   $20,041,890 
                          
Return on average assets   0.96%   1.20%   1.08%   1.48%   1.04%
Core return on average assets   1.13%   1.25%   1.11%   1.42%   1.41%
                          
Calculation of Return on Tangible Common Equity                         
                          
Net income  $52,955   $65,885   $58,789   $77,223   $52,709 
Amortization of intangibles, net of taxes   2,475    2,483    2,489    2,521    2,416 
Total income available to common stockholders  $55,430   $68,368   $61,278   $79,744   $55,125 
                          
Net non-core items, net of taxes   9,022    2,453    1,358    (3,385)   18,365 
Core earnings   61,977    68,338    60,147    73,838    71,074 
Amortization of intangibles, net of taxes   2,475    2,483    2,489    2,521    2,416 
Total core income available to common stockholders  $64,452   $70,821   $62,636   $76,359   $73,490 
                          
Average common stockholders' equity  $2,955,865   $2,942,045   $2,879,337   $2,869,177   $2,611,143 
Average intangible assets:                         
   Goodwill   (1,075,305)   (1,064,893)   (1,064,955)   (1,055,498)   (997,004)
   Other intangibles   (113,098)   (116,385)   (120,111)   (125,746)   (118,311)
Total average intangibles   (1,188,403)   (1,181,278)   (1,185,066)   (1,181,244)   (1,115,315)
Average tangible common stockholders' equity  $1,767,462   $1,760,767   $1,694,271   $1,687,933   $1,495,828 
                          
Return on average common equity   7.13%   8.91%   8.21%   10.83%   8.01%
Return on tangible common equity   12.48%   15.45%   14.55%   19.00%   14.62%
Core return on average common equity   8.34%   9.24%   8.40%   10.35%   10.80%
Core return on tangible common equity   14.51%   16.00%   14.87%   18.19%   19.49%
                          
Calculation of Efficiency Ratio (1)                         
                          
Non-interest expense  $128,135   $118,949   $117,598   $128,813   $142,095 
Non-core non-interest expense adjustment   (12,489)   (3,690)   (4,044)   (1,306)   (24,868)
Other real estate and foreclosure expense adjustment   (545)   (600)   (242)   (319)   (1,063)
Amortization of intangibles adjustment   (3,351)   (3,362)   (3,369)   (3,413)   (3,270)
Efficiency ratio numerator  $111,750   $111,297   $109,943   $123,775   $112,894 
                          
Net-interest income  $154,960   $153,610   $163,681   $167,483   $167,066 
Non-interest income   44,056    71,851    50,227    82,394    45,630 
Non-core non-interest income adjustment   (275)   (370)   (2,204)   (5,889)   - 
Fully tax-equivalent adjustment (effective tax rate of 26.135%)   3,482    2,864    2,350    2,305    2,172 
Gain on sale of securities   (16)   (22,305)   (390)   (32,095)   (377)
Efficiency ratio denominator  $202,207   $205,650   $213,664   $214,198   $214,491 
                          
Efficiency ratio (1)   55.27%   54.12%   51.46%   57.79%   52.63%

 

(1) Efficiency ratio is core non-interest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and non-interest revenues, excluding gains and losses from securities transactions and non-core items.

 

 Page 12   

 

 

 

Simmons First National Corporation              SFNC
Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date (continued)         
For the Quarters Ended  Dec 31  Sep 30  Jun 30  Mar 31  Dec 31
(Unaudited)  2020  2020  2020  2020  2019
($ in thousands)               
Calculation of Core Net Interest Margin               
                
Net interest income  $154,960   $153,610   $163,681   $167,483   $167,066 
Fully tax-equivalent adjustment (effective tax rate of 26.135%)   3,482    2,864    2,350    2,305    2,172 
Fully tax-equivalent net interest income   158,442    156,474    166,031    169,788    169,238 
                          
Total accretable yield   (8,999)   (8,948)   (11,723)   (11,837)   (15,100)
Core net interest income  $149,443   $147,526   $154,308   $157,951   $154,138 
                          
PPP loan and excess liquidity interest income   (6,983)   (6,131)   (5,623)          
Net interest income adjusted for PPP loans and liquidity  $151,459   $150,343   $160,408           
                          
Average earning assets  $19,573,651   $19,415,314   $19,517,475   $18,581,491   $17,753,004 
Average PPP loan balance and excess liquidity   (2,837,125)   (2,359,928)   (2,071,411)          
Average earning assets adjusted for PPL loans and liquidity  $16,736,526   $17,055,386   $17,446,064           
                          
Net interest margin   3.22%   3.21%   3.42%   3.68%   3.78%
Core net interest margin   3.04%   3.02%   3.18%   3.42%   3.44%
Net interest margin adjusted for PPP loans and liquidity   3.60%   3.51%   3.70%          
                          
Calculation of Core Loan Yield                         
                          
Loan interest income (FTE)  $160,306   $163,379   $177,168   $187,566   $193,402 
Total accretable yield   (8,999)   (8,948)   (11,723)   (11,837)   (15,100)
Core loan interest income  $151,307   $154,431   $165,445   $175,729   $178,302 
PPP loan interest income   (6,457)   (5,782)   (3,733)          
Core loan interest income without PPP loans  $144,850   $148,649   $161,712           
                          
Average loan balance  $13,457,077   $14,315,014   $14,731,306   $14,548,853   $14,144,703 
Average PPP loan balance   (937,544)   (967,152)   (645,172)          
Average loan balance without PPP loans  $12,519,533   $13,347,862   $14,086,134           
                          
Core loan yield   4.47%   4.29%   4.52%   4.86%   5.00%
Core loan yield without PPP loans   4.60%   4.43%   4.62%          
                          
Calculation of Adjusted Pre-Tax, Pre-Provision (PTPP) Earnings                         
                          
Net income available to common stockholders  $52,955   $65,885   $58,789   $77,223   $52,709 
Provision for income taxes   10,970    17,633    15,593    20,694    12,976 
Provision for credit losses (including provision for unfunded commitments)   6,943    22,981    21,915    23,134    4,903 
(Gain) loss on sale of securities   (16)   (22,305)   (390)   (32,095)   (377)
Net pre-tax non-core items   12,214    3,320    1,840    (4,583)   24,868 
Adjusted Pre-tax, pre-provision (PTPP) earnings  $83,066   $87,514   $97,747   $84,373   $95,079 

 

 

 Page 13 

 

 

 

Simmons First National Corporation              SFNC
Reconciliation Of Non-GAAP Financial Measures - Year-to-Date            
For the Quarters Ended  Dec 31  Sep 30  Jun 30  Mar 31  Dec 31
(Unaudited)  2020  2020  2020  2020  2019
($ in thousands)               
Calculation of Core Return on Average Assets               
                
Net income  $254,852   $201,897   $136,012   $77,223   $237,828 
Net non-core items, net of taxes, adjustment   9,448    426    (2,027)   (3,385)   31,738 
Core earnings  $264,300   $202,323   $133,985   $73,838   $269,566 
                          
Average total assets  $21,590,745   $21,503,564   $21,371,248   $20,920,223   $17,871,748 
                          
Return on average assets   1.18%   1.25%   1.28%   1.48%   1.33%
Core return on average assets   1.22%   1.26%   1.26%   1.42%   1.51%
                          
Calculation of Return on Tangible Common Equity                         
                          
Net income  $254,852   $201,897   $136,012   $77,223   $237,828 
Amortization of intangibles, net of taxes   9,968    7,493    5,010    2,521    8,720 
Total income available to common stockholders  $264,820   $209,390   $141,022   $79,744   $246,548 
                          
Net non-core items, net of taxes   9,448    426    (2,027)   (3,385)   31,738 
Core earnings   264,300    202,323    133,985    73,838    269,566 
Amortization of intangibles, net of taxes   9,968    7,493    5,010    2,521    8,720 
Total core income available to common stockholders  $274,268   $209,816   $138,995   $76,359   $278,286 
                          
Average common stockholders' equity  $2,921,039   $2,910,366   $2,894,351   $2,869,177   $2,396,024 
Average intangible assets:                         
   Goodwill   (1,065,190)   (1,061,793)   (1,060,226)   (1,055,498)   (921,635)
   Other intangibles   (118,812)   (120,731)   (122,928)   (125,746)   (104,000)
Total average intangibles   (1,184,002)   (1,182,524)   (1,183,154)   (1,181,244)   (1,025,635)
Average tangible common stockholders' equity  $1,737,037   $1,727,842   $1,711,197   $1,687,933   $1,370,389 
                          
Return on average common equity   8.72%   9.27%   9.45%   10.83%   9.93%
Return on tangible common equity   15.25%   16.19%   16.57%   19.00%   17.99%
Core return on average common equity   9.05%   9.29%   9.31%   10.35%   11.25%
Core return on tangible common equity   15.79%   16.22%   16.33%   18.19%   20.31%
                          
Calculation of Efficiency Ratio (1)                         
                          
Non-interest expense  $493,495   $365,360   $246,411   $128,813   $461,112 
Non-core non-interest expense adjustment   (21,529)   (9,040)   (5,350)   (1,306)   (42,972)
Other real estate and foreclosure expense adjustment   (1,706)   (1,161)   (561)   (319)   (3,282)
Amortization of intangibles adjustment   (13,495)   (10,144)   (6,782)   (3,413)   (11,805)
Efficiency ratio numerator  $456,765   $345,015   $233,718   $123,775   $403,053 
                          
Net-interest income  $639,734   $484,774   $331,164   $167,483   $601,753 
Non-interest income   248,528    204,472    132,621    82,394    205,031 
Non-core non-interest income adjustment   (8,738)   (8,463)   (8,093)   (5,889)   - 
Fully tax-equivalent adjustment (effective tax rate of 26.135%)   11,001    7,519    4,655    2,305    7,322 
Gain on sale of securities   (54,806)   (54,790)   (32,485)   (32,095)   (13,314)
Efficiency ratio denominator  $835,719   $633,512   $427,862   $214,198   $800,792 
                          
Efficiency ratio (1)   54.66%   54.46%   54.62%   57.79%   50.33%

 

(1) Efficiency ratio is core non-interest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and non-interest revenues, excluding gains and losses from securities transactions and non-core items.

 

Page 14

 

 

 

Simmons First National Corporation              SFNC
Reconciliation Of Non-GAAP Financial Measures - Year-to-Date (continued)         
For the Quarters Ended  Dec 31  Sep 30  Jun 30  Mar 31  Dec 31
(Unaudited)  2020  2020  2020  2020  2019
($ in thousands)               
Calculation of Core Net Interest Margin               
                
Net interest income  $639,734   $484,774   $331,164   $167,483   $601,753 
Fully tax-equivalent adjustment (effective tax rate of 26.135%)   11,001    7,519    4,655    2,305    7,322 
Fully tax-equivalent net interest income   650,735    492,293    335,819    169,788    609,075 
                          
Total accretable yield   (41,507)   (32,508)   (23,560)   (11,837)   (41,244)
Core net interest income  $609,228   $459,785   $312,259   $157,951   $567,831 
Average earning assets  $19,272,886   $19,172,318   $19,049,487   $18,581,491   $15,824,571 
                          
Net interest margin   3.38%   3.43%   3.55%   3.68%   3.85%
Core net interest margin   3.16%   3.20%   3.30%   3.42%   3.59%
                          
Calculation of Core Loan Yield                         
                          
Loan interest income (FTE)  $688,600   $528,294   $364,915   $187,566   $710,935 
Total accretable yield   (41,507)   (32,508)   (23,560)   (11,837)   (41,244)
Core loan interest income  $647,093   $495,786   $341,355   $175,729   $669,691 
Average loan balance  $14,260,689   $14,530,938   $14,640,082   $14,548,853   $12,938,013 
                          
Core loan yield   4.54%   4.56%   4.69%   4.86%   5.18%
                          
Calculation of Adjusted Pre-Tax, Pre-Provision (PTPP) Earnings                         
                          
Net income available to common stockholders  $254,852   $201,897   $136,012   $77,223   $237,828 
Provision for income taxes   64,890    53,920    36,287    20,694    64,265 
Provision for credit losses (including provision for unfunded commitments)   74,973    68,030    45,049    23,134    43,240 
(Gain) loss on sale of securities   (54,806)   (54,790)   (32,485)   (32,095)   (13,314)
Net pre-tax non-core items   12,791    577    (2,743)   (4,583)   42,972 
Adjusted Pre-tax, pre-provision (PTPP) earnings  $352,700   $269,634   $182,120   $84,373   $374,991 

 

 

 

 

 Page 15 

 

 


The following information was filed by Simmons First National Corp (SFNC) on Tuesday, January 26, 2021 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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