Exhibit 99.1

 

 

 

 

For Immediate Release: July 21, 2020

 

SIMMONS REPORTS SECOND QUARTER 2020 EARNINGS

 

Pine Bluff, AR – Simmons First National Corporation (NASDAQ: SFNC) (the “Company” or “Simmons”) today announced net income of $58.8 million for the quarter ended June 30, 2020, compared to $55.6 million for the same period in 2019, an increase of $3.2 million, or 5.7%. Diluted earnings per share were $0.54, a decrease of $0.04, or 6.9%, compared to the same period in the prior year. Included in second quarter 2020 results were $3.0 million in net after-tax merger-related, early retirement program and branch right-sizing costs as well as a $1.6 million after-tax gain associated with the sale of branches.

 

Excluding the impact of these items, core earnings were $60.1 million for the quarter ended June 30, 2020, compared to $65.5 million for the quarter ended June 30, 2019, a decrease of $5.3 million, or 8.1%. Core diluted earnings per share were $0.55, a decrease of $0.13, or 19.1%, from the same period in 2019.

 

Year-to-date net income for the first half of 2020 was $136.0 million, or $1.22 diluted earnings per share, compared to $103.3 million, or $1.09 diluted earnings per share, for the same period in 2019. Excluding $2.0 million in net after-tax merger-related, early retirement program and branch right-sizing costs and the gains on the sales of branches in south Texas and Colorado, year-to-date core earnings for 2020 were $134.0 million, an increase of $19.5 million compared to the same period last year. Core diluted earnings per share for the first half of 2020 were $1.21, equal to the same period in 2019.

 

“Our associates at Simmons Bank have done an amazing job of adapting to the changes that have occurred over the past four months,” said George A. Makris, Jr., chairman and CEO of Simmons First National Corporation. “We continue to operate in an uncertain environment, and we will continue to adjust as necessary. We have consolidated various operations to provide capacity for continued service to our customers and communities. Our digital banking options have been very well received by our customers, and we expect to continue to see the trend toward more self-service. We need a sustainable plan for the opening of the economy, including public education across the country. We remain optimistic we will get one soon.”

 

Selected Highlights: 2nd Qtr 2020 1st Qtr 2020 2nd Qtr 2019
Net income $58.8 million $77.2 million $55.6 million
Diluted earnings per share $0.54 $0.68 $0.58
Return on avg assets 1.08% 1.48% 1.28%
Return on avg common equity 8.21% 10.83% 9.48%
Return on tangible common equity (1) 14.55% 19.00% 17.40%
       
Core earnings (2) $60.1 million $73.8 million $65.5 million
Core diluted earnings per share (2) $0.55 $0.65 $0.68
Core return on avg assets (2) 1.11% 1.42% 1.51%
Core return on avg common equity (2) 8.40% 10.35% 11.16%
Core return on tangible common equity (1)(2) 14.87% 18.19% 20.36%
Efficiency ratio (3) 49.12% 56.38% 49.88%
Pre-tax, pre-provision (PTPP) earnings (2) $97.7 million $84.4 million $88.8 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. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.
(3)Efficiency ratio is noninterest expense before foreclosed property expense, 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) 2nd Qtr 2020 1st Qtr 2020 2nd Qtr 2019
Total loans $14.61 $14.37 $13.13

 

Total loans were $14.6 billion at June 30, 2020, an increase of $1.5 billion, or 11.3%, compared to June 30, 2019, primarily due to The Landrum Company (“Landrum”) merger completed during the fourth quarter 2019. On a linked-quarter basis (June 30, 2020 compared to March 31, 2020), total loans increased $232.6 million, or 1.6%. During the second quarter of 2020, the Company had $963.7 million in loan originations under the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act and an increase in agricultural loans of $26.2 million. These increases were partially offset by decreases in energy loan lending, commercial real estate and single-family real estate loan categories of $64.8 million, $149.7 million and $136.5 million, respectively.

 

Deposits

 

($ in billions) 2nd Qtr 2020 1st Qtr 2020 2nd Qtr 2019
Total deposits $16.6 $15.6 $13.5
Non-interest bearing deposits $4.6 $3.6 $2.9
Interest bearing deposits $9.0 $8.8 $7.3
Time deposits $3.0 $3.2 $3.3

 

Total deposits were $16.6 billion at June 30, 2020, an increase of $3.1 billion, or 22.9%, since June 30, 2019, primarily due to the Landrum merger. On a linked-quarter basis, total deposits increased $1.1 billion, or 6.8%, primarily due to the $1.0 billion increase in non-interest bearing deposits. This increase was partially offset by a decrease in brokered funds of $308.9 million during the second quarter.

 

Net Interest Income

 

  2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
3rd Qtr
2019
2nd Qtr
2019
Loan yield (1) 4.84% 5.19% 5.43% 5.47% 5.58%
Core loan yield (1) (2) 4.52% 4.86% 5.00% 5.19% 5.26%
Security yield (1) 2.50% 2.63% 2.73% 2.87% 3.06%
Cost of interest bearing deposits 0.59% 1.03% 1.22% 1.40% 1.37%
Cost of deposits (3) 0.44% 0.80% 0.94% 1.09% 1.07%
Cost of borrowed funds 1.84% 2.06% 2.30% 2.52% 2.50%
Net interest margin (1) 3.42% 3.68% 3.78% 3.82% 3.94%
Core net interest margin (1) (2) 3.18% 3.42% 3.44% 3.59% 3.67%

 

(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 second quarter of 2020 was $163.7 million, an increase of $14.3 million, or 9.5%, from the same period of 2019, primarily due to the 78 basis point decline in the cost of interest bearing deposits year over year. Included in interest income was the yield accretion recognized on loans acquired of $11.7 million and $10.2 million for the second quarters of 2020 and 2019, respectively.

 

The loan yield was 4.84% for the quarter ended June 30, 2020, while the core loan yield, which excludes the accretion, was 4.52% for the same period. The decrease in the loan yield during the second quarter of 2020 was primarily driven by the lower yielding PPP loans originated during the quarter. The PPP loan yield was approximately 2.33% (including accretion of net fees), which decreased the loan yield by approximately 10 basis points.

 

Net interest margin (FTE) was 3.42% for the quarter ended June 30, 2020, while the core net interest margin, which excludes the accretion, was 3.18% for the same period. The decrease in the net interest margin during the second quarter of 2020 was primarily driven by the additional liquidity and the lower yielding PPP loans, which decreased the net interest margin by approximately 25 basis points.

 

 

 

 

Non-Interest Income

 

Non-interest income for the second quarter of 2020 was $50.2 million, an increase of $10.3 million compared to the same period in the previous year. During the second quarter 2020, the Company recognized a $2.2 million gain associated with the sale of the branches recorded in other income, which the Company considers a non-core item.

 

The increase in non-interest income was primarily due to the increase in mortgage lending income driven by the current low mortgage interest rate environment. The decrease in service charges on deposit accounts was primarily attributable to a lower number of customer transactions, related to the impact of the COVID-19 pandemic.

 

Selected Non-Interest Income Items

($ in millions)

2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
3rd Qtr
2019
2nd Qtr
2019
Service charges on deposit accounts $8.6 $13.3 $13.3 $10.8 $10.6
Mortgage lending income $12.5 $5.0 $4.0 $4.5 $3.7
SBA lending income $0.2 $0.3 $0.3 $1.0 $0.9
Debit and credit card fees $8.0 $7.9 $8.9 $7.1 $7.2
Gain on sale of securities $0.4 $32.1 $0.4 $7.4 $2.8
Other income $9.8 $12.8 $7.1 $44.7 $6.1
           
Core other income(1) $7.6 $6.9 $7.1 $44.7 $6.1

 

(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.

 

Non-Interest Expense

 

Non-interest expense for the second quarter of 2020 was $112.6 million, an increase of $1.9 million compared to the second quarter of 2019. Included in this quarter were $4.0 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 $108.6 million for the second quarter of 2020, an increase of $11.2 million compared to the same period in 2019, primarily the result of the Landrum merger and additional software and technology costs related to the Company’s Next Generation Banking (“NGB”) initiative.

 

The efficiency ratio for the second quarter of 2020 was 49.12%, compared to 49.88% for the same period in 2019.

 

Selected Non-Interest Expense Items

($ in millions)

2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
3rd Qtr
2019
2nd Qtr
2019
Salaries and employee benefits $57.6 $67.9 $63.2 $52.1 $56.1
Merger related costs $1.8 $1.1 $24.8 $2.6 $7.5
Other operating expenses $34.7 $38.8 $38.0 $37.9 $32.9
           
Core salaries and employee benefits(1) $57.2 $67.9 $63.2 $51.9 $53.2
Core merger related costs(1) - - - - -
Core other operating expenses(1) $33.0 $38.6 $38.0 $37.8 $30.0

 

(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.

 

On a linked-quarter basis, salaries and employee benefits decreased by $10.3 million, which included the impact of cost savings from the Landrum merger. The decrease was primarily driven by the following categories:

 

·Employee benefits - $3.1 million decrease (payroll taxes, insurance utilization, and other employee benefits)
·Salaries - $2.3 million decrease
·Incentive based plans - $4.9 million decrease (executive, lender and retail incentive plans)

 

On a linked-quarter basis, other operating expenses decreased $4.1 million. The remaining decrease was primarily related to cost savings from the Landrum merger and lower operating expenses due to the impact of COVID-19.

 

 

 

 

Early in 2020, the Company offered qualifying associates an early retirement option resulting in $493,000 of non-core expense during the second quarter. 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 June 2020, with estimated net annual cost savings of approximately $2.4 million related to these locations. In addition, the Company expects to close an additional 23 branch locations and one loan production office during the fourth quarter of 2020, with an expected net annual cost savings of approximately $6.8 million.

 

Asset Quality

 

  2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
3rd Qtr
2019
2nd Qtr
2019
Allowance for credit losses to total loans 1.59% 1.69% 0.47% 0.51% 0.49%
Allowance for credit losses to non-performing loans 175% 154% 74% 78% 60%
Non-performing loans to total loans 0.91% 1.10% 0.64% 0.65% 0.81%
Net charge-off ratio (annualized) 1.04% 0.07% 0.09% 0.59% 0.11%
Net charge-off ratio YTD (annualized) 0.56% 0.07% 0.24% 0.30% 0.15%

 

At June 30, 2020, the allowance for credit losses was $231.6 million. Provision for credit losses for the second quarter of 2020 was $26.9 million. Included in total loans was $963.7 million of government guaranteed PPP loans. Excluding the PPP loans, the allowance for credit losses to total loans was 1.70%.

 

Net charge-offs for the second quarter of 2020 were $38.2 million, of which $32.6 million were from loans included in the energy lending portfolios acquired from Bank SNB and Southwest Bank in 2017. Of the second quarter charge-offs, $27.8 million was specifically reserved for and included in the March 31, 2020 allowance for credit loss. Therefore, additional provision related to these charges was not required.

 

Foreclosed Assets and Other Real Estate Owned

 

At June 30, 2020, foreclosed assets and other real estate owned were $14.1 million, decreases of $10.7 million, or 43.0%, compared to the same period in 2019 and $6.7 million, or 32.2% from March 31, 2020. The composition of these assets is divided into three types:

 

 

($ in millions)

2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
3rd Qtr
2019
2nd Qtr
2019
Closed bank branches and branch sites $2.7 $8.8 $5.7 $5.9 $6.5
Foreclosed assets – acquired $9.2 $9.2 $10.3 $10.1 $13.3
Foreclosed assets – legacy $2.2 $2.8 $3.1 $3.6 $5.0

 

Capital

 

  2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
3rd Qtr
2019
2nd Qtr
2019
Stockholders’ equity to total assets 13.3% 13.7% 14.1% 14.3% 13.8%
Tangible common equity to tangible assets(1) 8.3% 8.4% 9.0% 9.1% 8.5%
Regulatory common equity tier 1 ratio 11.9% 11.1% 10.9% 10.3% 9.8%
Regulatory tier 1 leverage ratio 8.8% 9.0% 9.6% 9.1% 8.9%
Regulatory tier 1 risk-based capital ratio 11.9% 11.1% 10.9% 10.3% 9.8%
Regulatory total risk-based capital ratio 14.9% 14.1% 13.7% 13.2% 12.7%

 

(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 June 30, 2020, common stockholders' equity was $2.9 billion. Book value per share was $26.64 and tangible book value per share was $15.79 at June 30, 2020. The ratio of stockholders’ equity to total assets was 13.3% at June 30, 2020 while the tangible common equity to tangible assets was 8.3% at June 30, 2020. As of June 30, 2020, PPP loans totaled $963.7 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 8.7% and the regulatory tier 1 leverage ratio was 9.1%.

 

No shares have been repurchased under the Company’s stock repurchase program since March 31, 2020. Market conditions and the Company’s capital needs will drive the decisions regarding additional, future stock repurchases.

 

Digital Banking

 

Since the end of February 2020, the Company has added over 38,000 new digital banking users, a 23% increase.  More than 78% of deposit transaction accounts are now enrolled in digital banking.  For the first time, in March, the Company processed more weekly transactions using the digital channels than at the branches.  During May 2020, the Company completed the conversion of all consumer customers to the new online platform.  All consumer customers are now on the same online and mobile platforms, including acquired institutions.

 

COVID-19 Impact

 

Through June 30, 2020, the Company originated over 7,800 PPP loans with an average balance of $123,000 per loan. Approximately 93% of the PPP loans had a balance less than $350,000.

 

PPP Loans

as of June 30, 2020

# of

Loans

 

Balance

($ in millions)

 
Loan balance less than $350,000 7,286 93% $392.3 41%
Loan balance $350,000 or less than $2 million 478 6% $355.4 37%
Loan balance $2 million to $10 million 62 1% $216.0 22%
Total 7,826 100% $963.7 100%

 

In March and in response to the pandemic, the Company announced temporary closure of 52 branches and has been focusing on the enhanced digital banking experience. While the majority of these branches have been reopened, the Company has continued to review its branch network.

 

Simmons First National Corporation

 

Simmons First National Corporation is a financial holding company headquartered in Pine Bluff, Arkansas, with total consolidated assets of approximately $21.9 billion as of June 30, 2020, conducting financial operations in Arkansas, 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 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. CDT today, Tuesday, July 21, 2020. 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 9275743. 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, gain on sale of branches, early retirement program expenses and branch right-sizing expenses. In addition, the Company also presents certain figures based on tangible common stockholders’ equity and tangible book value, which exclude goodwill and other intangible assets. The Company further presents certain figures that are exclusive of PPP loans. 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, 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 and completed and future branch closures, the adequacy of the allowance for credit losses, and the ability of the Company to manage the impact of the COVID-19 pandemic. 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 in response to COVID-19, the severity and duration of the pandemic, including whether there is a “second wave” as a result of the loosening of governmental restrictions, 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; potential 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 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; 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 its Form 10-K for the year ended December 31, 2019, which has been filed with, and is 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  Jun 30  Mar 31  Dec 31  Sep 30  Jun 30
(Unaudited)  2020  2020  2019  2019  2019
($ in thousands)               
ASSETS                         
Cash and non-interest bearing balances due from banks  $234,998   $244,123   $277,208   $161,440   $145,491 
Interest bearing balances due from banks and federal funds sold   2,310,162    1,493,076    719,415    368,530    509,765 
Cash and cash equivalents   2,545,160    1,737,199    996,623    529,970    655,256 
Interest bearing balances due from banks - time   4,561    4,309    4,554    5,041    5,041 
Investment securities - held-to-maturity   51,720    53,968    40,927    42,237    47,455 
Investment securities - available-for-sale   2,496,896    2,466,640    3,288,343    2,210,931    2,191,573 
Mortgage loans held for sale   120,034    49,984    58,102    50,099    34,999 
Other assets held for sale   399    115,315    260,332    383    397 
Loans:                         
Loans   14,606,900    14,374,277    14,425,704    13,003,549    13,128,125 
Allowance for credit losses on loans   (231,643)   (243,195)   (68,244)   (66,590)   (64,179)
Net loans   14,375,257    14,131,082    14,357,460    12,936,959    13,063,946 
Premises and equipment   478,896    484,990    492,384    378,678    370,551 
Premises held for sale   4,576                 
Foreclosed assets and other real estate owned   14,111    20,805    19,121    19,576    24,761 
Interest receivable   79,772    57,039    62,707    53,966    54,781 
Bank owned life insurance   256,643    255,197    254,152    234,655    233,345 
Goodwill   1,064,765    1,064,978    1,055,520    926,648    926,450 
Other intangible assets   117,823    121,673    127,340    101,149    104,096 
Other assets   293,071    278,173    241,578    268,219    224,784 
Total assets  $21,903,684   $20,841,352   $21,259,143   $17,758,511   $17,937,435 
                          
LIABILITIES AND STOCKHOLDERS' EQUITY                         
Deposits:                         
Non-interest bearing transaction accounts  $4,608,098   $3,572,244   $3,741,093   $3,044,330   $2,954,032 
Interest bearing transaction accounts and savings deposits   8,978,045    8,840,678    9,090,878    7,337,571    7,258,005 
Time deposits   3,029,975    3,146,811    3,276,969    3,086,108    3,304,176 
Total deposits   16,616,118    15,559,733    16,108,940    13,468,009    13,516,213 
Federal funds purchased and securities sold under agreements to repurchase   387,025    377,859    150,145    116,536    130,470 
Other borrowings   1,393,689    1,396,829    1,297,599    1,098,395    1,324,094 
Subordinated notes and debentures   382,604    388,396    388,260    354,223    354,132 
Other liabilities held for sale       58,405    159,853        162 
Accrued interest and other liabilities   219,545    214,730    165,422    174,277    142,851 
Total liabilities   18,998,981    17,995,952    18,270,219    15,211,440    15,467,922 
                          
Stockholders' equity:                         
Preferred stock   767    767    767         
Common stock   1,090    1,090    1,136    966    966 
Surplus   2,029,383    2,026,420    2,117,282    1,708,058    1,705,262 
Undivided profits   819,153    778,893    848,848    814,338    747,969 
Accumulated other comprehensive income (loss):                         
Unrealized accretion (depreciation) on AFS securities   54,310    38,230    20,891    23,709    15,316 
Total stockholders' equity   2,904,703    2,845,400    2,988,924    2,547,071    2,469,513 
Total liabilities and stockholders' equity  $21,903,684   $20,841,352   $21,259,143   $17,758,511   $17,937,435 

 

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Simmons First National Corporation              SFNC
Consolidated Statements of Income - Quarter-to-Date               
For the Quarters Ended  Jun 30  Mar 31  Dec 31  Sep 30  Jun 30
(Unaudited)  2020  2020  2019  2019  2019
($ in thousands, except per share data)               
INTEREST INCOME                         
Loans  $176,910   $187,566   $193,402   $179,971   $178,122 
Interest bearing balances due from banks and federal funds sold   603    2,441    2,625    1,586    1,121 
Investment securities   13,473    18,943    16,962    14,467    15,666 
Mortgage loans held for sale   668    281    402    382    332 
TOTAL INTEREST INCOME   191,654    209,231    213,391    196,406    195,241 
INTEREST EXPENSE                         
Time deposits   10,803    13,323    16,198    15,573    14,606 
Other deposits   7,203    17,954    20,331    21,363    20,190 
Federal funds purchased and securities sold under agreements to repurchase   337    759    368    249    257 
Other borrowings   4,963    4,877    4,615    5,381    6,219 
Subordinated notes and debentures   4,667    4,835    4,813    4,576    4,541 
TOTAL INTEREST EXPENSE   27,973    41,748    46,325    47,142    45,813 
NET INTEREST INCOME   163,681    167,483    167,066    149,264    149,428 
Provision for credit losses   26,915    26,134    4,903    21,973    7,079 
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES   136,766    141,349    162,163    127,291    142,349 
NON-INTEREST INCOME                         
Trust income   7,253    7,151    7,430    6,108    5,794 
Service charges on deposit accounts   8,570    13,328    13,332    10,825    10,557 
Other service charges and fees   1,489    1,588    1,915    1,308    1,312 
Mortgage lending income   12,459    5,046    4,029    4,509    3,656 
SBA lending income   245    296    321    956    895 
Investment banking income   571    877    822    513    360 
Debit and credit card fees   7,996    7,914    8,920    7,059    7,212 
Bank owned life insurance income   1,445    1,298    1,411    1,302    1,260 
Gain on sale of securities, net   390    32,095    377    7,374    2,823 
Other income   9,809    12,801    7,073    44,721    6,065 
TOTAL NON-INTEREST INCOME   50,227    82,394    45,630    84,675    39,934 
NON-INTEREST EXPENSE                         
Salaries and employee benefits   57,644    67,924    63,235    52,065    56,128 
Occupancy expense, net   9,217    9,510    9,272    8,342    6,919 
Furniture and equipment expense   6,144    5,723    5,758    4,898    4,206 
Other real estate and foreclosure expense   274    325    1,089    1,125    591 
Deposit insurance   2,838    2,475    (134)       2,510 
Merger-related costs   1,830    1,068    24,831    2,556    7,522 
Other operating expenses   34,651    38,788    38,044    37,879    32,867 
TOTAL NON-INTEREST EXPENSE   112,598    125,813    142,095    106,865    110,743 
NET INCOME BEFORE INCOME TAXES   74,395    97,930    65,698    105,101    71,540 
Provision for income taxes   15,593    20,694    12,976    23,275    15,616 
NET INCOME   58,802    77,236    52,722    81,826    55,924 
Preferred stock dividends   13    13    13        326 
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS  $58,789   $77,223   $52,709   $81,826   $55,598 
BASIC EARNINGS PER SHARE  $0.54   $0.68   $0.49   $0.85   $0.58 
DILUTED EARNINGS PER SHARE  $0.54   $0.68   $0.49   $0.84   $0.58 

 

 Page 2 

 

 

Simmons First National Corporation           SFNC
Consolidated Risk-Based Capital               
For the Quarters Ended  Jun 30  Mar 31  Dec 31  Sep 30  Jun 30
(Unaudited)  2020  2020  2019  2019  2019
($ in thousands)               
Tier 1 capital                         
Stockholders' equity  $2,904,703   $2,845,400   $2,988,924   $2,547,071   $2,469,513 
CECL transition provision (1)   130,480    134,558             
Disallowed intangible assets, net of deferred tax   (1,160,385)   (1,164,038)   (1,160,079)   (1,013,309)   (1,001,676)
Unrealized (gain) loss on AFS securities   (54,310)   (38,230)   (20,891)   (23,709)   (15,316)
Total Tier 1 capital   1,820,488    1,777,690    1,807,954    1,510,053    1,452,521 
                          
Tier 2 capital                         
Trust preferred securities and subordinated debt   382,604    388,396    388,260    354,223    354,132 
Qualifying allowance for loan losses and reserve for unfunded commitments   83,780    96,015    76,644    74,455    72,044 
Total Tier 2 capital   466,384    484,411    464,904    428,678    426,176 
Total risk-based capital  $2,286,872   $2,262,101   $2,272,858   $1,938,731   $1,878,697 
                          
Risk weighted assets  $15,362,175   $16,012,233   $16,554,081   $14,725,571   $14,825,253 
                          
Adjusted average assets for leverage ratio  $20,742,824   $19,832,219   $18,852,798   $16,681,527   $16,382,520 
                          
Ratios at end of quarter                         
Equity to assets   13.26%   13.65%   14.06%   14.34%   13.77%
Tangible common equity to tangible assets (2)   8.31%   8.44%   8.99%   9.08%   8.51%
Common equity Tier 1 ratio (CET1)   11.85%   11.10%   10.92%   10.25%   9.80%
Tier 1 leverage ratio   8.78%   8.96%   9.59%   9.05%   8.87%
Tier 1 risk-based capital ratio   11.85%   11.10%   10.92%   10.25%   9.80%
Total risk-based capital ratio   14.89%   14.13%   13.73%   13.17%   12.67%

 

(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  Jun 30  Mar 31  Dec 31  Sep 30  Jun 30
(Unaudited)  2020  2020  2019  2019  2019
($ in thousands)               
Investment Securities - End of Period                         
Held-to-Maturity                         
U.S. Government agencies  $   $   $   $   $999 
Mortgage-backed securities   25,980    27,121    10,796    11,549    12,225 
State and political subdivisions   24,777    25,985    27,082    28,692    32,236 
Other securities   963    862    3,049    1,996    1,995 
Total held-to-maturity (net of credit losses)   51,720    53,968    40,927    42,237    47,455 
Available-for-Sale                         
U.S. Treasury  $   $424,989   $449,729   $   $ 
U.S. Government agencies   210,921    161,289    194,249    178,139    197,656 
Mortgage-backed securities   1,154,086    1,179,837    1,742,945    1,337,794    1,345,760 
State and political subdivisions   1,054,068    678,243    880,524    681,202    636,558 
Other securities   77,821    22,282    20,896    13,796    11,599 
Total available-for-sale (net of credit losses)   2,496,896    2,466,640    3,288,343    2,210,931    2,191,573 
Total investment securities (net of credit losses)  $2,548,616   $2,520,608   $3,329,270   $2,253,168   $2,239,028 
Fair value - HTM investment securities  $53,751   $55,714   $41,855   $43,302   $48,640 
                          
Investment Securities - QTD Average                         
Taxable securities  $1,642,083   $2,324,188   $1,940,755   $1,561,308   $1,641,986 
Tax exempt securities   866,944    900,223    825,000    681,505    624,898 
Total investment securities - QTD average  $2,509,027   $3,224,411   $2,765,755   $2,242,813   $2,266,884 

 

 Page 4 

 

 

Simmons First National Corporation           SFNC
Consolidated Loans               
For the Quarters Ended  Jun 30  Mar 31  Dec 31  Sep 30  Jun 30
(Unaudited)  2020  2020  2019  2019  2019
($ in thousands)               
Loan Portfolio - End of Period                         
Consumer                         
Credit cards  $184,348   $188,596   $204,802   $195,083   $187,919 
Other consumer   214,024    267,870    249,195    215,283    216,144 
Total consumer   398,372    456,466    453,997    410,366    404,063 
Real Estate                         
Construction   2,010,256    2,024,118    2,248,673    2,081,595    1,975,179 
Single-family residential   2,207,087    2,343,543    2,414,753    1,951,842    1,998,655 
Other commercial real estate   6,316,444    6,466,104    6,358,514    5,758,511    5,983,488 
Total real estate   10,533,787    10,833,765    11,021,940    9,791,948    9,957,322 
Commercial                         
Commercial   3,038,216    2,314,472    2,451,119    2,215,539    2,249,078 
Agricultural   217,715    191,535    191,525    214,610    192,988 
Total commercial   3,255,931    2,506,007    2,642,644    2,430,149    2,442,066 
Other   418,810    578,039    307,123    371,086    324,674 
Total Loans  $14,606,900   $14,374,277   $14,425,704   $13,003,549   $13,128,125 

 

 Page 5 

 

 

Simmons First National Corporation           SFNC
Consolidated Allowance and Asset Quality               
For the Quarters Ended  Jun 30  Mar 31  Dec 31  Sep 30  Jun 30
(Unaudited)  2020  2020  2019  2019  2019
($ in thousands)               
Allowance for Credit Losses on Loans                         
Beginning balance, prior to adoption of ASC 326       $68,244   $66,590   $64,179   $60,555 
Impact of adopting ASC 326 (1)        151,377                
Beginning balance, after adoption of ASC 326  $243,195   $219,621                
                          
Loans charged off                         
Credit cards   1,053    1,441    1,287    1,117    1,039 
Other consumer   592    1,379    1,425    1,065    964 
Real estate   1,824    396    892    1,367    1,216 
Commercial   35,687    523    459    17,778    1,963 
Total loans charged off   39,156    3,739    4,063    21,327    5,182 
                          
Recoveries of loans previously charged off                         
Credit cards   272    225    287    223    271 
Other consumer   301    443    304    1,422    331 
Real estate   253    101    146    55    158 
Commercial   98    347    77    65    967 
Total recoveries   924    1,116    814    1,765    1,727 
Net loans charged off   38,232    2,623    3,249    19,562    3,455 
Provision for credit losses on loans   26,678    26,197    4,903    21,973    7,079 
Balance, end of quarter  $231,641   $243,195   $68,244   $66,590   $64,179 
                          
Non-performing assets                         
Non-performing loans                         
Nonaccrual loans  $131,888   $156,746   $91,723   $84,660   $106,670 
Loans past due 90 days or more   537    1,305    855    177    277 
Total non-performing loans   132,425    158,051    92,578    84,837    106,947 
Other non-performing assets                         
Foreclosed assets and other real estate owned   14,111    20,805    19,121    19,576    24,761 
Other non-performing assets   2,008    2,169    1,964    540    613 
Total other non-performing assets   16,119    22,974    21,085    20,116    25,374 
Total non-performing assets  $148,544   $181,025   $113,663   $104,953   $132,321 
Performing TDRs (troubled debt restructurings)  $3,960   $4,110   $4,411   $6,519   $6,246 
                          
Ratios                         
Allowance for credit losses to total loans   1.59%   1.69%   0.47%   0.51%   0.49%
Allowance for credit losses to non-performing loans   175%   154%   74%   78%   60%
Non-performing loans to total loans   0.91%   1.10%   0.64%   0.65%   0.81%
Non-performing assets (including performing TDRs) to total assets   0.70%   0.89%   0.56%   0.63%   0.77%
Non-performing assets to total assets   0.68%   0.87%   0.53%   0.59%   0.74%
Annualized net charge offs to total loans   1.04%   0.07%   0.09%   0.59%   0.11%
Annualized net credit card charge offs to total credit card loans   1.67%   2.29%   1.99%   1.82%   1.63%

 

(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
Jun 2020
  Three Months Ended
Mar 2020
  Three Months Ended
Jun 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  $2,190,878   $603    0.11%  $764,639   $2,441    1.28%  $276,370   $1,121    1.63%
Investment securities - taxable   1,642,083    7,131    1.75%   2,324,188    12,752    2.21%   1,641,986    11,066    2.70%
Investment securities - non-taxable (FTE)   866,944    8,434    3.91%   900,223    8,315    3.71%   624,898    6,209    3.99%
Mortgage loans held for sale   86,264    668    3.11%   43,588    281    2.59%   32,030    332    4.16%
Loans (FTE)   14,731,306    177,168    4.84%   14,548,853    187,747    5.19%   12,814,386    178,219    5.58%
Total interest earning assets (FTE)   19,517,475    194,004    4.00%   18,581,491    211,536    4.58%   15,389,670    196,947    5.13%
Non-earning assets   2,304,798              2,338,732              1,993,202           
Total assets  $21,822,273             $20,920,223             $17,382,872           
                                              
LIABILITIES AND STOCKHOLDERS' EQUITY                                             
Interest bearing liabilities:                                             
Interest bearing transaction and savings accounts  $9,138,563   $7,203    0.32%  $9,005,701   $17,954    0.80%  $7,139,356   $20,190    1.13%
Time deposits   3,057,153    10,803    1.42%   3,150,909    13,323    1.70%   3,072,246    14,606    1.91%
Total interest bearing deposits   12,195,716    18,006    0.59%   12,156,610    31,277    1.03%   10,211,602    34,796    1.37%
Federal funds purchased and securities sold under agreement to repurchase   392,633    337    0.35%   330,902    759    0.92%   133,242    257    0.77%
Other borrowings   1,395,109    4,963    1.43%   1,320,245    4,877    1.49%   1,277,450    6,219    1.95%
Subordinated notes and debentures   387,422    4,667    4.84%   388,330    4,835    5.01%   354,088    4,541    5.14%
Total interest bearing liabilities   14,370,880    27,973    0.78%   14,196,087    41,748    1.18%   11,976,382    45,813    1.53%
Non-interest bearing liabilities:                                             
Non-interest bearing deposits   4,354,781              3,602,678              2,834,452           
Other liabilities   216,508              251,514              207,500           
Total liabilities   18,942,169              18,050,279              15,018,334           
Stockholders' equity   2,880,104              2,869,944              2,364,538           
Total liabilities and stockholders' equity  $21,822,273             $20,920,223             $17,382,872           
Net interest income (FTE)       $166,031             $169,788             $151,134      
Net interest spread (FTE)             3.22%             3.40%             3.60%
Net interest margin (FTE) - quarter-to-date             3.42%             3.68%             3.94%
                                              
Net interest margin (FTE) - year-to-date             3.55%             3.68%             3.90%
                                              
Core net interest margin (FTE) - quarter-to-date (1)             3.18%             3.42%             3.67%
Core loan yield (FTE) - quarter-to-date (1)             4.52%             4.86%             5.26%
                                              
Core net interest margin (FTE) - year-to-date (1)             3.30%             3.42%             3.68%
Core loan yield (FTE) - year-to-date (1)             4.69%             4.86%             5.27%

 

(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  Jun 30  Mar 31  Dec 31  Sep 30  Jun 30
(Unaudited)  2020  2020  2019  2019  2019
($ in thousands, except share data)               
QUARTER-TO-DATE                         
Financial Highlights - GAAP                         
Net Income  $58,789   $77,223   $52,709   $81,826   $55,598 
Diluted earnings per share   0.54    0.68    0.49    0.84    0.58 
Return on average assets   1.08%   1.48%   1.04%   1.83%   1.28%
Return on average common equity   8.21%   10.83%   8.01%   13.70%   9.48%
Return on tangible common equity   14.55%   19.00%   14.62%   24.89%   17.40%
Net interest margin (FTE)   3.42%   3.68%   3.78%   3.82%   3.94%
FTE adjustment   2,350    2,305    2,172    1,843    1,706 
Amortization of intangibles   3,369    3,413    3,270    2,947    2,947 
Amortization of intangibles, net of taxes   2,489    2,521    2,416    2,176    2,177 
Average diluted shares outstanding   109,130,866    113,137,223    108,472,559    96,968,775    96,367,857 
Shares repurchased under plan       4,922,336    390,000         
Average price of shares repurchased       18.96    25.95         
Cash dividends declared per common share   0.17    0.17    0.16    0.16    0.16 
Financial Highlights - Core (non-GAAP)                         
Core earnings (excludes non-core items) (1)  $60,147   $73,838   $71,074   $83,963   $65,453 
Core diluted earnings per share (1)   0.55    0.65    0.66    0.87    0.68 
Core net interest margin (FTE) (2)   3.18%   3.42%   3.44%   3.59%   3.67%
Accretable yield on acquired loans   11,723    11,837    15,100    9,322    10,162 
Efficiency ratio (1)   49.12%   56.38%   52.63%   43.77%   49.88%
Core return on average assets (1)   1.11%   1.42%   1.41%   1.88%   1.51%
Core return on average common equity (1)   8.40%   10.35%   10.80%   14.06%   11.16%
Core return on tangible common equity (1)   14.87%   18.19%   19.49%   25.52%   20.36%
YEAR-TO-DATE                         
Financial Highlights - GAAP                         
Net Income  $136,012   $77,223   $237,828   $185,119   $103,293 
Diluted earnings per share   1.22    0.68    2.41    1.94    1.09 
Return on average assets   1.28%   1.48%   1.33%   1.44%   1.24%
Return on average common equity   9.45%   10.83%   9.93%   10.65%   9.05%
Return on tangible common equity   16.57%   19.00%   17.99%   19.27%   16.38%
Net interest margin (FTE)   3.55%   3.68%   3.85%   3.88%   3.90%
FTE adjustment   4,655    2,305    7,322    5,150    3,307 
Amortization of intangibles   6,782    3,413    11,805    8,535    5,588 
Amortization of intangibles, net of taxes   5,010    2,521    8,720    6,304    4,128 
Average diluted shares outstanding   111,083,999    113,137,223    98,796,628    95,450,732    94,588,739 
Cash dividends declared per common share   0.34    0.17    0.64    0.48    0.32 
Financial Highlights - Core (non-GAAP)                         
Core earnings (excludes non-core items) (1)  $133,985   $73,838   $269,566   $198,492   $114,529 
Core diluted earnings per share (1)   1.21    0.65    2.73    2.08    1.21 
Core net interest margin (FTE) (2)   3.30%   3.42%   3.59%   3.64%   3.68%
Accretable yield on acquired loans   23,560    11,837    41,244    26,144    16,822 
Efficiency ratio (1)   52.75%   56.38%   50.33%   49.49%   53.14%
Core return on average assets (1)   1.26%   1.42%   1.51%   1.55%   1.37%
Core return on average common equity (1)   9.31%   10.35%   11.25%   11.42%   10.04%
Core return on tangible common equity (1)   16.33%   18.19%   20.31%   20.62%   18.09%
END OF PERIOD                         
Book value per share  $26.64   $26.11   $26.30   $26.36   $25.57 
Tangible book value per share   15.79    15.22    15.89    15.73    14.90 
Shares outstanding   108,994,389    108,966,331    113,628,601    96,613,855    96,590,656 
Full-time equivalent employees   2,939    3,079    3,270    2,701    2,700 
Total number of financial centers   226    240    251    212    212 

 

 (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
Consolidated - Reconciliation of Core Earnings (non-GAAP)         
For the Quarters Ended  Jun 30  Mar 31  Dec 31  Sep 30  Jun 30
(Unaudited)  2020  2020  2019  2019  2019
($ in thousands, except per share data)               
QUARTER-TO-DATE                         
Net Income  $58,789   $77,223   $52,709   $81,826   $55,598 
Non-core items                         
Gain on sale of branches   (2,204)   (5,889)            
Merger-related costs   1,830    1,068    24,831    2,556    7,522 
Early retirement program   493            177    2,932 
Branch right-sizing   1,721    238    37    160    2,887 
Tax effect (1)   (482)   1,198    (6,503)   (756)   (3,486)
Net non-core items   1,358    (3,385)   18,365    2,137    9,855 
Core earnings (non-GAAP)  $60,147   $73,838   $71,074   $83,963   $65,453 
                          
Diluted earnings per share  $0.54   $0.68   $0.49   $0.84   $0.58 
Non-core items                         
Gain on sale of branches   (0.02)   (0.05)            
Merger-related costs   0.02    0.01    0.23    0.04    0.08 
Early retirement program                   0.03 
Branch right-sizing   0.02                0.03 
Tax effect (1)   (0.01)   0.01    (0.06)   (0.01)   (0.04)
Net non-core items   0.01    (0.03)   0.17    0.03    0.10 
Core diluted earnings per share (non-GAAP)  $0.55   $0.65   $0.66   $0.87   $0.68 
                          
YEAR-TO-DATE                         
Net Income  $136,012   $77,223   $237,828   $185,119   $103,293 
Non-core items                         
Gain on sale of branches   (8,093)   (5,889)            
Merger-related costs   2,898    1,068    36,379    11,548    8,992 
Early retirement program   493        3,464    3,464    3,287 
Branch right-sizing   1,959    238    3,129    3,092    2,932 
Tax effect (1)   716    1,198    (11,234)   (4,731)   (3,975)
Net non-core items   (2,027)   (3,385)   31,738    13,373    11,236 
Core earnings (non-GAAP)  $133,985   $73,838   $269,566   $198,492   $114,529 
                          
Diluted earnings per share  $1.22   $0.68   $2.41   $1.94   $1.09 
Non-core items                         
Gain on sale of branches   (0.07)   (0.05)            
Merger-related costs   0.03    0.01    0.37    0.12    0.10 
Early retirement program           0.03    0.04    0.03 
Branch right-sizing   0.02        0.03    0.03    0.03 
Tax effect (1)   0.01    0.01    (0.11)   (0.05)   (0.04)
Net non-core items   (0.01)   (0.03)   0.32    0.14    0.12 
Core diluted earnings per share (non-GAAP)  $1.21   $0.65   $2.73   $2.08   $1.21 
                          
(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  $9,809   $12,801   $7,073   $44,721   $6,065 
Non-core items (1)   (2,204)   (5,889)            
Core other income (non-GAAP)  $7,605   $6,912   $7,073   $44,721   $6,065 
                          
Non-interest expense  $112,598   $125,813   $142,095   $106,865   $110,743 
Non-core items (1)   (4,044)   (1,306)   (24,868)   (2,893)   (13,341)
Core non-interest expense (non-GAAP)  $108,554   $124,507   $117,227   $103,972   $97,402 
                          
Salaries and employee benefits  $57,644   $67,924   $63,235   $52,065   $56,128 
Non-core items (1)   (493)           (176)   (2,937)
Core salaries and employee benefits (non-GAAP)  $57,151   $67,924   $63,235   $51,889   $53,191 
                          
Merger related costs  $1,830   $1,068   $24,831   $2,556   $7,522 
Non-core items (1)   (1,830)   (1,068)   (24,831)   (2,556)   (7,522)
Core merger related costs (non-GAAP)  $   $   $   $   $ 
                          
Other operating expenses  $34,651   $38,788   $38,044   $37,881   $32,867 
Non-core items (1)   (1,662)   (212)   (4)   (90)   (2,834)
Core other operating expenses (non-GAAP)  $32,989   $38,576   $38,040   $37,791   $30,033 

 

 (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 - End of Period            
For the Quarters Ended  Jun 30  Mar 31  Dec 31  Sept 30  Jun 30
(Unaudited)  2020  2020  2019  2019  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  $2,903,936   $2,844,633   $2,988,157   $2,547,071   $2,469,513 
Intangible assets:                         
Goodwill   (1,064,765)   (1,064,978)   (1,055,520)   (926,648)   (926,450)
Other intangible assets   (117,823)   (121,673)   (127,340)   (101,149)   (104,096)
Total intangibles   (1,182,588)   (1,186,651)   (1,182,860)   (1,027,797)   (1,030,546)
Tangible common stockholders' equity  $1,721,348   $1,657,982   $1,805,297   $1,519,274   $1,438,967 
                          
Total assets  $21,903,684   $20,841,352   $21,259,143   $17,758,511   $17,937,435 
Intangible assets:                         
Goodwill   (1,064,765)   (1,064,978)   (1,055,520)   (926,648)   (926,450)
Other intangible assets   (117,823)   (121,673)   (127,340)   (101,149)   (104,096)
Total intangibles   (1,182,588)   (1,186,651)   (1,182,860)   (1,027,797)   (1,030,546)
Tangible assets  $20,721,096   $19,654,701   $20,076,283   $16,730,714   $16,906,889 
                          
Paycheck protection program ("PPP") loans   (963,712)                    
Total assets less PPP loans  $20,939,972                     
Tangible assets less PPP loans  $19,757,384                     
                          
Ratio of equity to assets   13.26%   13.65%   14.06%   14.34%   13.77%
Ratio of equity to assets less PPP loans   13.87%                    
Ratio of tangible common equity to tangible assets   8.31%   8.44%   8.99%   9.08%   8.51%
Ratio of tangible common equity to tangible assets less PPP loans   8.71%                    
                          
Calculation of Tangible Book Value per Share
                          
Total common stockholders' equity  $2,903,936   $2,844,633   $2,988,157   $2,547,071   $2,469,513 
Intangible assets:                         
Goodwill   (1,064,765)   (1,064,978)   (1,055,520)   (926,648)   (926,450)
Other intangible assets   (117,823)   (121,673)   (127,340)   (101,149)   (104,096)
Total intangibles   (1,182,588)   (1,186,651)   (1,182,860)   (1,027,797)   (1,030,546)
Tangible common stockholders' equity  $1,721,348   $1,657,982   $1,805,297   $1,519,274   $1,438,967 
Shares of common stock outstanding   108,994,389    108,966,331    113,628,601    96,613,855    96,590,656 
Book value per common share  $26.64   $26.11   $26.30   $26.36   $25.57 
Tangible book value per common share  $15.79   $15.22   $15.89   $15.73   $14.90 
                          
Calculation of Regulatory Tier 1 Leverage Ratio Less Average PPP Loans
                          
Total Tier 1 capital  $1,820,488                     
                          
Adjusted average assets for leverage ratio  $20,742,824                     
Average PPP loans   (645,172)                    
Adjusted average assets less average PPP loans  $20,097,652                     
                          
Tier 1 leverage ratio   8.78%                    
Tier 1 leverage ratio less average PPP loans   9.06%                    

 

 Page 10 

 

 

Simmons First National Corporation              SFNC
Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date         
For the Quarters Ended  Jun 30  Mar 31  Dec 31  Sept 30  Jun 30
(Unaudited)  2020  2020  2019  2019  2019
($ in thousands)               
Calculation of Core Return on Average Assets                         
                          
Net income  $58,789   $77,223   $52,709   $81,826   $55,598 
Net non-core items, net of taxes, adjustment   1,358    (3,385)   18,365    2,137    9,855 
Core earnings  $60,147   $73,838   $71,074   $83,963   $65,453 
                          
Average total assets  $21,822,273   $20,920,223   $20,041,890   $17,720,598   $17,382,872 
                          
Return on average assets   1.08%   1.48%   1.04%   1.83%   1.28%
Core return on average assets   1.11%   1.42%   1.41%   1.88%   1.51%
                          
Calculation of Return on Tangible Common Equity                         
                          
Net income  $58,789   $77,223   $52,709   $81,826   $55,598 
Amortization of intangibles, net of taxes   2,489    2,521    2,416    2,176    2,177 
Total income available to common stockholders  $61,278   $79,744   $55,125   $84,002   $57,775 
                          
Net non-core items, net of taxes   1,358    (3,385)   18,365    2,137    9,855 
Core earnings   60,147    73,838    71,074    83,963    65,453 
Amortization of intangibles, net of taxes   2,489    2,521    2,416    2,176    2,177 
Total core income available to common stockholders  $62,636   $76,359   $73,490   $86,139   $67,630 
                          
Average common stockholders' equity  $2,879,337   $2,869,177   $2,611,143   $2,368,773   $2,351,603 
Average intangible assets:                         
Goodwill   (1,064,955)   (1,055,498)   (997,004)   (926,687)   (915,445)
Other intangibles   (120,111)   (125,746)   (118,311)   (103,028)   (104,050)
Total average intangibles   (1,185,066)   (1,181,244)   (1,115,315)   (1,029,715)   (1,019,495)
Average tangible common stockholders' equity  $1,694,271   $1,687,933   $1,495,828   $1,339,058   $1,332,108 
                          
Return on average common equity   8.21%   10.83%   8.01%   13.70%   9.48%
Return on tangible common equity   14.55%   19.00%   14.62%   24.89%   17.40%
Core return on average common equity   8.40%   10.35%   10.80%   14.06%   11.16%
Core return on tangible common equity   14.87%   18.19%   19.49%   25.52%   20.36%
                          
Calculation of Efficiency Ratio (1)                         
                          
Non-interest expense  $112,598   $125,813   $142,095   $106,865   $110,743 
Non-core non-interest expense adjustment   (4,044)   (1,306)   (24,868)   (2,893)   (13,341)
Other real estate and foreclosure expense adjustment   (242)   (319)   (1,063)   (1,057)   (563)
Amortization of intangibles adjustment   (3,369)   (3,413)   (3,270)   (2,947)   (2,947)
Efficiency ratio numerator  $104,943   $120,775   $112,894   $99,968   $93,892 
                          
Net-interest income  $163,681   $167,483   $167,066   $149,264   $149,428 
Non-interest income   50,227    82,394    45,630    84,675    39,934 
Fully tax-equivalent adjustment   2,350    2,305    2,172    1,843    1,706 
Gain on sale of securities   (390)   (32,095)   (377)   (7,374)   (2,823)
Efficiency ratio denominator  $213,664   $214,198   $214,491   $228,408   $188,245 
                          
Efficiency ratio (1)   49.12%   56.38%   52.63%   43.77%   49.88%

 

(1) Efficiency ratio is 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 11 

 

 

Simmons First National Corporation              SFNC
Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date (continued)         
For the Quarters Ended  Jun 30  Mar 31  Dec 31  Sept 30  Jun 30
(Unaudited)  2020  2020  2019  2019  2019
($ in thousands)               
Calculation of Core Net Interest Margin                         
                          
Net interest income  $163,681   $167,483   $167,066   $149,264   $149,428 
Fully tax-equivalent adjustment   2,350    2,305    2,172    1,843    1,706 
Fully tax-equivalent net interest income   166,031    169,788    169,238    151,107    151,134 
                          
Total accretable yield   (11,723)   (11,837)   (15,100)   (9,322)   (10,162)
Core net interest income  $154,308   $157,951   $154,138   $141,785   $140,972 
PPP loan and excess liquidity interest income   (5,623)                    
Core net interest adjusted for PPP loans and liquidity  $148,685                     
                          
Average earning assets  $19,517,475   $18,581,491   $17,753,004   $15,680,665   $15,389,670 
Average PPP loan balance and excess liquidity   (2,071,411)                    
Average earning assets adjusted for PPL loans and liquidity  $17,446,064                     
                          
Net interest margin   3.42%   3.68%   3.78%   3.82%   3.94%
Core net interest margin   3.18%   3.42%   3.44%   3.59%   3.67%
Core net interest margin adjusted for PPP loans and liquidity   3.43%                    
                          
Calculation of Core Loan Yield                         
                          
Loan interest income  $177,168   $187,566   $193,402   $179,971   $178,122 
Total accretable yield   (11,723)   (11,837)   (15,100)   (9,322)   (10,162)
Core loan interest income  $165,445   $175,729   $178,302   $170,649   $167,960 
PPP loan interest income   (3,733)                    
Core loan interest income without PPP loans  $161,712                     
                          
Average loan balance  $14,731,306   $14,548,853   $14,144,703   $13,053,540   $12,814,386 
Average PPP loan balance   (645,172)                    
Core loan interest income without PPP loans  $14,086,134                     
                          
Core loan yield   4.52%   4.86%   5.00%   5.19%   5.26%
Core loan yield without PPP loans   4.62%                    
                          
Calculation of Pre-Tax, Pre-Provision (PTPP) Earnings                         
                          
Net income available to common stockholders  $58,789   $77,223   $52,709   $81,826   $55,598 
Provision for income taxes   15,593    20,694    12,976    23,275    15,616 
Provision for credit losses   26,915    26,134    4,903    21,973    7,079 
Provision for unfunded commitments   (5,000)   (3,000)            
(Gain) loss on sale of securities   (390)   (32,095)   (377)   (7,374)   (2,823)
Net pre-tax non-core items   1,840    (4,583)   24,868    2,893    13,341 
Pre-tax, pre-provision (PTPP) earnings  $97,747   $84,373   $95,079   $122,593   $88,811 

 

 Page 12 

 

 

Simmons First National Corporation              SFNC
Reconciliation Of Non-GAAP Financial Measures - Year-to-Date            
For the Quarters Ended               
(Unaudited)  Jun 30  Mar 31  Dec 31  Sept 30  Jun 30
   2020  2020  2019  2019  2019
($ in thousands)               
Calculation of Core Return on Average Assets                         
                          
Net income  $136,012   $77,223   $237,828   $185,119   $103,293 
Net non-core items, net of taxes, adjustment   (2,027)   (3,385)   31,738    13,373    11,236 
Core earnings  $133,985   $73,838   $269,566   $198,492   $114,529 
                          
Average total assets  $21,371,248   $20,920,223   $17,871,748   $17,140,419   $16,845,528 
                          
Return on average assets   1.28%   1.48%   1.33%   1.44%   1.24%
Core return on average assets   1.26%   1.42%   1.51%   1.55%   1.37%
                          
Calculation of Return on Tangible Common Equity                         
                          
Net income  $136,012   $77,223   $237,828   $185,119   $103,293 
Amortization of intangibles, net of taxes   5,010    2,521    8,720    6,304    4,128 
Total income available to common stockholders  $141,022   $79,744   $246,548   $191,423   $107,421 
                          
Net non-core items, net of taxes   (2,027)   (3,385)   31,738    13,373    11,236 
Core earnings   133,985    73,838    269,566    198,492    114,529 
Amortization of intangibles, net of taxes   5,010    2,521    8,720    6,304    4,128 
Total core income available to common stockholders  $138,995   $76,359   $278,286   $204,796   $118,657 
                          
Average common stockholders' equity  $2,894,351   $2,869,177   $2,396,024   $2,323,530   $2,300,535 
Average intangible assets:                         
Goodwill   (1,060,226)   (1,055,498)   (921,635)   (896,236)   (880,759)
Other intangibles   (122,928)   (125,746)   (104,000)   (99,178)   (97,221)
Total average intangibles   (1,183,154)   (1,181,244)   (1,025,635)   (995,414)   (977,980)
Average tangible common stockholders' equity  $1,711,197   $1,687,933   $1,370,389   $1,328,116   $1,322,555 
                          
Return on average common equity   9.45%   10.83%   9.93%   10.65%   9.05%
Return on tangible common equity   16.57%   19.00%   17.99%   19.27%   16.38%
Core return on average common equity   9.31%   10.35%   11.25%   11.42%   10.04%
Core return on tangible common equity   16.33%   18.19%   20.31%   20.62%   18.09%
                          
Calculation of Efficiency Ratio (1)                         
                          
Non-interest expense  $238,411   $125,813   $461,112   $319,017   $212,152 
Non-core non-interest expense adjustment   (5,350)   (1,306)   (42,972)   (18,104)   (15,211)
Other real estate and foreclosure expense adjustment   (561)   (319)   (3,282)   (2,219)   (1,162)
Amortization of intangibles adjustment   (6,782)   (3,413)   (11,805)   (8,535)   (5,588)
Efficiency ratio numerator  $225,718   $120,775   $403,053   $290,159   $190,191 
                          
Net-interest income  $331,164   $167,483   $601,753   $434,687   $285,423 
Non-interest income   132,621    82,394    205,031    159,401    74,726 
Fully tax-equivalent adjustment   4,655    2,305    7,322    5,150    3,307 
Gain on sale of securities   (32,485)   (32,095)   (13,314)   (12,937)   (5,563)
Efficiency ratio denominator  $427,862   $214,198   $800,792   $586,301   $357,893 
                          
Efficiency ratio (1)   52.75%   56.38%   50.33%   49.49%   53.14%
                          
Calculation of Core Net Interest Margin                         
                          
Net interest income  $331,164   $167,483   $601,753   $434,687   $285,423 
Fully tax-equivalent adjustment   4,655    2,305    7,322    5,150    3,307 
Fully tax-equivalent net interest income   335,819    169,788    609,075    439,837    288,730 
                          
Total accretable yield   (23,560)   (11,837)   (41,244)   (26,144)   (16,822)
Core net interest income  $312,259   $157,951   $567,831   $413,693   $271,908 
Average earning assets  $19,049,487   $18,581,491   $15,824,571   $15,174,671   $14,917,493 
                          
Net interest margin   3.55%   3.68%   3.85%   3.88%   3.90%
Core net interest margin   3.30%   3.42%   3.59%   3.64%   3.68%
                          
Calculation of Core Loan Yield                         
                          
Loan interest income  $364,476   $187,566   $710,935   $517,533   $337,562 
Total accretable yield   (23,560)   (11,837)   (41,244)   (26,144)   (16,822)
Core loan interest income  $340,916   $175,729   $669,691   $491,389   $320,740 
Average loan balance  $14,640,082   $14,548,853   $12,938,013   $12,531,355   $12,265,936 
                          
Core loan yield   4.68%   4.86%   5.18%   5.24%   5.27%

 

(1) Efficiency ratio is 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 13

 

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