Exhibit 99.1

 

 

For Immediate Release:  July 23, 2019

 

SIMMONS REPORTS SECOND QUARTER 2019 EARNINGS

 

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

 

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

 

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

 

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

 

Selected Highlights:  2nd Qtr 2019  1st Qtr 2019  2nd Qtr 2018
Net income  $55.6 million  $47.7 million  $53.6 million
Diluted earnings per share  $0.58  $0.51  $0.58
Return on avg assets  1.28%  1.19%  1.38%
Return on avg common equity  9.48%  8.60%  10.05%
Return on tangible common equity  17.40%  15.34%  18.70%
          
Core earnings (1)  $65.5 million  $49.1 million  $54.7 million
Diluted core earnings per share (1)  $0.68  $0.53  $0.59
Core return on avg assets (1)  1.51%  1.22%  1.41%
Core return on avg common equity (1)  11.16%  8.85%  10.26%
Core return on tangible common equity (1)  20.36%  15.76%  19.06%
          
Efficiency ratio (2)  49.88%  56.76%  52.70%

 

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

 

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

 

 

Loans

 

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

 

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

 

Deposits

 

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

 

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

 

Net Interest Income

 

   2nd Qtr
2019
  1st Qtr
2019
  4th Qtr
2018
 

3rd Qtr

2018

 

2nd Qtr

2018

Loan yield (1)  5.58%  5.53%  5.39%  5.54%  5.40%
Core loan yield (1) (2)  5.26%  5.29%  5.25%  5.19%  5.04%
Security yield (1)  3.02%  3.09%  2.87%  2.74%  2.75%
Cost of interest bearing deposits  1.37%  1.31%  1.20%  1.05%  0.84%
Cost of deposits (3)  1.07%  1.02%  0.93%  0.81%  0.64%
Cost of borrowed funds  2.50%  2.73%  2.64%  2.48%  2.38%
Net interest margin (1)  3.92%  3.85%  3.76%  3.98%  3.99%
Core net interest margin (1) (2)  3.66%  3.67%  3.66%  3.71%  3.70%

 

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

 

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

 

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

 

 

 

Non-Interest Income

 

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

 

Selected Non-Interest Income Items

($ in millions)

  2nd Qtr
2019
  1st Qtr
2019
  4th Qtr
2018
 

3rd Qtr

2018

 

2nd Qtr

2018

Service charges on deposit accounts  $10.6  $10.1  $11.3  $10.8  $10.1
Mortgage lending income  $3.7  $2.8  $1.5  $1.5  $2.8
SBA lending income  $0.9  $0.5  $0.2  $0.3  $0.4
Debit and credit card fees  $7.2  $6.1  $6.5  $6.8  $10.1
Gain (loss) on sale of securities  $2.8  $2.7  -  $0.1  -

 

Non-Interest Expense

 

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

 

Selected Non-Interest Expense Items
($ in millions)
  2nd Qtr
2019
  1st Qtr
2019
  4th Qtr
2018
 

3rd Qtr

2018

 

2nd Qtr

2018

Salaries and employee benefits  $56.1  $56.4  $49.2  $55.5  $55.7
Merger related costs  $7.5  $1.5  $0.8  $0.8  $1.5
Other operating expenses  $32.9  $30.1  $30.2  $29.7  $26.2
                
Core salaries and employee benefits  $53.2  $56.0  $49.1  $55.5  $55.7
Core merger related costs  -  -  -  -  -
Core other operating expenses  $30.0  $30.1  $30.3  $28.7  $26.2

 

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

 

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

 

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

 

 

 

Asset Quality

 

   2nd Qtr
2019
  1st Qtr
2019
  4th Qtr
2018
 

3rd Qtr

2018

 

2nd Qtr

2018

Allowance for loan losses to total loans  0.68%  0.68%  0.67%  0.68%  0.73%
Allowance for loan losses to non-performing loans  101%  97%  164%  136%  115%
Non-performing loans to total loans  0.67%  0.70%  0.41%  0.50%  0.63%
Net charge-off ratio (annualized)  0.14%  0.20%  0.35%  0.36%  0.17%
 -  Net charge-off ratio excluding loan sale           0.12%   

 

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

 

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

 

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

 

Foreclosed Assets and Other Real Estate Owned

 

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

 

($ in millions)  2nd Qtr
2019
  1st Qtr
2019
  4th Qtr
2018
 

3rd Qtr

2018

 

2nd Qtr

2018

Closed bank branches, branch sites & associate relocation  $6.5  $7.6  $8.0  $9.6  $7.2
Foreclosed assets - acquired  $13.3  $6.2  $11.5  $8.0  $13.2
Foreclosed assets - legacy  $5.0  $5.2  $6.1  $5.1  $10.1

 

Capital

 

   2nd Qtr
2019
  1st Qtr
2019
  4th Qtr
2018
 

3rd Qtr

2018

 

2nd Qtr

2018

Stockholders’ equity to total assets  13.8%  14.3%  13.6%  13.4%  13.3%
Tangible common equity to tangible assets  8.5%  9.0%  8.4%  8.1%  7.9%
Regulatory tier 1 leverage ratio  8.9%  9.1%  8.8%  8.7%  8.6%
Regulatory total risk-based capital ratio  12.7%  13.6%  13.3%  13.1%  13.7%

 

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

 

 

 

Simmons First National Corporation

 

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

 

Conference Call

 

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

 

Non-GAAP Financial Measures

 

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

 

Forward-Looking Statements

 

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

 

 

 

####

 

FOR MORE INFORMATION CONTACT:

Stephen C. Massanelli

EVP, Chief Administrative Officer and Investor Relations Officer

Simmons First National Corporation

steve.massanelli@simmonsbank.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Page 1

 

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

 

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

 

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

 

Page 3

 

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

 

Page 4

 

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

 

(1) Calculations of the non-GAAP loan coverage ratios and the reconciliations to GAAP are included in the schedules accompanying this release.

 

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

 

 (1) Excludes all acquired loans, except for their inclusion in total assets.

 (2) Includes acquired foreclosed assets and acquired other real estate owned.

 

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

 

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

 

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

 

 (1) Core earnings exclude non-core items, which is a non-GAAP measurement. Reconciliations to GAAP are included in the  schedules accompanying this release.

 (2) Excludes accretable yield adjustment on loans, which is a non-GAAP measurement. Reconciliations to GAAP are included in  the schedules accompanying this release.

 

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)  2019  2019  2018  2018  2018
($ in thousands, except per share data)               
QUARTER-TO-DATE                         
Net Income  $55,598   $47,695   $55,646   $55,193   $53,562 
Non-core items                         
Merger-related costs   7,522    1,470    797    804    1,465 
Early retirement program   2,932    355    -    -    - 
Branch right-sizing   2,887    45    292    970    22 
Tax effect (1)   (3,486)   (489)   (284)   (463)   (389)
Net non-core items   9,855    1,381    805    1,311    1,098 
Core earnings (non-GAAP)  $65,453   $49,076   $56,451   $56,504   $54,660 
                          
Diluted earnings per share  $0.58   $0.51   $0.60   $0.59   $0.58 
Non-core items                         
Merger-related costs   0.08    0.02    0.01    0.01    0.02 
Early retirement program   0.03    0.01    -    -    - 
Branch right-sizing   0.03    -    -    0.01    - 
Tax effect (1)   (0.04)   (0.01)   -    -    (0.01)
Net non-core items   0.10    0.02    0.01    0.02    0.01 
Core earnings (non-GAAP)  $0.68   $0.53   $0.61   $0.61   $0.59 
                          
YEAR-TO-DATE                         
Net Income  $103,293   $47,695   $215,713   $160,067   $104,874 
Non-core items                         
Merger-related costs   8,992    1,470    4,777    3,980    3,176 
Early retirement program   3,287    355    -    -    - 
Branch right-sizing   2,932    45    1,341    1,049    79 
Tax effect (1)   (3,975)   (489)   (1,598)   (1,314)   (851)
Net non-core items   11,236    1,381    4,520    3,715    2,404 
Core earnings (non-GAAP)  $114,529   $49,076   $220,233   $163,782   $107,278 
                          
Diluted earnings per share  $1.09   $0.51   $2.32   $1.72   $1.13 
Non-core items                         
Merger-related costs   0.10    0.02    0.05    0.04    0.04 
Early retirement program   0.03    0.01    -    -    - 
Branch right-sizing   0.03    -    0.02    0.01    - 
Tax effect (1)   (0.04)   (0.01)   (0.02)   (0.01)   (0.01)
Net non-core items   0.12    0.02    0.05    0.04    0.03 
Core earnings (non-GAAP)  $1.21   $0.53   $2.37   $1.76   $1.16 
                          
(1) Effective tax rate of 26.135%.                         
                          
Reconciliation of Selected Non-Core Non-Interest Expense Items (non-GAAP) 
                          
QUARTER-TO-DATE                         
Salaries and employee benefits  $56,128   $56,367   $49,193   $55,515   $55,678 
Non-core items (1)   (2,937)   (351)   (118)   -    - 
Core salaries and employee benefits (non-GAAP)  $53,191   $56,016   $49,075   $55,515   $55,678 
                          
Merger related costs  $7,522   $1,470   $797   $804   $1,465 
Non-core items (1)   (7,522)   (1,470)   (797)   (804)   (1,465)
Core merger related costs (non-GAAP)  $-   $-   $-   $-   $- 
                          
Other operating expenses  $32,867   $30,062   $30,222   $29,674   $26,185 
Non-core items (1)   (2,834)   (10)   70    (957)   (7)
Core other operating expenses (non-GAAP)  $30,033   $30,052   $30,292   $28,717   $26,178 

 

 (1) Non-core items include 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               
(Unaudited)  Jun 30  Mar 31  Dec 31  Sept 30  Jun 30
   2019  2019  2018  2018  2018
($ in thousands, except per share data)               
                
Calculation of Tangible Common Equity and the Ratio of Tangible Common Equity to Tangible Assets 
                          
Total common stockholders' equity  $2,469,513   $2,302,321   $2,246,434   $2,183,319   $2,146,908 
Intangible assets:                         
Goodwill   (926,450)   (845,687)   (845,687)   (845,687)   (845,687)
Other intangible assets   (104,096)   (88,694)   (91,334)   (93,975)   (96,720)
Total intangibles   (1,030,546)   (934,381)   (937,021)   (939,662)   (942,407)
Tangible common stockholders' equity  $1,438,967   $1,367,940   $1,309,413   $1,243,657   $1,204,501 
                          
Total assets  $17,937,435   $16,091,639   $16,543,337   $16,281,264   $16,165,533 
Intangible assets:                         
Goodwill   (926,450)   (845,687)   (845,687)   (845,687)   (845,687)
Other intangible assets   (104,096)   (88,694)   (91,334)   (93,975)   (96,720)
Total intangibles   (1,030,546)   (934,381)   (937,021)   (939,662)   (942,407)
Tangible assets  $16,906,889   $15,157,258   $15,606,316   $15,341,602   $15,223,126 
                          
Ratio of equity to assets   13.77%   14.31%   13.58%   13.41%   13.28%
Ratio of tangible common equity to tangible assets   8.51%   9.02%   8.39%   8.11%   7.91%
                          
Calculation of Discount for credit losses and allowance on loans acquired to total loans acquired plus 
discount for credit losses and allowance on loans acquired 
                          
Credit discount on acquired loans  $73,498   $42,416   $49,297   $53,968   $68,282 
Allowance for loan losses on acquired loans   1,112    1,312    95    1,345    2,044 
Total credit discount and ALLL on acquired loans  $74,610   $43,728   $49,392   $55,313   $70,326 
Total loans acquired  $3,939,126   $3,099,915   $3,342,175   $3,790,234   $4,302,760 
Discount and ALLL on acquired loans to acquired loans   1.89%   1.41%   1.48%   1.46%   1.63%
                          
Calculation of Total Allowance and Credit Coverage                         
                          
Allowance for loan losses  $63,067   $59,243   $56,599   $55,358   $51,732 
Total credit discount and ALLL on acquired loans   74,610    43,728    49,392    55,313    70,326 
Total allowance and credit discount  $137,677   $102,971   $105,991   $110,671   $122,058 
Total loans  $13,201,623   $11,784,465   $11,772,563   $11,913,508   $11,436,221 
Total allowance and credit coverage   1.04%   0.87%   0.90%   0.93%   1.07%
                          
Calculation of Tangible Book Value per Share                         
                          
Total common stockholders' equity  $2,469,513   $2,302,321   $2,246,434   $2,183,319   $2,146,908 
Intangible assets:                         
Goodwill   (926,450)   (845,687)   (845,687)   (845,687)   (845,687)
Other intangible assets   (104,096)   (88,694)   (91,334)   (93,975)   (96,720)
Total intangibles   (1,030,546)   (934,381)   (937,021)   (939,662)   (942,407)
Tangible common stockholders' equity  $1,438,967   $1,367,940   $1,309,413   $1,243,657   $1,204,501 
Shares of common stock outstanding   96,590,656    92,568,361    92,347,643    92,291,070    92,281,370 
Book value per common share  $25.57   $24.87   $24.33   $23.66   $23.26 
Tangible book value per common share  $14.90   $14.78   $14.18   $13.48   $13.05 

 

Page 10

 

Simmons First National Corporation              SFNC
Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date         
For the Quarters Ended               
(Unaudited)  Jun 30  Mar 31  Dec 31  Sept 30  Jun 30
   2019  2019  2018  2018  2018
($ in thousands)               
Calculation of Core Return on Average Assets                         
                          
Net income  $55,598   $47,695   $55,646   $55,193   $53,562 
Net non-core items, net of taxes, adjustment   9,855    1,381    805    1,311    1,098 
Core earnings  $65,453   $49,076   $56,451   $56,504   $54,660 
                          
Average total assets  $17,382,872   $16,302,197   $16,357,753   $16,040,884   $15,580,697 
                          
Return on average assets   1.28%   1.19%   1.35%   1.37%   1.38%
Core return on average assets   1.51%   1.22%   1.37%   1.40%   1.41%
                          
Calculation of Return on Tangible Common Equity                         
                          
Net income  $55,598   $47,695   $55,646   $55,193   $53,562 
Amortization of intangibles, net of taxes   2,177    1,951    1,952    2,027    2,057 
Total income available to common stockholders  $57,775   $49,646   $57,598   $57,220   $55,619 
                          
Net non-core items, net of taxes   9,855    1,381    805    1,311    1,098 
Core earnings   65,453    49,076    56,451    56,504    54,660 
Amortization of intangibles, net of taxes   2,177    1,951    1,952    2,027    2,057 
Total core income available to common stockholders  $67,630   $51,027   $58,403   $58,531   $56,717 
                          
Average common stockholders' equity  $2,351,603   $2,248,898   $2,211,217   $2,176,565   $2,137,097 
Average intangible assets:                         
Goodwill   (915,445)   (845,687)   (845,687)   (845,687)   (845,687)
Other intangibles   (104,050)   (90,317)   (92,990)   (95,576)   (98,152)
Total average intangibles   (1,019,495)   (936,004)   (938,677)   (941,263)   (943,839)
Average tangible common stockholders' equity  $1,332,108   $1,312,894   $1,272,540   $1,235,302   $1,193,258 
                          
Return on average common equity   9.48%   8.60%   9.98%   10.06%   10.05%
Return on tangible common equity   17.40%   15.34%   17.96%   18.38%   18.70%
Core return on average common equity   11.16%   8.85%   10.13%   10.30%   10.26%
Core return on tangible common equity   20.36%   15.76%   18.21%   18.80%   19.06%
                          
Calculation of Efficiency Ratio (1)                         
                          
Non-interest expense  $110,743   $101,409   $95,396   $100,253   $98,507 
Non-core non-interest expense adjustment   (13,341)   (1,870)   (1,089)   (1,774)   (1,483)
Other real estate and foreclosure expense adjustment   (563)   (599)   (1,300)   (538)   (1,382)
Amortization of intangibles adjustment   (2,947)   (2,641)   (2,642)   (2,745)   (2,785)
Efficiency ratio numerator  $93,892   $96,299   $90,365   $95,196   $92,857 
                          
Net-interest income  $150,356   $137,026   $137,781   $142,968   $136,837 
Non-interest income   39,006    33,761    34,588    33,725    38,048 
Non-core non-interest income adjustment   -    -    -    -    4 
Fully tax-equivalent adjustment   1,706    1,601    1,466    1,393    1,308 
(Gain) loss on sale of securities   (2,823)   (2,740)   (8)   (54)   7 
Efficiency ratio denominator  $188,245   $169,648   $173,827   $178,032   $176,204 
                          
Efficiency ratio (1)   49.88%   56.76%   51.99%   53.47%   52.70%
                          
Calculation of Core Net Interest Margin                         
                          
Net interest income  $150,356   $137,026   $137,781   $142,968   $136,837 
Fully tax-equivalent adjustment   1,706    1,601    1,466    1,393    1,308 
Fully tax-equivalent net interest income   152,062    138,627    139,247    144,361    138,145 
                          
Total accretable yield   (10,162)   (6,660)   (3,850)   (10,006)   (10,113)
Core net interest income  $141,900   $131,967   $135,397   $134,355   $128,032 
Average earning assets  $15,540,371   $14,593,905   $14,686,038   $14,373,253   $13,876,557 
                          
Net interest margin   3.92%   3.85%   3.76%   3.98%   3.99%
Core net interest margin   3.66%   3.67%   3.66%   3.71%   3.70%
                          
Calculation of Core Loan Yield                         
                          
Loan interest income  $178,122   $159,440   $159,996   $162,438   $150,253 
Total accretable yield   (10,162)   (6,660)   (3,850)   (10,006)   (10,113)
Core loan interest income  $167,960   $152,780   $156,146   $152,432   $140,140 
Average loan balance  $12,813,274   $11,710,075   $11,788,838   $11,641,843   $11,159,872 
                          
Core loan yield   5.26%   5.29%   5.25%   5.19%   5.04%

 

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

 

Page 11

 

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
   2019  2019  2018  2018  2018
($ in thousands)               
Calculation of Core Return on Average Assets                         
                          
Net income  $103,293   $47,695   $215,713   $160,067   $104,874 
Net non-core items, net of taxes, adjustment   11,236    1,381    4,520    3,715    2,404 
Core earnings  $114,529   $49,076   $220,233   $163,782   $107,278 
                          
Average total assets  $16,845,528   $16,302,197   $15,771,362   $15,573,762   $15,334,453 
                          
Return on average assets   1.24%   1.19%   1.37%   1.37%   1.38%
Core return on average assets   1.37%   1.22%   1.40%   1.41%   1.41%
                          
Calculation of Return on Tangible Common Equity                         
                          
Net income  $103,293   $47,695   $215,713   $160,067   $104,874 
Amortization of intangibles, net of taxes   4,128    1,951    8,132    6,180    4,153 
Total income available to common stockholders  $107,421   $49,646   $223,845   $166,247   $109,027 
                          
Net non-core items, net of taxes   11,236    1,381    4,520    3,715    2,404 
Core earnings   114,529    49,076    220,233    163,782    107,278 
Amortization of intangibles, net of taxes   4,128    1,951    8,132    6,180    4,153 
Total core income available to common stockholders  $118,657   $51,027   $228,365   $169,962   $111,431 
                          
Average common stockholders' equity  $2,300,535   $2,248,898   $2,157,097   $2,138,818   $2,120,075 
Average intangible assets:                         
Goodwill   (880,759)   (845,688)   (845,308)   (845,180)   (844,917)
Other intangibles   (97,221)   (90,316)   (97,820)   (99,448)   (101,435)
Total average intangibles   (977,980)   (936,004)   (943,128)   (944,628)   (946,352)
Average tangible common stockholders' equity  $1,322,555   $1,312,894   $1,213,969   $1,194,190   $1,173,723 
                          
Return on average common equity   9.05%   8.60%   10.00%   10.01%   9.98%
Return on tangible common equity   16.38%   15.34%   18.44%   18.61%   18.73%
Core return on average common equity   10.04%   8.85%   10.21%   10.24%   10.20%
Core return on tangible common equity   18.09%   15.76%   18.81%   19.03%   19.14%
                          
Calculation of Efficiency Ratio (1)                         
                          
Non-interest expense  $212,152   $101,409   $392,229   $296,833   $196,580 
Non-core non-interest expense adjustment   (15,211)   (1,870)   (6,118)   (5,029)   (3,255)
Other real estate and foreclosure expense adjustment   (1,162)   (599)   (4,240)   (2,940)   (2,402)
Amortization of intangibles adjustment   (5,588)   (2,641)   (11,009)   (8,367)   (5,622)
Efficiency ratio numerator  $190,191   $96,299   $370,862   $280,497   $185,301 
                          
Net-interest income  $287,382   $137,026   $552,552   $414,771   $271,803 
Non-interest income   72,767    33,761    143,896    109,308    75,583 
Non-core non-interest income adjustment   -    -    -    -    - 
Fully tax-equivalent adjustment   3,307    1,601    5,297    3,831    2,438 
(Gain) loss on sale of securities   (5,563)   (2,740)   (61)   (53)   1 
Efficiency ratio denominator  $357,893   $169,648   $701,684   $527,857   $349,825 
                          
Efficiency ratio (1)   53.14%   56.76%   52.85%   53.14%   52.97%
                          
Calculation of Core Net Interest Margin                         
                          
Net interest income  $287,382   $137,026   $552,552   $414,771   $271,803 
Fully tax-equivalent adjustment   3,307    1,601    5,297    3,831    2,438 
Fully tax-equivalent net interest income   290,689    138,627    557,849    418,602    274,241 
                          
Total accretable yield   (16,822)   (6,660)   (35,263)   (31,413)   (21,407)
Core net interest income  $273,867   $131,967   $522,586   $387,189   $252,834 
Average earning assets  $15,069,751   $14,593,905   $14,036,614   $13,837,639   $13,564,056 
                          
Net interest margin   3.89%   3.85%   3.97%   4.04%   4.08%
Core net interest margin   3.66%   3.67%   3.72%   3.74%   3.76%
                          
Calculation of Core Loan Yield                         
                          
Loan interest income  $337,562   $159,440   $616,037   $456,041   $293,603 
Total accretable yield   (16,822)   (6,660)   (35,263)   (31,413)   (21,407)
Core loan interest income  $320,740   $152,780   $580,774   $424,628   $272,196 
Average loan balance  $12,264,724   $11,710,075   $11,355,890   $11,209,992   $10,989,600 
                          
Core loan yield   5.27%   5.29%   5.11%   5.06%   4.99%

 

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

 

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The following information was filed by Simmons First National Corp (SFNC) on Tuesday, July 23, 2019 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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