Simmons First National Corp (SFNC) SEC Filing 10-K Annual report for the fiscal year ending Tuesday, December 31, 2019

Exhibit 99.1

 

 

 

 

For Immediate Release:

January 23, 2020

 

SIMMONS REPORTS RECORD 2019 EARNINGS

 

Pine Bluff, AR – Simmons First National Corporation (NASDAQ: SFNC) today announced net income of $237.8 million for the year ended December 31, 2019, compared to $215.7 million for 2018, an increase of $22.1 million, or 10.3%. Diluted earnings per share were $2.41 for 2019, an increase of $0.09, or 3.9%, compared to prior year. Included in the 2019 results were $31.7 million in net after-tax merger-related, early retirement program and branch right-sizing costs. Excluding the impact of these items, core earnings were $269.6 million for the year ended December 31, 2019, compared to $220.2 million for 2018, an increase of $49.3 million, or 22.4%. Core diluted earnings per share were $2.73, an increase of $0.36, or 15.2%, from the same period in 2018.

 

Fourth quarter 2019 net income was $52.7 million, or $0.49 diluted earnings per share, compared to $55.6 million, or $0.60 diluted earnings per share, for the same period in 2018. Excluding $18.4 million in net after-tax merger-related and branch right-sizing costs, fourth quarter 2019 core earnings were $71.1 million, an increase of $14.6 million compared to the same period last year. Core diluted earnings per share were $0.66, an increase of $0.05, or 8.2%, from the same period in 2018.

 

“We are very proud of our results for 2019,” said George A. Makris, Jr., chairman and CEO of Simmons First National Corporation. “Not only did we produce excellent financial results, we welcomed new associates from Reliance Bank in St. Louis and Landmark Bank in Columbia, MO to the Simmons family.

 

“From time to time we tend to be focused more on specific metrics within our financial performance and lose sight of the bigger picture results. In retrospect, our performance in 2019 was remarkable. We achieved a return on assets of 1.33% and a core return on assets of 1.51%, which exceeded our target of 1.50%. We produced a 9.9% return on common equity with an 18.0% return on tangible common equity and a 20.3% core return on tangible common equity. We operated at an efficiency ratio of 50.3%, which is within our target range of 50-55%. Our construction and development concentration went from 105% at the end of the second quarter to 98% at year-end while our commercial real estate concentration was lowered from 333% at the end of the second quarter to 293% at year-end – both ratios now below the regulatory guidelines. And importantly, our book value per share rose 8.1% while our tangible book value per share rose 12.1% during a time when we completed two acquisitions – Reliance Bank in St. Louis and Landmark Bank in Columbia, MO – which added $4.9 billion in assets and we repurchased $10 million of our stock.”

 

Makris continued, “During 2020, we will continue to implement our technology initiatives, including the expansion of our digital offerings, and adjust our business strategy to take advantage of our successful growth over the past few years. I am extremely optimistic about the future of Simmons Bank.”

 

 

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

 

Selected Highlights:	YTD 2019	YTD 2018	4th Qtr 2019	4th Qtr 2018
Net income	$237.8 million	$215.7 million	$52.7 million	$55.6 million
Diluted earnings per share	$2.41	$2.32	$0.49	$0.60
Return on avg assets	1.33%	1.37%	1.04%	1.35%
Return on avg common equity	9.93%	10.00%	8.01%	9.98%
Return on tangible common equity (1)	17.99%	18.44%	14.62%	17.96%
Core earnings (2)	$269.6 million	$220.2 million	$71.1 million	$56.5 million
Core diluted earnings per share (2)	$2.73	$2.37	$0.66	$0.61
Core return on avg assets (2)	1.51%	1.40%	1.41%	1.37%
Core return on avg common equity (2)	11.25%	10.21%	10.80%	10.13%
Core return on tangible common equity (1)(2)	20.31%	18.81%	19.50%	18.21%
Efficiency ratio (3)	50.33%	52.85%	52.63%	51.99%

 

(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 earnings excludes non-core items, and is a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.

(3)

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

 

Loans

 

($ in billions)	4th Qtr 2019	3rd Qtr 2019	4th Qtr 2018
Total loans	$14.4	$13.0	$11.7
Legacy loans (excludes loans acquired)	$9.6	$9.6	$8.4
Loans acquired	$4.8	$3.4	$3.3

 

Total loans, including those acquired, were $14.4 billion at December 31, 2019, an increase of $2.7 billion, or 23.0%, compared to December 31, 2018, primarily due to The Landrum Company and Reliance Bank mergers completed during the fourth and second quarters of 2019, respectively. On a linked-quarter basis (December 31, 2019 compared to September 30, 2019), total loans increased $1.4 billion, or 10.9%, from the fourth quarter merger. The increase was partially offset by the reclassification of $260 million in loan balances associated with the branches held for sale in south Texas.

 

Deposits

 

($ in billions)	4th Qtr 2019	3rd Qtr 2019	4th Qtr 2018
Total deposits	$16.1	$13.5	$12.4
Non-time deposits	$12.8	$10.4	$9.5
Time deposits	$3.3	$3.1	$2.9

 

Total deposits were $16.1 billion at December 31, 2019, an increase of $3.7 billion, or 29.9%, since December 31, 2018, primarily due to the 2019 mergers partially offset by the reclassification of $160 million of deposits associated with the branches held for sale.

 

 

Net Interest Income

 

	4th Qtr 2019	3rd Qtr 2019	2nd Qtr 2019	1st Qtr 2019	4th Qtr 2018
Loan yield (1)	5.43%	5.47%	5.58%	5.53%	5.39%
Core loan yield (1) (2)	5.00%	5.19%	5.26%	5.29%	5.25%
Security yield (1)	2.67%	2.83%	3.02%	3.09%	2.87%
Cost of interest bearing deposits	1.22%	1.40%	1.37%	1.31%	1.20%
Cost of deposits (3)	0.94%	1.09%	1.07%	1.02%	0.93%
Cost of borrowed funds	2.30%	2.52%	2.50%	2.73%	2.64%
Net interest margin (1)	3.76%	3.81%	3.92%	3.85%	3.76%
Core net interest margin (1) (2)	3.43%	3.58%	3.66%	3.67%	3.66%

 

(1)

Fully tax equivalent using an effective tax rate of 26.135%.

(2)

Core loan yield and core net interest margin exclude accretion, and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.

(3)

Includes non-interest bearing deposits.

 

The Company’s net interest income for the fourth quarter of 2019 was $167.7 million, an increase of $29.9 million, or 21.7%, from the same period of 2018. Included in interest income was the yield accretion recognized on loans acquired of $15.1 million and $3.9 million for the fourth quarters of 2019 and 2018, respectively. Of this quarter’s yield accretion, 52% was accretable credit mark related and 48% was interest mark related.

 

Net interest margin (FTE) was 3.76% for the quarter ended December 31, 2019, while core net interest margin, which excludes the accretion, was 3.43% for the same period.

 

Non-Interest Income

 

Non-interest income for 2019 was $201.5 million, an increase of $57.6 million compared to the previous year. The increase was primarily due to the gain on sale of the Visa Inc. class B common stock of $42.9 million that was completed during the third quarter 2019. Additionally, during 2019 the Company was focused on rebalancing its investment portfolio and consequently recognized additional gains on the sale of securities.

 

Non-interest income for the fourth quarter of 2019 was $45.0 million, an increase of $10.4 million compared to the same period in the previous year. The increase was due to additional income within most non-interest income categories as a result of The Landrum Company and Reliance Bank mergers completed during 2019.

 

Selected Non-Interest Income Items ($ in millions)	YTD 2019	YTD 2018	4th Qtr 2019	4th Qtr 2018
Service charges on deposit accounts	$44.8	$42.5	$13.3	$11.3
Mortgage lending income	$15.0	$9.2	$4.0	$1.5
SBA lending income	$2.7	$1.8	$0.3	$0.2
Debit and credit card fees	$29.3	$32.3	$8.9	$6.5
Gain on sale of securities	$13.3	$0.1	$0.4	-
Other income	$58.5	$19.9	$6.4	$5.7

 

Non-Interest Expense

 

Non-interest expense for 2019 was $461.1 million, an increase of $68.9 million compared to the previous year. Included in 2019 were $43.0 million of pre-tax non-core items, that mostly consisted of merger-related costs. Excluding these expenses, core non-interest expense was $418.1 million, an increase of $32.0 million compared to 2018 core non-interest expense. The increase was primarily due to the incremental costs associated with the 2019 mergers and the Next Generation Banking (“NGB”) technology initiative. The Company recognized an additional $11.4 million in software and technology expense related to its NGB initiative in 2019.

 

Non-interest expense for the fourth quarter of 2019 was $142.1 million, an increase of $46.7 million compared to the fourth quarter of 2018. Included in this quarter were $24.9 million of pre-tax non-core items. Excluding these expenses, core non-interest expense was $117.2 million for the fourth quarter of 2019, an increase of $22.9 million compared to the same period in 2018, primarily the result of the 2019 mergers and additional software and technology costs related to the NGB initiative.

 

 

The efficiency ratio for 2019 was 50.33% compared to 52.85% for 2018.

 

Selected Non-Interest Expense Items ($ in millions)	YTD 2019	YTD 2018	4th Qtr 2019	4th Qtr 2018
Salaries and employee benefits	$227.8	$216.7	$63.2	$49.2
Merger related costs	$36.4	$4.8	$24.8	$0.8
Other operating expenses	$138.9	$111.6	$38.0	$30.2
Core salaries and employee benefits(1)	$224.3	$216.6	$63.2	$49.1
Core merger related costs(1)	-	-	-	-
Core other operating expenses(1)	$135.9	$110.7	$38.0	$30.3

 

(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.

 

Asset Quality

 

	4th Qtr 2019	3rd Qtr 2019	2nd Qtr 2019	1st Qtr 2019	4th Qtr 2018
Allowance for loan losses to total loans	0.70%	0.68%	0.68%	0.68%	0.67%
Allowance for loan losses to non-performing loans	95%	91%	101%	97%	164%
Non-performing loans to total loans	0.74%	0.76%	0.67%	0.70%	0.41%
Net charge-off ratio (annualized)	0.12%	0.78%	0.14%	0.20%	0.35%
Net charge-off ratio YTD (annualized)	0.31%	0.38%	0.17%	0.20%	0.28%

 

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 December 31, 2019, the allowance for loan losses for legacy loans was $67.8 million. The allowance for loan losses for loans acquired was $444,000 and the acquired loan discount mark was $87.3 million. The allowance for loan losses and discount mark provides a total of $155.5 million of coverage, which equates to a total coverage ratio of 1.07% of gross loans. The ratio of discount mark and related allowance to loans acquired was 1.80%.

 

Provision for loan losses for 2019 was $43.2 million, an increase of $5.1 million from 2018. Provision for loan losses for the fourth quarter 2019 was $4.9 million, a decrease of $4.7 million when compared to the same period of 2018.

 

Foreclosed Assets and Other Real Estate Owned

 

At December 31, 2019, foreclosed assets and other real estate owned were $19.1 million, a decrease of $6.4 million, or 25.2%, compared to year end 2018. The composition of these assets is divided into three types:

 

($ in millions)	4th Qtr 2019	3rd Qtr 2019	2nd Qtr 2019	1st Qtr 2019	4th Qtr 2018
Closed bank branches, branch sites & associate relocation	$5.7	$5.9	$6.5	$7.6	$8.0
Foreclosed assets - acquired	$10.3	$10.1	$13.3	$6.2	$11.5
Foreclosed assets – legacy	$3.1	$3.6	$5.0	$5.2	$6.1

 

 

Capital

 

	4th Qtr 2019	3rd Qtr 2019	2nd Qtr 2019	1st Qtr 2019	4th Qtr 2018
Stockholders’ equity to total assets	14.1%	14.3%	13.8%	14.3%	13.6%
Tangible common equity to tangible assets	9.0%	9.1%	8.5%	9.0%	8.4%
Regulatory tier 1 leverage ratio	9.6%	9.1%	8.9%	9.1%	8.8%
Regulatory total risk-based capital ratio	13.6%	13.2%	12.7%	13.6%	13.3%

 

At December 31, 2019, common stockholders' equity was $3.0 billion. Book value per share was $26.30 and tangible book value per share was $15.89 at December 31, 2019, compared to $24.33 and $14.18, respectively, at December 31, 2018. The ratio of tangible common equity to tangible assets was 9.0% at December 31, 2019, compared to 8.4% from the previous year-end.

 

During the fourth quarter of 2019, the Company repurchased approximately 400,000 shares at an average price of $25.97.

 

Management Changes

 

The Company also announced today that Marty Casteel, a Company director and senior executive vice president, as well as the chairman, president, and chief executive officer of the Company’s subsidiary bank, Simmons Bank, will retire from his employment with the Company and Simmons Bank, effective March 31, 2020. Casteel will continue to serve as a director of both the Company and Simmons Bank. “For over thirty years, Marty has been a critical component of Simmons’ success,” said Makris. “With deep knowledge, experience, and integrity, Marty has provided incredible leadership to our organization and masterfully overseen its recent transformation through acquisitions with great care and compassion for all involved. I am personally extremely grateful for his presence and counsel during my tenure with this company, and I am thankful Marty has agreed to remain affiliated with it as a director. On behalf of everyone at Simmons, I’d like to congratulate Marty on a job very well done and wish him the best as he begins his next chapter.” Upon Casteel’s retirement, Makris will assume the role of chairman, president, and chief executive officer of Simmons Bank, in addition to his current role as chairman and chief executive officer of the Company.

 

In addition, the Company announced that Patrick Burrow, executive vice president and general counsel, will retire, effective March 31, 2020. “As the company’s first general counsel,” Makris noted, “and prior to that, its longtime outside counsel, Pat has been a steady source of legal advice for our organization and its associates. He has played a significant role in many of the company’s strategic transactions, and I am thankful for his service to Simmons. As with Marty, we wish him the best and congratulate him on his retirement.”

 

Current Expected Credit Losses (“CECL”)

 

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

 

The CECL methodology replaces the current incurred loss methodology with a lifetime “expected credit loss” measurement objective for loans, held-to-maturity debt securities and other receivables measured at amortized cost at the time the financial asset is originated or acquired. This standard requires the consideration of historical loss experience and current conditions adjusted for reasonable and supportable economic forecasts. The Company has elected to utilize a blended macroeconomic scenario using a one-year forecast horizon with a subsequent reversion to historical loss experience. Within the life cycle of a loan or other financial asset, this new guidance will generally result in the earlier recognition of the provision for credit losses and the related allowance for credit losses than current practice. The CECL guidance was effective for the Company as of January 1, 2020.

 

The CECL methodology represents a significant change from existing guidance and is expected to result in material changes to the Company’s accounting for financial instruments. The Company is continuing to evaluate the effect that the new CECL methodology will have on its consolidated financial statements and related disclosures. Based on additional analysis performed during the fourth quarter of 2019, the Company currently estimates that the allowance for credit losses will be approximately 1.35% to 1.45% of total loans upon adoption. This estimate is based upon the Company’s analysis of current conditions, assumptions and economic forecasts at this point in time. The estimate is subject to change based on continuing review and challenge of the models, methodologies and judgements. The impact will be reflected as an adjustment to beginning retained earnings, net of income taxes. Federal banking regulatory agencies have provided relief for an initial regulatory capital decrease at adoption by allowing the impact to be phased-in over three years on a straight-line basis. The adoption of CECL in 2020 could also impact the Company’s ongoing earnings, perhaps materially.

 

 

Simmons First National Corporation

 

Simmons First National Corporation is a financial holding company headquartered in Pine Bluff, Arkansas, with total consolidated assets of approximately $21.3 billion as of December 31, 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. CST today, Thursday, January 23, 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 9397974. In addition, the call will be available live or in recorded version on the Company’s website at www.simmonsbank.com.

 

Non-GAAP Financial Measures

 

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

 

 

Forward-Looking Statements

 

Some of the statements in this news release may not be based on historical facts and should be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by reference to future periods or by the use of forward-looking terminology, such as “believe,” “budget,” “expect,” “foresee,” “anticipate,” “intend,” “indicate,” “target,” “estimate,” “plan,” “project,” “continue,” “contemplate,” “positions,” “prospects,” “predict,” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could,” “might” or “may,” or by variations of such words or by similar expressions. These forward-looking statements include, without limitation, statements relating to Simmons’ future growth, revenue, assets, asset quality, profitability, net interest margin, non-interest revenue, share repurchase program, the Company’s ability to recruit and retain key employees, the adequacy of the allowance for loan losses, and the effect of certain new accounting standards (including, without limitation, the CECL methodology and its anticipated effect on the provision and allowance for credit losses) on the Company’s financial statements. Any forward-looking statement speaks only as of the date of this news release, and Simmons undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release. By nature, forward-looking statements are based on various assumptions and involve inherent risk and uncertainties. Various factors, including, but not limited to, changes in economic conditions, credit quality, interest rates, loan demand, deposit flows, real estate values, the assumptions used in making the forward-looking statements, the securities markets generally or the price of Simmons common stock specifically, information technology affecting the financial industry, the assumptions, forecasts, models, and methodology used to calculate the expected impact of CECL on the Company’s financial statements, 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 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		Dec 31				Sep 30				Jun 30				Mar 31				Dec 31
(Unaudited)		2019				2019				2019				2019				2018
($ in thousands)
ASSETS
Cash and non-interest bearing balances due from banks		$	277,208			$	161,440			$	145,491			$	151,112			$	171,792
Interest bearing balances due from banks and federal funds sold			719,415				368,530				509,765				340,049				661,666
Cash and cash equivalents			996,623				529,970				655,256				491,161				833,458
Interest bearing balances due from banks - time			4,554				5,041				5,041				4,684				4,934
Investment securities - held-to-maturity			40,927				42,237				47,455				61,435				289,194
Investment securities - available-for-sale			3,453,338				2,356,134				2,342,387				2,240,111				2,151,752
Mortgage loans held for sale			58,102				50,099				34,999				18,480				26,799
Other assets held for sale			260,332				383				397				397				1,790
Loans:
Legacy loans			9,630,076				9,643,365				9,262,497				8,684,550				8,430,388
Allowance for loan losses			(67,800	)			(65,993	)			(63,067	)			(59,243	)			(56,599	)
Loans acquired, net of discount and allowance			4,795,184				3,359,587				3,864,516				3,056,187				3,292,783
Net loans			14,357,460				12,936,959				13,063,946				11,681,494				11,666,572
Premises and equipment			492,384				378,678				370,551				333,740				295,060
Foreclosed assets and other real estate owned			19,121				19,576				24,761				18,952				25,565
Interest receivable			62,707				53,966				54,781				51,796				49,938
Bank owned life insurance			254,152				234,655				233,345				192,736				193,170
Goodwill			1,055,520				926,648				926,450				845,687				845,687
Other intangible assets			127,340				101,149				104,096				88,694				91,334
Other assets			76,583				123,016				73,970				62,272				68,084
Total assets		$	21,259,143			$	17,758,511			$	17,937,435			$	16,091,639			$	16,543,337
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing transaction accounts		$	3,741,093			$	3,044,330			$	2,954,032			$	2,674,034			$	2,672,405
Interest bearing transaction accounts and savings deposits			9,090,878				7,337,571				7,258,005				6,666,823				6,830,191
Time deposits			3,276,969				3,086,108				3,304,176				2,648,674				2,896,156
Total deposits			16,108,940				13,468,009				13,516,213				11,989,531				12,398,752
Federal funds purchased and securities sold under agreements to repurchase			150,145				116,536				130,470				120,213				95,792
Other borrowings			1,297,599				1,098,395				1,324,094				1,169,989				1,345,450
Subordinated notes and debentures			388,260				354,223				354,132				354,041				353,950
Other liabilities held for sale			159,853				–				162				162				162
Accrued interest and other liabilities			165,409				174,277				142,851				155,382				102,797
Total liabilities			18,270,206				15,211,440				15,467,922				13,789,318				14,296,903
Stockholders' equity:
Preferred stock			767				–				–				–				–
Common stock			1,136				966				966				926				923
Surplus			2,117,282				1,708,058				1,705,262				1,599,566				1,597,944
Undivided profits			848,861				814,338				747,969				707,829				674,941
Accumulated other comprehensive income (loss):
Unrealized accretion (depreciation) on AFS securities			20,891				23,709				15,316				(6,000	)			(27,374	)
Total stockholders' equity			2,988,937				2,547,071				2,469,513				2,302,321				2,246,434
Total liabilities and stockholders' equity		$	21,259,143			$	17,758,511			$	17,937,435			$	16,091,639			$	16,543,337

 

 

Simmons First National Corporation																		SFNC
Consolidated Statements of Income - Quarter-to-Date
For the Quarters Ended		Dec 31				Sep 30				Jun 30				Mar 31				Dec 31
(Unaudited)		2019				2019				2019				2019				2018
($ in thousands, except per share data)
INTEREST INCOME
Loans		$	193,402			$	179,971			$	178,122			$	159,440			$	159,996
Interest bearing balances due from banks and federal funds sold			2,625				1,586				1,121				2,154				2,168
Investment securities			17,625				15,367				16,594				17,312				15,760
Mortgage loans held for sale			402				382				332				210				372
TOTAL INTEREST INCOME			214,054				197,306				196,169				179,116				178,296
INTEREST EXPENSE
Time deposits			16,198				15,573				14,606				12,320				11,273
Other deposits			20,331				21,363				20,190				18,430				17,489
Federal funds purchased and securities sold under agreements to repurchase			368				249				257				136				121
Other borrowings			4,615				5,381				6,219				6,793				7,134
Subordinated notes and debentures			4,813				4,576				4,541				4,411				4,498
TOTAL INTEREST EXPENSE			46,325				47,142				45,813				42,090				40,515
NET INTEREST INCOME			167,729				150,164				150,356				137,026				137,781
Provision for loan losses			4,903				21,973				7,079				9,285				9,620
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES			162,826				128,191				143,277				127,741				128,161
NON-INTEREST INCOME
Trust income			7,430				6,108				5,794				5,708				5,980
Service charges on deposit accounts			13,332				10,825				10,557				10,068				11,263
Other service charges and fees			1,915				1,308				1,312				1,289				1,501
Mortgage lending income			4,029				4,509				3,656				2,823				1,457
SBA lending income			321				956				895				497				186
Investment banking income			822				513				360				618				829
Debit and credit card fees			8,920				7,059				7,212				6,098				6,547
Bank owned life insurance income			1,411				1,302				1,260				795				1,105
Gain on sale of securities, net			377				7,374				2,823				2,740				8
Other income			6,410				43,821				5,137				3,125				5,712
TOTAL NON-INTEREST INCOME			44,967				83,775				39,006				33,761				34,588
NON-INTEREST EXPENSE
Salaries and employee benefits			63,235				52,065				56,128				56,367				49,193
Occupancy expense, net			9,272				8,342				6,919				7,475				7,016
Furniture and equipment expense			5,758				4,898				4,206				3,358				4,139
Other real estate and foreclosure expense			1,089				1,125				591				637				1,540
Deposit insurance			(134	)			–				2,510				2,040				2,489
Merger-related costs			24,831				2,556				7,522				1,470				797
Other operating expenses			38,044				37,879				32,867				30,062				30,222
TOTAL NON-INTEREST EXPENSE			142,095				106,865				110,743				101,409				95,396
NET INCOME BEFORE INCOME TAXES			65,698				105,101				71,540				60,093				67,353
Provision for income taxes			12,976				23,275				15,616				12,398				11,707
NET INCOME			52,722				81,826				55,924				47,695				55,646
Preferred stock dividends			–				–				326				–				–
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS		$	52,722			$	81,826			$	55,598			$	47,695			$	55,646
BASIC EARNINGS PER SHARE		$	0.49			$	0.85			$	0.58			$	0.52			$	0.60
DILUTED EARNINGS PER SHARE		$	0.49			$	0.84			$	0.58			$	0.51			$	0.60

 

 

Simmons First National Corporation																		SFNC
Consolidated Risk-Based Capital
For the Quarters Ended		Dec 31				Sep 30				Jun 30				Mar 31				Dec 31
(Unaudited)		2019				2019				2019				2019				2018
($ in thousands)
Tier 1 capital
Stockholders' equity		$	2,988,937			$	2,547,071			$	2,469,513			$	2,302,321			$	2,246,434
Disallowed intangible assets, net of deferred tax			(1,155,405	)			(1,013,309	)			(1,001,676	)			(910,122	)			(912,428	)
Unrealized (gain) loss on AFS securities			(20,891	)			(23,709	)			(15,316	)			6,000				27,374
Total Tier 1 capital			1,812,641				1,510,053				1,452,521				1,398,199				1,361,380
Tier 2 capital
Qualifying unrealized gain on AFS equity securities			–				–				–				–				–
Trust preferred securities and subordinated debt			388,260				354,223				354,132				354,041				353,950
Qualifying allowance for loan losses and reserve for unfunded commitments			76,644				74,455				72,044				67,771				63,608
Total Tier 2 capital			464,904				428,678				426,176				421,812				417,558
Total risk-based capital		$	2,277,545			$	1,938,731			$	1,878,697			$	1,820,011			$	1,778,938
Risk weighted assets		$	16,731,384			$	14,725,571			$	14,825,253			$	13,364,636			$	13,326,832
Adjusted average assets for leverage ratio		$	18,848,103			$	16,681,527			$	16,382,520			$	15,423,961			$	15,512,042
Ratios at end of quarter
Equity to assets			14.06	%			14.34	%			13.77	%			14.31	%			13.58	%
Tangible common equity to tangible assets (1)			8.99	%			9.08	%			8.51	%			9.02	%			8.39	%
Common equity Tier 1 ratio (CET1)			10.83	%			10.25	%			9.80	%			10.46	%			10.22	%
Tier 1 leverage ratio			9.62	%			9.05	%			8.87	%			9.07	%			8.78	%
Tier 1 risk-based capital ratio			10.83	%			10.25	%			9.80	%			10.46	%			10.22	%
Total risk-based capital ratio			13.61	%			13.17	%			12.67	%			13.62	%			13.35	%

 

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

 

 

Simmons First National Corporation																		SFNC
Consolidated Loans and Investments
For the Quarters Ended		Dec 31				Sep 30				Jun 30				Mar 31				Dec 31
(Unaudited)		2019				2019				2019				2019				2018
($ in thousands)
Legacy Loan Portfolio - End of Period (1)
Consumer
Credit cards		$	204,802			$	195,083			$	187,919			$	181,549			$	204,173
Other consumer			191,946				208,643				207,445				213,659				201,297
Total consumer			396,748				403,726				395,364				395,208				405,470
Real Estate
Construction			1,760,894				1,712,858				1,540,352				1,376,162				1,300,723
Single-family residential			1,444,620				1,448,455				1,444,525				1,431,407				1,440,443
Other commercial			3,678,908				3,630,708				3,531,273				3,355,109				3,225,287
Total real estate			6,884,422				6,792,021				6,516,150				6,162,678				5,966,453
Commercial
Commercial			1,909,796				1,894,819				1,871,695				1,801,422				1,774,909
Agricultural			163,396				213,753				191,922				147,216				164,514
Total commercial			2,073,192				2,108,572				2,063,617				1,948,638				1,939,423
Other			275,714				339,046				287,366				178,026				119,042
Total Loans		$	9,630,076			$	9,643,365			$	9,262,497			$	8,684,550			$	8,430,388
(1) Excludes all acquired loans.
Investment Securities - End of Period
Held-to-Maturity
U.S. Government agencies		$	–			$	–			$	999			$	12,996			$	16,990
Mortgage-backed securities			10,796				11,549				12,225				12,847				13,346
State and political subdivisions			27,082				28,692				32,236				33,597				256,863
Other securities			3,049				1,996				1,995				1,995				1,995
Total held-to-maturity			40,927				42,237				47,455				61,435				289,194
Available-for-Sale
U.S. Treasury		$	449,729			$	–			$	–			$	–			$	–
U.S. Government agencies			194,249				178,139				197,656				161,577				154,301
Mortgage-backed securities			1,742,945				1,337,794				1,345,760				1,345,677				1,522,900
State and political subdivisions			880,524				681,202				636,558				580,790				314,843
FHLB stock			66,285				62,403				66,588				65,220				73,105
Other securities			119,606				96,596				95,825				86,847				86,603
Total available-for-sale			3,453,338				2,356,134				2,342,387				2,240,111				2,151,752
Total investment securities		$	3,494,265			$	2,398,371			$	2,389,842			$	2,301,546			$	2,440,946
Fair value - HTM investment securities		$	41,855			$	43,302			$	48,640			$	61,956			$	290,830
Investment Securities - QTD Average
Taxable securities		$	2,099,266			$	1,712,672			$	1,793,799			$	1,880,694			$	1,815,203
Tax exempt securities			825,000				681,505				624,898				590,941				551,185
Total investment securities - QTD average		$	2,924,266			$	2,394,177			$	2,418,697			$	2,471,635			$	2,366,388

 

 

Simmons First National Corporation																		SFNC
Consolidated Loans and Credit Coverage
For the Quarters Ended		Dec 31				Sep 30				Jun 30				Mar 31				Dec 31
(Unaudited)		2019				2019				2019				2019				2018
($ in thousands)
LOANS
Legacy loans		$	9,630,076			$	9,643,365			$	9,262,497			$	8,684,550			$	8,430,388
Allowance for loan losses (legacy loans)			(67,800	)			(65,993	)			(63,067	)			(59,243	)			(56,599	)
Legacy loans (net of allowance)			9,562,276				9,577,372				9,199,430				8,625,307				8,373,789
Loans acquired			4,882,919				3,420,563				3,939,126				3,099,915				3,342,175
Credit discount			(87,291	)			(60,379	)			(73,498	)			(42,416	)			(49,297	)
Allowance for loan losses (loans acquired)			(444	)			(597	)			(1,112	)			(1,312	)			(95	)
Loans acquired (net of discount and allowance)			4,795,184				3,359,587				3,864,516				3,056,187				3,292,783
Net loans		$	14,357,460			$	12,936,959			$	13,063,946			$	11,681,494			$	11,666,572
Loan Coverage Ratios
Allowance for loan losses to legacy loans			0.70	%			0.68	%			0.68	%			0.68	%			0.67	%
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)			1.80	%			1.78	%			1.89	%			1.41	%			1.48	%
Total allowance and credit coverage (non-GAAP) (1)			1.07	%			0.97	%			1.04	%			0.87	%			0.90	%

 

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

 

 

 

Simmons First National Corporation																		SFNC
Consolidated Allowance and Asset Quality
For the Quarters Ended		Dec 31				Sep 30				Jun 30				Mar 31				Dec 31
(Unaudited)		2019				2019				2019				2019				2018
($ in thousands)
Allowance for Loan Losses (Legacy Loans)
Balance, beginning of quarter		$	65,993			$	63,067			$	59,243			$	56,599			$	55,358
Loans charged off
Credit cards			1,287				1,117				1,039				1,142				1,121
Other consumer			1,397				1,059				905				1,533				2,894
Real estate			767				907				271				374				337
Commercial			459				17,729				1,867				1,968				3,480
Total loans charged off			3,910				20,812				4,082				5,017				7,832
Recoveries of loans previously charged off
Credit cards			287				223				271				240				227
Other consumer			304				1,422				331				300				154
Real estate			146				55				153				142				367
Commercial			77				65				72				158				167
Total recoveries			814				1,765				827				840				915
Net loans charged off			3,096				19,047				3,255				4,177				6,917
Provision for loan losses			4,903				21,973				7,079				6,821				8,158
Balance, end of quarter		$	67,800			$	65,993			$	63,067			$	59,243			$	56,599
Non-performing assets (1) (2)
Non-performing loans
Nonaccrual loans		$	70,836			$	72,721			$	61,956			$	60,925			$	34,201
Loans past due 90 days or more			259				155				267				281				224
Total non-performing loans			71,095				72,876				62,223				61,206				34,425
Other non-performing assets
Foreclosed assets and other real estate owned (2)			19,121				19,576				24,761				18,952				25,565
Other non-performing assets			1,964				540				613				505				553
Total other non-performing assets			21,085				20,116				25,374				19,457				26,118
Total non-performing assets		$	92,180			$	92,992			$	87,597			$	80,663			$	60,543
Performing TDRs (troubled debt restructurings)		$	4,411			$	6,519			$	6,246			$	6,297			$	6,369
Ratios (1) (2)
Allowance for loan losses to total loans			0.70	%			0.68	%			0.68	%			0.68	%			0.67	%
Allowance for loan losses to non-performing loans			95	%			91	%			101	%			97	%			164	%
Non-performing loans to total loans			0.74	%			0.76	%			0.67	%			0.70	%			0.41	%
Non-performing assets (including performing TDRs) to total assets			0.45	%			0.56	%			0.52	%			0.54	%			0.40	%
Non-performing assets to total assets			0.43	%			0.52	%			0.49	%			0.50	%			0.37	%
Annualized net charge offs to total loans			0.12	%			0.78	%			0.14	%			0.20	%			0.35	%
Annualized net credit card charge offs to total credit card loans			1.99	%			1.82	%			1.63	%			1.92	%			1.86	%

 

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

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

 

 

Simmons First National Corporation																																		SFNC
Consolidated - Average Balance Sheet and Net Interest Income Analysis
For the Quarters Ended
(Unaudited)
		Three Months Ended Dec 2019												Three Months Ended Sep 2019												Three Months Ended Dec 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		$	789,035			$	2,625				1.32	%		$	344,761			$	1,586				1.83	%		$	499,961			$	2,168				1.72	%
Investment securities - taxable			2,099,266				11,743				2.22	%			1,712,672				10,414				2.41	%			1,815,200				11,828				2.59	%
Investment securities - non-taxable (FTE)			825,000				7,945				3.82	%			681,505				6,687				3.89	%			551,188				5,313				3.82	%
Mortgage loans held for sale			53,511				402				2.98	%			39,551				382				3.83	%			30,851				372				4.78	%
Loans, including acquired loans			14,144,259				193,511				5.43	%			13,052,943				180,080				5.47	%			11,788,838				160,081				5.39	%
Total interest earning assets (FTE)			17,911,071				216,226				4.79	%			15,831,432				199,149				4.99	%			14,686,038				179,762				4.86	%
Non-earning assets			2,130,819												1,889,166												1,671,715
Total assets		$	20,041,890											$	17,720,598											$	16,357,753
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest bearing liabilities:
Interest bearing transaction and savings accounts		$	8,440,090			$	20,331				0.96	%		$	7,322,395			$	21,363				1.16	%		$	6,770,217			$	17,489				1.02	%
Time deposits			3,393,089				16,198				1.89	%			3,122,422				15,573				1.98	%			2,752,113				11,273				1.63	%
Total interest bearing deposits			11,833,179				36,529				1.22	%			10,444,817				36,936				1.40	%			9,522,330				28,762				1.20	%
Federal funds purchased and securities sold under agreement to repurchase			147,395				368				0.99	%			123,883				249				0.80	%			108,687				121				0.44	%
Other borrowings			1,168,897				4,615				1.57	%			1,127,886				5,381				1.89	%			1,302,453				7,134				2.17	%
Subordinated notes and debentures			376,766				4,813				5.07	%			354,178				4,576				5.13	%			353,906				4,498				5.04	%
Total interest bearing liabilities			13,526,237				46,325				1.36	%			12,050,764				47,142				1.55	%			11,287,376				40,515				1.42	%
Non-interest bearing liabilities:
Non-interest bearing deposits			3,524,092												3,012,544												2,768,437
Other liabilities			379,909												288,517												90,723
Total liabilities			17,430,238												15,351,825												14,146,536
Stockholders' equity			2,611,652												2,368,773												2,211,217
Total liabilities and stockholders' equity		$	20,041,890											$	17,720,598											$	16,357,753
Net interest income (FTE)						$	169,901											$	152,007											$	139,247
Net interest spread (FTE)											3.43	%											3.44	%											3.44	%
Net interest margin (FTE) - quarter-to-date											3.76	%											3.81	%											3.76	%
Net interest margin (FTE) - year-to-date											3.83	%											3.86	%											3.97	%
Core net interest margin (FTE) - quarter-to-date (1)											3.43	%											3.58	%											3.66	%
Core loan yield (FTE) - quarter-to-date (1)											5.00	%											5.19	%											5.25	%
Core net interest margin (FTE) - year-to-date (1)											3.58	%											3.63	%											3.72	%
Core loan yield (FTE) - year-to-date (1)											5.18	%											5.24	%											5.11	%

 

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

 

 

 

Simmons First National Corporation																		SFNC
Consolidated - Selected Financial Data
For the Quarters Ended		Dec 31				Sep 30				Jun 30				Mar 31				Dec 31
(Unaudited)		2019				2019				2019				2019				2018
($ in thousands, except share data)
QUARTER-TO-DATE
Financial Highlights - GAAP
Net Income		$	52,722			$	81,826			$	55,598			$	47,695			$	55,646
Diluted earnings per share			0.49				0.84				0.58				0.51				0.60
Return on average assets			1.04	%			1.83	%			1.28	%			1.19	%			1.35	%
Return on average common equity			8.01	%			13.70	%			9.48	%			8.60	%			9.98	%
Return on tangible common equity			14.62	%			24.89	%			17.40	%			15.34	%			17.96	%
Net interest margin (FTE)			3.76	%			3.81	%			3.92	%			3.85	%			3.76	%
FTE adjustment			2,172				1,843				1,706				1,601				1,466
Amortization of intangibles			3,270				2,947				2,947				2,641				2,642
Amortization of intangibles, net of taxes			2,416				2,176				2,177				1,951				1,952
Average diluted shares outstanding			108,472,559				96,968,775				96,367,857				92,870,813				92,897,105
Shares repurchased			400,000				–				–				–				–
Average price of shares repurchased			25.97				–				–				–				–
Cash dividends declared per common share			0.16				0.16				0.16				0.16				0.15
Financial Highlights - Core (non-GAAP)
Core earnings (excludes non-core items) (1)		$	71,087			$	83,963			$	65,453			$	49,076			$	56,451
Core diluted earnings per share (1)			0.66				0.87				0.68				0.53				0.61
Core net interest margin (FTE) (2)			3.43	%			3.58	%			3.66	%			3.67	%			3.66	%
Accretable yield on acquired loans			15,100				9,322				10,162				6,660				3,850
Efficiency ratio (1)			52.63	%			43.77	%			49.88	%			56.76	%			51.99	%
Core return on average assets (1)			1.41	%			1.88	%			1.51	%			1.22	%			1.37	%
Core return on average common equity (1)			10.80	%			14.06	%			11.16	%			8.85	%			10.13	%
Core return on tangible common equity (1)			19.50	%			25.52	%			20.36	%			15.76	%			18.21	%
YEAR-TO-DATE
Financial Highlights - GAAP
Net Income		$	237,841			$	185,119			$	103,293			$	47,695			$	215,713
Diluted earnings per share			2.41				1.94				1.09				0.51				2.32
Return on average assets			1.33	%			1.44	%			1.24	%			1.19	%			1.37	%
Return on average common equity			9.93	%			10.65	%			9.05	%			8.60	%			10.00	%
Return on tangible common equity			17.99	%			19.27	%			16.38	%			15.34	%			18.44	%
Net interest margin (FTE)			3.83	%			3.86	%			3.89	%			3.85	%			3.97	%
FTE adjustment			7,322				5,150				3,307				1,601				5,297
Amortization of intangibles			11,805				8,535				5,588				2,641				11,009
Amortization of intangibles, net of taxes			8,720				6,304				4,128				1,951				8,132
Average diluted shares outstanding			98,796,628				95,450,732				94,588,739				92,870,813				92,830,485
Cash dividends declared per common share			0.64				0.48				0.32				0.16				0.60
Financial Highlights - Core (non-GAAP)
Core earnings (excludes non-core items) (1)		$	269,579			$	198,492			$	114,529			$	49,076			$	220,233
Diluted core earnings per share (1)			2.73				2.08				1.21				0.53				2.37
Core net interest margin (FTE) (2)			3.58	%			3.63	%			3.66	%			3.67	%			3.72	%
Accretable yield on acquired loans			41,244				26,144				16,822				6,660				35,263
Efficiency ratio (1)			50.33	%			49.49	%			53.14	%			56.76	%			52.85	%
Core return on average assets (1)			1.51	%			1.55	%			1.37	%			1.22	%			1.40	%
Core return on average common equity (1)			11.25	%			11.42	%			10.04	%			8.85	%			10.21	%
Core return on tangible common equity (1)			20.31	%			20.62	%			18.09	%			15.76	%			18.81	%
END OF PERIOD
Book value per share		$	26.30			$	26.36			$	25.57			$	24.87			$	24.33
Tangible book value per share			15.89				15.73				14.90				14.78				14.18
Shares outstanding			113,628,601				96,613,855				96,590,656				92,568,361				92,347,643
Full-time equivalent employees			3,270				2,701				2,700				2,602				2,654
Total number of financial centers			251				212				212				191				191

 

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

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

 

 

Simmons First National Corporation																		SFNC
Reconciliation Of Non-GAAP Financial Measures - Core Earnings
For the Quarters Ended		Dec 31				Sep 30				Jun 30				Mar 31				Dec 31
(Unaudited)		2019				2019				2019				2019				2018
($ in thousands, except per share data)
QUARTER-TO-DATE
Net Income		$	52,722			$	81,826			$	55,598			$	47,695			$	55,646
Non-core items
Merger-related costs			24,831				2,556				7,522				1,470				797
Early retirement program			–				177				2,932				355				–
Branch right-sizing			37				160				2,887				45				292
Tax effect (1)			(6,503	)			(756	)			(3,486	)			(489	)			(284	)
Net non-core items			18,365				2,137				9,855				1,381				805
Core earnings (non-GAAP)		$	71,087			$	83,963			$	65,453			$	49,076			$	56,451
Diluted earnings per share		$	0.49			$	0.84			$	0.58			$	0.51			$	0.60
Non-core items
Merger-related costs			0.23				0.04				0.08				0.02				0.01
Early retirement program			–				–				0.03				0.01				–
Branch right-sizing			–				–				0.03				–				–
Tax effect (1)			(0.06	)			(0.01	)			(0.04	)			(0.01	)			–
Net non-core items			0.17				0.03				0.10				0.02				0.01
Core earnings (non-GAAP)		$	0.66			$	0.87			$	0.68			$	0.53			$	0.61
YEAR-TO-DATE
Net Income		$	237,841			$	185,119			$	103,293			$	47,695			$	215,713
Non-core items
Merger-related costs			36,379				11,548				8,992				1,470				4,777
Early retirement program			3,464				3,464				3,287				355				–
Branch right-sizing			3,129				3,092				2,932				45				1,341
Tax effect (1)			(11,234	)			(4,731	)			(3,975	)			(489	)			(1,598	)
Net non-core items			31,738				13,373				11,236				1,381				4,520
Core earnings (non-GAAP)		$	269,579			$	198,492			$	114,529			$	49,076			$	220,233
Diluted earnings per share		$	2.41			$	1.94			$	1.09			$	0.51			$	2.32
Non-core items
Merger-related costs			0.37				0.12				0.10				0.02				0.05
Early retirement program			0.03				0.04				0.03				0.01				–
Branch right-sizing			0.03				0.03				0.03				–				0.02
Tax effect (1)			(0.11	)			(0.05	)			(0.04	)			(0.01	)			(0.02	)
Net non-core items			0.32				0.14				0.12				0.02				0.05
Core earnings (non-GAAP)		$	2.73			$	2.08			$	1.21			$	0.53			$	2.37
(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		$	63,235			$	52,065			$	56,128			$	56,367			$	49,193
Non-core items (1)			–				(176	)			(2,937	)			(351	)			(118	)
Core salaries and employee benefits (non-GAAP)		$	63,235			$	51,889			$	53,191			$	56,016			$	49,075
Merger related costs		$	24,831			$	2,556			$	7,522			$	1,470			$	797
Non-core items (1)			(24,831	)			(2,556	)			(7,522	)			(1,470	)			(797	)
Core merger related costs (non-GAAP)		$	–			$	–			$	–			$	–			$	–
Other operating expenses		$	38,044			$	37,881			$	32,867			$	30,062			$	30,222
Non-core items (1)			(4	)			(90	)			(2,834	)			(10	)			70
Core other operating expenses (non-GAAP)		$	38,040			$	37,791			$	30,033			$	30,052			$	30,292

 

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

 

 

Simmons First National Corporation																		SFNC
Reconciliation Of Non-GAAP Financial Measures - End of Period
For the Quarters Ended
(Unaudited)		Dec 31				Sept 30				Jun 30				Mar 31				Dec 31
		2019				2019				2019				2019				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		$	2,988,170			$	2,547,071			$	2,469,513			$	2,302,321			$	2,246,434
Intangible assets:
Goodwill			(1,055,520	)			(926,648	)			(926,450	)			(845,687	)			(845,687	)
Other intangible assets			(127,340	)			(101,149	)			(104,096	)			(88,694	)			(91,334	)
Total intangibles			(1,182,860	)			(1,027,797	)			(1,030,546	)			(934,381	)			(937,021	)
Tangible common stockholders' equity		$	1,805,310			$	1,519,274			$	1,438,967			$	1,367,940			$	1,309,413
Total assets		$	21,259,143			$	17,758,511			$	17,937,435			$	16,091,639			$	16,543,337
Intangible assets:
Goodwill			(1,055,520	)			(926,648	)			(926,450	)			(845,687	)			(845,687	)
Other intangible assets			(127,340	)			(101,149	)			(104,096	)			(88,694	)			(91,334	)
Total intangibles			(1,182,860	)			(1,027,797	)			(1,030,546	)			(934,381	)			(937,021	)
Tangible assets		$	20,076,283			$	16,730,714			$	16,906,889			$	15,157,258			$	15,606,316
Ratio of equity to assets			14.06	%			14.34	%			13.77	%			14.31	%			13.58	%
Ratio of tangible common equity to tangible assets			8.99	%			9.08	%			8.51	%			9.02	%			8.39	%
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		$	87,291			$	60,379			$	73,498			$	42,416			$	49,297
Allowance for loan losses on acquired loans			444				597				1,112				1,312				95
Total credit discount and ALLL on acquired loans		$	87,735			$	60,976			$	74,610			$	43,728			$	49,392
Total loans acquired		$	4,882,919			$	3,420,563			$	3,939,126			$	3,099,915			$	3,342,175
Discount and ALLL on acquired loans to acquired loans			1.80	%			1.78	%			1.89	%			1.41	%			1.48	%
Calculation of Total Allowance and Credit Coverage
Allowance for loan losses		$	67,800			$	65,993			$	63,067			$	59,243			$	56,599
Total credit discount and ALLL on acquired loans			87,735				60,976				74,610				43,728				49,392
Total allowance and credit discount		$	155,535			$	126,969			$	137,677			$	102,971			$	105,991
Total loans		$	14,512,995			$	13,063,928			$	13,201,623			$	11,784,465			$	11,772,563
Total allowance and credit coverage			1.07	%			0.97	%			1.04	%			0.87	%			0.90	%
Calculation of Tangible Book Value per Share
Total common stockholders' equity		$	2,988,170			$	2,547,071			$	2,469,513			$	2,302,321			$	2,246,434
Intangible assets:
Goodwill			(1,055,520	)			(926,648	)			(926,450	)			(845,687	)			(845,687	)
Other intangible assets			(127,340	)			(101,149	)			(104,096	)			(88,694	)			(91,334	)
Total intangibles			(1,182,860	)			(1,027,797	)			(1,030,546	)			(934,381	)			(937,021	)
Tangible common stockholders' equity		$	1,805,310			$	1,519,274			$	1,438,967			$	1,367,940			$	1,309,413
Shares of common stock outstanding			113,628,601				96,613,855				96,590,656				92,568,361				92,347,643
Book value per common share		$	26.30			$	26.36			$	25.57			$	24.87			$	24.33
Tangible book value per common share		$	15.89			$	15.73			$	14.90			$	14.78			$	14.18

 

 

Simmons First National Corporation																		SFNC
Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date
For the Quarters Ended
(Unaudited)		Dec 31				Sept 30				Jun 30				Mar 31				Dec 31
		2019				2019				2019				2019				2018
($ in thousands)
Calculation of Core Return on Average Assets
Net income		$	52,722			$	81,826			$	55,598			$	47,695			$	55,646
Net non-core items, net of taxes, adjustment			18,365				2,137				9,855				1,381				805
Core earnings		$	71,087			$	83,963			$	65,453			$	49,076			$	56,451
Average total assets		$	20,041,890			$	17,720,598			$	17,382,872			$	16,302,197			$	16,357,753
Return on average assets			1.04	%			1.83	%			1.28	%			1.19	%			1.35	%
Core return on average assets			1.41	%			1.88	%			1.51	%			1.22	%			1.37	%
Calculation of Return on Tangible Common Equity
Net income		$	52,722			$	81,826			$	55,598			$	47,695			$	55,646
Amortization of intangibles, net of taxes			2,416				2,176				2,177				1,951				1,952
Total income available to common stockholders		$	55,138			$	84,002			$	57,775			$	49,646			$	57,598
Net non-core items, net of taxes			18,365				2,137				9,855				1,381				805
Core earnings			71,087				83,963				65,453				49,076				56,451
Amortization of intangibles, net of taxes			2,416				2,176				2,177				1,951				1,952
Total core income available to common stockholders		$	73,503			$	86,139			$	67,630			$	51,027			$	58,403
Average common stockholders' equity		$	2,611,143			$	2,368,773			$	2,351,603			$	2,248,898			$	2,211,217
Average intangible assets:
Goodwill			(997,004	)			(926,687	)			(915,445	)			(845,687	)			(845,687	)
Other intangibles			(118,311	)			(103,028	)			(104,050	)			(90,317	)			(92,990	)
Total average intangibles			(1,115,315	)			(1,029,715	)			(1,019,495	)			(936,004	)			(938,677	)
Average tangible common stockholders' equity		$	1,495,828			$	1,339,058			$	1,332,108			$	1,312,894			$	1,272,540
Return on average common equity			8.01	%			13.70	%			9.48	%			8.60	%			9.98	%
Return on tangible common equity			14.62	%			24.89	%			17.40	%			15.34	%			17.96	%
Core return on average common equity			10.80	%			14.06	%			11.16	%			8.85	%			10.13	%
Core return on tangible common equity			19.50	%			25.52	%			20.36	%			15.76	%			18.21	%
Calculation of Efficiency Ratio (1)
Non-interest expense		$	142,095			$	106,865			$	110,743			$	101,409			$	95,396
Non-core non-interest expense adjustment			(24,868	)			(2,893	)			(13,341	)			(1,870	)			(1,089	)
Other real estate and foreclosure expense adjustment			(1,063	)			(1,057	)			(563	)			(599	)			(1,300	)
Amortization of intangibles adjustment			(3,270	)			(2,947	)			(2,947	)			(2,641	)			(2,642	)
Efficiency ratio numerator		$	112,894			$	99,968			$	93,892			$	96,299			$	90,365
Net-interest income		$	167,729			$	150,164			$	150,356			$	137,026			$	137,781
Non-interest income			44,967				83,775				39,006				33,761				34,588
Fully tax-equivalent adjustment			2,172				1,843				1,706				1,601				1,466
Gain on sale of securities			(377	)			(7,374	)			(2,823	)			(2,740	)			(8	)
Efficiency ratio denominator		$	214,491			$	228,408			$	188,245			$	169,648			$	173,827
Efficiency ratio (1)			52.63	%			43.77	%			49.88	%			56.76	%			51.99	%
Calculation of Core Net Interest Margin
Net interest income		$	167,729			$	150,164			$	150,356			$	137,026			$	137,781
Fully tax-equivalent adjustment			2,172				1,843				1,706				1,601				1,466
Fully tax-equivalent net interest income			169,901				152,007				152,062				138,627				139,247
Total accretable yield			(15,100	)			(9,322	)			(10,162	)			(6,660	)			(3,850	)
Core net interest income		$	154,801			$	142,685			$	141,900			$	131,967			$	135,397
Average earning assets		$	17,911,071			$	15,831,432			$	15,540,371			$	14,593,905			$	14,686,038
Net interest margin			3.76	%			3.81	%			3.92	%			3.85	%			3.76	%
Core net interest margin			3.43	%			3.58	%			3.66	%			3.67	%			3.66	%
Calculation of Core Loan Yield
Loan interest income		$	193,402			$	179,971			$	178,122			$	159,440			$	159,996
Total accretable yield			(15,100	)			(9,322	)			(10,162	)			(6,660	)			(3,850	)
Core loan interest income		$	178,302			$	170,649			$	167,960			$	152,780			$	156,146
Average loan balance		$	14,144,259			$	13,052,943			$	12,813,274			$	11,710,075			$	11,788,838
Core loan yield			5.00	%			5.19	%			5.26	%			5.29	%			5.25	%

 

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

 

 

Simmons First National Corporation																		SFNC
Reconciliation Of Non-GAAP Financial Measures - Year-to-Date
For the Quarters Ended
(Unaudited)		Dec 31				Sept 30				Jun 30				Mar 31				Dec 31
		2019				2019				2019				2019				2018
($ in thousands)
Calculation of Core Return on Average Assets
Net income		$	237,841			$	185,119			$	103,293			$	47,695			$	215,713
Net non-core items, net of taxes, adjustment			31,738				13,373				11,236				1,381				4,520
Core earnings		$	269,579			$	198,492			$	114,529			$	49,076			$	220,233
Average total assets		$	17,871,748			$	17,140,419			$	16,845,528			$	16,302,197			$	15,771,362
Return on average assets			1.33	%			1.44	%			1.24	%			1.19	%			1.37	%
Core return on average assets			1.51	%			1.55	%			1.37	%			1.22	%			1.40	%
Calculation of Return on Tangible Common Equity
Net income		$	237,841			$	185,119			$	103,293			$	47,695			$	215,713
Amortization of intangibles, net of taxes			8,720				6,304				4,128				1,951				8,132
Total income available to common stockholders		$	246,561			$	191,423			$	107,421			$	49,646			$	223,845
Net non-core items, net of taxes			31,738				13,373				11,236				1,381				4,520
Core earnings			269,579				198,492				114,529				49,076				220,233
Amortization of intangibles, net of taxes			8,720				6,304				4,128				1,951				8,132
Total core income available to common stockholders		$	278,299			$	204,796			$	118,657			$	51,027			$	228,365
Average common stockholders' equity		$	2,396,024			$	2,323,530			$	2,300,535			$	2,248,898			$	2,157,097
Average intangible assets:
Goodwill			(921,635	)			(896,236	)			(880,759	)			(845,688	)			(845,308	)
Other intangibles			(104,000	)			(99,178	)			(97,221	)			(90,316	)			(97,820	)
Total average intangibles			(1,025,635	)			(995,414	)			(977,980	)			(936,004	)			(943,128	)
Average tangible common stockholders' equity		$	1,370,389			$	1,328,116			$	1,322,555			$	1,312,894			$	1,213,969
Return on average common equity			9.93	%			10.65	%			9.05	%			8.60	%			10.00	%
Return on tangible common equity			17.99	%			19.27	%			16.38	%			15.34	%			18.44	%
Core return on average common equity			11.25	%			11.42	%			10.04	%			8.85	%			10.21	%
Core return on tangible common equity			20.31	%			20.62	%			18.09	%			15.76	%			18.81	%
Calculation of Efficiency Ratio (1)
Non-interest expense		$	461,112			$	319,017			$	212,152			$	101,409			$	392,229
Non-core non-interest expense adjustment			(42,972	)			(18,104	)			(15,211	)			(1,870	)			(6,118	)
Other real estate and foreclosure expense adjustment			(3,282	)			(2,219	)			(1,162	)			(599	)			(4,240	)
Amortization of intangibles adjustment			(11,805	)			(8,535	)			(5,588	)			(2,641	)			(11,009	)
Efficiency ratio numerator		$	403,053			$	290,159			$	190,191			$	96,299			$	370,862
Net-interest income		$	605,275			$	437,546			$	287,382			$	137,026			$	552,552
Non-interest income			201,509				156,542				72,767				33,761				143,896
Fully tax-equivalent adjustment			7,322				5,150				3,307				1,601				5,297
Gain on sale of securities			(13,314	)			(12,937	)			(5,563	)			(2,740	)			(61	)
Efficiency ratio denominator		$	800,792			$	586,301			$	357,893			$	169,648			$	701,684
Efficiency ratio (1)			50.33	%			49.49	%			53.14	%			56.76	%			52.85	%
Calculation of Core Net Interest Margin
Net interest income		$	605,275			$	437,546			$	287,382			$	137,026			$	552,552
Fully tax-equivalent adjustment			7,322				5,150				3,307				1,601				5,297
Fully tax-equivalent net interest income			612,597				442,696				290,689				138,627				557,849
Total accretable yield			(41,244	)			(26,144	)			(16,822	)			(6,660	)			(35,263	)
Core net interest income		$	571,353			$	416,552			$	273,867			$	131,967			$	522,586
Average earning assets		$	15,977,909			$	15,326,432			$	15,069,751			$	14,593,905			$	14,036,614
Net interest margin			3.83	%			3.86	%			3.89	%			3.85	%			3.97	%
Core net interest margin			3.58	%			3.63	%			3.66	%			3.67	%			3.72	%
Calculation of Core Loan Yield
Loan interest income		$	710,935			$	517,533			$	337,562			$	159,440			$	616,037
Total accretable yield			(41,244	)			(26,144	)			(16,822	)			(6,660	)			(35,263	)
Core loan interest income		$	669,691			$	491,389			$	320,740			$	152,780			$	580,774
Average loan balance		$	12,937,147			$	12,530,348			$	12,264,724			$	11,710,075			$	11,355,890
Core loan yield			5.18	%			5.24	%			5.27	%			5.29	%			5.11	%

 

(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 Thursday, January 23, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.