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 

 

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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 

 

 Page 2 

 

 

Simmons First National Corporation           SFNC
Consolidated Risk-Based Capital               
For the Quarters Ended  Dec 31  Sep 30  Jun 30  Mar 31  Dec 31
(Unaudited)  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.

 

 Page 3 

 

 

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 

 

 Page 4 

 

 

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.          

 

 

 Page 5 

 

 

Simmons First National Corporation           SFNC
Consolidated Allowance and Asset Quality               
For the Quarters Ended  Dec 31  Sep 30  Jun 30  Mar 31  Dec 31
(Unaudited)  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.       

 

 Page 6 

 

 

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

 

 Page 7 

 

 

 

Simmons First National Corporation           SFNC
Consolidated - Selected Financial Data               
For the Quarters Ended  Dec 31  Sep 30  Jun 30  Mar 31  Dec 31
(Unaudited)  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.           

 

 Page 8 

 

 

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. 

 

 Page 9 

 

 

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 

 

 Page 10 

 

 

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.  

 

 Page 11 

 

 

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.  

 

 

 Page 12 

 

 

 

 

 

 

 

 

 


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.

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