EXHIBIT 99.1

 

 

For Immediate Release:  October 19, 2020

 

SIMMONS REPORTS THIRD QUARTER 2020 EARNINGS

 

Pine Bluff, AR – Simmons First National Corporation (NASDAQ: SFNC) (the “Company” or “Simmons”) today announced net income of $65.9 million for the quarter ended September 30, 2020, compared to $81.8 million for the same period in 2019, a decrease of $15.9 million, or 19.5%. Diluted earnings per share were $0.60, a decrease of $0.24, or 28.6%, compared to the same period in the prior year. Included in the third quarter of 2019 results was a one-time after-tax gain on the sale of Visa Inc. class B common stock of $31.7 million.

 

Included in third quarter 2020 results were $2.5 million in net after-tax merger-related, early retirement program and net branch right-sizing costs. Excluding the impact of these items, core earnings were $68.3 million for the quarter ended September 30, 2020, compared to $84.0 million for the quarter ended September 30, 2019, a decrease of $15.6 million, or 18.6%. Core diluted earnings per share were $0.63, a decrease of $0.24, or 27.6%, from the same period in 2019.

 

Year-to-date net income for the first nine months of 2020 was $201.9 million, or $1.83 diluted earnings per share, compared to $185.1 million, or $1.94 diluted earnings per share, for the same period in 2019. Excluding $426,000 in net after-tax merger-related, early retirement program and net branch right-sizing costs and the gains on the sales of branches in south Texas and Colorado, year-to-date core earnings for 2020 were $202.3 million, an increase of $3.8 million compared to the same period last year. Core diluted earnings per share for the first nine months of 2020 were $1.83, a decrease of $0.25, or 12.0%, from the same period in 2019.

 

“We are very proud of our results under these trying conditions. We have experienced very meaningful shifts in consumer habits which we believe will impact our delivery of products and services as well as the retail delivery of everyday amenities. Our investment in digital channels will continue to position our company for these changes and our associates are ready for the new normal,” said George A. Makris, Jr., chairman and CEO of Simmons First National Corporation.

 

Selected Highlights: 3rd Qtr 2020 2nd Qtr 2020 3rd Qtr 2019
Net income $65.9 million $58.8 million $81.8 million
Diluted earnings per share $0.60 $0.54 $0.84
Return on avg assets 1.20% 1.08% 1.83%
Return on avg common equity 8.91% 8.21% 13.70%
Return on tangible common equity (1) 15.45% 14.55% 24.89%
       
Core earnings (2) $68.3 million $60.1 million $84.0 million
Core diluted earnings per share (2) $0.63 $0.55 $0.87
Core return on avg assets (2) 1.25% 1.11% 1.88%
Core return on avg common equity (2) 9.24% 8.40% 14.06%
Core return on tangible common equity (1)(2) 16.00% 14.87% 25.52%
Efficiency ratio (3) 54.12% 51.46% 43.77%
Pre-tax, pre-provision (PTPP) earnings (2) $87.5 million $97.7 million

$122.6 million

 

(1)Return on tangible common equity excludes goodwill and other intangible assets and is a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.

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

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

 

 

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

 

 

Loans

 

($ in billions) 3rd Qtr 2020 2nd Qtr 2020 3rd Qtr 2019
Total loans $14.02 $14.61 $13.00

 

Total loans were $14.0 billion at September 30, 2020, an increase of $1.0 billion, or 7.8%, compared to September 30, 2019, primarily due to The Landrum Company (“Landrum”) merger completed during the fourth quarter of 2019. On a linked-quarter basis (September 30, 2020 compared to June 30, 2020), total loans decreased $589.5 million, or 4.0%. The decrease was across most loan categories with the largest decrease in the real estate loan portfolios. Makris stated, “Loan demand is very weak in almost every aspect of our commercial economy.”

 

Through September 30, 2020, the Company originated approximately 8,200 loans under the Paycheck Protection Program (“PPP”) of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, with an average balance of $118,000 per loan. Approximately 93% of the PPP loans had a balance less than $350,000 as of September 30, 2020.

 

PPP Loans

Balance as of September 30, 2020

# of

Loans

 

Balance

($ in millions)

 
Less than $50,000 5,216 63% $94.4 10%
$50,000 to $350,000 2,441 30% $304.8 31%
More than $350,000 to less than $2 million 481 6% $358.0 37%
$2 million to $10 million 61 1% $213.3 22%
Total 8,199 100% $970.5 100%

 

Deposits

 

($ in billions) 3rd Qtr 2020 2nd Qtr 2020 3rd Qtr 2019
Total deposits $16.2 $16.6 $13.5
Non-interest bearing deposits $4.4 $4.6 $3.1
Interest bearing deposits $9.0 $9.0 $7.3
Time deposits $2.8 $3.0 $3.1

 

Total deposits were $16.2 billion at September 30, 2020, an increase of $2.8 billion, or 20.6%, since September 30, 2019, primarily due to the Landrum merger. On a linked-quarter basis, total deposits decreased $369.5 million, or 2.2%, primarily due to decreases in non-interest bearing and large public fund time deposits.

 

Net Interest Income

 

  3rd Qtr
2020
2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
3rd Qtr
2019
Loan yield (1) 4.54% 4.84% 5.19% 5.43% 5.47%
Core loan yield (1) (2) 4.29% 4.52% 4.86% 5.00% 5.19%
Security yield (1) 2.60% 2.50% 2.63% 2.73% 2.87%
Cost of interest bearing deposits 0.54% 0.59% 1.03% 1.22% 1.40%
Cost of deposits (3) 0.39% 0.44% 0.80% 0.94% 1.09%
Cost of borrowed funds 1.85% 1.84% 2.06% 2.30% 2.52%
Net interest margin (1) 3.21% 3.42% 3.68% 3.78% 3.82%
Core net interest margin (1) (2) 3.02% 3.18% 3.42% 3.44% 3.59%

 

(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 third quarter of 2020 was $153.6 million, an increase of $4.3 million, or 2.9%, from the same period of 2019. The increase in net interest income was primarily due to the decline in the cost of interest-bearing deposits of 86 basis points, which was partially offset by a reduction in the loan yield of 93 basis points. Included in interest income was the yield accretion recognized on loans acquired of $8.9 million and $9.3 million for the third quarters of 2020 and 2019, respectively.

 

The loan yield was 4.54% for the quarter ended September 30, 2020, while the core loan yield, which excludes the accretion, was 4.29% for the same period. The decrease in the loan yield during the third quarter of 2020 was primarily driven by the lower yielding PPP loans originated during the second and third quarters of 2020. The PPP loan yield was approximately 2.37% during the third quarter of 2020 (including accretion of net fees), which decreased the loan yield by approximately 16 basis points.

 

Net interest margin (FTE) was 3.21% for the quarter ended September 30, 2020, while the core net interest margin, which excludes the accretion, was 3.02% for the same period. The decrease in the net interest margin during the third quarter of 2020 was primarily driven by additional liquidity created in response to the COVID-19 pandemic and the lower yielding PPP loans originated during the second and third quarters of 2020, which decreased the net interest margin by approximately 30 basis points.

 

Non-Interest Income

 

Non-interest income for the third quarter of 2020 was $71.9 million, a decrease of $12.8 million compared to the same period in the previous year, primarily due to the gain on sale of Visa Inc. class B common stock recognized during the prior year period. During the third quarter of 2020, the Company benefited from additional gains on the sale of securities and incremental mortgage lending income driven by the current low mortgage interest rate environment.

 

Selected Non-Interest Income Items

($ in millions)

3rd Qtr
2020
2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
3rd Qtr
2019
Service charges on deposit accounts $10.4 $8.6 $13.3 $13.3 $10.8
Mortgage lending income $14.0 $12.5 $5.0 $4.0 $4.5
SBA lending income $0.3 $0.2 $0.3 $0.3 $1.0
Debit and credit card fees $8.9 $8.0 $7.9 $8.9 $7.1
Gain on sale of securities $22.3 $0.4 $32.1 $0.4 $7.4
Gain on sale of Visa Inc. class B stock - - - - $42.9
Other income $5.4 $9.8 $12.8 $7.1 $1.8
           
Core other income (1)(2) $5.0 $7.6 $6.9 $7.1 $44.7

 

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

(2)Core other income includes the gain on sale of Visa Inc. class B common stock.

 

Non-Interest Expense

 

Non-interest expense for the third quarter of 2020 was $118.9 million, an increase of $12.1 million compared to the third quarter of 2019. Included in this quarter were $3.3 million of pre-tax non-core items for merger-related, early retirement program and branch right-sizing costs. Excluding these expenses, core non-interest expense was $115.3 million for the third quarter of 2020, an increase of $11.3 million compared to the same period in 2019, primarily the result of the Landrum merger and additional software and technology costs related to the Company’s Next Generation Banking (“NGB”) initiative.

 

The efficiency ratio for the third quarter of 2020 was 54.12%.

 

 

 

Selected Non-Interest Expense Items

($ in millions)

3rd Qtr
2020
2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
3rd Qtr
2019
Salaries and employee benefits $61.1 $57.6 $67.9 $63.2 $52.1
Merger related costs $0.9 $1.8 $1.1 $24.8 $2.6
Other operating expenses $38.2 $39.7 $41.8 $38.0 $37.9
           
Core salaries and employee benefits (1) $58.7 $57.2 $67.9 $63.2 $51.9
Core merger related costs (1) - - - - -
Core other operating expenses (1) $38.2 $38.0 $41.6 $38.0 $37.8

 

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

 

Early in 2020, the Company offered qualifying associates an early retirement option resulting in $2.3 million of non-core expense during the third quarter. The Company expects ongoing net annualized savings of approximately $2.9 million.

 

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

 

Asset Quality

 

  3rd Qtr
2020
2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
3rd Qtr
2019
Allowance for credit losses on loans to total loans 1.77% 1.59% 1.69% 0.47% 0.51%
Allowance for credit losses on loans to non-performing loans 147% 175% 154% 74% 78%
Non-performing loans to total loans 1.20% 0.91% 1.10% 0.64% 0.65%
Net charge-off ratio (annualized) 0.16% 1.04% 0.07% 0.09% 0.59%
Net charge-off ratio YTD (annualized) 0.43% 0.56% 0.07% 0.24% 0.30%

 

At September 30, 2020, the allowance for credit losses on loans was $248.3 million. Provision for credit losses on loans for the third quarter of 2020 was $22.3 million. Included in total loans was $970.5 million of government guaranteed PPP loans. Excluding the PPP loans, the allowance for credit losses on loans to total loans was 1.90%.

 

Foreclosed Assets and Other Real Estate Owned

 

At September 30, 2020, foreclosed assets and other real estate owned were $12.6 million, a decrease of $7.0 million, or 35.7%, compared to the same period in 2019. The composition of these assets is divided into three types:

 

($ in millions)

 

3rd Qtr
2020
2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
3rd Qtr
2019
Closed bank branches and branch sites $0.6 $2.7 $8.8 $5.7 $5.9
Foreclosed assets – acquired $9.3 $9.2 $9.2 $10.3 $10.1
Foreclosed assets – legacy $2.7 $2.2 $2.8 $3.1 $3.6

 

 

 

Capital

 

  3rd Qtr
2020
2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
3rd Qtr
2019
Stockholders’ equity to total assets 13.7% 13.3% 13.7% 14.1% 14.3%
Tangible common equity to tangible assets (1) 8.7% 8.3% 8.4% 9.0% 9.1%
Regulatory common equity tier 1 ratio 12.6% 11.9% 11.1% 10.9% 10.3%
Regulatory tier 1 leverage ratio 9.1% 8.8% 9.0% 9.6% 9.1%
Regulatory tier 1 risk-based capital ratio 12.6% 11.9% 11.1% 10.9% 10.3%
Regulatory total risk-based capital ratio 15.8% 14.9% 14.1% 13.7% 13.2%

 

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

 

At September 30, 2020, common stockholders' equity was $2.9 billion. Book value per share was $26.98 and tangible book value per share was $16.07 at September 30, 2020. The ratio of stockholders’ equity to total assets was 13.7% at September 30, 2020, while the ratio of tangible common equity to tangible assets was 8.7%. As of September 30, 2020, PPP loans totaled $970.5 million, which are 100% federally guaranteed and have a zero percent risk-weight for regulatory capital ratios. Excluding PPP loans from total assets, equity to total assets was 14.4%, tangible common equity to tangible assets was 9.1% and the regulatory tier 1 leverage ratio was 9.5%.

 

Simmons First National Corporation

 

Simmons First National Corporation is a financial holding company headquartered in Pine Bluff, Arkansas, with total consolidated assets of approximately $21.4 billion as of September 30, 2020, conducting financial operations in Arkansas, Illinois, Kansas, Missouri, Oklahoma, Tennessee and Texas. The Company, through its subsidiaries, offers comprehensive financial solutions delivered with a client-centric approach. The Company’s common stock is listed on the NASDAQ Global Select Market under the symbol “SFNC.”

 

Conference Call

 

Management will conduct a live conference call to review this information beginning at 9:00 a.m. CDT today, Monday, October 19, 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 6533868. In addition, the call will be available live or in recorded version on the Company’s website at www.simmonsbank.com for at least 60 days.

 

Non-GAAP Financial Measures

 

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

 

 

 

Forward-Looking Statements

 

Some of the statements in this news release may not be based on historical facts and should be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, including, without limitation, statements made in Mr. Makris’s quotes, may be identified by reference to future periods or by the use of forward-looking terminology, such as “believe,” “budget,” “expect,” “foresee,” “anticipate,” “intend,” “indicate,” “target,” “estimate,” “plan,” “project,” “continue,” “contemplate,” “positions,” “prospects,” “predict,” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could,” “might” or “may,” or by variations of such words or by similar expressions. These forward-looking statements include, without limitation, statements relating to Simmons’ future growth, revenue, assets, asset quality, profitability, net interest margin, non-interest revenue, share repurchase program, acquisition strategy, NGB and other digital banking initiatives, the Company’s ability to recruit and retain key employees, the benefits associated with the Company’s early retirement program and completed and future branch closures, the adequacy of the allowance for credit losses, and the ability of the Company to manage the impact of the COVID-19 pandemic. Any forward-looking statement speaks only as of the date of this news release, and Simmons undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release. By nature, forward-looking statements are based on various assumptions and involve inherent risk and uncertainties. Various factors, including, but not limited to, changes in economic conditions, credit quality, interest rates, loan demand, deposit flows, real estate values, the assumptions used in making the forward-looking statements, the securities markets generally or the price of Simmons common stock specifically, and information technology affecting the financial industry; the effect of steps the Company takes in response to COVID-19, the severity and duration of the pandemic, including whether there is a widespread resurgence in COVID-19 infections combined with the seasonal flu, the pace of recovery when the pandemic subsides and the heightened impact it has on many of the risks described herein; the effects of the COVID-19 pandemic on, among other things, the Company’s operations, liquidity, and credit quality; general economic and market conditions; unemployment; claims, damages, and fines related to litigation or government actions, including litigation or actions arising from the Company’s participation in and administration of programs related to the COVID-19 pandemic (including, among other things, the PPP loan program authorized by the CARES Act); changes in accounting principles relating to loan loss recognition (current expected credit losses, or CECL); the Company’s ability to manage and successfully integrate its mergers and acquisitions; cyber threats, attacks or events; reliance on third parties for key services; and other factors, many of which are beyond the control of the Company, could cause actual results to differ materially from those contemplated by the forward-looking statements. Additional information on factors that might affect the Company’s financial results is included in its Form 10-K for the year ended December 31, 2019, and its Form 10-Q for the quarter ended June 30, 2020, which have been filed with, and are available from, the U.S. Securities and Exchange Commission.

 

####

 

FOR MORE INFORMATION CONTACT:

Stephen C. Massanelli

EVP, Chief Administrative Officer and Investor Relations Officer

Simmons First National Corporation

steve.massanelli@simmonsbank.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Simmons First National Corporation              SFNC
Consolidated End of Period Balance Sheets               
For the Quarters Ended  Sep 30  Jun 30  Mar 31  Dec 31  Sep 30
(Unaudited)  2020  2020  2020  2019  2019
($ in thousands)               
ASSETS                         
Cash and non-interest bearing balances due from banks  $382,691   $234,998   $244,123   $277,208   $161,440 
Interest bearing balances due from banks and federal funds sold   2,139,440    2,310,162    1,493,076    719,415    368,530 
Cash and cash equivalents   2,522,131    2,545,160    1,737,199    996,623    529,970 
Interest bearing balances due from banks - time   4,061    4,561    4,309    4,554    5,041 
Investment securities - held-to-maturity   47,102    51,720    53,968    40,927    42,237 
Investment securities - available-for-sale   2,607,288    2,496,896    2,466,640    3,288,343    2,210,931 
Mortgage loans held for sale   192,729    120,034    49,984    58,102    50,099 
Other assets held for sale   389    399    115,315    260,332    383 
Loans:                         
Loans   14,017,442    14,606,900    14,374,277    14,425,704    13,003,549 
Allowance for credit losses on loans   (248,251)   (231,643)   (243,195)   (68,244)   (66,590)
Net loans   13,769,191    14,375,257    14,131,082    14,357,460    12,936,959 
Premises and equipment   470,491    478,896    484,990    492,384    378,678 
Premises held for sale   4,486    4,576    -    -    - 
Foreclosed assets and other real estate owned   12,590    14,111    20,805    19,121    19,576 
Interest receivable   77,352    79,772    57,039    62,707    53,966 
Bank owned life insurance   257,718    256,643    255,197    254,152    234,655 
Goodwill   1,075,305    1,064,765    1,064,978    1,055,520    926,648 
Other intangible assets   114,460    117,823    121,673    127,340    101,149 
Other assets   282,102    293,071    278,173    241,578    268,219 
Total assets  $21,437,395   $21,903,684   $20,841,352   $21,259,143   $17,758,511 
                          
LIABILITIES AND STOCKHOLDERS' EQUITY                         
Deposits:                         
Non-interest bearing transaction accounts  $4,451,385   $4,608,098   $3,572,244   $3,741,093   $3,044,330 
Interest bearing transaction accounts and savings deposits   8,993,255    8,978,045    8,840,678    9,090,878    7,337,571 
Time deposits   2,802,007    3,029,975    3,146,811    3,276,969    3,086,108 
Total deposits   16,246,647    16,616,118    15,559,733    16,108,940    13,468,009 
Federal funds purchased and securities sold                         
under agreements to repurchase   313,694    387,025    377,859    150,145    116,536 
Other borrowings   1,342,769    1,393,689    1,396,829    1,297,599    1,098,395 
Subordinated notes and debentures   382,739    382,604    388,396    388,260    354,223 
Other liabilities held for sale   -    -    58,405    159,853    - 
Accrued interest and other liabilities   209,305    219,545    214,730    165,422    174,277 
Total liabilities   18,495,154    18,998,981    17,995,952    18,270,219    15,211,440 
                          
Stockholders' equity:                         
Preferred stock   767    767    767    767    - 
Common stock   1,090    1,090    1,090    1,136    966 
Surplus   2,032,372    2,029,383    2,026,420    2,117,282    1,708,058 
Undivided profits   866,503    819,153    778,893    848,848    814,338 
Accumulated other comprehensive income (loss):                         
Unrealized accretion (depreciation) on AFS securities   41,509    54,310    38,230    20,891    23,709 
Total stockholders' equity   2,942,241    2,904,703    2,845,400    2,988,924    2,547,071 
Total liabilities and stockholders' equity  $21,437,395   $21,903,684   $20,841,352   $21,259,143   $17,758,511 

 

 Page 1 

 

Simmons First National Corporation              SFNC
Consolidated Statements of Income - Quarter-to-Date               
For the Quarters Ended  Sep 30  Jun 30  Mar 31  Dec 31  Sep 30
(Unaudited)  2020  2020  2020  2019  2019
($ in thousands, except per share data)               
INTEREST INCOME                         
Loans  $163,180   $176,910   $187,566   $193,402   $179,971 
Interest bearing balances due from banks and federal funds sold   623    603    2,441    2,625    1,586 
Investment securities   14,910    13,473    18,943    16,962    14,467 
Mortgage loans held for sale   1,012    668    281    402    382 
TOTAL INTEREST INCOME   179,725    191,654    209,231    213,391    196,406 
INTEREST EXPENSE                         
Time deposits   9,437    10,803    13,323    16,198    15,573 
Other deposits   6,769    7,203    17,954    20,331    21,363 
Federal funds purchased and securities                         
sold under agreements to repurchase   335    337    759    368    249 
Other borrowings   4,943    4,963    4,877    4,615    5,381 
Subordinated notes and debentures   4,631    4,667    4,835    4,813    4,576 
TOTAL INTEREST EXPENSE   26,115    27,973    41,748    46,325    47,142 
NET INTEREST INCOME   153,610    163,681    167,483    167,066    149,264 
Provision for credit losses   22,981    21,915    23,134    4,903    21,973 
NET INTEREST INCOME AFTER PROVISION                         
FOR CREDIT LOSSES   130,629    141,766    144,349    162,163    127,291 
NON-INTEREST INCOME                         
Trust income   6,744    7,253    7,151    7,430    6,108 
Service charges on deposit accounts   10,385    8,570    13,328    13,332    10,825 
Other service charges and fees   1,764    1,489    1,588    1,915    1,308 
Mortgage lending income   13,971    12,459    5,046    4,029    4,509 
SBA lending income   304    245    296    321    956 
Investment banking income   557    571    877    822    513 
Debit and credit card fees   8,850    7,996    7,914    8,920    7,059 
Bank owned life insurance income   1,591    1,445    1,298    1,411    1,302 
Gain on sale of securities, net   22,305    390    32,095    377    7,374 
Other income   5,380    9,809    12,801    7,073    44,721 
TOTAL NON-INTEREST INCOME   71,851    50,227    82,394    45,630    84,675 
NON-INTEREST EXPENSE                         
Salaries and employee benefits   61,144    57,644    67,924    63,235    52,065 
Occupancy expense, net   9,647    9,217    9,510    9,272    8,342 
Furniture and equipment expense   6,231    6,144    5,723    5,758    4,898 
Other real estate and foreclosure expense   602    274    325    1,089    1,125 
Deposit insurance   2,244    2,838    2,475    (134)   - 
Merger-related costs   902    1,830    1,068    24,831    2,556 
Other operating expenses   38,179    39,651    41,788    38,044    37,879 
TOTAL NON-INTEREST EXPENSE   118,949    117,598    128,813    142,095    106,865 
NET INCOME BEFORE INCOME TAXES   83,531    74,395    97,930    65,698    105,101 
Provision for income taxes   17,633    15,593    20,694    12,976    23,275 
NET INCOME   65,898    58,802    77,236    52,722    81,826 
Preferred stock dividends   13    13    13    13    - 
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS  $65,885   $58,789   $77,223   $52,709   $81,826 
BASIC EARNINGS PER SHARE  $0.60   $0.54   $0.68   $0.49   $0.85 
DILUTED EARNINGS PER SHARE  $0.60   $0.54   $0.68   $0.49   $0.84 

 

 Page 2 

 

Simmons First National Corporation           SFNC
Consolidated Risk-Based Capital               
For the Quarters Ended  Sep 30  Jun 30  Mar 31  Dec 31  Sep 30
(Unaudited)  2020  2020  2020  2019  2019
($ in thousands)               
Tier 1 capital                         
Stockholders' equity  $2,942,241   $2,904,703   $2,845,400   $2,988,924   $2,547,071 
CECL transition provision (1)   134,798    130,480    134,558    -    - 
Disallowed intangible assets, net of deferred tax   (1,167,357)   (1,160,385)   (1,164,038)   (1,160,079)   (1,013,309)
Unrealized (gain) loss on AFS securities   (41,509)   (54,310)   (38,230)   (20,891)   (23,709)
Total Tier 1 capital   1,868,173    1,820,488    1,777,690    1,807,954    1,510,053 
                          
Tier 2 capital                         
Trust preferred securities and subordinated debt   382,739    382,604    388,396    388,260    354,223 
Qualifying allowance for loan losses and                         
reserve for unfunded commitments   96,734    83,780    96,015    76,644    74,455 
Total Tier 2 capital   479,473    466,384    484,411    464,904    428,678 
Total risk-based capital  $2,347,646   $2,286,872   $2,262,101   $2,272,858   $1,938,731 
                          
Risk weighted assets  $14,878,932   $15,362,175   $16,012,233   $16,554,081   $14,725,571 
                          
Adjusted average assets for leverage ratio  $20,652,454   $20,742,824   $19,832,219   $18,852,798   $16,681,527 
                          
Ratios at end of quarter                         
Equity to assets   13.72%   13.26%   13.65%   14.06%   14.34%
Tangible common equity to tangible assets (2)   8.65%   8.31%   8.44%   8.99%   9.08%
Common equity Tier 1 ratio (CET1)   12.55%   11.85%   11.10%   10.92%   10.25%
Tier 1 leverage ratio   9.05%   8.78%   8.96%   9.59%   9.05%
Tier 1 risk-based capital ratio   12.56%   11.85%   11.10%   10.92%   10.25%
Total risk-based capital ratio   15.78%   14.89%   14.13%   13.73%   13.17%

 

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

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Page 3 

 

Simmons First National Corporation           SFNC
Consolidated Investment Securities               
For the Quarters Ended  Sep 30  Jun 30  Mar 31  Dec 31  Sep 30
(Unaudited)  2020  2020  2020  2019  2019
($ in thousands)               
Investment Securities - End of Period                         
 Held-to-Maturity                         
Mortgage-backed securities  $24,297   $25,980   $27,121   $10,796   $11,549 
State and political subdivisions   21,930    24,777    25,985    27,082    28,692 
Other securities   875    963    862    3,049    1,996 
Total held-to-maturity (net of credit losses)   47,102    51,720    53,968    40,927    42,237 
 Available-for-Sale                         
U.S. Treasury  $-   $-   $424,989   $449,729   $- 
U.S. Government agencies   471,973    210,921    161,289    194,249    178,139 
Mortgage-backed securities   903,687    1,154,086    1,179,837    1,742,945    1,337,794 
State and political subdivisions   1,133,006    1,054,068    678,243    880,524    681,202 
Other securities   98,622    77,821    22,282    20,896    13,796 
Total available-for-sale (net of credit losses)   2,607,288    2,496,896    2,466,640    3,288,343    2,210,931 
Total investment securities (net of credit losses)  $2,654,390   $2,548,616   $2,520,608   $3,329,270   $2,253,168 
Fair value - HTM investment securities  $49,064   $53,751   $55,714   $41,855   $43,302 
                          
Investment Securities - QTD Average                         
Taxable securities  $1,534,742   $1,642,083   $2,324,188   $1,940,755   $1,561,308 
Tax exempt securities   1,155,099    866,944    900,223    825,000    681,505 
Total investment securities - QTD average  $2,689,841   $2,509,027   $3,224,411   $2,765,755   $2,242,813 

 

 

 

 

 

 

 

 

 

 

 Page 4 

 

Simmons First National Corporation           SFNC
Consolidated Loans               
For the Quarters Ended  Sep 30  Jun 30  Mar 31  Dec 31  Sep 30
(Unaudited)  2020  2020  2020  2019  2019
($ in thousands)               
Loan Portfolio - End of Period                         
Consumer                         
Credit cards  $172,880   $184,348   $188,596   $204,802   $195,083 
Other consumer   190,736    214,024    267,870    249,195    215,283 
Total consumer   363,616    398,372    456,466    453,997    410,366 
Real Estate                         
Construction   1,853,360    2,010,256    2,024,118    2,248,673    2,081,595 
Single-family residential   1,997,070    2,207,087    2,343,543    2,414,753    1,951,842 
Other commercial real estate   6,132,823    6,316,444    6,466,104    6,358,514    5,758,511 
Total real estate   9,983,253    10,533,787    10,833,765    11,021,940    9,791,948 
Commercial                         
Commercial   2,907,798    3,038,216    2,314,472    2,451,119    2,215,539 
Agricultural   241,687    217,715    191,535    191,525    214,610 
Total commercial   3,149,485    3,255,931    2,506,007    2,642,644    2,430,149 
Other   521,088    418,810    578,039    307,123    371,086 
Total Loans  $14,017,442   $14,606,900   $14,374,277   $14,425,704   $13,003,549 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Page 5 

 

Simmons First National Corporation           SFNC
Consolidated Allowance and Asset Quality               
For the Quarters Ended  Sep 30  Jun 30  Mar 31  Dec 31  Sep 30
(Unaudited)  2020  2020  2020  2019  2019
($ in thousands)               
Allowance for Credit Losses on Loans                         
Beginning balance, prior to adoption of ASC 326            $68,244   $66,590   $64,179 
Impact of adopting ASC 326 (1)            $151,377           
Beginning balance, after adoption of ASC 326  $231,641   $243,195   $219,621           
                          
Loans charged off                         
Credit cards   832    1,053    1,441    1,287    1,117 
Other consumer   1,091    592    1,379    1,425    1,065 
Real estate   1,153    1,824    396    892    1,367 
Commercial   4,327    35,687    523    459    17,778 
Total loans charged off   7,403    39,156    3,739    4,063    21,327 
                          
Recoveries of loans previously charged off                         
Credit cards   276    272    225    287    223 
Other consumer   366    301    443    304    1,422 
Real estate   120    253    101    146    55 
Commercial   936    98    347    77    65 
Total recoveries   1,698    924    1,116    814    1,765 
Net loans charged off   5,705    38,232    2,623    3,249    19,562 
Provision for credit losses on loans   22,315    26,678    26,197    4,903    21,973 
Balance, end of quarter  $248,251   $231,641   $243,195   $68,244   $66,590 
                          
Non-performing assets                         
Non-performing loans                         
Nonaccrual loans  $168,349   $131,888   $156,746   $91,723   $84,660 
Loans past due 90 days or more   156    537    1,305    855    177 
Total non-performing loans   168,505    132,425    158,051    92,578    84,837 
Other non-performing assets                         
Foreclosed assets and other real estate owned   12,590    14,111    20,805    19,121    19,576 
Other non-performing assets   1,983    2,008    2,169    1,964    540 
Total other non-performing assets   14,573    16,119    22,974    21,085    20,116 
Total non-performing assets  $183,078   $148,544   $181,025   $113,663   $104,953 
Performing TDRs (troubled debt restructurings)  $2,791   $3,960   $4,110   $4,411   $6,519 
                          
Ratios                         
Allowance for credit losses on loans to total loans   1.77%   1.59%   1.69%   0.47%   0.51%
Allowance for credit losses to non-performing loans   147%   175%   154%   74%   78%
Non-performing loans to total loans   1.20%   0.91%   1.10%   0.64%   0.65%
Non-performing assets (including performing TDRs)                         
to total assets   0.87%   0.70%   0.89%   0.56%   0.63%
Non-performing assets to total assets   0.85%   0.68%   0.87%   0.53%   0.59%
Annualized net charge offs to total loans   0.16%   1.04%   0.07%   0.09%   0.59%
Annualized net credit card charge offs to                         
total credit card loans   1.26%   1.67%   2.29%   1.99%   1.82%

 

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

 

 Page 6 

 

Simmons First National Corporation                       SFNC
Consolidated - Average Balance Sheet and Net Interest Income Analysis   
For the Quarters Ended                           
(Unaudited)                           
   Three Months Ended
Sep 2020
  Three Months Ended
Jun 2020
  Three Months Ended
Sep 2019
($ in thousands)  Average
Balance
  Income/
Expense
  Yield/
Rate
  Average
Balance
  Income/
Expense
  Yield/
Rate
  Average
Balance
  Income/
Expense
  Yield/
Rate
ASSETS                                             
Earning assets:                                             
Interest bearing balances due from banks                                             
and federal funds sold  $2,265,233   $623    0.11%  $2,190,878   $603    0.11%  $344,761   $1,586    1.83%
Investment securities - taxable   1,534,742    7,193    1.86%   1,642,083    7,131    1.75%   1,561,308    9,514    2.42%
Investment securities - non-taxable (FTE)   1,155,099    10,382    3.58%   866,944    8,434    3.91%   681,505    6,687    3.89%
Mortgage loans held for sale   145,226    1,012    2.77%   86,264    668    3.11%   39,551    382    3.83%
Loans (FTE)   14,315,014    163,379    4.54%   14,731,306    177,168    4.84%   13,053,540    180,080    5.47%
Total interest earning assets (FTE)   19,415,314    182,589    3.74%   19,517,475    194,004    4.00%   15,680,665    198,249    5.02%
Non-earning assets   2,350,007              2,304,798              2,039,933           
Total assets  $21,765,321             $21,822,273             $17,720,598           
                                              
LIABILITIES AND STOCKHOLDERS' EQUITY                                             
Interest bearing liabilities:                                             
Interest bearing transaction and                                             
savings accounts  $8,977,886   $6,769    0.30%  $9,138,563   $7,203    0.32%  $7,322,395   $21,363    1.16%
Time deposits   2,998,091    9,437    1.25%   3,057,153    10,803    1.42%   3,122,422    15,573    1.98%
Total interest bearing deposits   11,975,977    16,206    0.54%   12,195,716    18,006    0.59%   10,444,817    36,936    1.40%
Federal funds purchased and securities                                             
sold under agreement to repurchase   386,631    335    0.34%   392,633    337    0.35%   123,883    249    0.80%
Other borrowings   1,357,278    4,943    1.45%   1,395,109    4,963    1.43%   1,127,886    5,381    1.89%
Subordinated notes and debentures   382,672    4,631    4.81%   387,422    4,667    4.84%   354,178    4,576    5.13%
Total interest bearing liabilities   14,102,558    26,115    0.74%   14,370,880    27,973    0.78%   12,050,764    47,142    1.55%
Non-interest bearing liabilities:                                             
Non-interest bearing deposits   4,529,782              4,354,781              3,012,544           
Other liabilities   190,169              216,508              288,517           
Total liabilities   18,822,509              18,942,169              15,351,825           
Stockholders' equity   2,942,812              2,880,104              2,368,773           
Total liabilities and stockholders' equity  $21,765,321             $21,822,273             $17,720,598           
Net interest income (FTE)       $156,474             $166,031             $151,107      
Net interest spread (FTE)             3.00%             3.22%             3.47%
Net interest margin (FTE) - quarter-to-date             3.21%             3.42%             3.82%
                                              
Net interest margin (FTE) - year-to-date             3.43%             3.55%             3.88%
                                              
Core net interest margin (FTE) - quarter-to-date (1)             3.02%             3.18%             3.59%
Core loan yield (FTE) - quarter-to-date (1)             4.29%             4.52%             5.19%
                                              
Core net interest margin (FTE) - year-to-date (1)             3.20%             3.30%             3.64%
Core loan yield (FTE) - year-to-date (1)             4.56%             4.69%             5.24%

 

(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  Sep 30  Jun 30  Mar 31  Dec 31  Sep 30
(Unaudited)  2020  2020  2020  2019  2019
($ in thousands, except share data)               
QUARTER-TO-DATE                         
Financial Highlights - GAAP                         
Net Income  $65,885   $58,789   $77,223   $52,709   $81,826 
Diluted earnings per share   0.60    0.54    0.68    0.49    0.84 
Return on average assets   1.20%   1.08%   1.48%   1.04%   1.83%
Return on average common equity   8.91%   8.21%   10.83%   8.01%   13.70%
Return on tangible common equity   15.45%   14.55%   19.00%   14.62%   24.89%
Net interest margin (FTE)   3.21%   3.42%   3.68%   3.78%   3.82%
FTE adjustment   2,864    2,350    2,305    2,172    1,843 
Amortization of intangibles   3,362    3,369    3,413    3,270    2,947 
Amortization of intangibles, net of taxes   2,483    2,489    2,521    2,416    2,176 
Average diluted shares outstanding   109,207,294    109,130,866    113,137,223    108,472,559    96,968,775 
Shares repurchased under plan   -    -    4,922,336    390,000    - 
Average price of shares repurchased   -    -    18.96    25.95    - 
Cash dividends declared per common share   0.17    0.17    0.17    0.16    0.16 
Financial Highlights - Core (non-GAAP)                         
Core earnings (excludes non-core items) (1)  $68,338   $60,147   $73,838   $71,074   $83,963 
Core diluted earnings per share (1)   0.63    0.55    0.65    0.66    0.87 
Core net interest margin (FTE) (2)   3.02%   3.18%   3.42%   3.44%   3.59%
Accretable yield on acquired loans   8,948    11,723    11,837    15,100    9,322 
Efficiency ratio (1)   54.12%   51.46%   57.79%   52.63%   43.77%
Core return on average assets (1)   1.25%   1.11%   1.42%   1.41%   1.88%
Core return on average common equity (1)   9.24%   8.40%   10.35%   10.80%   14.06%
Core return on tangible common equity (1)   16.00%   14.87%   18.19%   19.49%   25.52%
YEAR-TO-DATE                         
Financial Highlights - GAAP                         
Net Income  $201,897   $136,012   $77,223   $237,828   $185,119 
Diluted earnings per share   1.83    1.22    0.68    2.41    1.94 
Return on average assets   1.25%   1.28%   1.48%   1.33%   1.44%
Return on average common equity   9.27%   9.45%   10.83%   9.93%   10.65%
Return on tangible common equity   16.19%   16.57%   19.00%   17.99%   19.27%
Net interest margin (FTE)   3.43%   3.55%   3.68%   3.85%   3.88%
FTE adjustment   7,519    4,655    2,305    7,322    5,150 
Amortization of intangibles   10,144    6,782    3,413    11,805    8,535 
Amortization of intangibles, net of taxes   7,493    5,010    2,521    8,720    6,304 
Average diluted shares outstanding   110,480,508    111,083,999    113,137,223    98,796,628    95,450,732 
Cash dividends declared per common share   0.51    0.34    0.17    0.64    0.48 
Financial Highlights - Core (non-GAAP)                         
Core earnings (excludes non-core items) (1)  $202,323   $133,985   $73,838   $269,566   $198,492 
Core diluted earnings per share (1)   1.83    1.21    0.65    2.73    2.08 
Core net interest margin (FTE) (2)   3.20%   3.30%   3.42%   3.59%   3.64%
Accretable yield on acquired loans   32,508    23,560    11,837    41,244    26,144 
Efficiency ratio (1)   54.46%   54.62%   57.79%   50.33%   49.49%
Core return on average assets (1)   1.26%   1.26%   1.42%   1.51%   1.55%
Core return on average common equity (1)   9.29%   9.31%   10.35%   11.25%   11.42%
Core return on tangible common equity (1)   16.22%   16.33%   18.19%   20.31%   20.62%
END OF PERIOD                         
Book value per share  $26.98   $26.64   $26.11   $26.30   $26.36 
Tangible book value per share   16.07    15.79    15.22    15.89    15.73 
Shares outstanding   109,023,781    108,994,389    108,966,331    113,628,601    96,613,855 
Full-time equivalent employees   2,904    2,939    3,079    3,270    2,701 
Total number of financial centers   226    226    240    251    212 

 

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

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

 

 Page 8 

 

Simmons First National Corporation           SFNC
Consolidated - Reconciliation of Core Earnings (non-GAAP)         
For the Quarters Ended  Sep 30  Jun 30  Mar 31  Dec 31  Sep 30
(Unaudited)  2020  2020  2020  2019  2019
($ in thousands, except per share data)               
QUARTER-TO-DATE                         
Net Income  $65,885   $58,789   $77,223   $52,709   $81,826 
Non-core items                         
Gain on sale of branches   -    (2,204)   (5,889)   -    - 
Merger-related costs   902    1,830    1,068    24,831    2,556 
Early retirement program   2,346    493    -    -    177 
Branch right-sizing (net)   72    1,721    238    37    160 
Tax effect (1)   (867)   (482)   1,198    (6,503)   (756)
Net non-core items   2,453    1,358    (3,385)   18,365    2,137 
Core earnings (non-GAAP)  $68,338   $60,147   $73,838   $71,074   $83,963 
                          
Diluted earnings per share  $0.60   $0.54   $0.68   $0.49   $0.84 
Non-core items                         
Gain on sale of branches   -    (0.02)   (0.05)   -    - 
Merger-related costs   0.01    0.02    0.01    0.23    0.04 
Early retirement program   0.02    -    -    -    - 
Branch right-sizing (net)   -    0.02    -    -    - 
Tax effect (1)   -    (0.01)   0.01    (0.06)   (0.01)
Net non-core items   0.03    0.01    (0.03)   0.17    0.03 
Core diluted earnings per share (non-GAAP)  $0.63   $0.55   $0.65   $0.66   $0.87 
                          
YEAR-TO-DATE                         
Net Income  $201,897   $136,012   $77,223   $237,828   $185,119 
Non-core items                         
Gain on sale of branches   (8,093)   (8,093)   (5,889)   -    - 
Merger-related costs   3,800    2,898    1,068    36,379    11,548 
Early retirement program   2,839    493    -    3,464    3,464 
Branch right-sizing (net)   2,031    1,959    238    3,129    3,092 
Tax effect (1)   (151)   716    1,198    (11,234)   (4,731)
Net non-core items   426    (2,027)   (3,385)   31,738    13,373 
Core earnings (non-GAAP)  $202,323   $133,985   $73,838   $269,566   $198,492 
                          
Diluted earnings per share  $1.83   $1.22   $0.68   $2.41   $1.94 
Non-core items                         
Gain on sale of branches   (0.07)   (0.07)   (0.05)   -    - 
Merger-related costs   0.03    0.03    0.01    0.37    0.12 
Early retirement program   0.02    -    -    0.03    0.04 
Branch right-sizing (net)   0.02    0.02    -    0.03    0.03 
Tax effect (1)   -    0.01    0.01    (0.11)   (0.05)
Net non-core items   -    (0.01)   (0.03)   0.32    0.14 
Core diluted earnings per share (non-GAAP)  $1.83   $1.21   $0.65   $2.73   $2.08 
                          
(1) Effective tax rate of 26.135%.                         
                          
Reconciliation of Selected Non-Core Non-Interest Income and Expense Items (non-GAAP) 
                          
QUARTER-TO-DATE                         
Other income  $5,380   $9,809   $12,801   $7,073   $44,721 
Non-core items (1)   (370)   (2,204)   (5,889)   -    - 
Core other income (non-GAAP)  $5,010   $7,605   $6,912   $7,073   $44,721 
                          
Non-interest expense  $118,949   $117,598   $128,813   $142,095   $106,865 
Non-core items (1)   (3,690)   (4,044)   (1,306)   (24,868)   (2,893)
Core non-interest expense (non-GAAP)  $115,259   $113,554   $127,507   $117,227   $103,972 
                          
Salaries and employee benefits  $61,144   $57,644   $67,924   $63,235   $52,065 
Non-core items (1)   (2,448)   (493)   -    -    (176)
Core salaries and employee benefits (non-GAAP)  $58,696   $57,151   $67,924   $63,235   $51,889 
                          
Merger related costs  $902   $1,830   $1,068   $24,831   $2,556 
Non-core items (1)   (902)   (1,830)   (1,068)   (24,831)   (2,556)
Core merger related costs (non-GAAP)  $-   $-   $-   $-   $- 
                          
Other operating expenses  $38,179   $39,651   $41,788   $38,044   $37,881 
Non-core items (1)   (11)   (1,662)   (212)   (4)   (90)
Core other operating expenses (non-GAAP)  $38,168   $37,989   $41,576   $38,040   $37,791 

 

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

 

 Page 9 

 

Simmons First National Corporation              SFNC
Reconciliation Of Non-GAAP Financial Measures - End of Period            
For the Quarters Ended  Sep 30  Jun 30  Mar 31  Dec 31  Sep 30
(Unaudited)  2020  2020  2020  2019  2019
($ in thousands, except per share data)               
                
Calculation of Tangible Common Equity and the Ratio of Tangible Common Equity to Tangible Assets      
                          
Total common stockholders' equity  $2,941,474   $2,903,936   $2,844,633   $2,988,157   $2,547,071 
Intangible assets:                         
Goodwill   (1,075,305)   (1,064,765)   (1,064,978)   (1,055,520)   (926,648)
Other intangible assets   (114,460)   (117,823)   (121,673)   (127,340)   (101,149)
Total intangibles   (1,189,765)   (1,182,588)   (1,186,651)   (1,182,860)   (1,027,797)
Tangible common stockholders' equity  $1,751,709   $1,721,348   $1,657,982   $1,805,297   $1,519,274 
                          
Total assets  $21,437,395   $21,903,684   $20,841,352   $21,259,143   $17,758,511 
Intangible assets:                         
Goodwill   (1,075,305)   (1,064,765)   (1,064,978)   (1,055,520)   (926,648)
Other intangible assets   (114,460)   (117,823)   (121,673)   (127,340)   (101,149)
Total intangibles   (1,189,765)   (1,182,588)   (1,186,651)   (1,182,860)   (1,027,797)
Tangible assets  $20,247,630   $20,721,096   $19,654,701   $20,076,283   $16,730,714 
                          
Paycheck protection program ("PPP") loans   (970,488)   (963,712)               
Total assets less PPP loans  $20,466,907   $20,939,972                
Tangible assets less PPP loans  $19,277,142   $19,757,384                
                          
Ratio of equity to assets   13.72%   13.26%   13.65%   14.06%   14.34%
Ratio of equity to assets less PPP loans   14.38%   13.87%               
Ratio of tangible common equity to tangible assets   8.65%   8.31%   8.44%   8.99%   9.08%
Ratio of tangible common equity to tangible assets less PPP loans   9.09%   8.71%               
                          
Calculation of Tangible Book Value per Share                         
                          
Total common stockholders' equity  $2,941,474   $2,903,936   $2,844,633   $2,988,157   $2,547,071 
Intangible assets:                         
Goodwill   (1,075,305)   (1,064,765)   (1,064,978)   (1,055,520)   (926,648)
Other intangible assets   (114,460)   (117,823)   (121,673)   (127,340)   (101,149)
Total intangibles   (1,189,765)   (1,182,588)   (1,186,651)   (1,182,860)   (1,027,797)
Tangible common stockholders' equity  $1,751,709   $1,721,348   $1,657,982   $1,805,297   $1,519,274 
Shares of common stock outstanding   109,023,781    108,994,389    108,966,331    113,628,601    96,613,855 
Book value per common share  $26.98   $26.64   $26.11   $26.30   $26.36 
Tangible book value per common share  $16.07   $15.79   $15.22   $15.89   $15.73 
                          
Calculation of Regulatory Tier 1 Leverage Ratio Less Average PPP Loans      
                          
Total Tier 1 capital  $1,868,173   $1,820,488                
                          
Adjusted average assets for leverage ratio  $20,652,454   $20,742,824                
Average PPP loans   (967,152)   (645,172)               
Adjusted average assets less average PPP loans  $19,685,302   $20,097,652                
                          
Tier 1 leverage ratio   9.05%   8.78%               
Tier 1 leverage ratio less average PPP loans   9.49%   9.06%               

 

 Page 10 

 

Simmons First National Corporation              SFNC
Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date         
For the Quarters Ended  Sep 30  Jun 30  Mar 31  Dec 31  Sep 30
(Unaudited)  2020  2020  2020  2019  2019
($ in thousands)               
Calculation of Core Return on Average Assets                         
                          
Net income  $65,885   $58,789   $77,223   $52,709   $81,826 
Net non-core items, net of taxes, adjustment   2,453    1,358    (3,385)   18,365    2,137 
Core earnings  $68,338   $60,147   $73,838   $71,074   $83,963 
                          
Average total assets  $21,765,321   $21,822,273   $20,920,223   $20,041,890   $17,720,598 
                          
Return on average assets   1.20%   1.08%   1.48%   1.04%   1.83%
Core return on average assets   1.25%   1.11%   1.42%   1.41%   1.88%
                          
Calculation of Return on Tangible Common Equity                         
                          
Net income  $65,885   $58,789   $77,223   $52,709   $81,826 
Amortization of intangibles, net of taxes   2,483    2,489    2,521    2,416    2,176 
Total income available to common stockholders  $68,368   $61,278   $79,744   $55,125   $84,002 
                          
Net non-core items, net of taxes   2,453    1,358    (3,385)   18,365    2,137 
Core earnings   68,338    60,147    73,838    71,074    83,963 
Amortization of intangibles, net of taxes   2,483    2,489    2,521    2,416    2,176 
Total core income available to common stockholders  $70,821   $62,636   $76,359   $73,490   $86,139 
                          
Average common stockholders' equity  $2,942,045   $2,879,337   $2,869,177   $2,611,143   $2,368,773 
Average intangible assets:                         
Goodwill   (1,064,893)   (1,064,955)   (1,055,498)   (997,004)   (926,687)
Other intangibles   (116,385)   (120,111)   (125,746)   (118,311)   (103,028)
Total average intangibles   (1,181,278)   (1,185,066)   (1,181,244)   (1,115,315)   (1,029,715)
Average tangible common stockholders' equity  $1,760,767   $1,694,271   $1,687,933   $1,495,828   $1,339,058 
                          
Return on average common equity   8.91%   8.21%   10.83%   8.01%   13.70%
Return on tangible common equity   15.45%   14.55%   19.00%   14.62%   24.89%
Core return on average common equity   9.24%   8.40%   10.35%   10.80%   14.06%
Core return on tangible common equity   16.00%   14.87%   18.19%   19.49%   25.52%
                          
Calculation of Efficiency Ratio (1)                         
                          
Non-interest expense  $118,949   $117,598   $128,813   $142,095   $106,865 
Non-core non-interest expense adjustment   (3,690)   (4,044)   (1,306)   (24,868)   (2,893)
Other real estate and foreclosure expense adjustment   (600)   (242)   (319)   (1,063)   (1,057)
Amortization of intangibles adjustment   (3,362)   (3,369)   (3,413)   (3,270)   (2,947)
Efficiency ratio numerator  $111,297   $109,943   $123,775   $112,894   $99,968 
                          
Net-interest income  $153,610   $163,681   $167,483   $167,066   $149,264 
Non-interest income   71,851    50,227    82,394    45,630    84,675 
Non-core non-interest income adjustment   (370)   (2,204)   (5,889)   -    - 
Fully tax-equivalent adjustment (effective tax rate of 26.135%)   2,864    2,350    2,305    2,172    1,843 
Gain on sale of securities   (22,305)   (390)   (32,095)   (377)   (7,374)
Efficiency ratio denominator  $205,650   $213,664   $214,198   $214,491   $228,408 
                          
Efficiency ratio (1)   54.12%   51.46%   57.79%   52.63%   43.77%

 

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

 

 Page 11 

 

Simmons First National Corporation              SFNC
Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date (continued)         
For the Quarters Ended  Sep 30  Jun 30  Mar 31  Dec 31  Sep 30
(Unaudited)  2020  2020  2020  2019  2019
($ in thousands)               
Calculation of Core Net Interest Margin                         
                          
Net interest income  $153,610   $163,681   $167,483   $167,066   $149,264 
Fully tax-equivalent adjustment (effective tax rate of 26.135%)   2,864    2,350    2,305    2,172    1,843 
Fully tax-equivalent net interest income   156,474    166,031    169,788    169,238    151,107 
                          
Total accretable yield   (8,948)   (11,723)   (11,837)   (15,100)   (9,322)
Core net interest income  $147,526   $154,308   $157,951   $154,138   $141,785 
                          
PPP loan and excess liquidity interest income   (6,131)  $(5,623)               
Net interest income adjusted for PPP loans and liquidity  $150,343   $160,408                
                          
Average earning assets  $19,415,314   $19,517,475   $18,581,491   $17,753,004   $15,680,665 
Average PPP loan balance and excess liquidity   (2,359,928)   (2,071,411)               
Average earning assets adjusted for PPL loans and liquidity  $17,055,386   $17,446,064                
                          
Net interest margin   3.21%   3.42%   3.68%   3.78%   3.82%
Core net interest margin   3.02%   3.18%   3.42%   3.44%   3.59%
Net interest margin adjusted for PPP loans and liquidity   3.51%   3.70%               
                          
Calculation of Core Loan Yield                         
                          
Loan interest income (FTE)  $163,379   $177,168   $187,566   $193,402   $179,971 
Total accretable yield   (8,948)   (11,723)   (11,837)   (15,100)   (9,322)
Core loan interest income  $154,431   $165,445   $175,729   $178,302   $170,649 
PPP loan interest income   (5,782)   (3,733)               
Core loan interest income without PPP loans  $148,649   $161,712                
                          
Average loan balance  $14,315,014   $14,731,306   $14,548,853   $14,144,703   $13,053,540 
Average PPP loan balance   (967,152)  $(645,172)               
Average loan balance without PPP loans  $13,347,862   $14,086,134                
                          
Core loan yield   4.29%   4.52%   4.86%   5.00%   5.19%
Core loan yield without PPP loans   4.43%   4.62%               
                          
Calculation of Pre-Tax, Pre-Provision (PTPP) Earnings                         
                          
Net income available to common stockholders  $65,885   $58,789   $77,223   $52,709   $81,826 
Provision for income taxes   17,633    15,593    20,694    12,976    23,275 
Provision for credit losses (including provision for unfunded commitments)   22,981    21,915    23,134    4,903    21,973 
(Gain) loss on sale of securities   (22,305)   (390)   (32,095)   (377)   (7,374)
Net pre-tax non-core items   3,320    1,840    (4,583)   24,868    2,893 
Pre-tax, pre-provision (PTPP) earnings  $87,514   $97,747   $84,373   $95,079   $122,593 

 

 Page 12 

 

Simmons First National Corporation              SFNC
Reconciliation Of Non-GAAP Financial Measures - Year-to-Date            
For the Quarters Ended               
(Unaudited)  Sep 30  Jun 30  Mar 31  Dec 31  Sep 30
   2020  2020  2020  2019  2019
($ in thousands)               
Calculation of Core Return on Average Assets                         
                          
Net income  $201,897   $136,012   $77,223   $237,828   $185,119 
Net non-core items, net of taxes, adjustment   426    (2,027)   (3,385)   31,738    13,373 
Core earnings  $202,323   $133,985   $73,838   $269,566   $198,492 
                          
Average total assets  $21,503,564   $21,371,248   $20,920,223   $17,871,748   $17,140,419 
                          
Return on average assets   1.25%   1.28%   1.48%   1.33%   1.44%
Core return on average assets   1.26%   1.26%   1.42%   1.51%   1.55%
                          
Calculation of Return on Tangible Common Equity                         
                          
Net income  $201,897   $136,012   $77,223   $237,828   $185,119 
Amortization of intangibles, net of taxes   7,493    5,010    2,521    8,720    6,304 
Total income available to common stockholders  $209,390   $141,022   $79,744   $246,548   $191,423 
                          
Net non-core items, net of taxes   426    (2,027)   (3,385)   31,738    13,373 
Core earnings   202,323    133,985    73,838    269,566    198,492 
Amortization of intangibles, net of taxes   7,493    5,010    2,521    8,720    6,304 
Total core income available to common stockholders  $209,816   $138,995   $76,359   $278,286   $204,796 
                          
Average common stockholders' equity  $2,910,366   $2,894,351   $2,869,177   $2,396,024   $2,323,530 
Average intangible assets:                         
Goodwill   (1,061,793)   (1,060,226)   (1,055,498)   (921,635)   (896,236)
Other intangibles   (120,731)   (122,928)   (125,746)   (104,000)   (99,178)
Total average intangibles   (1,182,524)   (1,183,154)   (1,181,244)   (1,025,635)   (995,414)
Average tangible common stockholders' equity  $1,727,842   $1,711,197   $1,687,933   $