Simmons Reports Third Quarter 2017 Earnings

PINE BLUFF, Ark., Oct. 22, 2017 (GLOBE NEWSWIRE) — Simmons First National Corp. (NASDAQ:SFNC) today announced net income available to common shareholders of $28.9 million, or $0.89 per diluted share, for the quarter ended September 30, 2017, compared to $23.4 million, or $0.76 per diluted share, for the same period in 2016, a 17.1% increase.  Included in third quarter 2017 results was $721,000 in net after-tax merger-related and branch right-sizing costs as well as a $1.8 million gain on the sale of insurance lines.

Excluding the impact of these items, core earnings were $27.7 million, or $0.86 per diluted share, for the quarter ended September 30, 2017, compared to $24.4 million, or $0.79 per diluted share, for the quarter ended September 30, 2016, an 8.9% increase.

Year-to-date net income was $74.0 million, or $2.31 diluted earnings per share. Excluding the net after-tax merger-related and branch right-sizing costs and the insurance gain, year-to-date core earnings were $77.0 million, or $2.41 diluted core earnings per share.

On October 19, 2017, Simmons First National Corp. completed the acquisitions of Southwest Bancorp, Inc. (NASDAQ:OKSB), headquartered in Stillwater, OK., including its wholly-owned bank subsidiary, Bank SNB, and First Texas BHC, Inc., headquartered in Ft. Worth, TX, including its wholly-owned subsidiary, Southwest Bank. With the completion of these acquisitions, the proforma combined total assets of the company are approximately $14.2 billion. The systems conversions are planned during the first half of 2018, at which time the subsidiary banks will be merged into Simmons Bank.

Simmons Bank was the successful bidder at a public auction held to discharge certain indebtedness owed to the Bank and became the sole shareholder of Heartland Bank in Little Rock, AR, on August 28, 2017. Heartland Bank remains a separately chartered state bank. Simmons is evaluating the next steps with respect to the institution.

On September 1, 2017, the insurance affiliates of the Company completed the sale of their property and casualty insurance business lines and an after-tax gain of $1.8 million was recognized on the transaction.  Tangible common equity was positively impacted by $7.2 million due to a reduction in intangible assets related to the sold business.

Additionally, during the quarter, the Company completed its conversion and integration of First South Bank with and into its subsidiary, Simmons Bank.

“The third quarter was certainly an exciting and eventful quarter for us,” said George A. Makris, Jr., chairman and CEO.  “We are pleased with the operating results from the third quarter and I am extremely proud of our associates’ ability to manage the significant transactions during the quarter while producing outstanding results.  We are also excited to welcome the associates of Bank SNB and Southwest Bank to the Simmons family.  We look forward to a great partnership.”

Selected Highlights: 3rd Qtr 2017 2nd Qtr 2017          3rd Qtr 2016  
         
Net income $28.9 million $23.1 million $23.4 million  
Diluted earnings per share $0.89   $0.72   $0.76    
Return on avg assets  1.25%    1.05%    1.21%    
Return on avg common equity  9.12%    7.65%    8.36%    
Return on tangible common equity  14.47%    12.13%    13.26%    
Net interest margin(1)  3.91%    4.04%    4.08%    
         
Core earnings(2) $27.7 million $26.8 million $24.4 million  
Diluted core earnings per share(2) $0.86   $0.84   $0.79    
Core return on avg assets(2)  1.20%    1.22%    1.26%    
Core return on avg common equity(2)  8.77%    8.87%    8.71%    
Core return on tangible common equity(2)  13.93%    13.99%    13.78%    
Core net interest margin(1)(2)  3.77%    3.79%    3.79%    
         
Efficiency ratio  55.06%    56.04%    53.94%    
(1)  Fully tax equivalent.      
(2)  Core earnings excludes non-core items, which is a non-GAAP measurement.      
 

 

Loans

  3rd Qtr 2017              2nd Qtr 2017          3rd Qtr 2016  
 
Total loans $6.3 billion $6.2 billion $5.4 billion  
Legacy loans (all loans excluding loans acquired)                          $5.2 billion $5.0 billion $3.9 billion  
Loans acquired $1.1 billion $1.2 billion $1.5 billion   
 

Total loans, including those acquired, were $6.3 billion at September 30, 2017, an increase of $902.1 million, or 16.7% from September 30, 2016. 

On a linked-quarter basis (September 30, 2017 compared to June 30, 2017), total loans increased $78.0 million, or 1.3%.  The increase was due to:

  • $30 million decrease in liquidating portfolio (indirect lending and consumer finance)
  • $13 million increase from participations purchased from Southwest Bank
  • $228 million in net legacy loan growth including $36 million of migrated loans (acquired to legacy)
  • $133 million decrease in the existing acquired loan portfolio including migration

Deposits

  3rd Qtr 2017              2nd Qtr 2017          3rd Qtr 2016  
 
Total deposits $7.3 billion $7.1 billion $6.6 billion  
Non-time deposits                                                                            $6.0 billion $5.8 billion $5.3 billion  
Time deposits $1.3 billion $1.3 billion $1.3 billion   

At September 30, 2017, total deposits were $7.3 billion, an increase of 10.7%, compared to the same period in 2016. The increase is from recent acquisitions and growth in core deposits.  Total non-time deposits increased 13.7% compared to the same period in 2016, and comprised 82% of total deposits.

Net Interest Income

The Company’s net interest income for the third quarter of 2017 was $78.8 million, an increase of $10.8 million, or 15.8%, from the same period of 2016. Included in interest income was the yield accretion recognized on loans acquired of $2.9 million and $4.9 million for the third quarter of 2017 and 2016, respectively. Net interest margin was 3.91% for the quarter ended September 30, 2017, a 17 basis point decline from the same quarter of 2016. The Company’s core net interest margin, excluding the accretion, was 3.77% for the third quarter of 2017, a 2 basis point decline from September 30, 2016 and a 2 basis point decrease from June 30, 2017.  Cost of interest bearing deposits were 0.43% for the third quarter of 2017, a 12 basis point increase from September 30, 2016 and a 7 basis point increase from June 30, 2017.

Non-Interest Income

Non-interest income for the third quarter was $36.3 million, a decrease of $544,000 compared with the third quarter of 2016. Included in non-interest income were the following items:

  • $3.7 million gain on sale of property and casualty insurance business lines
  • $325,000 loss on the sale of fixed assets
  • $1.2 million decrease in mortgage revenue due to decline in demand in the industry
  • $451,000 decrease in investment banking revenue, due to the exit from the institutional division of the broker dealer line of business in the third quarter of 2016
  • $312,000 decrease in gain on sale of securities
  • $2.0 million decrease in other income due to recovery of charged off loans acquired in third quarter of 2016

Non-Interest Expense

Non-interest expense for the third quarter of 2017 was $66.2 million, an increase of $3.7 million compared to the third quarter of 2016. Included in this quarter were $862,000 of merger-related expenses and branch rightsizing costs.   Excluding these expenses, core non-interest expense was $65.3 million.

The increases during the quarter were driven by incremental increases in operating expenses related to the additions of First South Bank which closed during 2017 and Citizens Bank which closed in September 2016. These increases were partially offset by a $716,000 decrease in other real estate and foreclosure expense. The efficiency ratio for the third quarter was 55.06%.

Asset Quality

  3rd Qtr 2017                2nd Qtr 2017              3rd Qtr 2016
 
Allowance for loan losses on loans to total loans 0.82%   0.83%   0.86%
Allowance for loan losses on loans to non-performing loans                      78%   72% 91%
Non-performing loans to total loans 1.05%   1.15%   0.95%
Net charge-off ratio (annualized) 0.32%   0.23%   0.82%
Net charge-off ratio excluding credit cards  0.27%   0.19%   0.81%
   

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 September 30, 2017, the allowance for loan losses for legacy loans was $42.7 million. The allowance for loan losses for loans acquired was $391,000 and the acquired loan discount credit mark was $25.0 million. The allowances for loan losses and credit marks provide a total of $68.1 million of coverage, which equates to a total coverage ratio of 1.1% of gross loans. The ratio of credit mark and related allowance to loans acquired was 2.3%.

Provision for loan losses for the third quarter of 2017 was $5.5 million, a decrease of $2.8 million compared to September 30, 2016.

Foreclosed Assets and Other Real Estate Owned

At September 30, 2017, foreclosed assets and other real estate owned were $31.5 million, an increase of $1.1 million, or 3.6%, compared to the same period in 2016. The composition of these assets is divided in to three types:  

  3rd Qtr 2017                2nd Qtr 2017                3rd Qtr 2016
 
Closed bank branches, branch sites & associate relocation                        $12.8 million $8.7 million $6.1 million
Foreclosed assets – acquired $11.1 million $12.0 million $15.2 million
Foreclosed assets – legacy $7.6 million $5.3 million $9.1 million
   

Arkansas State banking laws require that former bank branches and vacant land that was previously held for potential bank branches be classified as foreclosed assets and other real estate owned at the time they are no longer used for bank operations. Due to this requirement, foreclosed assets and other real estate owned increased during the quarter by $4.1 million as a result of branch closures during the conversion of First South Bank in to Simmons Bank.

Capital

  3rd Qtr 2017                  2nd Qtr 2017                3rd Qtr 2016
 
Stockholders’ equity to total assets 13.2%   13.6%   13.9%
Tangible common equity to tangible assets                                                  9.1%   9.2%   9.5%
Regulatory tier 1 leverage ratio 10.6%   10.8%   11.6%
Regulatory total risk-based capital ratio 13.6%   13.7%   15.5%
       

At September 30, 2017, common stockholders’ equity was $1.3 billion, book value per share was $39.03 and tangible book value per share was $25.64.  

Simmons First National Corporation

Simmons First National Corp. is a financial holding company, headquartered in Pine Bluff, Ark., with total assets of $9.5 billion as of September 30, 2017 and proforma assets of approximately $14.2 billion conducting financial operations throughout Arkansas, Colorado, 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 Global Select Market under the symbol “SFNC.”

Conference Call

Management will conduct a live conference call to review this information beginning at 9:30 a.m. CDT on Monday, October 23, 2017. 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 Corp. conference call, conference ID 84536260. In addition, the call will be available live or in recorded version on the Company’s website at www.simmonsbank.com.

Non-GAAP Financial Measures

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

Forward-Looking Statements

Statements in this news release that are not historical facts should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any forward-looking statement speaks only as of the date of this news release, and we undertake 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 involve inherent risk and uncertainties. Various factors, including, but not limited to, economic conditions, credit quality, interest rates, loan demand, changes in the assumptions used in making the forward-looking statements, and the Company’s ability to obtain regulatory approvals and meet other closing conditions associated with the above-described mergers and acquisitions could cause actual results to differ materially from those contemplated by the forward-looking statements. Additional information on factors that might affect Simmons First National Corp.’s financial results is included in its Form 10-K filing with the Securities and Exchange Commission.

FOR MORE INFORMATION CONTACT:
DAVID W. GARNER
EVP and Investor Relations Officer
Simmons First National Corporation
(870) 541-1000

 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)     2017         2017         2017         2016         2016   
($ in thousands)                  
ASSETS                   
Cash and non-interest bearing balances due from banks $   108,675     $   112,567     $   103,875     $   117,007     $   112,572  
Interest bearing balances due from banks and federal funds sold          323,615         217,047         201,406         168,652         341,951  
Cash and cash equivalents     432,290         329,614         305,281         285,659         454,523  
Interest bearing balances due from banks – time     4,059         6,057         4,563         4,563         4,393  
Investment securities – held-to-maturity     406,033         419,003         431,176         462,096         496,594  
Investment securities – available-for-sale     1,317,420         1,190,600         1,257,813         1,157,354         1,024,206  
Mortgage loans held for sale     12,614         16,266         9,754         27,788         28,069  
Assets held in trading accounts     49         50         55         41         2,969  
Other assets held for sale     182,378         –          –          –          –   
Loans:                  
Legacy loans     5,211,312         5,000,572         4,632,905         4,327,207         3,943,089  
Allowance for loan losses     (42,717 )       (41,379 )       (37,865 )       (36,286 )       (34,094 )
Loans acquired, net of discount and allowance     1,092,039         1,224,739         1,144,291         1,305,683         1,458,198  
Net loans     6,260,634         6,183,932         5,739,331         5,596,604         5,367,193  
Premises and equipment     224,376         230,641         221,880         199,359         192,523  
Premises held for sale     –          –          4,611         6,052         6,732  
Foreclosed assets and other real estate owned     31,477         26,012         26,421         26,895         30,396  
Interest receivable     30,749         27,337         26,089         27,788         27,390  
Bank owned life insurance     148,984         148,134         139,439         138,620         138,298  
Goodwill     375,731         379,437         350,035         348,505         348,769  
Other intangible assets     55,501         58,528         51,408         52,959         54,268  
Other assets     53,075         52,697         58,782         65,773         50,669  
   Total assets $   9,535,370     $   9,068,308     $   8,626,638     $   8,400,056     $   8,226,992  
                   
LIABILITIES AND STOCKHOLDERS’ EQUITY                   
Deposits:                  
Non-interest bearing transaction accounts $   1,669,860     $   1,650,986     $   1,554,675     $   1,491,676     $   1,473,420  
Interest bearing transaction accounts and savings deposits     4,344,779         4,141,426         3,987,730         3,956,483         3,815,939  
Time deposits less than $100,000     675,186         645,855         653,538         686,780         653,105  
Time deposits greater than $100,000     635,765         665,268         592,345         600,280         674,917  
Total deposits     7,325,590         7,103,535         6,788,288         6,735,219         6,617,381  
Federal funds purchased and securities sold                  
under agreements to repurchase     121,687         121,419         110,007         115,029         124,289  
Other borrowings     522,541         474,962         441,074         273,159         215,276  
Subordinated debentures     67,418         67,312         60,503         60,397         60,290  
Other liabilities held for sale     176,964         –          –          –          –   
Accrued interest and other liabilities     63,971         67,004         55,877         65,141         62,615  
Total liabilities     8,278,171         7,834,232         7,455,749         7,248,945         7,079,851  
                   
 Stockholders’ equity:                   
 Common stock      322         322         314         313         313  
 Surplus      763,443         761,754         716,564         711,976         710,132  
 Undivided profits      504,085         483,322         468,309         454,034         434,579  
 Accumulated other comprehensive income (loss):                   
 Unrealized appreciation (depreciation) on AFS securities      (10,651 )       (11,322 )       (14,298 )       (15,212 )       2,117  
 Total stockholders’ equity      1,257,199         1,234,076         1,170,889         1,151,111         1,147,141  
    Total liabilities and stockholders’ equity  $   9,535,370     $   9,068,308     $   8,626,638     $   8,400,056     $   8,226,992  
                   
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 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)     2017       2017       2017       2016       2016   
($ in thousands, except per share data)                    
 INTEREST INCOME                     
Loans $   77,457   $   73,549   $   68,728   $   70,887   $   65,078  
Interest bearing balances due from banks and federal funds sold        650       214       122       245       263  
Investment securities     9,218       9,990       9,451       8,700       7,774  
Mortgage loans held for sale     159       145       126       230       299  
Assets held in trading accounts     –        –        –        3       4  
TOTAL INTEREST INCOME     87,484       83,898       78,427       80,065       73,418  
 INTEREST EXPENSE                     
Time deposits     2,110       1,832       1,758       2,023       1,767  
Other deposits     3,920       2,984       2,446       2,032       1,965  
Federal funds purchased and securities                    
sold under agreements to repurchase     83       92       75       90       59  
Other borrowings     1,875       1,559       1,194       1,034       1,048  
Subordinated debentures     677       619       574       558       516  
TOTAL INTEREST EXPENSE     8,665       7,086       6,047       5,737       5,355  
 NET INTEREST INCOME      78,819       76,812       72,380       74,328       68,063  
    Provision for loan losses     5,462       7,023       4,307       4,332       8,294  
 NET INTEREST INCOME AFTER PROVISION                     
 FOR LOAN LOSSES      73,357       69,789       68,073       69,996       59,769  
 NON-INTEREST INCOME                     
Trust income     4,225       4,113       4,212       4,282       3,873  
Service charges on deposit accounts     8,907       8,483       8,102       8,666       8,771  
Other service charges and fees     2,433       2,515       2,197       4,026       3,261  
Mortgage and SBA lending income     3,219       3,961       2,423       4,580       4,339  
Investment banking income     680       637       690       472       1,131  
Debit and credit card fees     8,864       8,659       7,934       8,027       7,825  
Bank owned life insurance income     725       859       818       895       606  
Gain on sale of securities, net     3       2,236       63       1,445       315  
Other income     7,276       4,281       3,621       3,722       6,755  
TOTAL NON-INTEREST INCOME     36,332       35,744       30,060       36,115       36,876  
 NON-INTEREST EXPENSE                     
Salaries and employee benefits     35,285       34,205       35,536       33,797       31,784  
Occupancy expense, net     4,928       4,868       4,663       4,516       4,690  
Furniture and equipment expense     4,840       4,550       4,443       4,387       4,272  
Other real estate and foreclosure expense     1,071       517       589       679       1,849  
Deposit insurance     1,020       780       680       89       1,136  
Merger-related costs     752       6,603       524       2,846       1,524  
Other operating expenses     18,263       19,885       19,887       20,411       17,179  
TOTAL NON-INTEREST EXPENSE     66,159       71,408       66,322       66,725       62,434  
 NET INCOME BEFORE INCOME TAXES      43,530       34,125       31,811       39,386       34,211  
Provision for income taxes     14,678       11,060       9,691       12,415       10,782  
 NET INCOME  $   28,852   $   23,065   $   22,120   $   26,971   $   23,429  
 BASIC EARNINGS PER SHARE  $   0.90   $   0.72   $   0.71   $   0.86   $   0.77  
 DILUTED EARNINGS PER SHARE  $   0.89   $   0.72   $   0.70   $   0.85   $   0.76  
                     
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 Simmons First National Corporation                   SFNC 
 Consolidated Risk-Based Capital                   
 For the Quarters Ended   Sep 30     Jun 30     Mar 31     Dec 31     Sep 30 
 (Unaudited)     2017         2017         2017         2016         2016   
($ in thousands)                  
Tier 1 capital                  
Stockholders’ equity $   1,257,199     $   1,234,076     $   1,170,889     $   1,151,111     $   1,147,141  
Trust preferred securities, net allowable     67,418         67,312         60,503         60,397         60,290  
Disallowed intangible assets, net of deferred tax     (401,419 )       (406,990 )       (361,944 )       (354,028 )       (354,582 )
Unrealized loss (gain) on AFS securities     10,651         11,322         14,298         15,212         (2,117 )
Other     –          –          –          15         –   
Total Tier 1 capital     933,849         905,720         883,746         872,707         850,732  
                   
Tier 2 capital                  
Qualifying unrealized gain on AFS equity securities     1         1         2         –          –   
Qualifying allowance for loan losses and                  
reserve for unfunded commitments     46,709         45,369         41,303         40,241         38,050  
Total Tier 2 capital     46,710         45,370         41,305         40,241         38,050  
Total risk-based capital $   980,559     $   951,090     $   925,051     $   912,948     $   888,782  
                   
Common equity                  
Tier 1 capital $   933,849     $   905,720     $   883,746     $   872,707     $   850,732  
Less: Trust preferred securities     (67,418 )       (67,312 )       (60,503 )       (60,397 )       (60,290 )
Total common equity $   866,431     $   838,408     $   823,243     $   812,310     $   790,442  
                   
Risk weighted assets $   7,225,846     $   6,925,727     $   6,425,150     $   6,039,034     $   5,724,052  
                   
Adjusted average assets for leverage ratio  $   8,794,433     $   8,424,763     $   8,076,525     $   7,966,681     $   7,355,702  
                   
Ratios at end of quarter                  
Equity to assets   13.18 %     13.61 %     13.57 %     13.70 %     13.94 %
Tangible common equity to tangible assets (1)   9.07 %     9.22 %     9.35 %     9.37 %     9.51 %
Common equity Tier 1 ratio (CET1)   11.99 %     12.11 %     12.81 %     13.45 %     13.81 %
Tier 1 leverage ratio   10.62 %     10.75 %     10.94 %     10.95 %     11.57 %
Tier 1 risk-based capital ratio   12.92 %     13.08 %     13.75 %     14.45 %     14.86 %
Total risk-based capital ratio   13.57 %     13.73 %     14.40 %     15.12 %     15.53 %
                   
                   
(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   Sep 30     Jun 30     Mar 31     Dec 31     Sep 30   
 (Unaudited)     2017       2017       2017       2016       2016   
($ in thousands)                    
Legacy Loan Portfolio – End of Period (1)                         
Consumer                    
Credit cards $   176,316   $   176,953   $   171,947   $   184,591   $   175,032  
Other consumer     317,946       366,136       349,200       303,972       275,947  
Total consumer     494,262       543,089       521,147       488,563       450,979  
Real Estate                    
Construction     515,274       457,896       365,051       336,759       304,082  
Single-family residential     1,048,403       1,014,412       957,717       904,245       841,958  
Other commercial     2,231,223       2,089,707       1,959,677       1,787,075       1,521,132  
Total real estate     3,794,900       3,562,015       3,282,445       3,028,079       2,667,172  
Commercial                    
Commercial     688,960       678,932       657,606       639,525       607,738  
Agricultural     207,849       191,345       141,125       150,378       203,529  
Total commercial     896,809       870,277       798,731       789,903       811,267  
Other     25,341       25,191       30,582       20,662       13,671  
Total Loans $   5,211,312   $   5,000,572   $   4,632,905   $   4,327,207   $   3,943,089  
                     
 (1) Excludes all acquired loans.                     
                     
Investment Securities – End of Period                    
 Held-to-Maturity                     
U.S. Government agencies $   66,928   $   67,912   $   68,895   $   76,875   $   80,849  
Mortgage-backed securities     16,972       17,882       18,743       19,773       21,454  
State and political subdivisions     320,116       331,249       341,854       362,532       391,495  
Other securities     2,017       1,960       1,684       2,916       2,796  
Total held-to-maturity     406,033       419,003       431,176       462,096       496,594  
 Available-for-Sale                     
U.S. Treasury $   –    $   19,997   $   –    $   300   $   63,985  
U.S. Government agencies     208,220       147,619       142,356       137,771       148,781  
Mortgage-backed securities     959,698       878,205       927,277       868,324       699,748  
State and political subdivisions     84,822       83,672       130,747       102,943       67,019  
FHLB stock     24,415       21,772       19,149       12,235       11,235  
Other securities     40,265       39,335       38,285       35,781       33,438  
Total available-for-sale     1,317,420       1,190,600       1,257,814       1,157,354       1,024,206  
Total investment securities $   1,723,453   $   1,609,603   $   1,688,990   $   1,619,450   $   1,520,800  
Fair value – HTM investment securities $   412,140   $   425,263   $   435,701   $   465,960   $   508,910  
                     
Investment Securities – QTD Average                    
 Taxable securities $   1,229,172   $   1,244,071   $   1,185,794   $   1,146,703   $   963,150  
 Tax exempt securities     409,062       467,420       455,481       467,757       466,782  
Total investment securities – QTD average $   1,638,234   $   1,711,491   $   1,641,275   $   1,614,460   $   1,429,932  
                     
 Page 4   
                     

 

 Simmons First National Corporation                   SFNC   
 Consolidated Loans and Credit Coverage                     
 For the Quarters Ended  Sep 30   Jun 30   Mar 31   Dec 31   Sep 30  
 (Unaudited)  2017   2017    2017    2016    2016  
 ($ in thousands)                     
 LOANS                     
Legacy loans $   5,211,312     $   5,000,572     $   4,632,905     $   4,327,207     $   3,943,089    
Allowance for loan losses (legacy loans)     (42,717 )       (41,379 )       (37,865 )       (36,286 )       (34,094 )  
Legacy loans (net of allowance)     5,168,595         4,959,193         4,595,040         4,290,921         3,908,995    
Loans acquired     1,117,424         1,253,539         1,173,667         1,342,099         1,502,051    
Credit discount     (24,994 )       (28,409 )       (28,941 )       (35,462 )       (42,899 )  
Allowance for loan losses (loans acquired)     (391 )       (391 )       (435 )       (954 )       (954 )  
Loans acquired (net of discount and allowance)     1,092,039         1,224,739         1,144,291         1,305,683         1,458,198    
Net loans $   6,260,634     $   6,183,932     $   5,739,331     $   5,596,604     $   5,367,193    
                     
                     
Loan Coverage Ratios                     
Allowance for loan losses to legacy loans   0.82 %     0.83 %     0.82 %     0.84 %     0.86 %  
                     
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)   2.27 %     2.30 %     2.50 %     2.71 %     2.92 %  
                     
Total allowance and credit coverage (non-GAAP) (1)   1.08 %     1.12 %     1.16 %     1.28 %     1.43 %  
                     
                     
(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   Sep 30     Jun 30     Mar 31     Dec 31     Sep 30 
 (Unaudited)     2017         2017         2017         2016         2016   
($ in thousands)                  
Allowance for Loan Losses (Legacy Loans)                  
 Balance, beginning of quarter $   41,379     $   37,865     $   36,286     $   34,094     $   33,523  
 Loans charged off                  
Credit cards     1,017         901         1,044         935         699  
Other consumer     819         993         1,174         493         600  
Real estate     896         1,712         656         167         6,297  
Commercial     2,442         349         292         913         284  
Total loans charged off     5,174         3,955         3,166         2,508         7,880  
                   
Recoveries of loans previously charged off                  
Credit cards     275         277         236         213         199  
Other consumer     445         636         690         158         106  
Real estate     309         216         232         73         55  
Commercial     21         32         30         28         12  
Total recoveries     1,050         1,161         1,188         472         372  
Net loans charged off     4,124         2,794         1,978         2,036         7,508  
Provision for loan losses     5,462         6,308         3,557         4,228         8,079  
Balance, end of quarter $   42,717     $   41,379     $   37,865     $   36,286     $   34,094  
                   
Non-performing assets (1) (2)                  
 Non-performing loans                  
Nonaccrual loans     54,439         57,127         52,913         39,104         37,392  
Loans past due 90 days or more     232         281         231         299         144  
Total non-performing loans     54,671         57,408         53,144         39,403         37,536  
 Other non-performing assets                  
Foreclosed assets and other real estate owned (2)     31,477         26,012         26,421         26,895         30,396  
 Other non-performing assets     639         485         352         471         621  
Total other non-performing assets     32,116         26,497         26,773         27,366         31,017  
Total non-performing assets $   86,787     $   83,905     $   79,917     $   66,769     $   68,553  
Performing TDRs (troubled debt restructurings) $   9,212     $   8,794     $   10,833     $   10,998     $   13,604  
                   
Ratios (1) (2)                  
 Allowance for loan losses to total loans   0.82 %     0.83 %     0.82 %     0.84 %     0.86 %
 Allowance for loan losses to non-performing loans   78 %     72 %     71 %     92 %     91 %
 Non-performing loans to total loans   1.05 %     1.15 %     1.15 %     0.91 %     0.95 %
 Non-performing assets (including performing TDRs)                  
to total assets   1.01 %     1.02 %     1.05 %     0.93 %     1.00 %
 Non-performing assets to total assets   0.91 %     0.93 %     0.93 %     0.79 %     0.83 %
 Annualized net charge offs to total loans   0.32 %     0.23 %     0.18 %     0.20 %     0.82 %
 Annualized net credit card charge offs to                  
 total credit card loans   1.63 %     1.42 %     1.84 %     1.66 %     1.14 %
 Annualized net charge offs to total loans                  
(excluding credit cards)   0.27 %     0.19 %     0.11 %     0.14 %     0.81 %
                   
 (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
Sep 2017 
   Three Months Ended
Jun 2017 
   Three Months Ended
Sep 2016 
 ($ 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                                  
Federal funds sold     269,111       650   0.96 %       163,396       214   0.53 %       253,249       263   0.41 %
Investment securities – taxable     1,313,333       6,574   1.99 %       1,374,261       6,874   2.01 %       1,038,437       4,775   1.83 %
Investment securities – non-taxable (FTE)     324,901       4,341   5.30 %       337,230       5,118   6.09 %       391,495       4,926   5.01 %
Mortgage loans held for sale     13,388       159   4.71 %       12,250       145   4.75 %       31,256       299   3.81 %
Assets held in trading accounts     52       –    0.00 %       52       –    0.00 %       5,108       4   0.31 %
Loans, including acquired loans     6,261,507       77,511   4.91 %       5,954,019       73,629   4.96 %       5,105,474       65,120   5.07 %
Total interest earning assets (FTE)     8,182,292       89,235   4.33 %       7,841,208       85,980   4.40 %       6,825,019       75,387   4.39 %
Non-earning assets     993,315               971,252               878,818        
Total assets $   9,175,607           $   8,812,460           $   7,703,837        
                                   
LIABILITIES AND STOCKHOLDERS’ EQUITY                                  
Interest bearing liabilities:                                  
Interest bearing transaction and                                  
  savings accounts $   4,227,567   $   3,920   0.37 %   $   4,069,179   $   2,984   0.29 %   $   3,645,414   $   1,965   0.21 %
Time deposits     1,330,889       2,110   0.63 %       1,277,336       1,832   0.58 %       1,213,895       1,767   0.58 %
Total interest bearing deposits     5,558,456       6,030   0.43 %       5,346,515       4,816   0.36 %       4,859,309       3,732   0.31 %
Federal funds purchased and securities                                  
  sold under agreement to repurchase     115,583       83   0.28 %       115,101       92   0.32 %       105,576       59   0.22 %
Other borrowings     502,972       1,875   1.48 %       434,584       1,559   1.44 %       192,453       1,048   2.17 %
Subordinated debentures     67,367       677   3.99 %       64,019       619   3.88 %       60,238       516   3.41 %
Total interest bearing liabilities     6,244,378       8,665   0.55 %       5,960,219       7,086   0.48 %       5,217,576       5,355   0.41 %
Non-interest bearing liabilities:                                  
Non-interest bearing deposits     1,613,248               1,597,550               1,322,818        
Other liabilities     62,287               45,348               49,191        
Total liabilities     7,919,913               7,603,117               6,589,585        
Stockholders’ equity     1,255,694               1,209,343               1,114,252        
Total liabilities and stockholders’ equity $   9,175,607           $   8,812,460           $   7,703,837        
Net interest income (FTE)     $   80,570           $   78,894           $   70,032    
Net interest spread (FTE)         3.78 %           3.92 %           3.98 %
Net interest margin (FTE) – quarter-to-date         3.91 %           4.04 %           4.08 %
                                   
Net interest margin (FTE) – year-to-date         3.99 %           4.04 %           4.21 %
                                   
Core net interest margin (FTE) – quarter-to-date (1)         3.77 %           3.79 %           3.79 %
Core loan yield (FTE) – quarter-to-date (1)         4.72 %           4.63 %           4.69 %
                                   
Core net interest margin (FTE) – year-to-date (1)         3.79 %           3.79 %           3.86 %
Core loan yield (FTE) – year-to-date (1)         4.65 %           4.61 %           4.75 %
                                   
(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)     2017         2017         2017         2016         2016     
($ in thousands, except share data)                    
QUARTER-TO-DATE                    
Financial Highlights – GAAP                    
 Net Income  $   28,852     $   23,065     $   22,120     $   26,971     $   23,429    
 Diluted earnings per share      0.89         0.72         0.70         0.85         0.76    
 Return on average assets    1.25 %     1.05 %     1.07 %     1.29 %     1.21 %  
 Return on average common equity    9.12 %     7.65 %     7.69 %     9.27 %     8.36 %  
 Return on tangible common equity    14.47 %     12.13 %     12.22 %     14.71 %     13.26 %  
 Net interest margin (FTE)    3.91 %     4.04 %     4.04 %     4.12 %     4.08 %  
 FTE adjustment      1,751         2,082         1,965         1,994         1,969    
 Amortization of intangibles      1,724         1,553         1,550         1,533         1,503    
 Amortization of intangibles, net of taxes      1,048         944         942         932         913    
 Average diluted shares outstanding      32,423,796         32,025,780         31,612,900         31,592,713         30,843,714    
 Cash dividends declared per common share      0.25         0.25         0.25         0.24         0.24    
Financial Highlights – Core (non-GAAP)                    
 Core earnings (excludes non-core items) (1)  $   27,746     $   26,753     $   22,532     $   28,751     $   24,382    
 Diluted core earnings per share (1)      0.86         0.84         0.71         0.91         0.79    
 Core net interest margin (FTE) (2)    3.77 %     3.79 %     3.80 %     3.76 %     3.79 %  
 Accretable yield on acquired loans      2,890         4,792         4,427         6,552         4,928    
 Efficiency ratio (1)    55.06 %     56.04 %     60.92 %     55.47 %     53.94 %  
 Core return on average assets (1)    1.20 %     1.22 %     1.09 %     1.38 %     1.26 %  
 Core return on average common equity (1)    8.77 %     8.87 %     7.83 %     9.89 %     8.71 %  
 Core return on tangible common equity (1)    13.93 %     13.99 %     12.44 %     15.65 %     13.78 %  
YEAR-TO-DATE                    
Financial Highlights – GAAP                    
 Net Income  $   74,037     $   45,185     $   22,120     $   96,790     $   69,819    
 Diluted earnings per share      2.31         1.42         0.70         3.13         2.28    
 Return on average assets    1.12 %     1.06 %     1.07 %     1.25 %     1.23 %  
 Return on average common equity    8.18 %     7.67 %     7.69 %     8.75 %     8.57 %  
 Return on tangible common equity    12.97 %     12.17 %     12.22 %     13.92 %     13.68 %  
 Net interest margin (FTE)    3.99 %     4.04 %     4.04 %     4.19 %     4.21 %  
 FTE adjustment      5,798         4,047         1,965         7,722         5,728    
 Amortization of intangibles      4,827         3,103         1,550         5,942         4,409    
 Amortization of intangibles, net of taxes      2,934         1,886         942         3,611         2,679    
 Average diluted shares outstanding      32,007,135         31,794,363         31,612,900         30,963,546         30,656,882    
 Cash dividends declared per common share      0.75         0.50         0.25         0.96         0.72    
Financial Highlights – Core (non-GAAP)                    
 Core earnings (excludes non-core items) (1)  $   77,031     $   49,285     $   22,532     $   101,409     $   72,658    
 Diluted core earnings per share (1)      2.41         1.55         0.71         3.28         2.37    
 Core net interest margin (FTE) (2)    3.79 %     3.79 %     3.80 %     3.83 %     3.86 %  
 Accretable yield on acquired loans      12,109         9,219         4,427         24,257         17,705    
 Efficiency ratio (1)    57.25 %     58.40 %     60.92 %     56.32 %     56.62 %  
 Core return on average assets (1)    1.17 %     1.15 %     1.09 %     1.31 %     1.28 %  
 Core return on average common equity (1)    8.51 %     8.37 %     7.83 %     9.17 %     8.91 %  
 Core return on tangible common equity (1)    13.48 %     13.23 %     12.44 %     14.56 %     14.22 %  
END OF PERIOD                    
 Book value per share  $   39.03     $   38.31     $   37.30     $   36.80     $   36.69    
 Tangible book value per share      25.64         24.71         24.51         23.97         23.80    
 Shares outstanding      32,212,242         32,212,832         31,388,357         31,277,723         31,267,614    
 Full-time equivalent employees      1,942         1,919         1,876         1,875         1,985    
 Total number of ATM’s      192         197         187         186         186    
 Total number of financial centers      156         161         151         150         150    
                     
 (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)     2017         2017         2017         2016         2016     
($ in thousands, except per share data)                    
QUARTER-TO-DATE                    
 Net Income  $   28,852     $   23,065     $   22,120     $   26,971     $   23,429    
 Non-core items                     
Gain on sale of P&C insurance business     (3,708 )       –          –          –          –     
Merger-related costs     752         6,603         524         2,846         1,524    
Branch right-sizing     435         (536 )       154         83         43    
Tax effect (1)     1,415         (2,379 )       (266 )       (1,149 )       (614 )  
 Net non-core items      (1,106 )       3,688         412         1,780         953    
 Core earnings (non-GAAP)  $   27,746     $   26,753     $   22,532     $   28,751     $   24,382    
                     
 Diluted earnings per share  $   0.89     $   0.72     $   0.70     $   0.85     $   0.76    
 Non-core items                     
Gain on sale of P&C insurance business     (0.11 )       –          –          –          –     
Merger-related costs     0.02         0.21         0.02         0.09         0.05    
Branch right-sizing     0.01         (0.02 )       –          –          –     
Tax effect (1)     0.05         (0.07 )       (0.01 )       (0.03 )       (0.02 )  
 Net non-core items      (0.03 )       0.12         0.01         0.06         0.03    
 Core earnings (non-GAAP)  $   0.86     $   0.84     $   0.71     $   0.91     $   0.79    
                     
YEAR-TO-DATE                    
 Net Income  $   74,037     $   45,185     $   22,120     $   96,790     $   69,819    
 Non-core items                     
Gain from early retirement of trust preferred securities     –          –          –          (594 )       (594 )  
Gain on sale of P&C insurance business     (3,708 )       –          –          –          –     
Merger-related costs     7,879         7,127         524         4,835         1,989    
Branch right-sizing     53         (382 )       154         3,359         3,276    
Tax effect (1)     (1,230 )       (2,645 )       (266 )       (2,981 )       (1,832 )  
 Net non-core items      2,994         4,100         412         4,619         2,839    
 Core earnings (non-GAAP)  $   77,031     $   49,285     $   22,532     $   101,409     $   72,658    
                     
 Diluted earnings per share  $   2.31     $   1.42     $   0.70     $   3.13     $   2.28    
 Non-core items                     
Gain from early retirement of trust preferred securities     –          –          –          (0.02 )       (0.02 )  
Gain on sale of P&C insurance business     (0.11 )                  
Merger-related costs     0.25         0.22         0.02         0.16         0.06    
Branch right-sizing     –          (0.01 )       –          0.11         0.11    
Tax effect (1)     (0.04 )       (0.08 )       (0.01 )       (0.10 )       (0.06 )  
 Net non-core items      0.10         0.13         0.01         0.15         0.09    
 Core earnings (non-GAAP)  $   2.41     $   1.55     $   0.71     $   3.28     $   2.37    
                     
 (1) Effective tax rate of 39.225%, adjusted for non-deductible merger-related costs and deferred tax items on P&C insurance sale.         
                     
 Page 9   
                     

 

Simmons First National Corporation                  SFNC   
 Reconciliation Of Non-GAAP Financial Measures – End of Period                     
 For the Quarters Ended                     
 (Unaudited)   Sept 30     Jun 30     Mar 31     Dec 31     Sept 30   
     2017         2017         2017         2016         2016     
($ 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 $   1,257,199     $   1,234,076     $   1,170,889     $   1,151,111     $   1,147,141    
Intangible assets:                    
Goodwill     (375,731 )       (379,437 )       (350,035 )       (348,505 )       (348,769 )  
Other intangible assets     (55,501 )       (58,528 )       (51,408 )       (52,959 )       (54,268 )  
Total intangibles     (431,232 )       (437,965 )       (401,443 )       (401,464 )       (403,037 )  
Tangible common stockholders’ equity $   825,967     $   796,111     $   769,446     $   749,647     $   744,104    
                     
Total assets $   9,535,370     $   9,068,308     $   8,626,638     $   8,400,056     $   8,226,992    
Intangible assets:                    
Goodwill     (375,731 )       (379,437 )       (350,035 )       (348,505 )       (348,769 )  
Other intangible assets     (55,501 )       (58,528 )       (51,408 )       (52,959 )       (54,268 )  
Total intangibles     (431,232 )       (437,965 )       (401,443 )       (401,464 )       (403,037 )  
Tangible assets $   9,104,138     $   8,630,343     $   8,225,195     $   7,998,592     $   7,823,955    
                     
Ratio of equity to assets   13.18 %     13.61 %     13.57 %     13.70 %     13.94 %  
Ratio of tangible common equity to tangible assets   9.07 %     9.22 %     9.35 %     9.37 %     9.51 %  
                     
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 $   24,994     $   28,409     $   28,941     $   35,462     $   42,899    
Allowance for loan losses on acquired loans     391         391         435         954         954    
Total credit discount and ALLL on acquired loans $   25,385     $   28,800     $   29,376     $   36,416     $   43,853    
Total loans acquired $   1,117,424     $   1,253,539     $   1,173,667     $   1,342,099     $   1,502,051    
Discount and ALLL on acquired loans to acquired loans   2.27 %     2.30 %     2.50 %     2.71 %     2.92 %  
                     
Calculation of Total Allowance and Credit Coverage                    
                     
Allowance for loan losses $   42,717     $   41,379     $   37,865     $   36,286     $   34,094    
Total credit discount and ALLL on acquired loans     25,385         28,800         29,376         36,416         43,853    
Total allowance and credit discount $   68,102     $   70,179     $   67,241     $   72,702     $   77,947    
Total loans $   6,328,736     $   6,254,155     $   5,806,572     $   5,669,306     $   5,445,140    
Total allowance and credit coverage   1.08 %     1.12 %     1.16 %     1.28 %     1.43 %  
                     
Calculation of Tangible Book Value per Share                    
                     
Total common stockholders’ equity $   1,257,199     $   1,234,076     $   1,170,889     $   1,151,111     $   1,147,141    
Intangible assets:                    
Goodwill     (375,731 )       (379,437 )       (350,035 )       (348,505 )       (348,769 )  
Other intangible assets     (55,501 )       (58,528 )       (51,408 )       (52,959 )       (54,268 )  
Total intangibles     (431,232 )       (437,965 )       (401,443 )       (401,464 )       (403,037 )  
Tangible common stockholders’ equity $   825,967     $   796,111     $   769,446     $   749,647     $   744,104    
Shares of common stock outstanding     32,212,242         32,212,832         31,388,357         31,277,723         31,267,614    
Book value per common share $   39.03     $   38.31     $   37.30     $   36.80     $   36.69    
Tangible book value per common share $   25.64     $   24.71     $   24.51     $   23.97     $   23.80    
                     
 Page 10   
   

 

Simmons First National Corporation                  SFNC   
 Reconciliation Of Non-GAAP Financial Measures – Quarter-to-Date                     
 For the Quarters Ended                     
 (Unaudited)   Sept 30     Jun 30     Mar 31     Dec 31     Sept 30   
     2017         2017         2017         2016         2016     
($ in thousands)                    
Calculation of Core Return on Average Assets                    
                     
Net income $   28,852     $   23,065     $   22,120     $   26,971     $   23,429    
Net non-core items, net of taxes, adjustment     (1,106 )       3,688         412         1,780         953    
Core earnings $   27,746     $   26,753     $   22,532     $   28,751     $   24,382    
                     
Average total assets $   9,175,607     $   8,812,460     $   8,414,470     $   8,308,458     $   7,703,837    
                     
Return on average assets   1.25 %     1.05 %     1.07 %     1.29 %     1.21 %  
Core return on average assets   1.20 %     1.22 %     1.09 %     1.38 %     1.26 %  
                     
Calculation of Return on Tangible Common Equity                    
                     
Net income $   28,852     $   23,065     $   22,120     $   26,971     $   23,429    
Amortization of intangibles, net of taxes     1,048         944         942         932         913    
Total income available to common stockholders $   29,900     $   24,009     $   23,062     $   27,903     $   24,342    
                     
Net non-core items, net of taxes     (1,106 )       3,688         412         1,780         953    
Core earnings     27,746         26,753         22,532         28,751         24,382    
Amortization of intangibles, net of taxes     1,048         944         942         932         913    
Total core income available to common stockholders $   28,794     $   27,697     $   23,474     $   29,683     $   25,295    
                     
Average common stockholders’ equity $   1,255,694     $   1,209,343     $   1,166,473     $   1,156,933     $   1,114,252    
Average intangible assets:                    
Goodwill     (378,387 )       (362,925 )       (348,837 )       (348,597 )       (332,893 )  
Other intangibles     (57,232 )       (52,419 )       (52,169 )       (53,646 )       (50,893 )  
Total average intangibles     (435,619 )       (415,344 )       (401,006 )       (402,243 )       (383,786 )  
Average tangible common stockholders’ equity $   820,075     $   793,999     $   765,467     $   754,690     $   730,466    
                     
Return on average common equity   9.12 %     7.65 %     7.69 %     9.27 %     8.36 %  
Return on tangible common equity   14.47 %     12.13 %     12.22 %     14.71 %     13.26 %  
Core return on average common equity   8.77 %     8.87 %     7.83 %     9.89 %     8.71 %  
Core return on tangible common equity   13.93 %     13.99 %     12.44 %     15.65 %     13.78 %  
                     
Calculation of Efficiency Ratio (1)                    
                     
Non-interest expense $   66,159     $   71,408     $   66,322     $   66,725     $   62,434    
Non-core non-interest expense adjustment     (862 )       (6,700 )       (635 )       (2,995 )       (1,742 )  
Other real estate and foreclosure expense adjustment     (1,071 )       (517 )       (550 )       (669 )       (1,787 )  
Amortization of intangibles adjustment     (1,724 )       (1,553 )       (1,550 )       (1,533 )       (1,503 )  
Efficiency ratio numerator $   62,502     $   62,638     $   63,587     $   61,528     $   57,402    
                     
Net-interest income $   78,819     $   76,812     $   72,380     $   74,328     $   68,063    
Non-interest income     36,332         35,744         30,060         36,115         36,876    
Non-core non-interest income adjustment     (3,383 )       (632 )       43         (66 )       (175 )  
Fully tax-equivalent adjustment     1,751         2,082         1,965         1,994         1,969    
(Gain) loss on sale of securities     (3 )       (2,236 )       (63 )       (1,445 )       (315 )  
Efficiency ratio denominator $   113,516     $   111,770     $   104,385     $   110,926     $   106,418    
                     
Efficiency ratio (1)   55.06 %     56.04 %     60.92 %     55.47 %     53.94 %  
                     
Calculation of Core Net Interest Margin                    
                     
Net interest income $   78,819     $   76,812     $   72,380     $   74,328     $   68,063    
Fully tax-equivalent adjustment     1,751         2,082         1,965         1,994         1,969    
Fully tax-equivalent net interest income     80,570         78,894         74,345         76,322         70,032    
                     
Total accretable yield     (2,890 )       (4,792 )       (4,427 )       (6,552 )       (4,928 )  
Core net interest income $   77,680     $   74,102     $   69,918     $   69,770     $   65,104    
Average earning assets $   8,182,292     $   7,841,208     $   7,469,709     $   7,373,236     $   6,825,019    
                     
Net interest margin   3.95 %     4.04 %     4.04 %     4.12 %     4.08 %  
Core net interest margin   3.81 %     3.79 %     3.80 %     3.76 %     3.79 %  
                     
Calculation of Core Loan Yield                    
                     
Loan interest income $   77,457     $   73,549     $   68,728     $   70,887     $   65,078    
Total accretable yield     (2,890 )       (4,792 )       (4,427 )       (6,552 )       (4,928 )  
Core loan interest income $   74,567     $   68,757     $   64,301     $   64,335     $   60,150    
Average loan balance $   6,261,507     $   5,954,019     $   5,685,585     $   5,484,918     $   5,105,474    
                     
Core loan yield   4.78 %     4.63 %     4.59 %     4.67 %     4.69 %  
                     
(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)   Sept 30     Jun 30     Mar 31     Dec 31     Sept 30   
     2017         2017         2017         2016         2016     
($ in thousands)                    
Calculation of Core Return on Average Assets                    
                     
Net income $   74,037     $   45,185     $   22,120     $   96,790     $   69,819    
Net non-core items, net of taxes, adjustment     2,994         4,100         412         4,619         2,839    
Core earnings $   77,031     $   49,285     $   22,532     $   101,409     $   72,658    
                     
Average total assets $   8,800,675     $   8,613,240     $   8,414,470     $   7,760,233     $   7,575,053    
                     
Return on average assets   1.12 %     1.06 %     1.07 %     1.25 %     1.23 %  
Core return on average assets   1.17 %     1.15 %     1.09 %     1.31 %     1.28 %  
                     
Calculation of Return on Tangible Common Equity                    
                     
Net income $   74,037     $   45,185     $   22,120     $   96,790     $   69,819    
Amortization of intangibles, net of taxes     2,934         1,886         942         3,611         2,679    
Total income available to common stockholders $   76,971     $   47,071     $   23,062     $   100,401     $   72,498    
                     
Net non-core items, net of taxes     2,994         4,100         412         4,619         2,839    
Core earnings     77,031         49,285         22,532         101,409         72,658    
Amortization of intangibles, net of taxes     2,934         1,886         942         3,611         2,679    
Total core income available to common stockholders $   79,965     $   51,171     $   23,474     $   105,020     $   75,337    
                     
Average common stockholders’ equity $   1,210,487     $   1,187,906     $   1,166,473     $   1,105,775     $   1,088,723    
Average intangible assets:                    
Goodwill     (363,383 )       (355,881 )       (348,837 )       (332,974 )       (329,422 )  
Other intangibles     (53,941 )       (52,294 )       (52,169 )       (51,710 )       (51,478 )  
Total average intangibles     (417,324 )       (408,175 )       (401,006 )       (384,684 )       (380,900 )  
Average tangible common stockholders’ equity $   793,163     $   779,731     $   765,467     $   721,091     $   707,823    
                     
Return on average common equity   8.18 %     7.67 %     7.69 %     8.75 %     8.57 %  
Return on tangible common equity   12.97 %     12.17 %     12.22 %     13.92 %     13.68 %  
Core return on average common equity   8.51 %     8.37 %     7.83 %     9.17 %     8.91 %  
Core return on tangible common equity   13.48 %     13.23 %     12.44 %     14.56 %     14.22 %  
                     
Calculation of Efficiency Ratio (1)                    
                     
Non-interest expense $   203,889     $   137,730     $   66,322     $   255,085     $   188,360    
Non-core non-interest expense adjustment     (8,197 )       (7,335 )       (635 )       (8,435 )       (5,440 )  
Other real estate and foreclosure expense adjustment     (2,177 )       (1,067 )       (550 )       (4,389 )       (3,720 )  
Amortization of intangibles adjustment     (4,827 )       (3,103 )       (1,550 )       (5,942 )       (4,409 )  
Efficiency ratio numerator $   188,688     $   126,225     $   63,587     $   236,319     $   174,791    
                     
Net-interest income $   228,011     $   149,192     $   72,380     $   279,206     $   204,878    
Non-interest income     102,136         65,804         30,060         139,382         103,267    
Non-core non-interest income adjustment     (3,972 )       (589 )       43         (835 )       (769 )  
Fully tax-equivalent adjustment     5,798         4,047         1,965         7,722         5,728    
(Gain) loss on sale of securities     (2,302 )       (2,299 )       (63 )       (5,848 )       (4,403 )  
Efficiency ratio denominator $   329,671     $   216,155     $   104,385     $   419,627     $   308,701    
                     
Efficiency ratio (1)   57.25 %     58.40 %     60.92 %     56.32 %     56.62 %  
                     
Calculation of Core Net Interest Margin                    
                     
Net interest income $   228,011     $   149,192     $   72,380     $   279,206     $   204,878    
Fully tax-equivalent adjustment     5,798         4,047         1,965         7,722         5,728    
Fully tax-equivalent net interest income     233,809         153,239         74,345         286,928         210,606    
                     
Total accretable yield     (12,109 )       (9,219 )       (4,427 )       (24,257 )       (17,705 )  
Core net interest income $   221,700     $   144,020     $   69,918     $   262,671     $   192,901    
Average earning assets $   7,829,548     $   7,653,177     $   7,469,709     $   6,855,322     $   6,682,683    
                     
Net interest margin   3.99 %     4.04 %     4.04 %     4.19 %     4.21 %  
Core net interest margin   3.79 %     3.79 %     3.80 %     3.83 %     3.86 %  
                     
Calculation of Core Loan Yield                    
                     
Loan interest income $   219,734     $   142,277     $   68,728     $   265,652     $   194,765    
Total accretable yield     (12,109 )       (9,219 )       (4,427 )       (24,257 )       (17,705 )  
Core loan interest income $   207,625     $   133,058     $   64,301     $   241,395     $   177,060    
Average loan balance $   5,967,036     $   5,819,803     $   5,685,585