Chronicle Journal: Finance

Simmons First National Corporation Reports 2020 Earnings

PINE BLUFF, Ark., Jan. 26, 2021 (GLOBE NEWSWIRE) -- Simmons First National Corporation (NASDAQ: SFNC) (the “Company” or “Simmons”), parent company of Simmons Bank, today announced net income of $254.9 million for the year ended December 31, 2020, compared to $237.8 million for 2019, an increase of $17.0 million, or 7.2%. Diluted earnings per share were $2.31 for 2020, a decrease of $0.10 or 4.2%, compared to the prior year. Included in the 2020 results were $9.4 million in net after-tax merger-related, early retirement program and net branch right-sizing costs and the gains on the sales of branches in Texas and Colorado. Excluding the impact of these items, core earnings were $264.3 million for the year ended December 31, 2020, compared to $269.6 million for 2019, a decrease of $5.3 million, or 2.0%. Core diluted earnings per share were $2.40, a decrease of $0.33 or 12.1%, from 2019.

Fourth quarter 2020 net income was $53.0 million compared to $52.7 million for the same period in 2019. Diluted earnings per share were $0.49 for the fourth quarters of both 2020 and 2019. Excluding $9.0 million in net after-tax merger-related, early retirement program and net branch right-sizing costs, fourth quarter 2020 core earnings were $62.0 million, a decrease of $9.1 million, or 12.8%, compared to the fourth quarter of 2019. Core diluted earnings per share were $0.57, a decrease of $0.09, or 13.6%, from the same period in 2019.

“As we look back on a very challenging year, we are very proud of the teamwork and results we achieved,” said George A. Makris, Jr., chairman and CEO of Simmons First National Corporation. “We mobilized over 1,500 associates to work from home at times during the year while maintaining our ability to serve our customers. We provided over 8,000 PPP loans totaling almost $1 billion to businesses that faced extraordinary uncertainty and helped support over 100,000 jobs. We integrated Landmark Bank into Simmons Bank, not without some obstacles due to COVID-19 restrictions, but our associates persevered to get the job done. We contributed $3 million to the Simmons First Foundation to support conservation projects throughout our service area. We enhanced our digital banking offerings, and our customers have benefitted from their ability to conduct their business when they want, where they want. We worked diligently to position ourselves with less risk and with the capacity to help the economy recover from the economic crisis caused by COVID-19. We increased our dividend to our shareholders, and our profitability was excellent, especially under the circumstances. Also during 2020, we successfully completed our regulatory exam cycle, including our first CFPB exam. I, personally, could not be prouder of our team.”

Selected Highlights:FY 2020 FY 2019 4th Qtr 2020 4th Qtr 2019
Net income$254.9 million $237.8 million $53.0 million $52.7 million
Diluted earnings per share$2.31 $2.41 $0.49 $0.49
Return on avg assets1.18% 1.33% 0.96% 1.04%
Return on avg common equity8.72% 9.93% 7.13% 8.01%
Return on tangible common equity (1)15.25% 17.99% 12.48% 14.62%
        
Core earnings (2)264.3 million $269.6 million $62.0 million $71.1 million
Core diluted earnings per share (2)$2.40 $2.73 $0.57 $0.66
Core return on avg assets (2)1.22% 1.51% 1.13% 1.41%
Core return on avg common equity (2)9.05% 11.25% 8.34% 10.80%
Core return on tangible common equity (1)(2)15.79% 20.31% 14.51% 19.49%
Efficiency ratio (3)54.66% 50.33% 55.27% 52.63%
Adjusted pre-tax, pre-provision earnings (2)$352.7 million $375.0 million $83.1 million $95.1 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. Adjusted pre-tax, pre-provision earnings excludes provision for income taxes, provisions for credit losses and unfunded commitments, gains on sales of securities, and other pre-tax, non-core items, and is also a non-GAAP measurement. 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.
   

Loans

($ in billions)4th Qtr 20203rd Qtr 20204th Qtr 2019
Total loans$12.90$14.02$14.43

Total loans were $12.9 billion at December 31, 2020, a decrease of $1.5 billion, or 10.6%, compared to December 31, 2019. On a linked-quarter basis (December 31, 2020 compared to September 30, 2020), total loans decreased $1.1 billion, or 8.0%. “The decline in the loan balance reflects the tepid loan demand during 2020. Approximately $375 million of the decrease was due to the sale of loans associated with branch sales in South Texas and Colorado during the year. Our total loan pipeline consisting of all loan opportunities, which was a robust $1.7 billion at December 31, 2019 fell to $374 million at September 30, 2020. The pipeline is starting to rebuild and ended 2020 at $674 million, including $177 million in loans approved and ready to close. On a positive note, our concentration levels in commercial real estate are now well below regulatory guidelines and we have substantial capacity to make additional loans, help borrowers in our markets and help the economy recover,” said Makris.

Through December 31, 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 $119,000 per loan. Approximately 93% of the PPP loans had a balance less than $350,000 as of December 31, 2020.

PPP Loans
Balance as of December 31, 2020
# of
Loans
 Original
Balance

($ in millions)
 Balance
December 31, 2020
($ in millions)
 
Less than $50,0005,22063%$94.510% $90.810%
$50,000 to $350,0002,44530%$305.231% $285.231%
More than $350,000 to less than $2 million4816%$357.937% $315.435%
$2 million to $10 million621%$217.922% $213.324%
Total8,208100%$975.6100% $904.7100%

Deposits

($ in billions)4th Qtr 20203rd Qtr 20204th Qtr 2019
Total deposits$17.0$16.2$16.1
Non-interest bearing deposits$4.5$4.4$3.7
Interest bearing deposits$9.7$9.0$9.1
Time deposits$2.8$2.8$3.3

Total deposits were $17.0 billion at December 31, 2020, an increase of $878.1 million, or 5.5%, since December 31, 2019. On a linked-quarter basis, total deposits increased $740.4 million, or 4.6%, primarily due to increases in interest bearing accounts. Both consumer and commercial deposit balances have grown since the economic stimulus legislation, including legislation that established the PPP program, was implemented in mid-2020. Trends affected by the increasing cash balances are paydowns on loans, reduced credit card balances and fewer overdraft activities.

Net Interest Income

 4th Qtr
2020
3rd Qtr
2020
2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
Loan yield (1)4.74%4.54%4.84%5.19%5.43%
Core loan yield (1) (2)4.47%4.29%4.52%4.86%5.00%
Security yield (1)2.48%2.60%2.50%2.63%2.73%
Cost of interest bearing deposits0.47%0.54%0.59%1.03%1.22%
Cost of deposits (3)0.34%0.39%0.44%0.80%0.94%
Cost of borrowed funds1.88%1.85%1.84%2.06%2.30%
Net interest margin (1)3.22%3.21%3.42%3.68%3.78%
Core net interest margin (1) (2)3.04%3.02%3.18%3.42%3.44%


(1) Fully tax equivalent using an effective tax rate of 26.135%.
(2) Core loan yield and core net interest margin exclude accretion and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.
(3) Includes non-interest bearing deposits.

The Company’s net interest income for the fourth quarter of 2020 was $155.0 million, a decrease of $12.1 million, or 7.3%, from the same period in 2019. The decrease in net interest income was primarily due to the decline in the loan yield of 69 basis points and the lower average loan balance during the period. Included in interest income was the yield accretion recognized on loans acquired of $9.0 million and $15.1 million for the fourth quarters of 2020 and 2019, respectively.

The loan yield was 4.74% for the quarter ended December 31, 2020, a 20 basis point increase from the third quarter of 2020. The core loan yield, which excludes the accretion, was 4.47% for the same period. The PPP loan yield was approximately 2.42% during the fourth quarter of 2020 (including accretion of net fees), which decreased the Company’s overall loan yield by approximately 13 basis points.

Net interest margin (FTE) was 3.22% for the quarter ended December 31, 2020, while the core net interest margin, which excludes the accretion, was 3.04% for the same period. The net interest margin during the fourth quarter of 2020 was affected by additional liquidity and the lower yielding PPP loans originated during the second and third quarters of 2020, which decreased the net interest margin by approximately 38 basis points.

Non-Interest Income

Non-interest income for 2020 was $248.5 million, an increase of $43.5 million compared to the previous year. The increase was primarily due to a $19.5 million increase in mortgage lending income and a $41.5 million increase in gains on sale of securities recognized on the rebalancing of the investment portfolio during 2020. These increases were partially offset by the one-time gain on sale of the Visa Inc. class B common stock of $42.9 million that was completed during the third quarter of 2019.

Non-interest income for the fourth quarter of 2020 was $44.1 million, a decrease of $1.6 million compared to the same period in the previous year.

Selected Non-Interest Income Items
($ in millions)
FY 2020FY 20194th Qtr 20204th Qtr 2019
Service charges on deposit accounts$43.1$44.8$10.8$13.3
Mortgage lending income$34.5$15.0$3.0$4.0
SBA lending income$1.3$2.7$0.5$0.3
Debit and credit card fees$33.5$29.3$8.7$8.9
Gain on sale of securities$54.8$13.3-$0.4
Other income$38.5$62.0$10.6$7.1
     
Core other income (1)(2)$29.8$62.0$10.3$7.1


(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 in 2019.

Non-Interest Expense

Non-interest expense for 2020 was $493.5 million, an increase of $32.4 million compared to the previous year. Included in 2020 were $21.5 million of pre-tax non-core items, which mostly consisted of branch right sizing costs. Excluding these expenses, core non-interest expense for 2020 was $472.0 million, an increase of $53.8 million compared to 2019 core non-interest expense. The increase was primarily due to the incremental costs associated with the 2019 mergers and the Next Generation Banking (“NGB”) technology initiative. The Company recognized an additional $14.8 million in software and technology expense related to its NGB initiative in 2020.

Non-interest expense for the fourth quarter of 2020 was $128.1 million, a decrease of $14.0 million compared to the fourth quarter of 2019. Included in this quarter were $12.5 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 $115.6 million for the fourth quarter of 2020, a decrease of $1.6 million compared to the same period in 2019.

Also included during the fourth quarter of 2020 was a $3 million contribution to the Simmons First Foundation for grants to support conservation projects throughout the Simmons Bank footprint.

The efficiency ratio for 2020 was 54.66% while the efficiency ratio for the fourth quarter of 2020 was 55.27%.

Selected Non-Interest Expense Items
($ in millions)


FY 2020


FY 2019


4th Qtr 2020


4th Qtr 2019
Salaries and employee benefits$242.5$227.8$55.8$63.2
Merger related costs$4.5$36.4$0.7$24.8
Other operating expenses$174.0$138.9$54.3$38.0
     
Core salaries and employee benefits (1)$239.4$224.3$55.6$63.2
Core merger related costs (1)----
Core other operating expenses (1)$161.8$135.9$44.1$38.0


(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 $2.9 million of non-core expense during 2020. 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 23 branch locations on October 9, 2020, with an expected net annual cost savings of approximately $6.7 million. Also during 2020, nine branches were sold in South Texas and Colorado.

Asset Quality

 4th Qtr
2020
3rd Qtr
2020
2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
Allowance for credit losses on loans to total loans1.85%1.77%1.59%1.69%0.47%
Allowance for credit losses on loans to non-performing loans193%147%175%154%74%
Non-performing loans to total loans0.96%1.20%0.91%1.10%0.64%
Net charge-off ratio (annualized)0.52%0.16%1.04%0.07%0.09%
Net charge-off ratio YTD (annualized)0.45%0.43%0.56%0.07%0.24%

At December 31, 2020, the allowance for credit losses on loans was $238.1 million. Included in total loans was $904.7 million of government guaranteed PPP loans. Non-performing loans decreased $45.2 million during the fourth quarter of 2020, which contributed to the decrease in provision for credit losses for the quarter when compared to the third quarter of 2020.

Provision for credit losses for 2020 was $75.0 million, an increase of $31.7 million from 2019. Provision for credit losses for the fourth quarter of 2020 was $6.9 million, an increase of $2.0 million when compared to the same period of 2019. Makris stated, “Due to the uncertainty in the economy during 2020, we were quick to offer loan modifications to our customers to help them through the uncertain times. The majority of modified loans are projected to return to regular payments prior to the end of the third quarter of 2021. We feel we have made adequate provision for potential risk in our credit portfolio and have reviewed and adjusted the risk rating of all modified loans.” Makris continued, “The hospitality industry, particularly hotels, continues to struggle with a return to normal.”

Foreclosed Assets and Other Real Estate Owned

At December 31, 2020, foreclosed assets and other real estate owned were $18.4 million, a decrease of $728,000, or 3.8%, compared to the same period in 2019. The composition of these assets is divided into three types:        



($ in millions)
4th Qtr
2020
3rd Qtr
2020
2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
Closed bank branches and branch sites$0.6$0.6$2.7$8.8$5.7
Foreclosed assets – acquired$15.3$9.3$9.2$9.2$10.3
Foreclosed assets – legacy$2.5$2.7$2.2$2.8$3.1

Capital

 4th Qtr
2020
3rd Qtr
2020
2nd Qtr
2020
1st Qtr
2020
4th Qtr
2019
Stockholders’ equity to total assets13.3%13.7%13.3%13.7%14.1%
Tangible common equity to tangible assets (1)8.5%8.7%8.3%8.4%9.0%
Regulatory common equity tier 1 ratio13.4%12.6%11.9%11.1%10.9%
Regulatory tier 1 leverage ratio9.1%9.1%8.8%9.0%9.6%
Regulatory tier 1 risk-based capital ratio13.4%12.6%11.9%11.1%10.9%
Regulatory total risk-based capital ratio16.8%15.8%14.9%14.1%13.7%


(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 December 31, 2020, common stockholders' equity was $3.0 billion. Book value per share was $27.53 and tangible book value per share was $16.56 at December 31, 2020. The ratio of stockholders’ equity to total assets was 13.3% at December 31, 2020, while the ratio of tangible common equity to tangible assets was 8.5%. As of December 31, 2020, PPP loans totaled $904.7 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 13.9%, tangible common equity to tangible assets was 8.8% 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 $22.4 billion as of December 31, 2020. The Company, through its subsidiaries, conducts financial operations in Arkansas, Illinois, Kansas, Missouri, Oklahoma, Tennessee and Texas and 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. CST today, Tuesday, January 26, 2021. 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 3994603. 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 U.S. 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, non-interest income, and non-interest expense certain income and 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, tangible assets and tangible book value, which exclude goodwill and other intangible assets. The Company further presents certain figures that are exclusive of the impact of PPP loans. The Company’s management believes that these non-GAAP financial measures are useful to investors because they, among other things, 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 normalize 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, branch closures and branch sales, the adequacy of the allowance for credit losses, the ability of the Company to manage the impact of the COVID-19 pandemic, expectations and projections regarding the Company’s COVID-19 loan modification program, and the impacts of the Company’s and its customers participation in the PPP. 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 and has taken in response to COVID-19; the severity and duration of the pandemic, including the effectiveness of vaccination efforts; 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; government legislation; 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 the Company’s 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 Dec 31  Sep 30  Jun 30  Mar 31  Dec 31 
(Unaudited) 2020  2020  2020  2020  2019 
($ in thousands)               
ASSETS               
Cash and non-interest bearing balances due from banks$217,499 $382,691 $234,998 $244,123 $277,208 
Interest bearing balances due from banks and federal funds sold 3,254,653  2,139,440  2,310,162  1,493,076  719,415 
    Cash and cash equivalents 3,472,152  2,522,131  2,545,160  1,737,199  996,623 
Interest bearing balances due from banks - time 1,579  4,061  4,561  4,309  4,554 
Investment securities - held-to-maturity 333,031  47,102  51,720  53,968  40,927 
Investment securities - available-for-sale 3,473,598  2,607,288  2,496,896  2,466,640  3,288,343 
Mortgage loans held for sale 137,378  192,729  120,034  49,984  58,102 
Other assets held for sale 100  389  399  115,315  260,332 
Loans:               
Loans 12,900,897  14,017,442  14,606,900  14,374,277  14,425,704 
Allowance for credit losses on loans (238,050) (248,251) (231,643) (243,195) (68,244)
Net loans 12,662,847  13,769,191  14,375,257  14,131,082  14,357,460 
Premises and equipment 441,692  470,491  478,896  484,990  492,384 
Premises held for sale 15,008  4,486  4,576  -  - 
Foreclosed assets and other real estate owned 18,393  12,590  14,111  20,805  19,121 
Interest receivable 72,597  77,352  79,772  57,039  62,707 
Bank owned life insurance 255,630  257,718  256,643  255,197  254,152 
Goodwill 1,075,305  1,075,305  1,064,765  1,064,978  1,055,520 
Other intangible assets 111,110  114,460  117,823  121,673  127,340 
Other assets 289,332  282,102  293,071  278,173  241,578 
Total assets$22,359,752 $21,437,395 $21,903,684 $20,841,352 $21,259,143 
                
LIABILITIES AND STOCKHOLDERS' EQUITY               
Deposits:               
Non-interest bearing transaction accounts$4,482,091 $4,451,385 $4,608,098 $3,572,244 $3,741,093 
Interest bearing transaction accounts and savings deposits 9,672,608  8,993,255  8,978,045  8,840,678  9,090,878 
Time deposits 2,832,327  2,802,007  3,029,975  3,146,811  3,276,969 
        Total deposits 16,987,026  16,246,647  16,616,118  15,559,733  16,108,940 
Federal funds purchased and securities sold               
under agreements to repurchase 299,111  313,694  387,025  377,859  150,145 
Other borrowings 1,342,067  1,342,769  1,393,689  1,396,829  1,297,599 
Subordinated notes and debentures 382,874  382,739  382,604  388,396  388,260 
Other liabilities held for sale 154,620  -  -  58,405  159,853 
Accrued interest and other liabilities 217,398  209,305  219,545  214,730  165,422 
Total liabilities 19,383,096  18,495,154  18,998,981  17,995,952  18,270,219 
                
Stockholders' equity:               
Preferred stock 767  767  767  767  767 
Common stock 1,081  1,090  1,090  1,090  1,136 
Surplus 2,014,076  2,032,372  2,029,383  2,026,420  2,117,282 
Undivided profits 901,006  866,503  819,153  778,893  848,848 
Accumulated other comprehensive income (loss):               
Unrealized accretion (depreciation) on AFS securities 59,726  41,509  54,310  38,230  20,891 
Total stockholders' equity 2,976,656  2,942,241  2,904,703  2,845,400  2,988,924 
Total liabilities and stockholders' equity$22,359,752 $21,437,395 $21,903,684 $20,841,352 $21,259,143 
                


Simmons First National Corporation    SFNC
Consolidated Statements of Income - Quarter-to-Date    
For the Quarters Ended Dec 31  Sep 30  Jun 30  Mar 31  Dec 31 
(Unaudited) 2020  2020  2020  2020  2019 
($ in thousands, except per share data)               
INTEREST INCOME               
   Loans$160,115 $163,180 $176,910 $187,566 $193,402 
   Interest bearing balances due from banks and federal funds sold 716  623  603  2,441  2,625 
   Investment securities 17,207  14,910  13,473  18,943  16,962 
   Mortgage loans held for sale 1,070  1,012  668  281  402 
           TOTAL INTEREST INCOME 179,108  179,725  191,654  209,231  213,391 
INTEREST EXPENSE               
   Time deposits 7,835  9,437  10,803  13,323  16,198 
   Other deposits 6,536  6,769  7,203  17,954  20,331 
   Federal funds purchased and securities               
     sold under agreements to repurchase 284  335  337  759  368 
   Other borrowings 4,869  4,943  4,963  4,877  4,615 
   Subordinated notes and debentures 4,624  4,631  4,667  4,835  4,813 
           TOTAL INTEREST EXPENSE 24,148  26,115  27,973  41,748  46,325 
NET INTEREST INCOME 154,960  153,610  163,681  167,483  167,066 
   Provision for credit losses 6,943  22,981  21,915  23,134  4,903 
NET INTEREST INCOME AFTER PROVISION               
   FOR CREDIT LOSSES 148,017  130,629  141,766  144,349  162,163 
NON-INTEREST INCOME               
   Trust income 6,557  6,744  7,253  7,151  7,430 
   Service charges on deposit accounts 10,799  10,385  8,570  13,328  13,332 
   Other service charges and fees 1,783  1,764  1,489  1,588  1,915 
   Mortgage lending income 2,993  13,971  12,459  5,046  4,029 
   SBA lending income 484  304  245  296  321 
   Investment banking income 676  557  571  877  822 
   Debit and credit card fees 8,710  8,850  7,996  7,914  8,920 
   Bank owned life insurance income 1,481  1,591  1,445  1,298  1,411 
   Gain on sale of securities, net 16  22,305  390  32,095  377 
   Other income 10,557  5,380  9,809  12,801  7,073 
           TOTAL NON-INTEREST INCOME 44,056  71,851  50,227  82,394  45,630 
NON-INTEREST EXPENSE               
   Salaries and employee benefits 55,762  61,144  57,644  67,924  63,235 
   Occupancy expense, net 9,182  9,647  9,217  9,510  9,272 
   Furniture and equipment expense 5,940  6,231  6,144  5,723  5,758 
   Other real estate and foreclosure expense 551  602  274  325  1,089 
   Deposit insurance 1,627  2,244  2,838  2,475  (134)
   Merger-related costs 731  902  1,830  1,068  24,831 
   Other operating expenses 54,342  38,179  39,651  41,788  38,044 
           TOTAL NON-INTEREST EXPENSE 128,135  118,949  117,598  128,813  142,095 
NET INCOME BEFORE INCOME TAXES 63,938  83,531  74,395  97,930  65,698 
   Provision for income taxes 10,970  17,633  15,593  20,694  12,976 
NET INCOME 52,968  65,898  58,802  77,236  52,722 
   Preferred stock dividends 13  13  13  13  13 
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS$52,955 $65,885 $58,789 $77,223 $52,709 
BASIC EARNINGS PER SHARE$0.49 $0.60 $0.54 $0.68 $0.49 
DILUTED EARNINGS PER SHARE$0.49 $0.60 $0.54 $0.68 $0.49 
                


Simmons First National Corporation   SFNC
Consolidated Risk-Based Capital           
For the Quarters Ended Dec 31  Sep 30  Jun 30  Mar 31  Dec 31 
(Unaudited) 2020  2020  2020  2020  2019 
($ in thousands)               
Tier 1 capital               
   Stockholders' equity$2,976,656 $2,942,241 $2,904,703 $2,845,400 $2,988,924 
   CECL transition provision (1) 131,430  134,798  130,480  134,558  - 
   Disallowed intangible assets, net of deferred tax (1,163,797) (1,167,357) (1,160,385) (1,164,038) (1,160,079)
   Unrealized (gain) loss on AFS securities (59,726) (41,509) (54,310) (38,230) (20,891)
      Total Tier 1 capital 1,884,563  1,868,173  1,820,488  1,777,690  1,807,954 
                
Tier 2 capital               
   Trust preferred securities and subordinated debt 382,874  382,739  382,604  388,396  388,260 
   Qualifying allowance for loan losses and               
      reserve for unfunded commitments 89,546  96,734  83,780  96,015  76,644 
      Total Tier 2 capital 472,420  479,473  466,384  484,411  464,904 
      Total risk-based capital$2,356,983 $2,347,646 $2,286,872 $2,262,101 $2,272,858 
                
Risk weighted assets$14,034,563 $14,878,932 $15,362,175 $16,012,233 $16,554,081 
                
Adjusted average assets for leverage ratio$20,765,127 $20,652,454 $20,742,824 $19,832,219 $18,852,798 
                
Ratios at end of quarter               
   Equity to assets 13.31% 13.72% 13.26% 13.65% 14.06%
   Tangible common equity to tangible assets (2) 8.45% 8.65% 8.31% 8.44% 8.99%
   Common equity Tier 1 ratio (CET1) 13.42% 12.55% 11.85% 11.10% 10.92%
   Tier 1 leverage ratio 9.08% 9.05% 8.78% 8.96% 9.59%
   Tier 1 risk-based capital ratio 13.43% 12.56% 11.85% 11.10% 10.92%
   Total risk-based capital ratio 16.79% 15.78% 14.89% 14.13% 13.73%
                
(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.
      


Simmons First National Corporation   SFNC
Consolidated Investment Securities              
For the Quarters Ended Dec 31  Sep 30  Jun 30  Mar 31  Dec 31
(Unaudited) 2020  2020  2020  2020  2019
($ in thousands)              
Investment Securities - End of Period              
Held-to-Maturity              
   Mortgage-backed securities$22,354 $24,297 $25,980 $27,121 $10,796
   State and political subdivisions 310,109  21,930  24,777  25,985  27,082
   Other securities 568  875  963  862  3,049
      Total held-to-maturity (net of credit losses) 333,031  47,102  51,720  53,968  40,927
Available-for-Sale              
   U.S. Treasury$- $- $- $424,989 $449,729
   U.S. Government agencies 477,237  471,973  210,921  161,289  194,249
   Mortgage-backed securities 1,394,936  903,687  1,154,086  1,179,837  1,742,945
   State and political subdivisions 1,470,723  1,133,006  1,054,068  678,243  880,524
   Other securities 130,702  98,622  77,821  22,282  20,896
      Total available-for-sale (net of credit losses) 3,473,598  2,607,288  2,496,896  2,466,640  3,288,343
      Total investment securities (net of credit losses)$3,806,629 $2,654,390 $2,548,616 $2,520,608 $3,329,270
      Fair value - HTM investment securities$341,925 $49,064 $53,751 $55,714 $41,855
               
Investment Securities - QTD Average              
Taxable securities$1,757,234 $1,534,742 $1,642,083 $2,324,188 $1,940,755
Tax exempt securities 1,528,127  1,155,099  866,944  900,223  825,000
   Total investment securities - QTD average$3,285,361 $2,689,841 $2,509,027 $3,224,411 $2,765,755
               


Simmons First National Corporation   SFNC
Consolidated Loans              
For the Quarters Ended Dec 31  Sep 30  Jun 30  Mar 31  Dec 31
(Unaudited) 2020  2020  2020  2020  2019
($ in thousands)              
Loan Portfolio - End of Period              
Consumer              
   Credit cards$180,354 $172,880 $184,348 $188,596 $204,802
   Other consumer 210,870  190,736  214,024  267,870  249,694
Total consumer 391,224  363,616  398,372  456,466  454,496
Real Estate              
   Construction 1,596,255  1,853,360  2,010,256  2,024,118  2,236,861
   Single-family residential 1,880,673  1,997,070  2,207,087  2,343,543  2,442,064
   Other commercial real estate 5,746,863  6,132,823  6,316,444  6,466,104  6,205,599
Total real estate 9,223,791  9,983,253  10,533,787  10,833,765  10,884,524
Commercial              
   Commercial 2,574,386  2,907,798  3,038,216  2,314,472  2,495,516
   Agricultural 175,905  241,687  217,715  191,535  315,454
Total commercial 2,750,291  3,149,485  3,255,931  2,506,007  2,810,970
Other 535,591  521,088  418,810  578,039  275,714
      Total Loans$12,900,897 $14,017,442 $14,606,900 $14,374,277 $14,425,704
               



Simmons First National Corporation   SFNC
Consolidated Allowance and Asset Quality               
For the Quarters Ended Dec 31  Sep 30  Jun 30  Mar 31  Dec 31 
(Unaudited) 2020  2020  2020  2020  2019 
($ in thousands)               
Allowance for Credit Losses on Loans               
Beginning balance, prior to adoption of ASC 326         $68,244 $66,590 
Impact of adopting ASC 326 (1)         $151,377    
Beginning balance, after adoption of ASC 326$248,251 $231,641 $243,195 $219,621    
                
Loans charged off               
   Credit cards 787  832  1,053  1,441  1,287 
   Other consumer 960  1,091  592  1,379  1,425 
   Real estate 10,415  1,153  1,824  396  892 
   Commercial 8,199  4,327  35,687  523  459 
      Total loans charged off 20,361  7,403  39,156  3,739  4,063 
                
Recoveries of loans previously charged off               
   Credit cards 241  276  272  225  287 
   Other consumer 355  366  301  443  304 
   Real estate 431  120  253  101  146 
   Commercial 1,835  936  98  347  77 
      Total recoveries 2,862  1,698  924  1,116  814 
   Net loans charged off 17,499  5,705  38,232  2,623  3,249 
Provision for credit losses on loans 7,298  22,315  26,678  26,197  4,903 
Balance, end of quarter$238,050 $248,251 $231,641 $243,195 $68,244 
                
Non-performing assets               
Non-performing loans               
   Nonaccrual loans$122,968 $168,349 $131,888 $156,746 $91,723 
   Loans past due 90 days or more 322  156  537  1,305  855 
      Total non-performing loans 123,290  168,505  132,425  158,051  92,578 
Other non-performing assets               
   Foreclosed assets and other real estate owned 18,393  12,590  14,111  20,805  19,121 
   Other non-performing assets 2,016  1,983  2,008  2,169  1,964 
      Total other non-performing assets 20,409  14,573  16,119  22,974  21,085 
         Total non-performing assets$143,699 $183,078 $148,544 $181,025 $113,663 
Performing TDRs (troubled debt restructurings)$3,138 $3,379 $3,960 $4,110 $4,411 
                
Ratios               
Allowance for credit losses on loans to total loans 1.85% 1.77% 1.59% 1.69% 0.47%
Allowance for credit losses to non-performing loans 193% 147% 175% 154% 74%
Non-performing loans to total loans 0.96% 1.20% 0.91% 1.10% 0.64%
Non-performing assets (including performing TDRs)               
  to total assets 0.66% 0.86% 0.70% 0.89% 0.56%
Non-performing assets to total assets 0.64% 0.85% 0.68% 0.87% 0.53%
Annualized net charge offs to total loans 0.52% 0.16% 1.04% 0.07% 0.09%
Annualized net credit card charge offs to               
  total credit card loans 1.20% 1.26% 1.67% 2.29% 1.99%
                
(1) The Company adopted ASC 326.effective January 1, 2020.               
      



Simmons First National Corporation         SFNC
Consolidated - Average Balance Sheet and Net Interest Income Analysis      
For the Quarters Ended           
(Unaudited)           
 Three Months Ended
Dec 2020
 Three Months Ended
Sep 2020
 Three Months Ended
Dec 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$2,651,938 $716 0.11% $2,265,233 $623 0.11% $789,035 $2,625 1.32%
   Investment securities - taxable 1,757,234  7,720 1.75%  1,534,742  7,193 1.86%  1,940,755  11,080 2.27%
   Investment securities - non-taxable (FTE) 1,528,127  12,778 3.33%  1,155,099  10,382 3.58%  825,000  7,945 3.82%
   Mortgage loans held for sale 179,275  1,070 2.37%  145,226  1,012 2.77%  53,511  402 2.98%
   Loans (FTE) 13,457,077  160,306 4.74%  14,315,014  163,379 4.54%  14,144,703  193,511 5.43%
      Total interest earning assets (FTE) 19,573,651  182,590 3.71%  19,415,314  182,589 3.74%  17,753,004  215,563 4.82%
   Non-earning assets 2,278,443       2,350,007       2,288,886     
     Total assets$21,852,094      $21,765,321      $20,041,890     
                        
LIABILITIES AND STOCKHOLDERS' EQUITY          
Interest bearing liabilities:           
   Interest bearing transaction and           
     savings accounts$9,389,570 $6,536 0.28% $8,977,886 $6,769 0.30% $8,440,090 $20,331 0.96%
   Time deposits 2,823,166  7,835 1.10%  2,998,091  9,437 1.25%  3,393,089  16,198 1.89%
      Total interest bearing deposits 12,212,736  14,371 0.47%  11,975,977  16,206 0.54%  11,833,179  36,529 1.22%
   Federal funds purchased and securities                       
     sold under agreement to repurchase 340,333  284 0.33%  386,631  335 0.34%  147,395  368 0.99%
   Other borrowings 1,342,403  4,869 1.44%  1,357,278  4,943 1.45%  1,168,897  4,615 1.57%
   Subordinated notes and debentures 382,808  4,624 4.81%  382,672  4,631 4.81%  376,766  4,813 5.07%
      Total interest bearing liabilities 14,278,280  24,148 0.67%  14,102,558  26,115 0.74%  13,526,237  46,325 1.36%
Non-interest bearing liabilities:                       
   Non-interest bearing deposits 4,413,168       4,529,782       3,524,092     
   Other liabilities 204,014       190,169       379,909     
      Total liabilities 18,895,462       18,822,509       17,430,238     
Stockholders' equity 2,956,632       2,942,812       2,611,652     
      Total liabilities and stockholders' equity$21,852,094      $21,765,321      $20,041,890     
Net interest income (FTE)   $158,442      $156,474      $169,238  
Net interest spread (FTE)      3.04%       3.00%       3.46%
Net interest margin (FTE) - quarter-to-date      3.22%       3.21%       3.78%
                        
Net interest margin (FTE) - year-to-date      3.38%       3.43%       3.85%
                        
Core net interest margin (FTE) - quarter-to-date (1)      3.04%       3.02%       3.44%
Core loan yield (FTE) - quarter-to-date (1)      4.47%       4.29%       5.00%
                        
Core net interest margin (FTE) - year-to-date (1)      3.16%       3.20%       3.59%
Core loan yield (FTE) - year-to-date (1)      4.54%       4.56%       5.18%
                        
(1) Calculations of core net interest margin and core loan yield and the reconciliations to GAAP are included in the schedules accompanying this release.
            


Simmons First National Corporation   SFNC
Consolidated - Selected Financial Data     
For the Quarters EndedDec 31
 Sep 30
 Jun 30
 Mar 31
 Dec 31
 
(Unaudited) 2020 2020 2020 2020 2019 
($ in thousands, except share data)               
QUARTER-TO-DATE               
Financial Highlights - GAAP               
Net Income$52,955 $65,885 $58,789 $77,223 $52,709 
Diluted earnings per share 0.49  0.60  0.54  0.68  0.49 
Return on average assets 0.96% 1.20% 1.08% 1.48% 1.04%
Return on average common equity 7.13% 8.91% 8.21% 10.83% 8.01%
Return on tangible common equity 12.48% 15.45% 14.55% 19.00% 14.62%
Net interest margin (FTE) 3.22% 3.21% 3.42% 3.68% 3.78%
FTE adjustment 3,482  2,864  2,350  2,305  2,172 
Amortization of intangibles 3,351  3,362  3,369  3,413  3,270 
Amortization of intangibles, net of taxes 2,475  2,483  2,489  2,521  2,416 
Average diluted shares outstanding 108,888,264  109,207,294  109,130,866  113,137,223  108,472,559 
Shares repurchased under plan 1,034,364  -  -  4,922,336  390,000 
Average price of shares repurchased 19.36  -  -  18.96  25.95 
Cash dividends declared per common share 0.17  0.17  0.17  0.17  0.16 
Financial Highlights - Core (non-GAAP)               
Core earnings (excludes non-core items) (1)$61,977 $68,338 $60,147 $73,838 $71,074 
Core diluted earnings per share (1) 0.57  0.63  0.55  0.65  0.66 
Core net interest margin (FTE) (2) 3.04% 3.02% 3.18% 3.42% 3.44%
Accretable yield on acquired loans 8,999  8,948  11,723  11,837  15,100 
Efficiency ratio (1) 55.27% 54.12% 51.46% 57.79% 52.63%
Core return on average assets (1) 1.13% 1.25% 1.11% 1.42% 1.41%
Core return on average common equity (1) 8.34% 9.24% 8.40% 10.35% 10.80%
Core return on tangible common equity (1) 14.51% 16.00% 14.87% 18.19% 19.49%
YEAR-TO-DATE               
Financial Highlights - GAAP               
Net Income$254,852 $201,897 $136,012 $77,223 $237,828 
Diluted earnings per share 2.31  1.83  1.22  0.68  2.41 
Return on average assets 1.18% 1.25% 1.28% 1.48% 1.33%
Return on average common equity 8.72% 9.27% 9.45% 10.83% 9.93%
Return on tangible common equity 15.25% 16.19% 16.57% 19.00% 17.99%
Net interest margin (FTE) 3.38% 3.43% 3.55% 3.68% 3.85%
FTE adjustment 11,001  7,519  4,655  2,305  7,322 
Amortization of intangibles 13,495  10,144  6,782  3,413  11,805 
Amortization of intangibles, net of taxes 9,968  7,493  5,010  2,521  8,720 
Average diluted shares outstanding 110,173,661  110,480,508  111,083,999  113,137,223  98,796,628 
Cash dividends declared per common share 0.68  0.51  0.34  0.17  0.64 
Financial Highlights - Core (non-GAAP)               
Core earnings (excludes non-core items) (1)$264,300 $202,323 $133,985 $73,838 $269,566 
Core diluted earnings per share (1) 2.40  1.83  1.21  0.65  2.73 
Core net interest margin (FTE) (2) 3.16% 3.20% 3.30% 3.42% 3.59%
Accretable yield on acquired loans 41,507  32,508  23,560  11,837  41,244 
Efficiency ratio (1) 54.66% 54.46% 54.62% 57.79% 50.33%
Core return on average assets (1) 1.22% 1.26% 1.26% 1.42% 1.51%
Core return on average common equity (1) 9.05% 9.29% 9.31% 10.35% 11.25%
Core return on tangible common equity (1) 15.79% 16.22% 16.33% 18.19% 20.31%
END OF PERIOD               
Book value per share$27.53 $26.98 $26.64 $26.11 $26.30 
Tangible book value per share 16.56  16.07  15.79  15.22  15.89 
Shares outstanding 108,077,662  109,023,781  108,994,389  108,966,331  113,628,601 
Full-time equivalent employees 2,923  2,904  2,939  3,079  3,270 
Total number of financial centers 204  226  226  240  251 
                
(1) Core earnings exclude non-core items, which is a non-GAAP measurement. Reconciliations to GAAP are included in the schedules accompanying this release.
(2) Excludes accretable yield adjustment on loans, which is a non-GAAP measurement. Reconciliations to GAAP are included in the schedules accompanying this release.
      



Simmons First National Corporation   SFNC
Reconciliation Of Non-GAAP Financial Measures - Core Earnings - Quarter-to-Date 
For the Quarters Ended Dec 31  Sep 30  Jun 30  Mar 31  Dec 31 
(Unaudited) 2020  2020  2020  2020  2019 
($ in thousands, except per share data)               
QUARTER-TO-DATE               
Net Income$52,955 $65,885 $58,789 $77,223 $52,709 
Non-core items               
Gain on sale of branches (275) -  (2,204) (5,889) - 
Merger-related costs 731  902  1,830  1,068  24,831 
Early retirement program 62  2,346  493  -  - 
Branch right-sizing (net) 11,696  72  1,721  238  37 
Tax effect (1) (3,192) (867) (482) 1,198  (6,503)
Net non-core items 9,022  2,453  1,358  (3,385) 18,365 
Core earnings (non-GAAP)$61,977 $68,338 $60,147 $73,838 $71,074 
                
Diluted earnings per share$0.49 $0.60 $0.54 $0.68 $0.49 
Non-core items               
Gain on sale of branches -  -  (0.02) (0.05) - 
Merger-related costs -  0.01  0.02  0.01  0.23 
Early retirement program -  0.02  -  -  - 
Branch right-sizing (net) 0.11  -  0.02  -  - 
Tax effect (1) (0.03) -  (0.01) 0.01  (0.06)
Net non-core items 0.08  0.03  0.01  (0.03) 0.17 
Core diluted earnings per share (non-GAAP)$0.57 $0.63 $0.55 $0.65 $0.66 
                
(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$10,557 $5,380 $9,809 $12,801 $7,073 
Non-core items (1) (275) (370) (2,204) (5,889) - 
   Core other income (non-GAAP)$10,282 $5,010 $7,605 $6,912 $7,073 
                
   Non-interest expense$128,135 $118,949 $117,598 $128,813 $142,095 
Non-core items (1) (12,489) (3,690) (4,044) (1,306) (24,868)
   Core non-interest expense (non-GAAP)$115,646 $115,259 $113,554 $127,507 $117,227 
                
   Salaries and employee benefits$55,762 $61,144 $57,644 $67,924 $63,235 
Non-core items (1) (144) (2,448) (493) -  - 
   Core salaries and employee benefits (non-GAAP)$55,618 $58,696 $57,151 $67,924 $63,235 
                
   Merger related costs$731 $902 $1,830 $1,068 $24,831 
Non-core items (1) (731) (902) (1,830) (1,068) (24,831)
   Core merger related costs (non-GAAP)$- $- $- $- $- 
                
   Other operating expenses$54,342 $38,179 $39,651 $41,788 $38,044 
Non-core items (1) (10,270) (11) (1,662) (212) (4)
   Core other operating expenses (non-GAAP)$44,072 $38,168 $37,989 $41,576 $38,040 
                
(1) Non-core items include gain on sale of branches, merger related costs, early retirement program expenses and branch right-sizing costs.
      



Simmons First National Corporation   SFNC
Reconciliation Of Non-GAAP Financial Measures - Core Earnings - Year-to-Date 
For the Quarters Ended Dec 31  Sep 30  Jun 30  Mar 31  Dec 31 
(Unaudited) 2020  2020  2020  2020  2019 
($ in thousands, except per share data)               
YEAR-TO-DATE               
Net Income$254,852 $201,897 $136,012 $77,223 $237,828 
Non-core items               
Gain on sale of branches (8,368) (8,093) (8,093) (5,889) - 
Merger-related costs 4,531  3,800  2,898  1,068  36,379 
Early retirement program 2,901  2,839  493  -  3,464 
Branch right-sizing (net) 13,727  2,031  1,959  238  3,129 
Tax effect (1) (3,343) (151) 716  1,198  (11,234)
Net non-core items 9,448  426  (2,027) (3,385) 31,738 
Core earnings (non-GAAP)$264,300 $202,323 $133,985 $73,838 $269,566 
                
Diluted earnings per share$2.31 $1.83 $1.22 $0.68 $2.41 
Non-core items               
Gain on sale of branches (0.07) (0.07) (0.07) (0.05) - 
Merger-related costs 0.04  0.03  0.03  0.01  0.37 
Early retirement program 0.03  0.02  -  -  0.03 
Branch right-sizing (net) 0.12  0.02  0.02  -  0.03 
Tax effect (1) (0.03) -  0.01  0.01  (0.11)
Net non-core items 0.09  -  (0.01) (0.03) 0.32 
Core diluted earnings per share (non-GAAP)$2.40 $1.83 $1.21 $0.65 $2.73 
                
(1) Effective tax rate of 26.135%.     
      
Reconciliation of Selected Non-Core Non-Interest Income and Expense Items (non-GAAP) 
                
YEAR-TO-DATE               
   Other income$38,547 $27,990 $22,610 $12,801 $62,015 
Non-core items (1) (8,738) (8,463) (8,093) (5,889) - 
   Core other income (non-GAAP)$29,809 $19,527 $14,517 $6,912 $62,015 
                
   Non-interest expense$493,495 $365,360 $246,411 $128,813 $461,112 
Non-core items (1) (21,529) (9,040) (5,350) (1,306) (42,972)
   Core non-interest expense (non-GAAP)$471,966 $356,320 $241,061 $127,507 $418,140 
                
   Salaries and employee benefits$242,474 $186,712 $125,568 $67,924 $227,795 
Non-core items (1) (3,085) (2,941) (493) -  (3,464)
   Core salaries and employee benefits (non-GAAP)$239,389 $183,771 $125,075 $67,924 $224,331 
                
   Merger related costs$4,531 $3,800 $2,898 $1,068 $36,379 
Non-core items (1) (4,531) (3,800) (2,898) (1,068) (36,379)
   Core merger related costs (non-GAAP)$- $- $- $- $- 
                
   Other operating expenses$173,960 $119,618 $81,439 $41,788 $138,852 
Non-core items (1) (12,155) (1,885) (1,874) (212) (2,938)
   Core other operating expenses (non-GAAP)$161,805 $117,733 $79,565 $41,576 $135,914 
                
(1) Non-core items include gain on sale of branches, merger related costs, early retirement program expenses and branch right-sizing costs.
      


Simmons First National Corporation    SFNC
Reconciliation Of Non-GAAP Financial Measures - End of Period   
For the Quarters Ended Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
(Unaudited) 2020   2020   2020   2020   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$2,975,889  $2,941,474  $2,903,936  $2,844,633  $2,988,157 
Intangible assets:                   
   Goodwill (1,075,305)  (1,075,305)  (1,064,765)  (1,064,978)  (1,055,520)
   Other intangible assets (111,110)  (114,460)  (117,823)  (121,673)  (127,340)
Total intangibles (1,186,415)  (1,189,765)  (1,182,588)  (1,186,651)  (1,182,860)
Tangible common stockholders' equity$1,789,474  $1,751,709  $1,721,348  $1,657,982  $1,805,297 
                    
Total assets$22,359,752  $21,437,395  $21,903,684  $20,841,352  $21,259,143 
Intangible assets:                   
   Goodwill (1,075,305)  (1,075,305)  (1,064,765)  (1,064,978)  (1,055,520)
   Other intangible assets (111,110)  (114,460)  (117,823)  (121,673)  (127,340)
Total intangibles (1,186,415)  (1,189,765)  (1,182,588)  (1,186,651)  (1,182,860)
Tangible assets$21,173,337  $20,247,630  $20,721,096  $19,654,701  $20,076,283 
                    
Paycheck protection program ("PPP") loans (904,673)  (970,488)  (963,712)        
Total assets excluding PPP loans$21,455,079  $20,466,907  $20,939,972         
Tangible assets excluding PPP loans$20,268,664  $19,277,142  $19,757,384         
                    
Ratio of equity to assets 13.31%  13.72%  13.26%  13.65%  14.06%
Ratio of equity to assets excluding PPP loans 13.87%  14.38%  13.87%        
Ratio of tangible common equity to tangible assets 8.45%  8.65%  8.31%  8.44%  8.99%
Ratio of tangible common equity to tangible assets excluding PPP loans 8.83%  9.09%  8.71%        
                    
Calculation of Tangible Book Value per Share                   
                    
Total common stockholders' equity$2,975,889  $2,941,474  $2,903,936  $2,844,633  $2,988,157 
Intangible assets:                   
   Goodwill (1,075,305)  (1,075,305)  (1,064,765)  (1,064,978)  (1,055,520)
   Other intangible assets (111,110)  (114,460)  (117,823)  (121,673)  (127,340)
Total intangibles (1,186,415)  (1,189,765)  (1,182,588)  (1,186,651)  (1,182,860)
Tangible common stockholders' equity$1,789,474  $1,751,709  $1,721,348  $1,657,982  $1,805,297 
Shares of common stock outstanding 108,077,662   109,023,781   108,994,389   108,966,331   113,628,601 
Book value per common share$27.53  $26.98  $26.64  $26.11  $26.30 
Tangible book value per common share$16.56  $16.07  $15.79  $15.22  $15.89 
                    
Calculation of Regulatory Tier 1 Leverage Ratio Excluding Average PPP Loans                   
                    
Total Tier 1 capital$1,884,563  $1,868,173  $1,820,488         
                    
Adjusted average assets for leverage ratio$20,765,127  $20,652,454  $20,742,824         
Average PPP loans (937,544)  (967,152)  (645,172)        
Adjusted average assets excluding average PPP loans$19,827,583  $19,685,302  $20,097,652         
                    
Tier 1 leverage ratio 9.08%  9.05%  8.78%        
Tier 1 leverage ratio excluding average PPP loans 9.50%  9.49%  9.06%        
                    



Simmons First National Corporation    SFNC
Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date   
For the Quarters Ended Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
(Unaudited) 2020   2020   2020   2020   2019 
($ in thousands)                   
Calculation of Core Return on Average Assets                   
                    
Net income$52,955  $65,885  $58,789  $77,223  $52,709 
Net non-core items, net of taxes, adjustment 9,022   2,453   1,358   (3,385)  18,365 
Core earnings$61,977  $68,338  $60,147  $73,838  $71,074 
                    
Average total assets$21,852,094  $21,765,321  $21,822,273  $20,920,223  $20,041,890 
                    
Return on average assets 0.96%  1.20%  1.08%  1.48%  1.04%
Core return on average assets 1.13%  1.25%  1.11%  1.42%  1.41%
                    
Calculation of Return on Tangible Common Equity                   
                    
Net income$52,955  $65,885  $58,789  $77,223  $52,709 
Amortization of intangibles, net of taxes 2,475   2,483   2,489   2,521   2,416 
Total income available to common stockholders$55,430  $68,368  $61,278  $79,744  $55,125 
                    
Net non-core items, net of taxes 9,022   2,453   1,358   (3,385)  18,365 
Core earnings 61,977   68,338   60,147   73,838   71,074 
Amortization of intangibles, net of taxes 2,475   2,483   2,489   2,521   2,416 
Total core income available to common stockholders$64,452  $70,821  $62,636  $76,359  $73,490 
                    
Average common stockholders' equity$2,955,865  $2,942,045  $2,879,337  $2,869,177  $2,611,143 
Average intangible assets:                   
   Goodwill (1,075,305)  (1,064,893)  (1,064,955)  (1,055,498)  (997,004)
   Other intangibles (113,098)  (116,385)  (120,111)  (125,746)  (118,311)
Total average intangibles (1,188,403)  (1,181,278)  (1,185,066)  (1,181,244)  (1,115,315)
Average tangible common stockholders' equity$1,767,462  $1,760,767  $1,694,271  $1,687,933  $1,495,828 
                    
Return on average common equity 7.13%  8.91%  8.21%  10.83%  8.01%
Return on tangible common equity 12.48%  15.45%  14.55%  19.00%  14.62%
Core return on average common equity 8.34%  9.24%  8.40%  10.35%  10.80%
Core return on tangible common equity 14.51%  16.00%  14.87%  18.19%  19.49%
                    
Calculation of Efficiency Ratio (1)                   
                    
Non-interest expense$128,135  $118,949  $117,598  $128,813  $142,095 
Non-core non-interest expense adjustment (12,489)  (3,690)  (4,044)  (1,306)  (24,868)
Other real estate and foreclosure expense adjustment (545)  (600)  (242)  (319)  (1,063)
Amortization of intangibles adjustment (3,351)  (3,362)  (3,369)  (3,413)  (3,270)
Efficiency ratio numerator$111,750  $111,297  $109,943  $123,775  $112,894 
                    
Net-interest income$154,960  $153,610  $163,681  $167,483  $167,066 
Non-interest income 44,056   71,851   50,227   82,394   45,630 
Non-core non-interest income adjustment (275)  (370)  (2,204)  (5,889)  - 
Fully tax-equivalent adjustment (effective tax rate of 26.135%) 3,482   2,864   2,350   2,305   2,172 
Gain on sale of securities (16)  (22,305)  (390)  (32,095)  (377)
Efficiency ratio denominator$202,207  $205,650  $213,664  $214,198  $214,491 
                    
Efficiency ratio (1) 55.27%  54.12%  51.46%  57.79%  52.63%
                    
(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.
  



Simmons First National Corporation    SFNC
Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date (continued)  
For the Quarters Ended Dec 31  Sep 30  Jun 30  Mar 31  Dec 31 
(Unaudited) 2020  2020  2020  2020  2019 
($ in thousands)               
Calculation of Core Net Interest Margin               
                
Net interest income$154,960 $153,610 $163,681 $167,483 $167,066 
Fully tax-equivalent adjustment (effective tax rate of 26.135%) 3,482  2,864  2,350  2,305  2,172 
Fully tax-equivalent net interest income 158,442  156,474  166,031  169,788  169,238 
                
Total accretable yield (8,999) (8,948) (11,723) (11,837) (15,100)
Core net interest income$149,443 $147,526 $154,308 $157,951 $154,138 
                
PPP loan and excess liquidity interest income (6,983)$(6,131)$(5,623)      
Net interest income adjusted for PPP loans and liquidity$151,459 $150,343 $160,408       
                
Average earning assets$19,573,651 $19,415,314 $19,517,475 $18,581,491 $17,753,004 
Average PPP loan balance and excess liquidity (2,837,125) (2,359,928)$(2,071,411)      
Average earning assets adjusted for PPL loans and liquidity$16,736,526 $17,055,386 $17,446,064       
                
Net interest margin 3.22% 3.21% 3.42% 3.68% 3.78%
Core net interest margin 3.04% 3.02% 3.18% 3.42% 3.44%
Net interest margin adjusted for PPP loans and liquidity 3.60% 3.51% 3.70%      
                
Calculation of Core Loan Yield               
                
Loan interest income (FTE)$160,306 $163,379 $177,168 $187,566 $193,402 
Total accretable yield (8,999) (8,948) (11,723) (11,837) (15,100)
Core loan interest income$151,307 $154,431 $165,445 $175,729 $178,302 
PPP loan interest income (6,457) (5,782)$(3,733)      
Core loan interest income without PPP loans$144,850 $148,649 $161,712       
                
Average loan balance$13,457,077 $14,315,014 $14,731,306 $14,548,853 $14,144,703 
Average PPP loan balance (937,544)$(967,152)$(645,172)      
Average loan balance without PPP loans$12,519,533 $13,347,862 $14,086,134       
                
Core loan yield 4.47% 4.29% 4.52% 4.86% 5.00%
Core loan yield without PPP loans 4.60% 4.43% 4.62%      
                
Calculation of Adjusted Pre-Tax, Pre-Provision (PTPP) Earnings               
                
Net income available to common stockholders$52,955 $65,885 $58,789 $77,223 $52,709 
Provision for income taxes 10,970  17,633  15,593  20,694  12,976 
Provision for credit losses (including provision for unfunded commitments) 6,943  22,981  21,915  23,134  4,903 
(Gain) loss on sale of securities (16) (22,305) (390) (32,095) (377)
Net pre-tax non-core items 12,214  3,320  1,840  (4,583) 24,868 
Adjusted Pre-tax, pre-provision (PTPP) earnings$83,066 $87,514 $97,747 $84,373 $95,079 
                
                


Simmons First National Corporation    SFNC
Reconciliation Of Non-GAAP Financial Measures - Year-to-Date   
For the Quarters EndedDec 31Sep 30Jun 30Mar 31Dec 31
(Unaudited) 2020   2020   2020   2020   2019 
($ in thousands)                   
Calculation of Core Return on Average Assets     
      
Net income$254,852  $201,897  $136,012  $77,223  $237,828 
Net non-core items, net of taxes, adjustment 9,448   426   (2,027)  (3,385)  31,738 
Core earnings$264,300  $202,323  $133,985  $73,838  $269,566 
                    
Average total assets$21,590,745  $21,503,564  $21,371,248  $20,920,223  $17,871,748 
                    
Return on average assets 1.18%  1.25%  1.28%  1.48%  1.33%
Core return on average assets 1.22%  1.26%  1.26%  1.42%  1.51%
                    
Calculation of Return on Tangible Common Equity                   
      
Net income$254,852  $201,897  $136,012  $77,223  $237,828 
Amortization of intangibles, net of taxes 9,968   7,493   5,010   2,521   8,720 
Total income available to common stockholders$264,820  $209,390  $141,022  $79,744  $246,548 
                    
Net non-core items, net of taxes 9,448   426   (2,027)  (3,385)  31,738 
Core earnings 264,300   202,323   133,985   73,838   269,566 
Amortization of intangibles, net of taxes 9,968   7,493   5,010   2,521   8,720 
Total core income available to common stockholders$274,268  $209,816  $138,995  $76,359  $278,286 
                    
Average common stockholders' equity$2,921,039  $2,910,366  $2,894,351  $2,869,177  $2,396,024 
Average intangible assets:     
   Goodwill (1,065,190)  (1,061,793)  (1,060,226)  (1,055,498)  (921,635)
   Other intangibles (118,812)  (120,731)  (122,928)  (125,746)  (104,000)
Total average intangibles (1,184,002)  (1,182,524)  (1,183,154)  (1,181,244)  (1,025,635)
Average tangible common stockholders' equity$1,737,037  $1,727,842  $1,711,197  $1,687,933  $1,370,389 
                    
Return on average common equity 8.72%  9.27%  9.45%  10.83%  9.93%
Return on tangible common equity 15.25%  16.19%  16.57%  19.00%  17.99%
Core return on average common equity 9.05%  9.29%  9.31%  10.35%  11.25%
Core return on tangible common equity 15.79%  16.22%  16.33%  18.19%  20.31%
                    
Calculation of Efficiency Ratio (1)                   
      
Non-interest expense$493,495  $365,360  $246,411  $128,813  $461,112 
Non-core non-interest expense adjustment (21,529)  (9,040)  (5,350)  (1,306)  (42,972)
Other real estate and foreclosure expense adjustment (1,706)  (1,161)  (561)  (319)  (3,282)
Amortization of intangibles adjustment (13,495)  (10,144)  (6,782)  (3,413)  (11,805)
Efficiency ratio numerator$456,765  $345,015  $233,718  $123,775  $403,053 
                    
Net-interest income$639,734  $484,774  $331,164  $167,483  $601,753 
Non-interest income 248,528   204,472   132,621   82,394   205,031 
Non-core non-interest income adjustment (8,738)  (8,463)  (8,093)  (5,889)  - 
Fully tax-equivalent adjustment (effective tax rate of 26.135%) 11,001   7,519   4,655   2,305   7,322 
Gain on sale of securities (54,806)  (54,790)  (32,485)  (32,095)  (13,314)
Efficiency ratio denominator$835,719  $633,512  $427,862  $214,198  $800,792 
                    
Efficiency ratio (1) 54.66%  54.46%  54.62%  57.79%  50.33%
                    
(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.
  



Simmons First National Corporation    SFNC
Reconciliation Of Non-GAAP Financial Measures - Year-to-Date (continued)   
For the Quarters Ended Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
(Unaudited) 2020   2020   2020   2020   2019 
($ in thousands)                   
Calculation of Core Net Interest Margin                   
                    
Net interest income$639,734  $484,774  $331,164  $167,483  $601,753 
Fully tax-equivalent adjustment (effective tax rate of 26.135%) 11,001   7,519   4,655   2,305   7,322 
Fully tax-equivalent net interest income 650,735   492,293   335,819   169,788   609,075 
                    
Total accretable yield (41,507)  (32,508)  (23,560)  (11,837)  (41,244)
Core net interest income$609,228  $459,785  $312,259  $157,951  $567,831 
Average earning assets$19,272,886  $19,172,318  $19,049,487  $18,581,491  $15,824,571 
                    
Net interest margin 3.38%  3.43%  3.55%  3.68%  3.85%
Core net interest margin 3.16%  3.20%  3.30%  3.42%  3.59%
                    
Calculation of Core Loan Yield                   
                    
Loan interest income (FTE)$688,600  $528,294  $364,915  $187,566  $710,935 
Total accretable yield (41,507)  (32,508)  (23,560)  (11,837)  (41,244)
Core loan interest income$647,093  $495,786  $341,355  $175,729  $669,691 
Average loan balance$14,260,689  $14,530,938  $14,640,082  $14,548,853  $12,938,013 
                    
Core loan yield 4.54%  4.56%  4.69%  4.86%  5.18%
                    
Calculation of Adjusted Pre-Tax, Pre-Provision (PTPP) Earnings    
      
Net income available to common stockholders$254,852  $201,897  $136,012  $77,223  $237,828 
Provision for income taxes 64,890   53,920   36,287   20,694   64,265 
Provision for credit losses (including provision for unfunded commitments) 74,973   68,030   45,049   23,134   43,240 
(Gain) loss on sale of securities (54,806)  (54,790)  (32,485)  (32,095)  (13,314)
Net pre-tax non-core items 12,791   577   (2,743)  (4,583)  42,972 
Adjusted Pre-tax, pre-provision (PTPP) earnings$352,700  $269,634  $182,120  $84,373  $374,991 
                    

 


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