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Press Release

Simmons Reports First Quarter 2020 Earnings

Company Release - 4/21/2020 8:30 AM ET

PINE BLUFF, Ark., April 21, 2020 (GLOBE NEWSWIRE) -- Simmons First National Corporation (NASDAQ: SFNC) (the “Company” or “Simmons”) today announced net income of $77.2 million for the quarter ended March 31, 2020, compared to $47.7 million for the same period in 2019, an increase of $29.5 million, or 61.9%. Diluted earnings per share were $0.68, an increase of $0.17, or 33.3%, compared to the same period in the prior year. Included in first quarter 2020 results were $965,000 in net after-tax merger-related and branch right-sizing costs as well as a $4.4 million after-tax gain associated with the sale of branches in south Texas.

Excluding the impact of these items, core earnings were $73.8 million for the quarter ended March 31, 2020, compared to $49.1 million for the quarter ended March 31, 2019, an increase of $24.8 million, or 50.5%. Core diluted earnings per share were $0.65, an increase of $0.12, or 22.6%, from the same period in 2019.

“I am very proud of our team and their demonstration of our community banking values during these trying times,” said George A. Makris, Jr., chairman and CEO of Simmons First National Corporation. “Many of our associates could not work from home because they were serving our customers who needed our help.”

Makris continued, “On behalf of Simmons Bank, our customers, and the communities we serve, I would like to thank our healthcare professionals and other front-line workers, along with our federal, state and local officials, who have all responded quickly and with great care to the challenges presented by the pandemic. We believe we are well positioned to help our customers and communities as we come out of these unprecedented times. We have very strong liquidity and capital that we believe should assist Simmons once again in weathering critical economic times. The diversification in our risk profile along with a conservative risk appetite has helped to accommodate the needs of the communities we serve while providing value to our shareholders.”

Selected Highlights:1st Qtr 20204th Qtr 20191st Qtr 2019
Net income$77.2 million$52.7 million$47.7 million
Diluted earnings per share$0.68$0.49$0.51
Return on avg assets1.48%1.04%1.19%
Return on avg common equity10.83%8.01%8.60%
Return on tangible common equity (1)19.00%14.62%15.34%
    
Core earnings (2)$73.8 million$71.1 million$49.1 million
Core diluted earnings per share (2)$0.65$0.66$0.53
Core return on avg assets (2)1.42%1.41%1.22%
Core return on avg common equity (2)10.35%10.80%8.85%
Core return on tangible common equity (1)(2)18.19%19.49%15.76%
    
Efficiency ratio (3)56.38%52.63%56.76%
  1. Return on tangible common equity excludes goodwill and other intangible assets and is a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.
  2. Core figures exclude non-core items and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.
  3. Efficiency ratio is noninterest expense before foreclosed property expense, 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)1st Qtr 20204th Qtr 20191st Qtr 2019
Total loans$14.37$14.43$11.74

Total loans were $14.4 billion at March 31, 2020, an increase of $2.6 billion, or 22.4%, compared to March 31, 2019, primarily due to the Reliance Bancshares, Inc. and The Landrum Company mergers completed during 2019 (“2019 mergers”). On a linked-quarter basis (March 31, 2020 compared to December 31, 2019), total loans decreased $51.4 million, or 0.4%. During the first quarter 2020, $115 million in loan balances were reclassified associated with the four branches held for sale in Colorado.

Deposits

($ in billions)1st Qtr 20204th Qtr 20191st Qtr 2019
Total deposits$15.6$16.1$12.0
Non-time deposits$12.4$12.8$9.3
Time deposits$3.2$3.3$2.7

Total deposits were $15.6 billion at March 31, 2020, an increase of $3.6 billion, or 29.8%, since March 31, 2019, primarily due to the 2019 mergers, but partially offset by the reclassification of $58.4 million of deposits associated with the Colorado branches held for sale.

Net Interest Income

 1st Qtr
2020
4th Qtr
2019
3rd Qtr
2019
2nd Qtr
2019
1st Qtr
2019
Loan yield (1)5.19%5.43%5.47%5.58%5.53%
Core loan yield (1) (2)4.86%5.00%5.19%5.26%5.29%
Security yield (1)2.63%2.73%2.87%3.06%3.11%
Cost of interest bearing deposits1.03%1.22%1.40%1.37%1.31%
Cost of deposits (3)0.80%0.94%1.09%1.07%1.02%
Cost of borrowed funds2.06%2.30%2.52%2.50%2.73%
Net interest margin (1)3.68%3.78%3.82%3.94%3.86%
Core net interest margin (1) (2)3.42%3.44%3.59%3.67%3.68%
  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 first quarter of 2020 was $167.5 million, an increase of $31.5 million, or 23.2%, from the same period of 2019 as a result of the 2019 mergers. Included in interest income was the yield accretion recognized on loans acquired of $11.8 million and $6.7 million for the first quarters of 2020 and 2019, respectively.

Net interest margin (FTE) was 3.68% for the quarter ended March 31, 2020, while core net interest margin, which excludes the accretion, was 3.42% for the same period. The decrease in the net interest margin during the first quarter of 2020 was due to a timing difference between the Company’s ability to manage the rate decrease in its variable rate loan portfolio and its repricing of interest bearing deposits in response to the substantial interest rate cuts by the Federal Open Market Committee of the Federal Reserve in March.

Non-Interest Income

Non-interest income for the first quarter of 2020 was $82.4 million, an increase of $47.6 million compared to the same period in the previous year. During the first quarter 2020, the Company sold approximately $1.0 billion in securities resulting in a gain of $30.1 million. In addition, the Company recognized a $5.9 million gain associated with the sale of the branches in south Texas recorded in Other Income, which the Company considers a non-core item.

Selected Non-Interest Income Items
($ in millions)
1st Qtr
2020
4th Qtr
2019
3rd Qtr
2019
2nd Qtr
2019
1st Qtr
2019
Service charges on deposit accounts$13.3$13.3$10.8$10.6$10.1
Mortgage lending income$5.0$4.0$4.5$3.7$2.8
SBA lending income$0.3$0.3$1.0$0.9$0.5
Debit and credit card fees$7.9$8.9$7.1$7.2$6.1
Gain on sale of securities$32.1$0.4$7.4$2.8$2.7
Other income$12.8$7.1$44.7$6.1$4.2
      
Core other income(1)$6.9$7.1$44.7$6.1$4.2
  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.

Non-Interest Expense

Non-interest expense for the first quarter of 2020 was $125.8 million, an increase of $24.4 million compared to the first quarter of 2019. Included in this quarter were $1.3 million of pre-tax non-core items for merger-related expenses and branch right-sizing costs. Excluding these expenses, core non-interest expense was $124.5 million for the first quarter of 2020, an increase of $25.0 million compared to the same period in 2019, primarily the result of the 2019 mergers and additional software and technology costs related to the Next Generation Banking (“NGB”) initiative.

The efficiency ratio for the first quarter of 2020 was 56.38% compared to 56.76% for the same period in 2019.

Selected Non-Interest Expense Items
($ in millions)
1st Qtr
2020
4th Qtr
2019
3rd Qtr
2019
2nd Qtr
2019
1st Qtr
2019
Salaries and employee benefits$67.9$63.2$52.1$56.1$56.4
Merger related costs$1.1$24.8$2.6$7.5$1.5
Other operating expenses$38.8$38.0$37.9$32.9$30.1
      
Core salaries and employee benefits(1)$67.9$63.2$51.9$53.2$56.0
Core merger related costs(1)-----
Core other operating expenses(1)$38.6$38.0$37.8$30.0$30.1
  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.

Asset Quality

 1st Qtr
2020
4th Qtr
2019
3rd Qtr
2019
2nd Qtr
2019
1st Qtr
2019
Allowance for credit losses to total loans1.69%0.47%0.51%0.49%0.52%
Allowance for credit losses to non-performing loans154%74%78%60%63%
Non-performing loans to total loans1.10%0.64%0.65%0.81%0.81%
Net charge-off ratio (annualized)0.07%0.09%0.59%0.11%0.19%
Net charge-off ratio YTD (annualized)0.07%0.24%0.30%0.15%0.19%

At March 31, 2020, the allowance for credit losses was $243.2 million. Provision for credit losses for the first quarter of 2020 was $26.1 million.

Foreclosed Assets and Other Real Estate Owned

At March 31, 2020, foreclosed assets and other real estate owned were $20.8 million, an increase of $1.9 million, or 9.8%, compared to the same period in 2019 and an increase of $1.7 million, or 8.8% from December 31, 2019. The increase from year end was primarily due the closure of six branches in conjunction with the February 2020 system conversion of Landmark Bank into Simmons Bank. The composition of these assets is divided into three types:         

($ in millions)1st Qtr
2020
4th Qtr
2019
3rd Qtr
2019
2nd Qtr
2019
1st Qtr
2019
Closed bank branches, branch sites & associate relocation$8.8$5.7$5.9$6.5$7.6
Foreclosed assets – acquired$9.2$10.3$10.1$13.3$6.2
Foreclosed assets – legacy$2.8$3.1$3.6$5.0$5.2

Capital

 1st Qtr
2020
4th Qtr
2019
3rd Qtr
2019
2nd Qtr
2019
1st Qtr
2019
Stockholders’ equity to total assets13.7%14.1%14.3%13.8%14.3%
Tangible common equity to tangible assets8.4%9.0%9.1%8.5%9.0%
Regulatory tier 1 leverage ratio9.0%9.6%9.1%8.9%9.1%
Regulatory total risk-based capital ratio14.1%13.7%13.2%12.7%13.6%

At March 31, 2020, common stockholders' equity was $2.8 billion. Book value per share was $26.11 and tangible book value per share was $15.22 at March 31, 2020, compared to $26.30 and $15.89, respectively, at December 31, 2019. The ratio of stockholders’ equity to total assets was 13.7% at March 31, 2020, compared to 14.1% at December 31, 2019 while the tangible common equity to tangible assets was 8.4% at March 31, 2020, compared to 9.0% from the previous year-end.

Effective March 4, 2020, the Company’s board of directors approved an amendment to the Company’s stock repurchase program originally approved on October 17, 2019 to increase the amount of common stock that may be repurchased under the program from a maximum of $60 million to $180 million.  During the first quarter of 2020, the Company repurchased approximately 4,900,000 shares of its commons stock at an average price of $18.94. No shares have been repurchased since March 31, 2020. Market conditions and our capital needs will drive the decisions regarding additional, future stock repurchases.

Current Expected Credit Losses (“CECL”)   

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

The CECL methodology replaces the current incurred loss methodology with a lifetime “expected credit loss” measurement objective for loans, held-to-maturity debt securities and other receivables measured at amortized cost at the time the financial asset is originated or acquired. This standard requires the consideration of historical loss experience and current conditions adjusted for reasonable and supportable economic forecasts. The Company has elected to utilize a blended macroeconomic scenario using a one-year forecast horizon with a subsequent reversion to historical loss experience. Within the life cycle of a loan or other financial asset, this new guidance will generally result in the earlier recognition of the provision for credit losses and the related allowance for credit losses than previous practice. The CECL guidance was effective for the Company as of January 1, 2020. Upon adoption, the Company recorded an additional allowance for credit losses of approximately $151 million and an adjustment to the reserve for unfunded commitments of $24 million with a related $128 million as an adjustment to retained earnings, net of income taxes. The adjustment was based upon the Company’s analysis of current conditions, assumptions and economic forecasts.

COVID-19 Impact

In March 2020, Congress passed the Coronavirus Aid, Relief and Economic Security (“CARES”) Act, which is designed to provide comprehensive relief to individuals and businesses following the unprecedented impact of the COVID-19 pandemic. The CARES Act includes approximately $2 trillion in assistance and a key component is the Paycheck Protection Program (“PPP”), which provides 100% federally guaranteed loans for small businesses to cover up to eight weeks of payroll costs to retain their workforce and assist with mortgage interest, rent and utilities. Notably, these small business loans may be forgiven if borrowers maintain their payrolls and satisfy certain other conditions during the crisis.

In response to the economic hardships associated with the COVID-19 pandemic, as of April 16th, the Company has obtained approval from the SBA for over 3,100 PPP loans totaling over $745 million for existing and new customers. The Company is continually monitoring the PPP and making the necessary adjustments to its own operations.

In addition, the Company has completed or is in the process of modifying more than 3,600 loans totaling over $2.8 billion. The Company is dedicated to supporting its customers and communities throughout this period of uncertainty.

In March and in response to the pandemic, the Company announced temporary closure of 52 branches and has been focusing on the enhanced digital banking experience.

The Company has implemented business continuity plans to help ensure that customers have adequate access to banking services while at the same time working to protect associates through heightened safety procedures. As of March 31, 2020, the Company has approximately $4.7 billion in liquidity sources available and is well capitalized, which management believes should allow the Company to approach the crisis from a position of strength.

Simmons First National Corporation

Simmons First National Corporation is a financial holding company headquartered in Pine Bluff, Arkansas, with total consolidated assets of approximately $20.8 billion as of March 31, 2020, conducting financial operations in Arkansas, Colorado, Illinois, Kansas, Missouri, Oklahoma, Tennessee and Texas. The Company, through its subsidiaries, offers comprehensive financial solutions delivered with a client-centric approach. The Company’s common stock trades on the NASDAQ Market under the symbol “SFNC.”

Conference Call

Management will conduct a live conference call to review this information beginning at 9:00 a.m. CDT today, Tuesday, April 21, 2020. Interested persons can listen to this call by dialing toll-free 1-866-298-7926 (United States and Canada only) and asking for the Simmons First National Corporation conference call, conference ID 5979394. In addition, the call will be available live or in recorded version on the Company’s website at www.simmonsbank.com.

Non-GAAP Financial Measures

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

Forward-Looking Statements

Some of the statements in this news release may not be based on historical facts and should be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by reference to future periods or by the use of forward-looking terminology, such as “believe,” “budget,” “expect,” “foresee,” “anticipate,” “intend,” “indicate,” “target,” “estimate,” “plan,” “project,” “continue,” “contemplate,” “positions,” “prospects,” “predict,” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could,” “might” or “may,” or by variations of such words or by similar expressions. These forward-looking statements include, without limitation, statements relating to Simmons’ future growth, revenue, assets, asset quality, profitability, net interest margin, non-interest revenue, share repurchase program, acquisition strategy, NGB initiative, the Company’s ability to recruit and retain key employees, the adequacy of the allowance for credit losses, and the ability of the Company to manage the impact of the COVID-19 pandemic. Any forward-looking statement speaks only as of the date of this news release, and Simmons undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release. By nature, forward-looking statements are based on various assumptions and involve inherent risk and uncertainties. Various factors, including, but not limited to, changes in economic conditions, credit quality, interest rates, loan demand, deposit flows, real estate values, the assumptions used in making the forward-looking statements, the securities markets generally or the price of Simmons common stock specifically, and information technology affecting the financial industry; the effects of the COVID-19 pandemic on, among other things, the Company’s operations, liquidity, and credit quality; general economic and market conditions; unemployment; potential 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 CARES Act); changes in accounting principles relating to loan loss recognition (CECL); the Company’s ability to manage and successfully integrate its mergers and acquisitions; cyber threats, attacks or events; reliance on third parties for key services; and other factors, many of which are beyond the control of the Company, could cause actual results to differ materially from those contemplated by the forward-looking statements. Additional information on factors that might affect the Company’s financial results is included in its Form 10-K for the year ended December 31, 2019, which has been filed with, and is 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 EndedMar 31Dec 31Sep 30Jun 30Mar 31
(Unaudited) 2020  2019  2019  2019  2019 
($ in thousands)               
ASSETS               
Cash and non-interest bearing balances due from banks$244,123 $277,208 $161,440 $145,491 $151,112 
Interest bearing balances due from banks and federal funds sold 1,493,076  719,415  368,530  509,765  340,049 
Cash and cash equivalents 1,737,199  996,623  529,970  655,256  491,161 
Interest bearing balances due from banks - time 4,309  4,554  5,041  5,041  4,684 
Investment securities - held-to-maturity 53,968  40,927  42,237  47,455  61,435 
Investment securities - available-for-sale 2,466,640  3,288,343  2,210,931  2,191,573  2,092,637 
Mortgage loans held for sale 49,984  58,102  50,099  34,999  18,480 
Other assets held for sale 115,315  260,332  383  397  397 
Loans:     
Loans 14,374,277  14,425,704  13,003,549  13,128,125  11,742,049 
Allowance for credit losses on loans (243,195) (68,244) (66,590) (64,179) (60,555)
Net loans 14,131,082  14,357,460  12,936,959  13,063,946  11,681,494 
Premises and equipment 484,990  492,384  378,678  370,551  333,740 
Foreclosed assets and other real estate owned 20,805  19,121  19,576  24,761  18,952 
Interest receivable 57,039  62,707  53,966  54,781  51,796 
Bank owned life insurance 255,197  254,152  234,655  233,345  192,736 
Goodwill 1,064,978  1,055,520  926,648  926,450  845,687 
Other intangible assets 121,673  127,340  101,149  104,096  88,694 
Other assets 278,173  241,578  268,219  224,784  209,746 
Total assets$20,841,352 $21,259,143 $17,758,511 $17,937,435 $16,091,639 
                
LIABILITIES AND STOCKHOLDERS' EQUITY               
Deposits:               
Non-interest bearing transaction accounts$3,572,244 $3,741,093 $3,044,330 $2,954,032 $2,674,034 
Interest bearing transaction accounts and savings deposits 8,840,678  9,090,878  7,337,571  7,258,005  6,666,823 
Time deposits 3,146,811  3,276,969  3,086,108  3,304,176  2,648,674 
Total deposits 15,559,733  16,108,940  13,468,009  13,516,213  11,989,531 
Federal funds purchased and securities sold     
under agreements to repurchase 377,859  150,145  116,536  130,470  120,213 
Other borrowings 1,396,829  1,297,599  1,098,395  1,324,094  1,169,989 
Subordinated notes and debentures 388,396  388,260  354,223  354,132  354,041 
Other liabilities held for sale 58,405  159,853  -  162  162 
Accrued interest and other liabilities 214,730  165,422  174,277  142,851  155,382 
Total liabilities 17,995,952  18,270,219  15,211,440  15,467,922  13,789,318 
                
Stockholders' equity:               
Preferred stock 767  767  -  -  - 
Common stock 1,090  1,136  966  966  926 
Surplus 2,026,420  2,117,282  1,708,058  1,705,262  1,599,566 
Undivided profits 778,893  848,848  814,338  747,969  707,829 
Accumulated other comprehensive income (loss):     
Unrealized accretion (depreciation) on AFS securities 38,230  20,891  23,709  15,316  (6,000)
Total stockholders' equity 2,845,400  2,988,924  2,547,071  2,469,513  2,302,321 
Total liabilities and stockholders' equity$20,841,352 $21,259,143 $17,758,511 $17,937,435 $16,091,639 
                


       
Simmons First National Corporation    SFNC 
Consolidated Statements of Income - Quarter-to-Date     
For the Quarters EndedMar 31Dec 31Sep 30Jun 30Mar 31
(Unaudited) 2020  2019  2019  2019  2019 
($ in thousands, except per share data)               
INTEREST INCOME               
Loans$187,566 $193,402 $179,971 $178,122 $159,440 
Interest bearing balances due from banks and federal funds sold 2,441  2,625  1,586  1,121  2,154 
Investment securities 18,943  16,962  14,467  15,666  16,281 
Mortgage loans held for sale 281  402  382  332  210 
TOTAL INTEREST INCOME 209,231  213,391  196,406  195,241  178,085 
INTEREST EXPENSE               
Time deposits 13,323  16,198  15,573  14,606  12,320 
Other deposits 17,954  20,331  21,363  20,190  18,430 
Federal funds purchased and securities      
sold under agreements to repurchase 759  368  249  257  136 
Other borrowings 4,877  4,615  5,381  6,219  6,793 
Subordinated notes and debentures 4,835  4,813  4,576  4,541  4,411 
TOTAL INTEREST EXPENSE 41,748  46,325  47,142  45,813  42,090 
NET INTEREST INCOME 167,483  167,066  149,264  149,428  135,995 
Provision for credit losses 26,134  4,903  21,973  7,079  9,285 
NET INTEREST INCOME AFTER PROVISION               
FOR CREDIT LOSSES 141,349  162,163  127,291  142,349  126,710 
NON-INTEREST INCOME               
Trust income 7,151  7,430  6,108  5,794  5,708 
Service charges on deposit accounts 13,328  13,332  10,825  10,557  10,068 
Other service charges and fees 1,588  1,915  1,308  1,312  1,289 
Mortgage lending income 5,046  4,029  4,509  3,656  2,823 
SBA lending income 296  321  956  895  497 
Investment banking income 877  822  513  360  618 
Debit and credit card fees 7,914  8,920  7,059  7,212  6,098 
Bank owned life insurance income 1,298  1,411  1,302  1,260  795 
Gain on sale of securities, net 32,095  377  7,374  2,823  2,740 
Other income 12,801  7,073  44,721  6,065  4,156 
TOTAL NON-INTEREST INCOME 82,394  45,630  84,675  39,934  34,792 
NON-INTEREST EXPENSE               
Salaries and employee benefits 67,924  63,235  52,065  56,128  56,367 
Occupancy expense, net 9,510  9,272  8,342  6,919  7,475 
Furniture and equipment expense 5,723  5,758  4,898  4,206  3,358 
Other real estate and foreclosure expense 325  1,089  1,125  591  637 
Deposit insurance 2,475  (134) -  2,510  2,040 
Merger-related costs 1,068  24,831  2,556  7,522  1,470 
Other operating expenses 38,788  38,044  37,879  32,867  30,062 
TOTAL NON-INTEREST EXPENSE 125,813  142,095  106,865  110,743  101,409 
NET INCOME BEFORE INCOME TAXES 97,930  65,698  105,101  71,540  60,093 
Provision for income taxes 20,694  12,976  23,275  15,616  12,398 
NET INCOME 77,236  52,722  81,826  55,924  47,695 
Preferred stock dividends 13  13  -  326  - 
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS$77,223 $52,709 $81,826 $55,598 $47,695 
BASIC EARNINGS PER SHARE$0.68 $0.49 $0.85 $0.58 $0.52 
DILUTED EARNINGS PER SHARE$0.68 $0.49 $0.84 $0.58 $0.51 
                


     
Simmons First National Corporation   SFNC
Consolidated Risk-Based Capital     
For the Quarters EndedMar 31Dec 31Sep 30Jun 30Mar 31
(Unaudited) 2020  2019  2019  2019  2019 
($ in thousands)     
Tier 1 capital     
Stockholders' equity$2,845,400 $2,988,924 $2,547,071 $2,469,513 $2,302,321 
CECL transition provision (1) 134,558  -  -  -  - 
Disallowed intangible assets, net of deferred tax (1,164,038) (1,160,079) (1,013,309) (1,001,676) (910,122)
Unrealized (gain) loss on AFS securities (38,230) (20,891) (23,709) (15,316) 6,000 
Total Tier 1 capital 1,777,690  1,807,954  1,510,053  1,452,521  1,398,199 
      
Tier 2 capital     
Trust preferred securities and subordinated debt 388,396  388,260  354,223  354,132  354,041 
Qualifying allowance for loan losses and     
reserve for unfunded commitments 96,015  76,644  74,455  72,044  67,771 
Total Tier 2 capital 484,411  464,904  428,678  426,176  421,812 
Total risk-based capital$2,262,101 $2,272,858 $1,938,731 $1,878,697 $1,820,011 
      
Risk weighted assets$16,012,233 $16,554,081 $14,725,571 $14,825,253 $13,364,636 
      
Adjusted average assets for leverage ratio$19,832,219 $18,852,798 $16,681,527 $16,382,520 $15,423,961 
      
Ratios at end of quarter     
Equity to assets 13.65% 14.06% 14.34% 13.77% 14.31%
Tangible common equity to tangible assets (2) 8.44% 8.99% 9.08% 8.51% 9.02%
Common equity Tier 1 ratio (CET1) 11.10% 10.92% 10.25% 9.80% 10.46%
Tier 1 leverage ratio 8.96% 9.59% 9.05% 8.87% 9.07%
Tier 1 risk-based capital ratio 11.10% 10.92% 10.25% 9.80% 10.46%
Total risk-based capital ratio 14.13% 13.73% 13.17% 12.67% 13.62%
      
(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 EndedMar 31Dec 31Sep 30Jun 30Mar 31
(Unaudited) 2020  2019  2019  2019  2019 
($ in thousands)               
Investment Securities - End of Period               
Held-to-Maturity               
U.S. Government agencies$- $- $- $999 $12,996 
Mortgage-backed securities 27,121  10,796  11,549  12,225  12,847 
State and political subdivisions 26,082  27,082  28,692  32,236  33,597 
Other securities 765  3,049  1,996  1,995  1,995 
Total held-to-maturity (net of credit losses) 53,968  40,927  42,237  47,455  61,435 
Available-for-Sale               
U.S. Government agencies$161,289 $194,249 $178,139 $197,656 $161,577 
Mortgage-backed securities 1,179,837  1,742,945  1,337,794  1,345,760  1,345,677 
State and political subdivisions 678,338  880,524  681,202  636,558  580,790 
Other securities 22,187  20,896  13,796  11,599  4,593 
Total available-for-sale (net of credit losses) 2,466,640  3,288,343  2,210,931  2,191,573  2,092,637 
Total investment securities (net of credit losses)$2,520,608 $3,329,270 $2,253,168 $2,239,028 $2,154,072 
Fair value - HTM investment securities$56,123 $41,855 $43,302 $48,640 $61,956 
                
Investment Securities - QTD Average               
Taxable securities$2,324,188 $1,940,755 $1,561,308 $1,641,986 $1,725,568 
Tax exempt securities 900,223  825,000  681,505  624,898  590,941 
Total investment securities - QTD average$3,224,411 $2,765,755 $2,242,813 $2,266,884 $2,316,509 
                


     
Simmons First National Corporation   SFNC
Consolidated Allowance and Asset Quality     
For the Quarters EndedMar 31Dec 31Sep 30Jun 30Mar 31
(Unaudited) 2020  2019  2019  2019  2019 
($ in thousands)               
Allowance for Credit Losses on Loans               
Beginning balance, prior to adoption of ASC 326$68,244 $66,590 $64,179 $60,555 $56,694 
Impact of adopting ASC 326 (1)$151,377             
Beginning balance, after adoption of ASC 326$219,621             
                
Loans charged off               
Credit cards 1,441  1,287  1,117  1,039  1,142 
Other consumer 1,379  1,425  1,065  964  1,553 
Real estate 396  892  1,367  1,216  417 
Commercial 523  459  17,778  1,963  3,152 
Total loans charged off 3,739  4,063  21,327  5,182  6,264 
                
Recoveries of loans previously charged off               
Credit cards 225  287  223  271  240 
Other consumer 443  304  1,422  331  300 
Real estate 101  146  55  158  142 
Commercial 347  77  65  967  158 
Total recoveries 1,116  814  1,765  1,727  840 
Net loans charged off 2,623  3,249  19,562  3,455  5,424 
Provision for credit losses on loans 26,197  4,903  21,973  7,079  9,285 
Balance, end of quarter$243,195 $68,244 $66,590 $64,179 $60,555 
                
Non-performing assets               
Non-performing loans               
Nonaccrual loans$156,746 $91,723 $84,660 $106,670 $95,286 
Loans past due 90 days or more 1,305  855  177  277  305 
Total non-performing loans 158,051  92,578  84,837  106,947  95,591 
Other non-performing assets               
Foreclosed assets and other real estate owned 20,805  19,121  19,576  24,761  18,952 
Other non-performing assets 2,169  1,964  540  613  505 
Total other non-performing assets 22,974  21,085  20,116  25,374  19,457 
Total non-performing assets$181,025 $113,663 $104,953 $132,321 $115,048 
Performing TDRs (troubled debt restructurings)$4,110 $4,411 $6,519 $6,246 $6,297 
      
Ratios     
Allowance for credit losses to total loans 1.69% 0.47% 0.51% 0.49% 0.52%
Allowance for credit losses to non-performing loans 154% 74% 78% 60% 63%
Non-performing loans to total loans 1.10% 0.64% 0.65% 0.81% 0.81%
Non-performing assets (including performing TDRs)     
to total assets 0.89% 0.56% 0.63% 0.77% 0.75%
Non-performing assets to total assets 0.87% 0.53% 0.59% 0.74% 0.71%
Annualized net charge offs to total loans 0.07% 0.09% 0.59% 0.11% 0.19%
Annualized net credit card charge offs to     
total credit card loans 2.26% 1.99% 1.82% 1.63% 1.92%
      
(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
Mar 2020
  Three Months Ended
Dec 2019
  Three Months Ended
Mar 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$764,639 $2,441 1.28% $789,035 $2,625 1.32% $394,462 $2,154 2.21%
Investment securities - taxable 2,324,188  12,752 2.21%  1,940,755  11,080 2.27%  1,725,568  11,958 2.81%
Investment securities - non-taxable (FTE) 900,223  8,315 3.71%  825,000  7,945 3.82%  590,941  5,834 4.00%
Mortgage loans held for sale 43,588  281 2.59%  53,511  402 2.98%  17,733  210 4.80%
Loans (FTE) 14,548,853  187,747 5.19%  14,144,259  193,511 5.43%  11,710,075  159,530 5.53%
Total interest earning assets (FTE) 18,581,491  211,536 4.58%  17,752,560  215,563 4.82%  14,438,779  179,686 5.05%
Non-earning assets 2,338,732        2,289,330        1,863,418      
Total assets$20,920,223       $20,041,890       $16,302,197      
                           
LIABILITIES AND STOCKHOLDERS' EQUITY          
Interest bearing liabilities:           
Interest bearing transaction and           
savings accounts$9,005,701 $17,954 0.80% $8,440,090 $20,331 0.96% $6,749,032 $18,430 1.11%
Time deposits 3,150,909  13,323 1.70%  3,393,089  16,198 1.89%  2,781,592  12,320