Market Overview

Simmons Reports 2017 Second Quarter Earnings

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PINE BLUFF, Ark., July 19, 2017 (GLOBE NEWSWIRE) -- Simmons First National Corp. (NASDAQ-GS:SFNC) today announced net income available to common shareholders of $23.1 million, or $0.72 per diluted share, for the quarter ended June 30, 2017, compared to $22.9 million, or $0.75 per diluted share, for the quarter ended June 30, 2016.  Included in second quarter 2017 results were $3.7 million in net after-tax merger-related and branch right-sizing costs. Excluding the impact of these items, core earnings were $26.8 million, or $0.84 per diluted share, for the quarter ended June 30, 2017, compared to $25.1 million, or $0.82 per diluted share, for the quarter ended June 30, 2016. Year-to-date net income was $45.2 million, or $1.42 diluted core earnings per share. Excluding $4.1 million in net after-tax merger-related and branch right-sizing costs, year-to-date core earnings were $49.3 million, or $1.55 diluted core earnings per share.

On May 15, 2017, Simmons First National Corp. completed the acquisition of Hardeman County Investment Company, Inc., headquartered in Jackson, Tenn., including its wholly-owned bank subsidiary, First South Bank. The systems conversion will take place on September 5, 2017, at which time the First South Bank will be merged into Simmons Bank.

"We welcome our newest associates from the First South Bank merger into the Simmons family. We look forward to continued growth in our Tennessee markets," said George A. Makris Jr., Chairman and CEO of Simmons First National Corp. "We are also very excited about our previously announced mergers with Southwest Bancorp, Inc. (Bank SNB) and First Texas BHC, Inc. (Southwest Bank) and the new and attractive markets they serve."

"We had solid results in the second quarter.  Our loan growth continues to be strong.  We are experiencing some upward pressure on cost of funds which is currently prohibiting an expansion in the net interest margin.  We continue to expand our risk management programs in anticipation of surpassing $10 billion in assets within the next few months.  All-in-all, we feel we are well-prepared for continued growth both organically and through acquisitions," Makris said.

Selected Highlights:   2nd Qtr 2017   1st Qtr 2017   2nd Qtr 2016
             
Net income   $23.1 million   $22.1 million   $22.9 million
Diluted earnings per share   $.72   $.70   $.75
Return on avg assets   1.05%   1.07%   1.22%
Return on avg common equity   7.65%   7.69%   8.48%
Return on tangible common equity   12.13%   12.22%   13.52%
Net interest margin(1)   4.04%   4.04%   4.14%
             
Core earnings(2)   $26.8 million   $22.5 million   $25.1 million
Diluted core earnings per share(2)   $.84   $.71   $.82
Core return on avg assets(2)   1.22%   1.09%   1.34%
Core return on avg common equity(2)   8.87%   7.83%   9.29%
Core return on tangible common equity(2)   13.99%   12.44%   14.76%
Core net interest margin(1)(2)    3.79%   3.80%   3.86%
             
Efficiency ratio   56.04%   60.92%   57.33%
             
(1) Fully tax equivalent.            
(2) Core earnings excludes non-core items, which is a non-GAAP measurement.    

Loans

Total loans, including those acquired, were $6.2 billion at June 30, 2017, an increase of $1.2 billion, or 24.2%  from June 30, 2016.  Legacy loans (all loans excluding acquired loans) were $5.0 billion at June 30, 2017, an increase of $1.3 billion, or 34.2% from June 30, 2016. Acquired loans were $1.2 billion at June 30, 2017, a decrease of $63.7 million, or 4.9% from June 30, 2016. 

On a linked-quarter basis (June 30, 2017 compared to March 31, 2017), total loans increased $448 million, or 7.8%.  The increase was due to:

  • $253 million increase from loans acquired from the First South Bank acquisition
  • $26 million decrease in liquidating portfolio (indirect lending and consumer finance)
  • $35 million increase from participations purchased from Southwest Bank
  • $270 million in legacy loan growth (strong growth in Springfield, Northwest Arkansas, Kansas City, St. Louis and Little Rock)
  • $84 million decrease in the existing acquired loan portfolio due to migration (acquired to legacy), normal loan paydowns and loan sales

Deposits

At June 30, 2017, total deposits were $7.1 billion, an increase of $1.1 billion, or 17.8%, compared with the same period in 2016. The majority of this increase is from deposits acquired in acquisitions.  Total non-time deposits were $5.8 billion, an increase of $1.0 billion, or 20.1% compared to the same period in 2016, and comprised 82% of total deposits.

Net Interest Income

The Company's net interest income for the second quarter of 2017 was $76.8 million, an increase of $10.2 million, or 15.4%, from the same period of 2016. Included in interest income was the yield accretion recognized on acquired loans of $4.8 million and $4.7 million for the second quarter of 2017 and 2016, respectively. Net interest margin was 4.04% for the quarter ended June 30, 2017, a 10 basis point decline from the same quarter of 2016. The Company's core net interest margin, excluding the accretion, was 3.79% for the second quarter of 2017, a 7 basis point decline from June 30, 2016 and a 1 basis point decrease from March 31, 2017.  Cost of interest bearing deposits were 0.36% for the second quarter of 2017, a 4 basis point increase from June 30, 2016 and a 3 basis point increase from March 31, 2017.

Provision for Loan Losses

Provision for loan losses for the second quarter of 2017 was $7.0 million, an increase of $2.4 million compared with June 30, 2016. The increase was a result of a provision of $714,000 for acquired loans due to a loan sale during the quarter and a provision due to much higher than expected loan growth during the quarter.

Non-Interest Income

Non-interest income for the second quarter was $35.7 million, a decrease of $1.1 million compared with the second quarter of 2016. The decrease was driven primarily by the net of the following:

  • $835,000 decrease in mortgage revenue due to decline in demand in the industry.  SBA revenue was flat compared to 2016, but increased $912,000 from the first quarter 2017.
  • $544,000 decrease in investment banking revenue, due to the exit from the institutional division of the broker dealer line of business in the third quarter of 2016.
  • $1.5 million decrease in gain on sale of securities.  During the quarter, the Company sold approximate $150 million in securities to provide liquidity for the strong loan demand.  The sale resulted in a $2.2 million pre-tax gain.
  • Trust income, service charges on deposits and debit card fees increased from organic growth and the impact from our recent acquisitions.

Non-Interest Expense

Non-interest expense for the second quarter of 2017 was $71.4 million, an increase of $7.3 million compared to the second quarter of 2016. Included in this quarter were $6.7 million of merger-related expenses and branch rightsizing costs.   Excluding these expenses, core non-interest expense was $64.7 million.

Included in the second quarter of 2017 expenses were operating expenses related to the additions of First South Bank which closed during the quarter and Citizens Bank which closed in September 2016. The increase in other operating expense was primarily driven by increased professional services.  Professional services increased $1 million, which was primarily related to the continued preparations for crossing the $10 billion asset threshold.  The efficiency ratio for the second quarter was 56.04%.

Asset Quality

All acquired loans are recorded at their discounted net present value; therefore, they are excluded from the computations of the asset quality ratios for the legacy loan portfolio, except for their inclusion in total assets.

At June 30, 2017, the allowance for loan losses for legacy loans was $41.4 million. The Company's allowance for loan losses on legacy loans at June 30, 2017 was 0.83% of total loans and 72% of non-performing loans. In the legacy portfolio, non-performing loans as a percent of total loans were 1.15%.

The allowance for loan losses for acquired loans was $391,000 and the acquired loan discount credit mark was $28.4 million. The allowances for loan losses and credit marks provide a total of $70.2 million of coverage, which equates to a total coverage ratio of 1.1% of gross loans. The ratio of credit mark and related allowance to acquired loans was 2.3%.

The 2017 annualized net charge-off ratio was 21 basis points.  Excluding credit cards, the net charge-off ratio was 15 basis points.

Loan Sale

During the quarter, 35 classified loans were sold with a discounted principal balance of $13.8 million, which included $7.3 million of legacy loans and $6.5 million of acquired loans.  The acquired loan portion of the sale resulted in a benefit of $1.4 million accretion income and a $714,000 increase in provision expense for acquired loans, resulting in a net benefit of approximately $700,000.

Capital

At June 30, 2017, common stockholders' equity was $1.2 billion, book value per share was $38.31 and tangible book value per share was $24.71. The Company's ratio of stockholders' equity to total assets was 13.6% and its ratio of tangible common equity to tangible assets was 9.2%.  Regulatory tier 1 leverage ratio was 10.8% and regulatory total risk-based capital ratio was 13.7%.

Pending Acquisition Update

The Company previously announced the acquisition of Southwest Bancorp, Inc. (NASDAQ-GS:OKSB) in Stillwater, OK and First Texas BHC, Inc. in Ft. Worth, TX.  The merger applications for these transactions were filed on July 14, 2017.  Conversion and integration plans are in process.  Subject to regulatory approval and the satisfaction of other closing conditions, the Company anticipates a closing date as early as October 2017 or as late as January 2018.

Simmons First National Corporation

Simmons First National Corp. is a financial holding company, headquartered in Pine Bluff, Ark., with total assets of $9.1 billion conducting financial operations throughout Arkansas, Kansas, Missouri and Tennessee.  The Company, through its subsidiaries, offers comprehensive financial solutions delivered with a client-centric approach. The Company's common stock trades on the NASDAQ Global Select Market under the symbol "SFNC."

Conference Call

Management will conduct a live conference call to review this information beginning at 11 a.m. CDT on Thursday, July 20, 2017. Interested persons can listen to this call by dialing toll-free 1-866-298-7926 (United States and Canada only) and asking for the Simmons First National Corp. conference call, conference ID 40252860. In addition, the call will be available live or in recorded version on the Company's website at www.simmonsbank.com.

Non-GAAP Financial Measures

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

Forward-Looking Statements

Statements in this news release that are not historical facts should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any forward-looking statement speaks only as of the date of this news release, and we undertake no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release. By nature, forward-looking statements involve inherent risk and uncertainties. Various factors, including, but not limited to, economic conditions, credit quality, interest rates, loan demand, changes in the assumptions used in making the forward-looking statements, and the Company's ability to obtain regulatory approvals and meet other closing conditions associated with the above-described mergers and acquisitions could cause actual results to differ materially from those contemplated by the forward-looking statements. Additional information on factors that might affect Simmons First National Corp.'s financial results is included in its Form 10-K filing with the Securities and Exchange Commission.


Simmons First National Corporation             SFNC
Consolidated End of Period Balance Sheets             
For the Quarters Ended     Jun 30  Mar 31  Dec 31  Sep 30  Jun 30
(Unaudited)    2017
  2017
  2016
  2016
  2016
($ in thousands)                                        
ASSETS             
Cash and non-interest bearing balances due from banks   $ 127,600     $ 103,875     $ 117,007     $ 112,572     $ 96,037  
Interest bearing balances due from banks     212,547       201,406       168,652       324,951       151,570  
Federal funds sold       4,500         -          -          17,000         3,000  
Cash and cash equivalents     344,647       305,281       285,659       454,523       250,607  
Interest bearing balances due from banks - time     6,057       4,563       4,563       4,393       9,781  
Investment securities - held-to-maturity     419,003       431,176       462,096       496,594       632,154  
Investment securities - available-for-sale     1,190,600       1,257,813       1,157,354       1,024,206       821,372  
Mortgage loans held for sale     16,266       9,754       27,788       28,069       30,529  
Assets held in trading accounts     50       55       41       2,969       7,321  
Loans:            
Legacy loans     5,000,572       4,632,905       4,327,207       3,943,089       3,725,422  
Allowance for loan losses     (41,379 )     (37,865 )     (36,286 )     (34,094 )     (33,523 )
Loans acquired, net of discount and allowance       1,224,739         1,144,291         1,305,683         1,458,198         1,288,435  
Net loans     6,183,932       5,739,331       5,596,604       5,367,193       4,980,334  
Premises and equipment     230,641       221,880       199,359       192,523       183,362  
Premises held for sale     -       4,611       6,052       6,732       6,167  
Foreclosed assets     26,012       26,421       26,895       30,396       30,529  
Interest receivable     27,337       26,089       27,788       27,390       24,150  
Bank owned life insurance     148,134       139,439       138,620       138,298       130,943  
Goodwill     379,437       350,035       348,505       348,769       327,686  
Other intangible assets     58,528       51,408       52,959       54,268       50,329  
Other assets       37,664         58,782         65,773         50,669         48,955  
Total assets   $   9,068,308     $   8,626,638     $   8,400,056     $   8,226,992     $   7,534,219  
             
LIABILITIES AND STOCKHOLDERS' EQUITY             
Deposits:            
Non-interest bearing transaction accounts   $ 1,650,986     $ 1,554,675     $ 1,491,676     $ 1,473,420     $ 1,283,426  
Interest bearing transaction accounts and savings deposits     4,141,426       3,987,730       3,956,483       3,815,939       3,538,808  
Time deposits less than $100,000     645,855       653,538       686,780       653,105       643,081  
Time deposits greater than $100,000       665,268         592,345         600,280         674,917         562,888  
Total deposits     7,103,535       6,788,288       6,735,219       6,617,381       6,028,203  
Federal funds purchased and securities sold            
under agreements to repurchase     121,419       110,007       115,029       124,289       103,038  
Other borrowings     474,962       441,074       273,159       215,276       191,827  
Subordinated debentures     67,312       60,503       60,397       60,290       60,184  
Accrued interest and other liabilities       67,004         55,877         65,141         62,615         60,256  
Total liabilities       7,834,232         7,455,749         7,248,945         7,079,851         6,443,508  
             
Stockholders' equity:            
Common stock     322       314       313       313       304  
Surplus     714,435       716,564       711,976       710,132       668,306  
Undivided profits     530,641       468,309       454,034       434,579       417,863  
Accumulated other comprehensive income (loss):            
Unrealized appreciation (depreciation) on AFS securities       (11,322 )       (14,298 )       (15,212 )       2,117         4,238  
Total stockholders' equity       1,234,076         1,170,889         1,151,111         1,147,141         1,090,711  
Total liabilities and stockholders' equity   $   9,068,308     $   8,626,638     $   8,400,056     $   8,226,992     $   7,534,219  
             
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Simmons First National Corporation             SFNC
Consolidated Statements of Income - Quarter-to-Date             
For the Quarters Ended    Jun 30 Mar 31 Dec 31 Sep 30 Jun 30
(Unaudited)    2017    2017    2016    2016    2016 
($ in thousands, except per share data)            
INTEREST INCOME             
Loans   $ 73,549   $ 68,728   $ 70,887   $ 65,078   $ 63,009
Federal funds sold     13     1     11     19     17
Investment securities     9,990     9,451     8,700     7,774     8,499
Mortgage loans held for sale     145     126     230     299     295
Assets held in trading accounts     -     -     3     4     3
Interest bearing balances due from banks       201       121       234       244       77
TOTAL INTEREST INCOME       83,898       78,427       80,065       73,418       71,900
INTEREST EXPENSE             
Time deposits     1,832     1,758     2,023     1,767     1,741
Other deposits     2,984     2,446     2,032     1,965     2,035
Federal funds purchased and securities            
sold under agreements to repurchase     92     75     90     59     59
Other borrowings     1,559     1,194     1,034     1,048     938
Subordinated debentures       619       574       558       516       544
TOTAL INTEREST EXPENSE       7,086       6,047       5,737       5,355       5,317
NET INTEREST INCOME      76,812     72,380     74,328     68,063     66,583
Provision for loan losses       7,023       4,307       4,332       8,294       4,616
NET INTEREST INCOME AFTER PROVISION             
FOR LOAN LOSSES        69,789       68,073       69,996       59,769       61,967
 NON-INTEREST INCOME             
Trust income     4,113     4,212     4,282     3,873     3,656
Service charges on deposit accounts     8,483     8,102     8,666     8,771     7,661
Other service charges and fees     2,515     2,197     4,026     3,261     2,718
Mortgage and SBA lending income     3,961     2,423     4,580     4,339     4,730
Investment banking income     637     690     472     1,131     1,181
Debit and credit card fees     8,659     7,934     8,027     7,825     7,688
Bank owned life insurance income     859     818     895     606     826
Gain on sale of securities, net     2,236     63     1,445     315     3,759
Other income       4,281       3,621       3,722       6,755       4,669
TOTAL NON-INTEREST INCOME       35,744       30,060       36,115       36,876       36,888
NON-INTEREST EXPENSE             
Salaries and employee benefits     34,205     35,536     33,797     31,784     33,103
Occupancy expense, net     4,868     4,663     4,516     4,690     4,990
Furniture and equipment expense     4,550     4,443     4,387     4,272     4,077
Other real estate and foreclosure expense     517     589     679     1,849     967
Deposit insurance     780     680     89     1,136     1,096
Merger-related costs     6,603     524     2,846     1,524     372
Other operating expenses       19,885       19,887       20,411       17,179       19,532
TOTAL NON-INTEREST EXPENSE       71,408       66,322       66,725       62,434       64,137
NET INCOME BEFORE INCOME TAXES      34,125     31,811     39,386     34,211     34,718
Provision for income taxes       11,060       9,691       12,415       10,782       11,809
NET INCOME    $   23,065   $   22,120   $   26,971   $   23,429   $   22,909
BASIC EARNINGS PER SHARE    $   0.72   $   0.71   $   0.86   $   0.77   $   0.75
DILUTED EARNINGS PER SHARE    $   0.72   $   0.70   $   0.85   $   0.76   $   0.75
             
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Simmons First National Corporation         SFNC 
Consolidated Risk-Based Capital             
For the Quarters Ended     Jun 30   Mar 31   Dec 31   Sep 30   Jun 30 
(Unaudited)    2017 
  2017 
  2016 
  2016 
  2016 
($ in thousands)            
Tier 1 capital            
Stockholders' equity   $ 1,234,076     $ 1,170,889     $ 1,151,111     $ 1,147,141     $ 1,090,711  
Trust preferred securities, net allowable     67,312       60,503       60,397       60,290       60,184  
Disallowed intangible assets, net of deferred tax     (406,990 )     (361,944 )     (354,028 )     (354,582 )     (334,395 )
Unrealized loss (gain) on AFS securities     11,322       14,298       15,212       (2,117 )     (4,238 )
Other     -       -       15       -       -  
Total Tier 1 capital     905,720       883,746       872,707       850,732       812,262  
             
Tier 2 capital            
Qualifying unrealized gain on AFS equity securities     1       2       -       -       -  
Qualifying allowance for loan losses and            
reserve for unfunded commitments     45,369       41,303       40,241       38,050       37,240  
Total Tier 2 capital     45,370       41,305       40,241       38,050       37,240  
Total risk-based capital   $ 951,090     $ 925,051     $ 912,948     $ 888,782     $ 849,502  
             
Common equity            
Tier 1 capital   $ 905,720     $ 883,746     $ 872,707     $ 850,732     $ 812,262  
Less: Trust preferred securities     (67,312 )     (60,503 )     (60,397 )     (60,290 )     (60,184 )
Total common equity   $ 838,408     $ 823,243     $ 812,310     $ 790,442     $ 752,078  
             
Risk weighted assets   $ 6,925,727     $ 6,425,150     $ 6,039,034     $ 5,724,052     $ 5,343,355  
             
Adjusted average assets for leverage ratio   $ 8,424,763     $ 8,076,525     $ 7,966,681     $ 7,355,702     $ 7,185,633  
             
Ratios at end of quarter            
Equity to assets     13.61 %     13.57 %     13.70 %     13.94 %     14.48 %
Tangible common equity to tangible assets (1)     9.22 %     9.35 %     9.37 %     9.51 %     9.96 %
Common equity Tier 1 ratio (CET1)     12.11 %     12.81 %     13.45 %     13.81 %     14.08 %
Tier 1 leverage ratio     10.75 %     10.94 %     10.95 %     11.57 %     11.30 %
Tier 1 risk-based capital ratio     13.08 %     13.75 %     14.45 %     14.86 %     15.20 %
Total risk-based capital ratio     13.73 %     14.40 %     15.12 %     15.53 %     15.90 %
             
             
(1) Calculations of tangible common equity to tangible assets and the reconciliations to GAAP are included in the schedules accompanying this release.
             
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Simmons First National Corporation         SFNC 
Consolidated Loans and Investments             
For the Quarters Ended     Jun 30   Mar 31   Dec 31   Sep 30   Jun 30 
(Unaudited)    2017    2017    2016    2016    2016 
($ in thousands)            
Legacy Loan Portfolio - End of Period (1)            
Consumer            
Credit cards   $ 176,953   $ 171,947   $ 184,591   $ 175,032   $ 171,468
Other consumer       366,136       349,200       303,972       275,947       248,018
Total consumer     543,089     521,147     488,563     450,979     419,486
Real Estate            
Construction     457,896     365,051     336,759     304,082     330,666
Single-family residential     1,014,412     957,717     904,245     841,958     785,289
Other commercial       2,089,707       1,959,677       1,787,075       1,521,132       1,414,663
Total real estate     3,562,015     3,282,445     3,028,079     2,667,172     2,530,618
Commercial            
Commercial     678,932     657,606     639,525     607,738     577,771
Agricultural       191,345       141,125       150,378       203,529       187,047
Total commercial     870,277     798,731     789,903     811,267     764,818
Other       25,191       30,582       20,662       13,671       10,500
Total Loans   $   5,000,572   $   4,632,905   $   4,327,207   $   3,943,089   $   3,725,422
             
 (1) Excludes all acquired loans.             
             
Investment Securities - End of Period            
Held-to-Maturity             
U.S. Government agencies   $ 67,912   $ 68,895   $ 76,875   $ 80,849   $ 199,505
Mortgage-backed securities     17,882     18,743     19,773     21,454     22,612
State and political subdivisions     331,249     341,854     362,532     391,495     407,273
Other securities       1,960       1,684       2,916       2,796       2,765
Total held-to-maturity       419,003       431,176       462,096       496,594       632,155
Available-for-Sale             
U.S. Treasury   $ 19,997   $ -   $ 300   $ 63,985   $ 4,305
U.S. Government agencies     147,619     142,356     137,771     148,781     58,113
Mortgage-backed securities     878,205     927,277     868,324     699,748     652,425
State and political subdivisions     83,672     130,747     102,943     67,019     64,836
FHLB stock     21,772     19,149     12,235     11,235     8,781
Other securities       39,335       38,285       35,781       33,438       32,911
Total available-for-sale       1,190,600       1,257,814       1,157,354       1,024,206       821,371
Total investment securities   $   1,609,603   $   1,688,990   $   1,619,450   $   1,520,800   $   1,453,526
Fair value - HTM investment securities   $   425,263   $   435,701   $   465,960   $   508,910   $   647,293
             
Investment Securities - QTD Average            
Taxable securities   $ 1,244,071   $ 1,185,794   $ 1,146,703   $ 963,150   $ 1,059,802
Tax exempt securities       467,420       455,481       467,757       466,782       443,492
Total investment securities - QTD average   $   1,711,491   $   1,641,275   $   1,614,460   $   1,429,932   $   1,503,294
             
Page 4

 

Simmons First National Corporation             SFNC 
Consolidated Loans and Credit Coverage             
For the Quarters Ended     Jun 30   Mar 31   Dec 31   Sep 30   Jun 30 
(Unaudited)    2017 
  2017 
  2016 
  2016 
  2016 
 ($ in thousands)            
LOANS             
Legacy loans   $ 5,000,572     $ 4,632,905     $ 4,327,207     $ 3,943,089     $ 3,725,422  
Allowance for loan losses (legacy loans)       (41,379 )       (37,865 )       (36,286 )       (34,094 )       (33,523 )
Legacy loans (net of allowance)     4,959,193       4,595,040       4,290,921       3,908,995       3,691,899  
Loans acquired     1,253,539       1,173,667       1,342,099       1,502,051       1,327,683  
Credit discount     (28,409 )     (28,941 )     (35,462 )     (42,899 )     (38,294 )
Allowance for loan losses (loans acquired)       (391 )       (435 )       (954 )       (954 )       (954 )
Loans acquired (net of discount and allowance)       1,224,739         1,144,291         1,305,683         1,458,198         1,288,435  
Net loans   $   6,183,932     $   5,739,331     $   5,596,604     $   5,367,193     $   4,980,334  
             
             
Loan Coverage Ratios             
Allowance for loan losses to legacy loans     0.83 %     0.82 %     0.84 %     0.86 %     0.90 %
             
Discount for credit losses and allowance on loans acquired            
to total loans acquired plus discount for credit losses            
and allowance on loans acquired (non-GAAP) (1)     2.30 %     2.50 %     2.71 %     2.92 %     2.96 %
             
Total allowance and credit coverage (non-GAAP) (1)     1.12 %     1.16 %     1.28 %     1.43 %     1.44 %
             
             
(1) Calculations of the non-GAAP loan coverage ratios and the reconciliations to GAAP are included in the schedules accompanying this release.
 
 Page 5

 

Simmons First National Corporation         SFNC 
Consolidated Allowance and Asset Quality             
For the Quarters Ended     Jun 30   Mar 31   Dec 31   Sep 30   Jun 30 
(Unaudited)    2017 
  2017 
  2016 
  2016 
  2016 
($ in thousands)            
Allowance for Loan Losses (Legacy Loans)            
Balance, beginning of quarter   $   37,865     $   36,286     $   34,094     $   33,523     $   32,681  
Loans charged off            
Credit cards     901       1,044       935       699       702  
Other consumer     993       1,174       493       600       489  
Real estate     1,712       656       167       6,297       824  
Commercial       349         292         913         284         2,283  
Total loans charged off       3,955         3,166         2,508         7,880         4,298  
             
Recoveries of loans previously charged off            
Credit cards     277       236       213       199       253  
Other consumer     636       690       158       106       149  
Real estate     216       232       73       55       111  
Commercial       32         30         28         12         318  
Total recoveries       1,161         1,188         472         372         831  
Net loans charged off     2,794       1,978       2,036       7,508       3,467  
Provision for loan losses       6,308         3,557         4,228         8,079         4,309  
Balance, end of quarter   $   41,379     $   37,865     $   36,286     $   34,094     $   33,523  
             
Non-performing assets (1) (2)            
Non-performing loans            
Nonaccrual loans     57,127       52,913       39,104       37,392       43,305  
Loans past due 90 days or more       281         231         299         144         227  
Total non-performing loans       57,408         53,144         39,403         37,536         43,532  
Other non-performing assets            
Foreclosed assets held for sale (2)     26,012       26,421       26,895       30,396       30,529  
Other non-performing assets       485         352         471         621         519  
Total other non-performing assets       26,497         26,773         27,366         31,017         31,048  
Total non-performing assets   $   83,905     $   79,917     $   66,769     $   68,553     $   74,580  
Performing TDRs (troubled debt restructurings)   $ 8,794     $ 10,833     $ 10,998     $ 13,604     $ 10,887  
             
Ratios (1) (2)            
Allowance for loan losses to total loans     0.83 %     0.82 %     0.84 %     0.86 %     0.90 %
Allowance for loan losses to non-performing loans     72 %     71 %     92 %     91 %     77 %
Non-performing loans to total loans     1.15 %     1.15 %     0.91 %     0.95 %     1.17 %
Non-performing assets (including performing TDRs)            
to total assets     1.02 %     1.05 %     0.93 %     1.00 %     1.13 %
Non-performing assets to total assets     0.93 %     0.93 %     0.79 %     0.83 %     0.99 %
Annualized net charge offs to total loans     0.23 %     0.18 %     0.20 %     0.82 %     0.39 %
Annualized net credit card charge offs to            
total credit card loans     1.42 %     1.84 %     1.66 %     1.14 %     1.07 %
Annualized net charge offs to total loans            
(excluding credit cards)     0.19 %     0.11 %     0.14 %     0.81 %     0.36 %
             
 (1) Excludes all acquired loans, except for their inclusion in total assets.       
 (2) Includes acquired foreclosed assets held for sale.             
             
 Page 6 

 

Simmons First National Corporation                     SFNC 
Consolidated - Average Balance Sheet and Net Interest Income Analysis             
For the Quarters Ended                         
(Unaudited)                         
     Three Months Ended
Jun 2017 
   Three Months Ended
Mar 2017 
   Three Months Ended
Jun 2016 
($ in thousands)   Average
Balance
  Income/
Expense
  Yield/
Rate
  Average
Balance
  Income/
Expense
  Yield/
Rate
  Average
Balance
  Income/
Expense
  Yield/
Rate
ASSETS                                                      
Earning assets:                        
Interest bearing balances due from banks   $ 160,318   $ 201   0.50 %   $ 131,079   $ 121   0.37 %   $ 126,114   $ 77   0.25 %
Federal funds sold     3,078     13   1.69 %     249     1   1.63 %     2,570     17   2.66 %
Investment securities - taxable     1,374,261     6,874   2.01 %     1,292,441     6,477   2.03 %     1,087,179     5,939   2.20 %
Investment securities - non-taxable (FTE)     337,230     5,118   6.09 %     348,834     4,884   5.68 %     416,115     4,203   4.06 %
Mortgage loans held for sale     12,250     145   4.75 %     11,473     126   4.45 %     28,844     295   4.11 %
Assets held in trading accounts     52     -   0.00 %     48     -   0.00 %     6,932     3   0.17 %
Loans, including acquired loans       5,954,019       73,629   4.96 %       5,685,585       68,783   4.91 %       4,957,888       63,041   5.11 %
Total interest earning assets (FTE)     7,841,208       85,980   4.40 %     7,469,709       80,392   4.36 %     6,625,642       73,575   4.47 %
Non-earning assets       971,252           944,761           896,491    
Total assets   $   8,812,460       $   8,414,470       $   7,522,133    
                         
LIABILITIES AND STOCKHOLDERS' EQUITY                    
Interest bearing liabilities:                        
Interest bearing transaction and                        
savings accounts   $ 4,069,179   $ 2,984   0.29 %   $ 3,950,169   $ 2,446   0.25 %   $ 3,526,278   $ 2,035   0.23 %
Time deposits       1,277,336       1,832   0.58 %       1,262,430       1,758   0.56 %       1,242,805       1,741   0.56 %
Total interest bearing deposits     5,346,515     4,816   0.36 %     5,212,599     4,204   0.33 %     4,769,083     3,776   0.32 %
Federal funds purchased and securities                        
sold under agreement to repurchase     115,101     92   0.32 %     111,474     75   0.27 %     104,668     59   0.23 %
Other borrowings     434,584     1,559   1.44 %     345,664     1,194   1.40 %     172,268     938   2.19 %
Subordinated debentures       64,019       619   3.88 %       60,452       574   3.85 %       60,132       544   3.64 %
Total interest bearing liabilities     5,960,219       7,086   0.48 %     5,730,189       6,047   0.43 %     5,106,151       5,317   0.42 %
Non-interest bearing liabilities:                        
Non-interest bearing deposits     1,597,550         1,466,501         1,271,878    
Other liabilities       45,348           51,307           57,486    
Total liabilities     7,603,117         7,247,997         6,435,515    
Stockholders' equity       1,209,343           1,166,473           1,086,618    
Total liabilities and stockholders' equity   $   8,812,460       $   8,414,470       $   7,522,133    
Net interest income (FTE)       $   78,894         $   74,345         $   68,258  
Net interest spread (FTE)         3.92 %         3.93 %         4.05 %
Net interest margin (FTE) - quarter-to-date         4.04 %         4.04 %         4.14 %
                         
Net interest margin (FTE) - year-to-date         4.04 %         4.04 %         4.28 %
                         
Core net interest margin (FTE) - quarter-to-date (1)         3.79 %         3.80 %         3.86 %
Core loan yield (FTE) - quarter-to-date (1)         4.63 %         4.59 %         4.73 %
                         
Core net interest margin (FTE) - year-to-date (1)         3.79 %         3.80 %         3.89 %
Core loan yield (FTE) - year-to-date (1)         4.61 %         4.59 %         4.77 %
                         
(1) Calculations of core net interest margin and core loan yield and the reconciliations to GAAP are included in the schedules accompanying this release.
 
Page 7

 

Simmons First National Corporation         SFNC   
Consolidated - Selected Financial Data               
For the Quarters Ended     Jun 30   Mar 31   Dec 31   Sep 30   Jun 30   
(Unaudited)   2017
  2017 
  2016 
  2016 
  2016 
 
($ in thousands, except share data)              
QUARTER-TO-DATE              
Financial Highlights - GAAP              
Net Income   $ 23,065     $ 22,120     $ 26,971     $ 23,429     $ 22,909    
Diluted earnings per share     0.72       0.70       0.85       0.76       0.75    
Return on average assets     1.05 %     1.07 %     1.29 %     1.21 %     1.22 %  
Return on average common equity     7.65 %     7.69 %     9.27 %     8.36 %     8.48 %  
Return on tangible common equity     12.13 %     12.22 %     14.71 %     13.26 %     13.52 %  
Net interest margin (FTE)     4.04 %     4.04 %     4.12 %     4.08 %     4.14 %  
FTE adjustment     2,082       1,965       1,994       1,969       1,675    
Amortization of intangibles     1,553       1,550       1,533       1,503       1,451    
Amortization of intangibles, net of taxes     944       942       932       913       882    
Average diluted shares outstanding     32,025,780       31,612,900       31,592,713       30,843,714       30,452,285    
Cash dividends declared per common share     0.25       0.25       0.24       0.24       0.24    
Financial Highlights - Core (non-GAAP)              
Core earnings (excludes non-core items) (1)   $ 26,753     $ 22,532     $ 28,751     $ 24,382     $ 25,091    
Diluted core earnings per share (1)     0.84       0.71       0.91       0.79       0.82    
Core net interest margin (FTE) (2)     3.79 %     3.80 %     3.76 %     3.79 %     3.86 %  
Accretable yield on acquired loans     4,792       4,427       6,552       4,928       4,700    
Efficiency ratio (1)     56.04 %     60.92 %     55.47 %     53.94 %     57.33 %  
Core return on average assets (1)     1.22 %     1.09 %     1.38 %     1.26 %     1.34 %  
Core return on average common equity (1)     8.87 %     7.83 %     9.89 %     8.71 %     9.29 %  
Core return on tangible common equity (1)     13.99 %     12.44 %     15.65 %     13.78 %     14.76 %  
YEAR-TO-DATE              
Financial Highlights - GAAP              
Net Income   $ 45,185     $ 22,120     $ 96,790     $ 69,819     $ 46,390    
Diluted earnings per share     1.42       0.70       3.13       2.28       1.52    
Return on average assets     1.06 %     1.07 %     1.25 %     1.23 %     1.24 %  
Return on average common equity     7.67 %     7.69 %     8.75 %     8.57 %     8.67 %  
Return on tangible common equity     12.17 %     12.22 %     13.92 %     13.68 %     13.90 %  
Net interest margin (FTE)     4.04 %     4.04 %     4.19 %     4.21 %     4.28 %  
FTE adjustment     4,047       1,965       7,722       5,728       3,759    
Amortization of intangibles     3,103       1,550       5,942       4,409       2,906    
Amortization of intangibles, net of taxes     1,886       942       3,611       2,679       1,766    
Average diluted shares outstanding     31,794,363       31,612,900       30,963,546       30,656,882       30,438,939    
Cash dividends declared per common share     0.50       0.25       0.96       0.72       0.48    
Financial Highlights - Core (non-GAAP)              
Core earnings (excludes non-core items) (1)   $ 49,285     $ 22,532     $ 101,409     $ 72,658     $ 48,276    
Diluted core earnings per share (1)     1.55       0.71       3.28       2.37       1.59    
Core net interest margin (FTE) (2)     3.79 %     3.80 %     3.83 %     3.86 %     3.89 %  
Accretable yield on acquired loans     9,219       4,427       24,257       17,705       12,777    
Efficiency ratio (1)     58.40 %     60.92 %     56.32 %     56.62 %     58.03 %  
Core return on average assets (1)     1.15 %     1.09 %     1.31 %     1.28 %     1.29 %  
Core return on average common equity (1)     8.37 %     7.83 %     9.17 %     8.91 %     9.02 %  
Core return on tangible common equity (1)     13.23 %     12.44 %     14.56 %     14.22 %     14.45 %  
END OF PERIOD              
Book value per share   $ 38.31     $ 37.30     $ 36.80     $ 36.69     $ 35.86    
Tangible book value per share     24.71       24.51       23.97       23.80       23.43    
Shares outstanding     32,212,832       31,388,357       31,277,723       31,267,614       30,415,980    
Full-time equivalent employees     1,919       1,876       1,875       1,985       1,880    
Total number of ATM's     197       187       186       186       174    
Total number of financial centers     161       151       150       150       140    
               
(1) Core earnings exclude non-core items, which is a non-GAAP measurement. Reconciliations to GAAP are included in the schedules accompanying this release.
(2) Excludes accretable yield adjustment on loans, which is a non-GAAP measurement. Reconciliations to GAAP are included in the schedules accompanying this release.
 
   
 Page 8   

 

Simmons First National Corporation        SFNC 
Consolidated - Reconciliation of Core Earnings (non-GAAP)       
For the Quarters Ended     Jun 30   Mar 31   Dec 31   Sep 30   Jun 30 
(Unaudited)    2017 
  2017 
  2016 
  2016 
  2016 
($ in thousands, except per share data)            
QUARTER-TO-DATE            
Net Income   $ 23,065     $ 22,120     $ 26,971     $ 23,429     $ 22,909  
Non-core items            
Merger-related costs     6,603       524       2,846       1,524       372  
Branch right-sizing     (536 )     154       83       43       3,219  
Tax effect (1)       (2,379 )       (266 )       (1,149 )       (614 )       (1,409 )
Net non-core items       3,688         412         1,780         953         2,182  
Core earnings (non-GAAP)   $   26,753     $   22,532     $   28,751     $   24,382     $   25,091  
             
Diluted earnings per share   $ 0.72     $ 0.70     $ 0.85     $ 0.76     $ 0.75  
Non-core items            
Merger-related costs     0.21       0.02       0.09       0.05       0.01  
Branch right-sizing     (0.02 )     -       -       -       0.11  
Tax effect (1)       (0.07 )       (0.01 )       (0.03 )       (0.02 )       (0.05 )
Net non-core items       0.12         0.01         0.06         0.03         0.07  
Core earnings (non-GAAP)   $   0.84     $   0.71     $   0.91     $   0.79     $   0.82  
             
YEAR-TO-DATE            
Net Income   $ 45,185     $ 22,120     $ 96,790     $ 69,819     $ 46,390  
Non-core items            
Gain from early retirement of trust preferred securities     -       -       (594 )     (594 )     (594 )
Merger-related costs     7,127       524       4,835       1,989       465  
Branch right-sizing     (382 )     154       3,359       3,276       3,233  
Tax effect (1)       (2,645 )       (266 )       (2,981 )       (1,832 )       (1,218 )
Net non-core items       4,100         412         4,619         2,839         1,886  
Core earnings (non-GAAP)   $   49,285     $   22,532     $   101,409     $   72,658     $   48,276  
             
Diluted earnings per share   $ 1.42     $ 0.70     $ 3.13     $ 2.28     $ 1.52  
Non-core items            
Gain from early retirement of trust preferred securities     -       -       (0.02 )     (0.02 )     (0.02 )
Merger-related costs     0.22       0.02       0.16       0.06       0.02  
Branch right-sizing     (0.01 )     -       0.11       0.11       0.11  
Tax effect (1)       (0.08 )       (0.01 )       (0.10 )       (0.06 )       (0.04 )
Net non-core items       0.13         0.01         0.15         0.09         0.07  
Core earnings (non-GAAP)   $   1.55     $   0.71     $   3.28     $   2.37     $   1.59  
             
 (1) Effective tax rate of 39.225%, adjusted for non-deductible merger-related costs.       
             
 Page 9 

 

Simmons First National Corporation            SFNC
Reconciliation Of Non-GAAP Financial Measures - End of Period       
For the Quarters Ended             
(Unaudited)     Jun 30  Mar 31  Dec 31  Sept 30  Jun 30
    2017 
  2017 
  2016 
  2016 
  2016 
($ in thousands, except per share data)            
             
Calculation of Tangible Common Equity and the Ratio of Tangible Common Equity to Tangible Assets    
             
Total common stockholders' equity   $ 1,234,076     $ 1,170,889     $ 1,151,111     $ 1,147,141     $ 1,090,711  
Intangible assets:            
Goodwill     (379,437 )     (350,035 )     (348,505 )     (348,769 )     (327,686 )
Other intangible assets       (58,528 )       (51,408 )       (52,959 )       (54,268 )       (50,329 )
Total intangibles       (437,965 )       (401,443 )       (401,464 )       (403,037 )       (378,015 )
Tangible common stockholders' equity   $   796,111     $   769,446     $   749,647     $   744,104     $   712,696  
             
Total assets   $ 9,068,308     $ 8,626,638     $ 8,400,056     $ 8,226,992     $ 7,534,219  
Intangible assets:            
Goodwill     (379,437 )     (350,035 )     (348,505 )     (348,769 )     (327,686 )
Other intangible assets       (58,528 )       (51,408 )       (52,959 )       (54,268 )       (50,329 )
Total intangibles       (437,965 )       (401,443 )       (401,464 )       (403,037 )       (378,015 )
Tangible assets   $   8,630,343     $   8,225,195     $   7,998,592     $   7,823,955     $   7,156,204  
             
Ratio of equity to assets     13.61 %     13.57 %     13.70 %     13.94 %     14.48 %
Ratio of tangible common equity to tangible assets     9.22 %     9.35 %     9.37 %     9.51 %     9.96 %
             
Calculation of Discount for credit losses and allowance on loans acquired to total loans acquired plus     
discount for credit losses and allowance on loans acquired            
             
Credit discount on acquired loans   $ 28,409     $ 28,941     $ 35,462     $ 42,899     $ 38,294  
Allowance for loan losses on acquired loans       391         435         954         954         954  
Total credit discount and ALLL on acquired loans   $   28,800     $   29,376     $   36,416     $   43,853     $   39,248  
Total loans acquired   $   1,253,539     $   1,173,667     $   1,342,099     $   1,502,051     $   1,327,683  
Discount and ALLL on acquired loans to acquired loans     2.30 %     2.50 %     2.71 %     2.92 %     2.96 %
             
Calculation of Total Allowance and Credit Coverage            
             
Allowance for loan losses   $ 41,379     $ 37,865     $ 36,286     $ 34,094     $ 33,523  
Total credit discount and ALLL on acquired loans       28,800         29,376         36,416         43,853         39,248  
Total allowance and credit discount   $   70,179     $   67,241     $   72,702     $   77,947     $   72,771  
Total loans   $   6,254,155     $   5,806,572     $   5,669,306     $   5,445,140     $   5,053,105  
Total allowance and credit coverage     1.12 %     1.16 %     1.28 %     1.43 %     1.44 %
             
Calculation of Tangible Book Value per Share            
             
Total common stockholders' equity   $ 1,234,076     $ 1,170,889     $ 1,151,111     $ 1,147,141     $ 1,090,711  
Intangible assets:            
Goodwill     (379,437 )     (350,035 )     (348,505 )     (348,769 )     (327,686 )
Other intangible assets       (58,528 )       (51,408 )       (52,959 )       (54,268 )       (50,329 )
Total intangibles       (437,965 )       (401,443 )       (401,464 )       (403,037 )       (378,015 )
Tangible common stockholders' equity   $   796,111     $   769,446     $   749,647     $   744,104     $   712,696  
Shares of common stock outstanding       32,212,832         31,388,357         31,277,723         31,267,614         30,415,980  
Book value per common share   $   38.31     $   37.30     $   36.80     $   36.69     $   35.86  
Tangible book value per common share   $   24.71     $   24.51     $   23.97     $   23.80     $   23.43  
             
 Page 10 

 

Simmons First National Corporation            SFNC
Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date       
For the Quarters Ended             
(Unaudited)    Jun 30 Mar 31 Dec 31 Sept 30 Jun 30
    2017
  2017
  2016
  2016
  2016
($ in thousands)            
Calculation of Core Return on Average Assets            
             
Net income   $ 23,065     $ 22,120     $ 26,971     $ 23,429     $ 22,909  
Net non-core items, net of taxes, adjustment       3,688         412         1,780         953         2,182  
Core earnings   $   26,753     $   22,532     $   28,751     $   24,382     $   25,091  
             
Average total assets   $   8,812,460     $   8,414,470     $   8,308,458     $   7,703,837     $   7,522,133  
             
Return on average assets     1.05 %     1.07 %     1.29 %     1.21 %     1.22 %
Core return on average assets     1.22 %     1.09 %     1.38 %     1.26 %     1.34 %
             
Calculation of Return on Tangible Common Equity            
             
Net income   $ 23,065     $ 22,120     $ 26,971     $ 23,429     $ 22,909  
Amortization of intangibles, net of taxes       944         942         932         913         882  
Total income available to common stockholders   $   24,009     $   23,062     $   27,903     $   24,342     $   23,791  
             
Net non-core items, net of taxes       3,688         412         1,780         953         2,182  
Core earnings     26,753       22,532       28,751       24,382       25,091  
Amortization of intangibles, net of taxes       944         942         932         913         882  
Total core income available to common stockholders   $   27,697     $   23,474     $   29,683     $   25,295     $   25,973  
             
Average common stockholders' equity   $ 1,209,343     $ 1,166,473     $ 1,156,933     $ 1,114,252     $ 1,086,618  
Average intangible assets:            
Goodwill     (362,925 )     (348,837 )     (348,597 )     (332,893 )     (327,686 )
Other intangibles       (52,419 )       (52,169 )       (53,646 )       (50,893 )       (51,043 )
Total average intangibles       (415,344 )       (401,006 )       (402,243 )       (383,786 )       (378,729 )
Average tangible common stockholders' equity   $   793,999     $   765,467     $   754,690     $   730,466     $   707,889  
             
Return on average common equity     7.65 %     7.69 %     9.27 %     8.36 %     8.48 %
Return on tangible common equity     12.13 %     12.22 %     14.71 %     13.26 %     13.52 %
Core return on average common equity     8.87 %     7.83 %     9.89 %     8.71 %     9.29 %
Core return on tangible common equity     13.99 %     12.44 %     15.65 %     13.78 %     14.76 %
             
Calculation of Efficiency Ratio (1)            
             
Non-interest expense   $ 71,408     $ 66,322     $ 66,725     $ 62,434     $ 64,137  
Non-core non-interest expense adjustment     (6,700 )     (635 )     (2,995 )     (1,742 )     (3,591 )
Other real estate and foreclosure expense adjustment     (517 )     (550 )     (669 )     (1,787 )     (967 )
Amortization of intangibles adjustment       (1,553 )       (1,550 )       (1,533 )       (1,503 )       (1,451 )
Efficiency ratio numerator   $   62,638     $   63,587     $   61,528     $   57,402     $   58,128  
             
Net-interest income   $ 76,812     $ 72,380     $ 74,328     $ 68,063     $ 66,583  
Non-interest income     35,744       30,060       36,115       36,876       36,888  
Non-core non-interest income adjustment     (632 )     43       (66 )     (175 )     -  
Fully tax-equivalent adjustment     2,082       1,965       1,994       1,969       1,675  
(Gain) loss on sale of securities       (2,236 )       (63 )       (1,445 )       (315 )       (3,759 )
Efficiency ratio denominator   $   111,770     $   104,385     $   110,926     $   106,418     $   101,387  
             
Efficiency ratio (1)     56.04 %     60.92 %     55.47 %     53.94 %     57.33 %
             
Calculation of Core Net Interest Margin            
             
Net interest income   $ 76,812     $ 72,380     $ 74,328     $ 68,063     $ 66,583  
Fully tax-equivalent adjustment       2,082         1,965         1,994         1,969         1,675  
Fully tax-equivalent net interest income     78,894       74,345       76,322       70,032       68,258  
             
Total accretable yield       (4,792 )       (4,427 )       (6,552 )       (4,928 )       (4,700 )
Core net interest income   $   74,102     $   69,918     $   69,770     $   65,104     $   63,558  
Average earning assets   $   7,841,208     $   7,469,709     $   7,373,236     $   6,825,019     $   6,625,642  
             
Net interest margin     4.04 %     4.04 %     4.12 %     4.08 %     4.14 %
Core net interest margin     3.79 %     3.80 %     3.76 %     3.79 %     3.86 %
             
Calculation of Core Loan Yield            
             
Loan interest income   $ 73,549     $ 68,728     $ 70,887     $ 65,078     $ 63,009  
Total accretable yield       (4,792 )       (4,427 )       (6,552 )       (4,928 )       (4,700 )
Core loan interest income   $   68,757     $   64,301     $   64,335     $   60,150     $   58,309  
Average loan balance   $   5,954,019     $   5,685,585     $   5,484,918     $   5,105,474     $   4,957,888  
             
Core loan yield     4.63 %     4.59 %     4.67 %     4.69 %     4.73 %
             
(1) Efficiency ratio is noninterest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully
taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and non-core items.  
             
 Page 11 

 

Simmons First National Corporation            SFNC
Reconciliation Of Non-GAAP Financial Measures - Year-to-Date         
For the Quarters Ended             
(Unaudited)     Jun 30   Mar 31   Dec 31   Sept 30  Jun 30 
    2017
  2017
  2016
  2016
  2016
($ in thousands)                  
Calculation of Core Return on Average Assets            
             
Net income   $ 45,185     $ 22,120     $ 96,790     $ 69,819     $ 46,390  
Net non-core items, net of taxes, adjustment       4,100         412         4,619         2,839         1,886  
Core earnings   $   49,285     $   22,532     $   101,409     $   72,658     $   48,276  
             
Average total assets   $   8,613,240     $   8,414,470     $   7,760,233     $   7,575,053     $   7,510,657  
             
Return on average assets     1.06 %     1.07 %     1.25 %     1.23 %     1.24 %
Core return on average assets     1.15 %     1.09 %     1.31 %     1.28 %     1.29 %
             
Calculation of Return on Tangible Common Equity            
             
Net income   $ 45,185     $ 22,120     $ 96,790     $ 69,819     $ 46,390  
Amortization of intangibles, net of taxes       1,886         942         3,611         2,679         1,766  
Total income available to common stockholders   $   47,071     $   23,062     $   100,401     $   72,498     $   48,156  
             
Net non-core items, net of taxes       4,100         412         4,619         2,839         1,886  
Core earnings     49,285       22,532       101,409       72,658       48,276  
Amortization of intangibles, net of taxes       1,886         942         3,611         2,679         1,766  
Total core income available to common stockholders   $   51,171     $   23,474     $   105,020     $   75,337     $   50,042  
             
Average common stockholders' equity   $ 1,187,906     $ 1,166,473     $ 1,105,775     $ 1,088,723     $ 1,075,957  
Average intangible assets:            
Goodwill     (355,881 )     (348,837 )     (332,974 )     (329,422 )     (327,686 )
Other intangibles       (52,294 )       (52,169 )       (51,710 )       (51,478 )       (51,771 )
Total average intangibles       (408,175 )       (401,006 )       (384,684 )       (380,900 )       (379,457 )
Average tangible common stockholders' equity   $   779,731     $   765,467     $   721,091     $   707,823     $   696,500  
             
Return on average common equity     7.67 %     7.69 %     8.75 %     8.57 %     8.67 %
Return on tangible common equity     12.17 %     12.22 %     13.92 %     13.68 %     13.90 %
Core return on average common equity     8.37 %     7.83 %     9.17 %     8.91 %     9.02 %
Core return on tangible common equity     13.23 %     12.44 %     14.56 %     14.22 %     14.45 %
             
Calculation of Efficiency Ratio (1)            
             
Non-interest expense   $ 137,730     $ 66,322     $ 255,085     $ 188,360     $ 125,931  
Non-core non-interest expense adjustment     (7,335 )     (635 )     (8,435 )     (5,440 )     (3,698 )
Other real estate and foreclosure expense adjustment     (1,067 )     (550 )     (4,389 )     (3,720 )     (1,934 )
Amortization of intangibles adjustment       (3,103 )       (1,550 )       (5,942 )       (4,409 )       (2,906 )
Efficiency ratio numerator   $   126,225     $   63,587     $   236,319     $   174,791     $   117,393  
             
Net-interest income   $ 149,192     $ 72,380     $ 279,206     $ 204,878     $ 136,814  
Non-interest income     65,804       30,060       139,382       103,267       66,397  
Non-core non-interest income adjustment     (589 )     43       (835 )     (769 )     (594 )
Fully tax-equivalent adjustment     4,047       1,965       7,722       5,728       3,759  
(Gain) loss on sale of securities       (2,299 )       (63 )       (5,848 )       (4,403 )       (4,088 )
Efficiency ratio denominator   $   216,155     $   104,385     $   419,627     $   308,701     $   202,288  
             
Efficiency ratio (1)     58.40 %     60.92 %     56.32 %     56.62 %     58.03 %
             
Calculation of Core Net Interest Margin            
             
Net interest income   $ 149,192     $ 72,380     $ 279,206     $ 204,878     $ 136,814  
Fully tax-equivalent adjustment       4,047         1,965         7,722         5,728         3,759  
Fully tax-equivalent net interest income     153,239       74,345       286,928       210,606       140,573  
             
Total accretable yield       (9,219 )       (4,427 )       (24,257 )       (17,705 )       (12,777 )
Core net interest income   $   144,020     $   69,918     $   262,671     $   192,901     $   127,796  
Average earning assets   $   7,653,177     $   7,469,709     $   6,855,322     $   6,682,683     $   6,611,516  
             
Net interest margin     4.04 %     4.04 %     4.19 %     4.21 %     4.28 %
Core net interest margin     3.79 %     3.80 %     3.83 %     3.86 %     3.89 %
             
Calculation of Core Loan Yield            
             
Loan interest income   $ 142,277     $ 68,728     $ 265,652     $ 194,765     $ 129,688  
Total accretable yield       (9,219 )       (4,427 )       (24,257 )       (17,705 )       (12,777 )
Core loan interest income   $   133,058     $   64,301     $   241,395     $   177,060     $   116,911  
Average loan balance   $   5,819,803     $   5,685,585     $   5,109,492     $   4,984,349     $   4,923,787  
             
Core loan yield     4.61 %     4.59 %     4.72 %     4.75 %     4.77 %
             
(1) Efficiency ratio is noninterest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully
taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and non-core items.  
             
 Page 12 


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

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