Simmons First Announces Third Quarter Earnings

Simmons First National Corporation Logo

PINE BLUFF, Ark., Oct. 17, 2013 (GLOBE NEWSWIRE) -- Simmons First National Corporation (Nasdaq:SFNC) today announced 2013 third quarter core net income of $7.4 million, an increase of $796,000, or 12.1%, compared to the same quarter last year. Diluted core earnings per share were $0.45, a $0.05, or 12.5%, increase. Core earnings exclude $439,000 in after-tax non-interest expenses related to merger costs and branch right sizing initiatives. Including the non-core expenses, net income was $6.9 million and diluted earnings per share were $0.43, an increase of $0.03, or 4.9%, compared to the same quarter last year. Year-to-date net income was $19.4 million, or $1.19 diluted earnings per share, an increase of $0.03 from the same period last year.

"We are pleased with the core earnings results for the third-quarter. As a result of recent acquisitions and efficiency initiatives, we have and will continue to recognize one-time revenue and expense items which may skew our short-term core business results but provide long-term performance benefits. Our focus continues to be improvement in core operating income," commented George A. Makris, Jr., CEO-Elect.

Loans

Total loans, including those acquired, were $2.0 billion at September 30, 2013, an increase of $98.1 million, or 5.3%, compared to the same period in 2012. Legacy loans (all loans excluding acquired loans) grew $117.8 million, or 7.3%, and acquired loans declined by $19.7 million. "We have had nice loan growth this year, particularly from the new lenders we have attracted in our targeted growth markets. Their production has exceeded our expectations through the third quarter," added Makris.

Deposits

At September 30, 2013, total deposits were $2.8 billion, an increase of $43.5 million, or 1.6%, compared to the same period in 2012. Total non-time deposits were $2.0 billion, or 72% of total deposits.

Net Interest Income

The Company's net interest income for the third quarter of 2013 was $31.6 million, an increase of $3.6 million, or 13.0%, from the same period of 2012. Net interest margin was 4.27% for the quarter ended September 30, 2013. Included in interest income for both periods was the additional yield accretion recognized as a result of updated estimates of the cash flows of the loan pools acquired in the Company's FDIC-assisted transactions. Each quarter, the Company estimates the cash flows expected to be collected from the acquired loan pools, and adjustments may or may not be required. The cash flows estimate has increased based on payment histories and reduced loss expectations of the loan pools. This resulted in increased interest income that is spread on a level-yield basis over the remaining expected lives of the loan pools. The increases in expected cash flows also reduce the amount of expected reimbursements under the loss sharing agreements with the FDIC, which are recorded as indemnification assets.

The impact of the adjustments on the Company's financial results for the current reporting period is shown below:

Three Months Ended Nine Months Ended
(In thousands) September 30 September 30
2013 2012 2013 2012
Impact on net interest income $ 4,005 $ 2,915 $ 10,102 $ 9,104
Non-interest income (3,844) (2,729) (9,734) (8,245)
Net impact to pre-tax income $ 161 $ 186 $ 368 $ 859

Because these adjustments will be recognized over the remaining lives of the loan pools and the remainder of the loss sharing agreements, respectively, they will impact future periods as well. The current estimate of the remaining accretable yield adjustment that will positively impact interest income is $36.3 million and the remaining adjustment to the indemnification assets that will reduce non-interest income is $27.3 million. Of the remaining adjustments, we expect to recognize $8.1 million of interest income and a $7.4 million reduction of non-interest income during the remainder of 2013, resulting in a $0.7 million positive impact to pre-tax income. The accretable yield adjustments recorded in future periods will change as the Company continues to evaluate expected cash flows from the acquired loan pools.

Non-Interest Income

Non-interest income for the third quarter was $10.3 million, a decrease of $1.5 million, compared to the third quarter of 2012. The reduction in non-interest income was primarily due to the inclusion in the third quarter of 2012 a $1.1 million bargain purchase gain on the Company's FDIC-assisted acquisition of Truman Bank in St. Louis.

Non-Interest Expense

Non-interest expense for the third quarter of 2013 was $30.9 million, an increase of $2.2 million compared to the same period in 2012. "Included in the quarter were $1.7 million in incremental normal operating expenses attributable to our 2012 FDIC-assisted acquisitions and $190,000 in legal and advisory fees related to our announced acquisition of Metropolitan National Bank. We closed five underperforming branches during the quarter, incurring one-time costs of $533,000. Excluding these acquisition related costs and the nonrecurring branch right sizing expenses, non-interest expense for the quarter increased by only 2.2%. Expense control remains a focus as we continue to search for additional efficiency opportunities," added Makris.

Asset Quality

Beginning in 2010, the Company has acquired loans and foreclosed real estate ("OREO") through FDIC-assisted acquisitions. Through the loss share provisions of the purchase and assumption agreements, the FDIC agreed to reimburse the Company for 80% of the losses incurred on the disposition of covered loans and OREO. The acquired loans and OREO and any related FDIC loss share indemnification asset were presented in the Company's financial reports with a carrying value equal to the discounted net present value of expected future proceeds. At September 30, 2013, acquired loans covered by loss share were carried at $149 million, OREO covered by loss share was carried at $23 million and the FDIC loss share indemnification asset was carried at $62 million. Acquired loans and OREO not covered by loss share were carried at $68 million and $6 million, respectively. As a result of using the discounted net present value method of valuing these assets, and due to the significant protection against possible losses provided by the FDIC loss share indemnification, all acquired assets, with the exception of OREO not covered by loss share, are excluded from the computations of the asset quality ratios for the legacy loan portfolio, except for their inclusion in total assets.

The Company's allowance for loan losses was $27.5 million at September 30, 2013, or 1.58% of total loans and 285% of non-performing loans. Non-performing loans as a percent of total loans were 0.56% as of September 30, 2013. During the quarter, non-performing assets decreased by 9.9% to $35.9 million. For the third quarter, the annualized net charge-off ratio, excluding credit cards, was 0.11%, and the annualized credit card charge-off ratio was 1.21%.

Capital

At September 30, 2013, stockholders' equity was $403 million, book value per share was $24.88 and tangible book value per share was $20.80. The Company's ratio of stockholders' equity to total assets was 11.7% and its ratio of tangible common equity to tangible assets was 10.0%, as of September 30, 2013.

Stock Repurchase Program

Through the third quarter of 2013, the Company has repurchased approximately 420,000 shares at an average price of $25.89. During the third quarter, the Company suspended its stock repurchase program.

Simmons First National Corporation

Simmons First National Corporation is an eight bank financial holding company with community banks in Pine Bluff, Lake Village, Jonesboro, Rogers, Searcy, Russellville, El Dorado and Hot Springs, Arkansas. The Company's eight banks conduct financial operations from 91 offices, of which 87 are financial centers, in 54 communities in Arkansas, Missouri and Kansas. The Company's common stock trades on the NASDAQ Global Select Market under the symbol "SFNC".

Conference Call

Management will conduct a conference call to review this information beginning at 3:00 p.m. Central Time on Thursday, October 17, 2013. Interested persons can listen to this call by dialing toll-free 1-888-481-2877 (United States and Canada only) and asking for the Simmons First National Corporation conference call, conference ID 7056590. In addition, the call will be available live or in recorded version on the Company's website at www.simmonsfirst.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 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.

Forward Looking Statements

Statements in this press release that are not historical facts should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements of this type speak only as of 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 and changes in the assumptions used in making the forward-looking statements, 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 Corporation'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 Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
(Unaudited) 2013 2013 2013 2012 2012
(in thousands)
ASSETS
Cash and non-interest bearing balances due from banks $ 37,752 $ 38,494 $ 40,006 $ 47,470 $ 40,356
Interest bearing balances due from banks 320,368 420,740 602,992 467,984 440,524
Federal funds sold 18,365 -- -- 22,343 7,571
Cash and cash equivalents 376,485 459,234 642,998 537,797 488,451
Investment securities - held-to-maturity 581,768 555,464 488,513 496,141 510,630
Investment securities - available-for-sale 179,937 177,531 192,165 191,342 205,051
Mortgage loans held for sale 10,605 14,454 19,100 25,367 23,980
Assets held in trading accounts 8,744 8,739 8,368 6,224 7,002
Loans:
Loans 1,741,161 1,650,395 1,589,077 1,628,513 1,623,401
Allowance for loan losses (27,533) (27,398) (27,735) (27,882) (28,145)
Loans acquired, not covered by FDIC loss share
(net of discount) 68,133 63,500 78,745 82,764 73,023
Loans acquired, covered by FDIC loss share (net of discount) 148,884 163,736 181,537 210,842 163,657
Net loans 1,930,645 1,850,233 1,821,624 1,894,237 1,831,936
FDIC indemnification asset 61,500 67,744 71,002 75,286 59,547
Premises and equipment 87,065 88,164 87,934 87,557 85,969
Foreclosed assets not covered by FDIC loss share 26,203 30,390 30,714 33,352 29,665
Foreclosed assets covered by FDIC loss share 23,260 22,990 28,003 27,620 26,466
Interest receivable 15,635 12,637 13,027 14,530 15,253
Bank owned life insurance 60,040 59,710 59,344 52,066 51,681
Goodwill 60,605 60,605 60,605 60,605 60,605
Other intangible assets 5,420 3,487 3,624 3,760 2,549
Other assets 13,797 10,387 16,540 21,605 16,195
Total assets $ 3,441,709 $ 3,421,769 $ 3,543,561 $ 3,527,489 $ 3,414,980
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing transaction accounts $ 580,063 $ 565,433 $ 592,442 $ 576,655 $ 543,380
Interest bearing transaction accounts and savings deposits 1,453,139 1,428,422 1,456,005 1,421,137 1,343,784
Time deposits less than $100,000 454,325 467,778 482,688 505,773 521,259
Time deposits greater than $100,000 351,271 351,486 361,529 370,598 386,872
Total deposits 2,838,798 2,813,119 2,892,664 2,874,163 2,795,295
Federal funds purchased and securities sold under agreements to repurchase 62,311 79,063 108,227 104,078 64,829
Other borrowings 75,987 77,659 81,646 89,441 88,852
Subordinated debentures 20,620 20,620 20,620 20,620 20,620
Accrued interest and other liabilities 40,959 29,458 33,950 33,125 41,136
Total liabilities 3,038,675 3,019,919 3,137,107 3,121,427 3,010,732
Stockholders' equity:
Common stock 162 163 165 165 167
Surplus 87,279 89,434 94,723 96,587 99,156
Undivided profits 318,194 314,663 311,521 309,053 304,343
Accumulated other comprehensive income
Unrealized appreciation on AFS securities (2,601) (2,410) 45 257 582
Total stockholders' equity 403,034 401,850 406,454 406,062 404,248
Total liabilities and stockholders' equity $ 3,441,709 $ 3,421,769 $ 3,543,561 $ 3,527,489 $ 3,414,980
Simmons First National Corporation SFNC
Consolidated Average Quarter-to-Date Balance Sheets
For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
(Unaudited) 2013 2013 2013 2012 2012
(in thousands)
ASSETS
Cash and non-interest bearing balances due from banks $ 39,067 $ 41,030 $ 42,334 $ 43,691 $ 36,603
Interest bearing balances due from banks 365,504 527,787 560,759 490,532 479,435
Federal funds sold 3,719 1,922 8,487 8,931 2,850
Cash and cash equivalents 408,290 570,739 611,580 543,154 518,888
Investment securities - held-to-maturity 567,579 511,008 497,152 511,203 496,102
Investment securities - available-for-sale 178,351 182,227 191,981 194,815 178,247
Mortgage loans held for sale 12,171 14,154 19,442 17,804 19,334
Assets held in trading accounts 8,731 8,292 8,525 7,701 7,780
Loans:
Loans 1,705,204 1,616,036 1,588,299 1,633,710 1,637,437
Allowance for loan losses (27,735) (28,219) (27,999) (28,660) (29,228)
Loans acquired, not covered by FDIC loss share
(net of discount) 61,372 72,663 80,755 82,764 12,700
Loans acquired, covered by FDIC loss share (net of discount) 156,392 172,415 196,190 218,135 117,809
Net loans 1,895,233 1,832,895 1,837,245 1,905,949 1,738,718
FDIC indemnification asset 65,478 70,442 74,205 66,994 39,476
Premises and equipment 88,044 88,210 87,571 87,784 85,173
Foreclosed assets not covered by FDIC loss share 27,368 29,399 32,102 34,883 24,945
Foreclosed assets covered by FDIC loss share 22,392 25,603 27,812 29,779 14,521
Interest receivable 13,739 12,524 13,370 15,154 13,484
Bank owned life insurance 59,878 59,523 52,706 51,864 51,507
Goodwill 60,605 60,605 60,605 60,605 60,605
Other intangible assets 3,439 3,554 3,693 2,955 1,614
Other assets 12,122 13,435 20,827 3,574 14,991
Total assets $ 3,423,420 $ 3,482,610 $ 3,538,816 $ 3,534,218 $ 3,265,385
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing transaction accounts $ 559,461 $ 560,804 $ 567,588 $ 570,800 $ 504,923
Interest bearing transaction accounts and savings deposits 1,444,058 1,456,258 1,446,533 1,405,956 1,291,141
Time deposits less than $100,000 461,101 475,428 494,196 523,050 477,275
Time deposits greater than $100,000 358,307 359,155 364,496 380,843 361,504
Total deposits 2,822,927 2,851,645 2,872,813 2,880,649 2,634,843
Federal funds purchased and securities sold under agreements to repurchase 67,924 89,879 118,131 101,815 72,381
Other borrowings 75,704 80,090 83,872 89,617 90,307
Subordinated debentures 20,620 20,620 20,620 20,620 30,594
Accrued interest and other liabilities 31,867 32,146 34,486 33,227 30,219
Total liabilities 3,019,042 3,074,380 3,129,922 3,125,928 2,858,344
Total stockholders' equity 404,378 408,230 408,894 408,290 407,041
Total liabilities and stockholders' equity $ 3,423,420 $ 3,482,610 $ 3,538,816 $ 3,534,218 $ 3,265,385
Simmons First National Corporation SFNC
Consolidated Statements of Income - Quarter-to-Date
For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
(Unaudited) 2013 2013 2013 2012 2012
(in thousands, except per share data)
INTEREST INCOME
Loans not covered by loss share $ 23,483 $ 22,602 $ 23,696 $ 23,912 $ 23,192
Loans covered by FDIC loss share 7,132 6,469 6,175 6,759 5,041
Federal funds sold 6 5 3 4 2
Investment securities 3,428 3,019 2,902 3,106 3,027
Mortgage loans held for sale 122 118 155 149 171
Assets held in trading accounts 6 6 11 11 12
Interest bearing balances due from banks 234 352 290 301 267
TOTAL INTEREST INCOME 34,411 32,571 33,232 34,242 31,712
INTEREST EXPENSE
Time deposits 1,392 1,479 1,588 1,807 1,863
Other deposits 601 603 611 652 658
Federal funds purchased and securities sold under agreements to repurchase 46 53 65 65 69
Other borrowings 646 692 734 948 792
Subordinated debentures 162 162 159 163 389
TOTAL INTEREST EXPENSE 2,847 2,989 3,157 3,635 3,771
NET INTEREST INCOME 31,564 29,582 30,075 30,607 27,941
Provision for loan losses 1,081 1,034 919 1,295 1,299
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 30,483 28,548 29,156 29,312 26,642
NON-INTEREST INCOME
Trust income 1,448 1,342 1,444 1,484 1,440
Service charges on deposit accounts 4,603 4,474 4,241 4,645 4,368
Other service charges and fees 728 791 775 747 684
Mortgage lending income 1,122 1,338 1,216 1,553 1,705
Investment banking income 240 696 454 337 560
Credit card fees 4,400 4,341 4,039 4,655 4,104
Bank owned life insurance income 328 366 278 385 355
Gain on sale of securities, net -- (193) -- 2 --
Gain on FDIC-assisted transactions -- -- -- 2,291 1,120
Net (loss) gain on assets covered by FDIC loss share agreements (3,443) (2,615) (2,142) (2,286) (2,689)
Other income 887 733 1,008 930 165
TOTAL NON-INTEREST INCOME 10,313 11,273 11,313 14,743 11,812
NON-INTEREST EXPENSE
Salaries and employee benefits 17,701 17,937 18,507 17,674 15,911
Occupancy expense, net 2,485 2,450 2,555 2,311 2,182
Furniture and equipment expense 1,613 2,030 1,723 1,835 1,835
Other real estate and foreclosure expense 385 59 331 311 280
Deposit insurance 595 492 775 614 444
Merger related costs 190 (467) 240 1,081 815
Other operating expenses 7,934 7,818 7,781 8,340 7,219
TOTAL NON-INTEREST EXPENSE 30,903 30,319 31,912 32,166 28,686
NET INCOME BEFORE INCOME TAXES 9,893 9,502 8,557 11,889 9,768
Provision for income taxes 2,961 2,926 2,620 3,856 3,008
NET INCOME $ 6,932 $ 6,576 $ 5,937 $ 8,033 $ 6,760
BASIC EARNINGS PER SHARE $ 0.43 $ 0.40 $ 0.36 $ 0.48 $ 0.41
DILUTED EARNINGS PER SHARE $ 0.43 $ 0.40 $ 0.36 $ 0.48 $ 0.41
Simmons First National Corporation SFNC
Consolidated Statements of Income - Year-to-Date
For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
(Unaudited) 2013 2013 2013 2012 2012
(in thousands, except per share data)
INTEREST INCOME
Loans not covered by loss share $ 69,781 $ 46,298 $ 23,696 $ 91,734 $ 67,822
Loans covered by FDIC loss share 19,776 12,644 6,175 22,767 16,009
Federal funds sold 14 8 3 7 4
Investment securities 9,349 5,921 2,902 12,721 9,615
Mortgage loans held for sale 395 273 155 637 487
Assets held in trading accounts 23 17 11 48 37
Interest bearing balances due from banks 875 642 290 1,220 919
TOTAL INTEREST INCOME 100,213 65,803 33,232 129,134 94,893
INTEREST EXPENSE
Time deposits 4,460 3,067 1,588 7,943 6,136
Other deposits 1,814 1,214 611 2,682 2,029
Federal funds purchased and securities sold under agreements to repurchase 165 118 65 310 248
Other borrowings 2,072 1,426 734 3,354 2,406
Subordinated debentures 483 321 159 1,328 1,166
TOTAL INTEREST EXPENSE 8,994 6,146 3,157 15,617 11,985
NET INTEREST INCOME 91,219 59,657 30,075 113,517 82,908
Provision for loan losses 3,034 1,953 919 4,140 2,846
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 88,185 57,704 29,156 109,377 80,062
NON-INTEREST INCOME
Trust income 4,234 2,786 1,444 5,473 3,988
Service charges on deposit accounts 13,318 8,715 4,241 16,808 12,163
Other service charges and fees 2,294 1,566 775 2,961 2,211
Mortgage lending income 3,677 2,554 1,216 5,997 4,441
Investment banking income 1,390 1,150 454 2,038 1,700
Credit card fees 12,779 8,380 4,039 17,045 12,390
Bank owned life insurance income 974 644 278 1,463 1,078
Gain on sale of securities, net (193) (193) -- 2 --
Gain on FDIC-assisted transactions -- -- -- 3,411 1,120
Net (loss) gain on assets covered by FDIC loss share agreements (8,200) (4,757) (2,142) (9,793) (7,507)
Other income 2,626 1,741 1,008 2,966 2,037
TOTAL NON-INTEREST INCOME 32,899 22,586 11,313 48,371 33,621
NON-INTEREST EXPENSE
Salaries and employee benefits 54,146 36,444 18,507 66,999 49,323
Occupancy expense, net 7,490 5,005 2,555 8,603 6,291
Furniture and equipment expense 5,367 3,753 1,723 6,882 5,047
Other real estate and foreclosure expense 775 390 331 992 681
Deposit insurance 1,862 1,267 775 2,086 1,472
Merger related costs (37) (227) 240 1,896 815
Other operating expenses 23,529 15,599 7,781 30,275 21,928
TOTAL NON-INTEREST EXPENSE 93,132 62,231 31,912 117,733 85,557
NET INCOME BEFORE INCOME TAXES 27,952 18,059 8,557 40,015 28,126
Provision for income taxes 8,507 5,546 2,620 12,331 8,475
NET INCOME $ 19,445 $ 12,513 $ 5,937 $ 27,684 $ 19,651
BASIC EARNINGS PER SHARE $ 1.19 $ 0.76 $ 0.36 $ 1.64 $ 1.16
DILUTED EARNINGS PER SHARE $ 1.19 $ 0.76 $ 0.36 $ 1.64 $ 1.16
Simmons First National Corporation SFNC
Consolidated Risk-Based Capital
For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
(Unaudited) 2013 2013 2013 2012 2012
(in thousands)
Tier 1 capital
Stockholders' equity $ 403,034 $ 401,850 $ 406,454 $ 406,062 $ 404,248
Trust preferred securities, net allowable 20,000 20,000 20,000 20,000 20,000
Disallowed intangible assets, net of deferred tax (49,727) (48,091) (48,529) (48,966) (48,053)
Unrealized gain on AFS securities 2,601 2,410 (45) (257) (582)
Total Tier 1 capital 375,908 376,169 377,880 376,839 375,613
Tier 2 capital
Qualifying unrealized gain on AFS equity securities 40 35 28 19 14
Qualifying allowance for loan losses 25,633 24,818 24,129 24,743 24,395
Total Tier 2 capital 25,673 24,853 24,157 24,762 24,409
Total risk-based capital $ 401,581 $ 401,022 $ 402,037 $ 401,601 $ 400,022
Risk weighted assets $ 2,047,198 $ 1,981,341 $ 1,925,199 $ 1,974,800 $ 1,946,344
Adjusted average assets for leverage ratio $ 3,378,676 $ 3,434,844 $ 3,490,102 $ 3,484,504 $ 3,216,488
Ratios at end of quarter
Equity to assets 11.71% 11.74% 11.47% 11.51% 11.84%
Tangible common equity to tangible assets 9.98% 10.06% 9.84% 9.87% 10.18%
Tier 1 leverage ratio 11.13% 10.95% 10.83% 10.81% 11.68%
Tier 1 risk-based capital ratio 18.36% 18.99% 19.63% 19.08% 19.30%
Total risk-based capital ratio 19.62% 20.24% 20.88% 20.34% 20.55%
Simmons First National Corporation SFNC
Consolidated Loans and Investments
For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
(Unaudited) 2013 2013 2013 2012 2012
(in thousands)
Legacy Loan Portfolio - End of Period (1)
Consumer
Credit cards $ 177,463 $ 173,536 $ 171,599 $ 185,536 $ 175,760
Student loans 28,392 30,106 31,835 34,145 36,441
Other consumer 101,399 103,765 102,297 105,319 107,604
Total consumer 307,254 307,407 305,731 325,000 319,805
Real Estate
Construction 161,024 142,902 136,099 138,132 128,423
Single-family residential 375,703 364,239 355,479 356,907 355,976
Other commercial 602,463 572,110 569,686 568,166 546,224
Total real estate 1,139,190 1,079,251 1,061,264 1,063,205 1,030,623
Commercial
Commercial 154,508 152,122 150,427 141,336 138,719
Agricultural 135,633 107,113 68,028 93,805 130,727
Total commercial 290,141 259,235 218,455 235,141 269,446
Other 4,576 4,502 3,627 5,167 3,527
Total Loans $ 1,741,161 $ 1,650,395 $ 1,589,077 $ 1,628,513 $ 1,623,401
(1) Excludes all acquired loans, including those covered by FDIC loss share agreements.
Investment Securities - End of Period
Held-to-Maturity
U.S. Government agencies $ 313,052 $ 313,050 $ 288,480 $ 288,098 $ 303,640
Mortgage-backed securities 41 43 45 49 51
State and political subdivisions 268,055 241,751 199,368 207,374 206,319
Other securities 620 620 620 620 620
Total held-to-maturity 581,768 555,464 488,513 496,141 510,630
Available-for-Sale
U.S. Government agencies 163,127 159,390 159,846 152,481 164,467
Mortgage-backed securities 1,994 2,078 15,891 20,634 24,333
State and political subdivisions 1,263 1,262 1,417 2,988 --
FHLB stock 5,085 5,353 5,325 5,498 5,788
Other securities 8,468 9,448 9,686 9,741 10,463
Total available-for-sale 179,937 177,531 192,165 191,342 205,051
Total investment securities $ 761,705 $ 732,995 $ 680,678 $ 687,483 $ 715,681
Fair value - HTM investment securities $ 570,703 $ 543,154 $ 491,556 $ 500,578 $ 516,419
Investment Securities - QTD Average
Taxable securities $ 490,801 $ 478,946 $ 485,711 $ 495,917 $ 467,988
Tax exempt securities 255,129 214,289 203,422 210,101 206,361
Total investment securities - QTD average $ 745,930 $ 693,235 $ 689,133 $ 706,018 $ 674,349
Simmons First National Corporation SFNC
Consolidated Allowance and Asset Quality
For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
(Unaudited) 2013 2013 2013 2012 2012
(in thousands)
Allowance for Loan Losses
Balance, beginning of quarter $ 27,398 $ 27,735 $ 27,882 $ 28,145 $ 28,397
Loans charged off
Credit cards 770 743 909 884 806
Other consumer 449 310 374 362 358
Real estate 247 887 239 705 773
Commercial 20 133 96 163 86
Total loans charged off 1,486 2,073 1,618 2,114 2,023
Recoveries of loans previously charged off
Credit cards 235 204 236 194 242
Other consumer 114 116 195 177 107
Real estate 151 295 68 144 61
Commercial 40 87 53 41 62
Total recoveries 540 702 552 556 472
Net loans charged off 946 1,371 1,066 1,558 1,551
Provision for loan losses 1,081 1,034 919 1,295 1,299
Balance, end of quarter $ 27,533 $ 27,398 $ 27,735 $ 27,882 $ 28,145
Non-performing assets (1) (2)
Non-performing loans
Nonaccrual loans
Real estate $ 4,157 $ 4,327 $ 6,963 $ 7,135 $ 6,197
Commercial 525 526 602 618 894
Consumer 1,293 1,410 1,203 1,370 1,389
Total nonaccrual loans 5,975 6,263 8,768 9,123 8,480
Loans past due 90 days or more
Government guaranteed student loans 2,966 2,254 2,283 2,234 2,324
Other loans 725 879 661 681 1,001
Total loans past due 90 days or more 3,691 3,133 2,944 2,915 3,325
Total non-performing loans 9,666 9,396 11,712 12,038 11,805
Other non-performing assets
Foreclosed assets held for sale 20,493 21,804 21,253 21,556 23,126
Acquired foreclosed assets held for sale, not covered by FDIC loss share agreements 5,710 8,586 9,461 11,796 6,539
Other non-performing assets 60 80 238 221 60
Total other non-performing assets 26,263 30,470 30,952 33,573 29,725
Total non-performing assets $ 35,929 $ 39,866 $ 42,664 $ 45,611 $ 41,530
Performing TDRs (troubled debt restructurings) $ 9,584 $ 10,473 $ 10,745 $ 11,015 $ 10,995
Ratios (1) (2)
Allowance for loan losses to total loans 1.58% 1.66% 1.75% 1.71% 1.73%
Allowance for loan losses to non-performing loans 285% 292% 237% 232% 238%
Non-performing loans to total loans 0.56% 0.57% 0.74% 0.74% 0.73%
Non-performing assets (including performing TDRs) to total assets 1.32% 1.47% 1.51% 1.61% 1.54%
Non-performing assets to total assets 1.04% 1.17% 1.20% 1.29% 1.22%
Non-performing assets to total assets
(excluding Gov't guaranteed student loans) 0.96% 1.10% 1.14% 1.23% 1.15%
Annualized net charge offs to total loans 0.22% 0.34% 0.27% 0.38% 0.38%
Annualized net credit card charge offs to total credit card loans 1.21% 1.25% 1.53% 1.54% 1.27%
Annualized net charge offs to total loans
(excluding credit cards) 0.11% 0.23% 0.11% 0.24% 0.27%
Past due loans >30 days (excluding nonaccrual) 0.62% 0.54% 0.64% 0.63% 0.75%
Past due loans >30 days (excluding nonaccrual)
(excluding Gov't guaranteed student loans) 0.36% 0.35% 0.40% 0.44% 0.48%
(1) Excludes all acquired loans, including those covered by FDIC loss share agreements, except for their inclusion in total assets.
(2) Excludes acquired foreclosed assets covered by FDIC loss share agreements, except for their inclusion in total assets.
Simmons First National Corporation SFNC
Consolidated - Net Interest Income Analysis
For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
(Unaudited) 2013 2013 2013 2012 2012
ASSETS
Earning Assets
Interest bearing balances due from banks 0.25% 0.27% 0.21% 0.24% 0.22%
Investment securities 2.52% 2.37% 2.33% 2.39% 2.46%
Mortgage loans held for sale 3.98% 3.34% 3.23% 3.33% 3.52%
Assets held in trading accounts 0.27% 0.29% 0.52% 0.57% 0.61%
Loans, including covered loans* 6.32% 6.27% 6.50% 6.31% 6.36%
Total interest earning assets 4.63% 4.35% 4.41% 4.45% 4.45%
LIABILITIES
Interest bearing liabilities
Interest bearing transaction and savings accounts 0.17% 0.17% 0.17% 0.18% 0.20%
Time deposits 0.67% 0.71% 0.75% 0.80% 0.88%
Total interest bearing deposits 0.35% 0.36% 0.39% 0.42% 0.47%
Federal funds purchased and securities sold under agreement to repurchase 0.27% 0.24% 0.22% 0.25% 0.38%
Other borrowings 3.39% 3.47% 3.55% 4.21% 3.49%
Subordinated debentures 3.12% 3.15% 3.13% 3.14% 5.06%
Total interest bearing liabilities 0.47% 0.48% 0.51% 0.57% 0.65%
NET INTEREST MARGIN/SPREAD
Net interest spread 4.16% 3.87% 3.90% 3.88% 3.80%
Net interest margin - quarter-to-date 4.27% 3.96% 4.01% 3.99% 3.94%
Net interest margin - year-to-date 4.08% 3.98% 4.01% 3.93% 3.91%
* Covered loans are loans covered by FDIC loss share agreements.
Simmons First National Corporation SFNC
Consolidated - Selected Financial Data
For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
(Unaudited) 2013 2013 2013 2012 2012
($ in thousands, except share data)
QUARTER-TO-DATE
Diluted earnings per share $ 0.43 $ 0.40 $ 0.36 $ 0.48 $ 0.41
Core earnings (excludes nonrecurring items) (non-GAAP) 7,371 6,409 6,083 7,404 6,575
Diluted core earnings per share (non-GAAP) 0.45 0.39 0.37 0.44 0.40
Cash dividends declared per common share 0.21 0.21 0.21 0.20 0.20
Cash dividends declared - amount 3,401 3,434 3,469 3,323 3,334
Return on average stockholders' equity 6.80% 6.46% 5.89% 7.83% 6.61%
Return on tangible equity 8.18% 7.76% 7.09% 9.36% 7.85%
Return on average assets 0.80% 0.76% 0.68% 0.90% 0.82%
Net interest margin (FTE) 4.27% 3.96% 4.01% 3.99% 3.94%
FTE adjustment - investments 1,313 1,083 1,062 1,134 1,138
FTE adjustment - loans 11 12 11 11 11
Amortization of intangibles 135 137 137 126 74
Amortization of intangibles, net of taxes 82 83 83 77 45
Average shares outstanding 16,220,199 16,414,893 16,516,438 16,624,637 16,756,589
Average earning assets 3,059,023 3,106,504 3,151,590 3,165,595 2,938,994
Average interest bearing liabilities 2,427,714 2,481,430 2,527,848 2,521,901 2,323,202
YEAR-TO-DATE
Diluted earnings per share $ 1.19 $ 0.76 $ 0.36 $ 1.64 $ 1.16
Core earnings (excludes nonrecurring items) (non-GAAP) 19,863 12,492 6,083 26,870 19,466
Diluted core earnings per share (non-GAAP) 1.21 0.76 0.37 1.59 1.15
Cash dividends declared per common share 0.63 0.42 0.21 0.80 0.60
Cash dividends declared - amount 10,304 6,903 3,469 13,496 10,173
Return on average stockholders' equity 6.39% 6.18% 5.89% 6.77% 6.41%
Return on tangible equity 7.68% 7.43% 7.09% 8.05% 7.61%
Return on average assets 0.75% 0.72% 0.68% 0.83% 0.80%
Net interest margin (FTE) 4.08% 3.98% 4.01% 3.93% 3.91%
FTE adjustment - investments 3,458 2,145 1,062 4,660 3,526
FTE adjustment - loans 34 23 11 45 34
Amortization of intangibles 409 274 137 348 222
Amortization of intangibles, net of taxes 248 166 83 212 135
Average shares outstanding 16,382,758 16,465,385 16,516,438 16,908,904 17,004,351
Average diluted shares outstanding 16,388,393 16,468,814 16,520,398 16,911,363 17,007,623
Average earning assets 3,105,706 3,129,048 3,151,590 3,008,840 2,952,324
Average interest bearing liabilities 2,477,899 2,503,992 2,527,848 2,378,748 2,331,032
END OF PERIOD
Book value per share $ 24.88 $ 24.67 $ 24.62 $ 24.55 $ 24.26
Tangible book value per share 20.80 20.74 20.73 20.66 20.47
Shares outstanding 16,198,964 16,289,239 16,509,666 16,542,778 16,660,278
Full-time equivalent employees 1,097 1,114 1,112 1,068 1,073
Total number of ATM's 106 110 110 110 106
Total number of financial centers 87 92 92 92 88
Parent company only - investment in subsidiaries 371,531 369,965 370,728 368,847 387,944
Parent company only - intangible assets 133 133 133 133 133
Simmons First National Corporation SFNC
Consolidated - Reconciliation of Core Earnings (non-GAAP)
For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
(Unaudited) 2013 2013 2013 2012 2012
(in thousands, except per share data)
QUARTER-TO-DATE
Net Income $ 6,932 $ 6,576 $ 5,937 $ 8,033 $ 6,760
Nonrecurring items
Gain on FDIC assisted transactions -- -- -- (2,291) (1,120)
Merger related costs 190 (467) 240 1,081 815
Loss on sale of securities -- 193 -- -- --
FHLB prepayment penalties -- -- -- 175 --
Branch right sizing 533 -- -- -- --
Tax effect (284) 107 (94) 406 120
Net nonrecurring items 439 (167) 146 (629) (185)
Core earnings (non-GAAP) $ 7,371 $ 6,409 $ 6,083 $ 7,404 $ 6,575
Diluted earnings per share $ 0.43 $ 0.40 $ 0.36 $ 0.48 $ 0.41
Nonrecurring items
Gain on FDIC assisted transactions -- -- -- (0.14) (0.07)
Merger related costs 0.01 (0.03) 0.01 0.07 0.05
Loss on sale of securities -- 0.01 -- -- --
FHLB prepayment penalties -- -- -- 0.01 --
Branch right sizing 0.03 -- -- -- --
Tax effect (0.02) 0.01 -- 0.02 0.01
Net nonrecurring items 0.02 (0.01) 0.01 (0.04) (0.01)
Diluted core earnings per share (non-GAAP) $ 0.45 $ 0.39 $ 0.37 $ 0.44 $ 0.40
YEAR-TO-DATE
Net Income $ 19,445 $ 12,513 $ 5,937 $ 27,684 $ 19,651
Nonrecurring items
Gain on FDIC assisted transactions -- -- -- (3,411) (1,120)
Merger related costs (37) (227) 240 1,896 815
Loss on sale of securities 193 193 -- -- --
FHLB prepayment penalties -- -- -- 175 --
Branch right sizing 533 -- -- -- --
Tax effect (271) 13 (94) 526 120
Net nonrecurring items 418 (21) 146 (814) (185)
Core earnings (non-GAAP) $ 19,863 $ 12,492 $ 6,083 $ 26,870 $ 19,466
Diluted earnings per share $ 1.19 $ 0.76 $ 0.36 $ 1.64 $ 1.16
Nonrecurring items
Gain on FDIC assisted transactions -- -- -- (0.21) (0.07)
Merger related costs (0.01) (0.02) 0.01 0.12 0.05
Loss on sale of securities 0.01 0.01 -- -- --
FHLB prepayment penalties -- -- -- 0.01 --
Branch right sizing 0.03 -- -- -- --
Tax effect (0.01) 0.01 -- 0.03 0.01
Net nonrecurring items 0.02 -- 0.01 (0.05) (0.01)
Diluted core earnings per share (non-GAAP) $ 1.21 $ 0.76 $ 0.37 $ 1.59 $ 1.15

CONTACT: DAVID W. GARNER Senior Vice President and Investor Relations Officer Simmons First National Corporation (870) 541-1000

Source:Simmons First National Corporation