Simmons First Announces Fourth Quarter Earnings

Simmons First National Corporation Logo

PINE BLUFF, Ark., Jan. 23, 2014 (GLOBE NEWSWIRE) -- Simmons First National Corporation (Nasdaq:SFNC) today announced 2013 fourth quarter core earnings of $7.7 million, an increase of $345,000, or 4.7%, compared to the same quarter last year. Diluted core earnings per share were $0.48, a $0.04, or 9.1%, increase. Core earnings exclude $4.0 million in after-tax non-interest expenses related to merger costs and branch right sizing initiatives. Including the non-core expenses, net income was $3.8 million and diluted earnings per share were $0.23.

For the year ended December 31, 2013, core earnings were $27.6 million, or $1.69 diluted core earnings per share, a $0.10, or 6.3%, increase from 2012. Year-to-date net income was $23.2 million, or $1.42 diluted earnings per share.

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

Loans

Total loans, including those acquired, were $2.4 billion at December 31, 2013, an increase of $483 million, or 25.1%, compared to the same period in 2012. Acquired loans increased by $369 million, net of discounts, while legacy loans (all loans excluding acquired loans) grew $114 million, or 7.0%. "We are encouraged by the continued growth in our legacy loan portfolio during the fourth quarter. 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 end of the year," added Makris.

Deposits

At December 31, 2013, total deposits were $3.7 billion, an increase of $823 million, or 28.7%, compared to the same period in 2012. Total non-time deposits were $2.6 billion, or 70% of total deposits. Included in total deposits were $850 million from the Metropolitan transaction.

Net Interest Income

The Company's net interest income for the fourth quarter of 2013 was $39.6 million, an increase of $9.0 million, or 29.5%, from the same period of 2012. This increase was driven by growth in the legacy loan portfolio, earning assets acquired through the Metropolitan transaction and an increase in accretable yield on acquired loans. Net interest margin was 4.70% for the quarter ended December 31, 2013, a 71 basis point increase from the same quarter of 2012. 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 Twelve Months Ended
(In thousands) December 31 December 31
2013 2012 2013 2012
Impact on net interest income $ 8,802 $ 2,647 $ 18,905 $ 11,751
Non-interest income (8,371) (2,510) (18,106) (10,755)
Net impact to pre-tax income $ 431 $ 137 $ 799 $ 996

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 $33.0 million and the remaining adjustment to the indemnification assets that will reduce non-interest income is $25.6 million. Of the remaining adjustments, we expect to recognize $21.4 million of interest income and a $20.6 million reduction of non-interest income during 2014, resulting in a $0.8 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 fourth quarter was $7.7 million, a decrease of $7.0 million, compared to the third quarter of 2012. The reduction in non-interest income was primarily due to the $5.9 million incremental reduction in non-interest income from the adjustment to the indemnification assets. Also, included in non-interest income during the fourth quarter of 2012 was a $2.3 million bargain purchase gain on the Company's FDIC-assisted acquisition of Excel Bank in Sedalia, Missouri.

Non-Interest Expense

Non-interest expense for the fourth quarter of 2013 was $41.7 million, an increase of $9.5 million compared to the same period in 2012. Included in the quarter were $6.4 million of various merger related costs for the Company's acquisition of Metropolitan National Bank. During the fourth quarter of 2012, the Company recorded $1.1 million in merger related costs for its FDIC-assisted acquisitions, resulting in an increase in merger related expenses of $5.3 million in the fourth quarter of 2013. "During the fourth quarter there were $3.7 million in incremental normal operating expenses attributable to our acquisition of Metropolitan National Bank. We also closed one underperforming branch during the quarter, incurring one-time costs of $108,000. Excluding the acquisition related costs and the nonrecurring branch right sizing expenses, non-interest expense for the quarter increased by only 1.1%. 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 December 31, 2013, acquired loans covered by loss share were carried at $147 million, OREO covered by loss share was carried at $21 million and the FDIC loss share indemnification asset was carried at $49 million. Acquired loans and OREO not covered by loss share were carried at $516 million and $45 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.

"It is important to remember that the acquired non-covered loans are protected by a credit mark and the acquired covered loans are protected by a credit mark and 80% loss coverage by the FDIC," explained Makris. "At December 31, 2013, the allowance for loan losses was $27.4 million and the loan credit mark was $101.4 million, for a total of $128.8 million of coverage. This equates to a total coverage ratio of 5.1% of gross loans. The ratio of credit mark to acquired loans was 13.3%." The Company's allowance for loan losses at December 31, 2013, was 1.57% of total loans and 298% of non-performing loans. Non-performing loans as a percent of total loans were 0.53% as of December 31, 2013. Non-performing assets increased $38.2 million from the previous quarter, to $74.1 million. Included in this quarter was $42.1 million of acquired OREO not covered by loss share, net of the credit mark, from the Metropolitan acquisition. For the full year of 2013, the annualized net charge-off ratio, excluding credit cards, was 0.15%, and the annualized credit card charge-off ratio was 1.33%.

Capital

At December 31, 2013, stockholders' equity was $404 million, book value per share was $24.89 and tangible book value per share was $19.10. The Company's ratio of stockholders' equity to total assets was 9.2% and its ratio of tangible common equity to tangible assets was 7.2%, as of December 31, 2013.

Stock Repurchase Program

During 2013, the Company 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 a seven bank financial holding company with community banks in Pine Bluff, Lake Village, Jonesboro, Searcy, Russellville, El Dorado and Hot Springs, Arkansas and conducts banking operations 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, January 23, 2014. Interested persons can listen to this call by dialing toll-free 1-888-481-2844 (United States and Canada only) and asking for the Simmons First National Corporation conference call, conference ID 2687609. 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 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
(Unaudited) 2013 2013 2013 2013 2012
(in thousands)
ASSETS
Cash and non-interest bearing balances due from banks $ 69,827 $ 37,752 $ 38,494 $ 40,006 $ 47,470
Interest bearing balances due from banks 469,553 320,368 420,740 602,992 467,984
Federal funds sold -- 18,365 -- -- 22,343
Cash and cash equivalents 539,380 376,485 459,234 642,998 537,797
Investment securities - held-to-maturity 745,688 581,768 555,464 488,513 496,141
Investment securities - available-for-sale 212,277 179,937 177,531 192,165 191,342
Mortgage loans held for sale 9,494 10,605 14,454 19,100 25,367
Assets held in trading accounts 8,978 8,744 8,739 8,368 6,224
Loans:
Legacy loans 1,742,638 1,741,161 1,650,395 1,589,077 1,628,513
Allowance for loan losses (27,442) (27,533) (27,398) (27,735) (27,882)
Loans acquired, not covered by FDIC loss share
(net of discount) 515,644 68,133 63,500 78,745 82,764
Loans acquired, covered by FDIC loss share (net of discount) 146,653 148,884 163,736 181,537 210,842
Net loans 2,377,493 1,930,645 1,850,233 1,821,624 1,894,237
FDIC indemnification asset 48,791 61,500 67,744 71,002 75,286
Premises and equipment 119,614 87,065 88,164 87,934 87,557
Premises held for sale 19,466 -- -- -- --
Foreclosed assets not covered by FDIC loss share 64,820 26,203 30,390 30,714 33,352
Foreclosed assets covered by FDIC loss share 20,585 23,260 22,990 28,003 27,620
Interest receivable 15,654 15,635 12,637 13,027 14,530
Bank owned life insurance 60,384 60,040 59,710 59,344 52,066
Goodwill 78,906 60,605 60,605 60,605 60,605
Other intangible assets 14,972 5,420 3,487 3,624 3,760
Other assets 46,598 13,797 10,387 16,540 21,605
Total assets $ 4,383,100 $ 3,441,709 $ 3,421,769 $ 3,543,561 $ 3,527,489
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing transaction accounts $ 718,438 $ 580,063 $ 565,433 $ 592,442 $ 576,655
Interest bearing transaction accounts and savings deposits 1,862,618 1,453,139 1,428,422 1,456,005 1,421,137
Time deposits less than $100,000 611,729 454,325 467,778 482,688 505,773
Time deposits greater than $100,000 504,782 351,271 351,486 361,529 370,598
Total deposits 3,697,567 2,838,798 2,813,119 2,892,664 2,874,163
Federal funds purchased and securities sold under agreements to repurchase 107,887 62,311 79,063 108,227 104,078
Other borrowings 117,090 75,987 77,659 81,646 89,441
Subordinated debentures 20,620 20,620 20,620 20,620 20,620
Accrued interest and other liabilities 36,104 40,959 29,458 33,950 33,125
Total liabilities 3,979,268 3,038,675 3,019,919 3,137,107 3,121,427
Stockholders' equity:
Common stock 162 162 163 165 165
Surplus 88,095 87,279 89,434 94,723 96,587
Undivided profits 318,577 318,194 314,663 311,521 309,053
Accumulated other comprehensive income
Unrealized appreciation on AFS securities (3,002) (2,601) (2,410) 45 257
Total stockholders' equity 403,832 403,034 401,850 406,454 406,062
Total liabilities and stockholders' equity $ 4,383,100 $ 3,441,709 $ 3,421,769 $ 3,543,561 $ 3,527,489
Simmons First National Corporation SFNC
Consolidated Average Quarter-to-Date Balance Sheets
For the Quarters Ended Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
(Unaudited) 2013 2013 2013 2013 2012
(in thousands)
ASSETS
Cash and non-interest bearing balances due from banks $ 50,473 $ 39,067 $ 41,030 $ 42,334 $ 43,691
Interest bearing balances due from banks 428,551 365,504 527,787 560,759 490,532
Federal funds sold 2,616 3,719 1,922 8,487 8,931
Cash and cash equivalents 481,640 408,290 570,739 611,580 543,154
Investment securities - held-to-maturity 657,736 567,579 511,008 497,152 511,203
Investment securities - available-for-sale 220,292 178,351 182,227 191,981 194,815
Mortgage loans held for sale 6,666 12,171 14,154 19,442 17,804
Assets held in trading accounts 8,881 8,731 8,292 8,525 7,701
Loans:
Legacy loans 1,734,469 1,705,204 1,616,036 1,588,299 1,633,710
Allowance for loan losses (27,806) (27,735) (28,219) (27,999) (28,660)
Loans acquired, not covered by FDIC loss share
(net of discount) 261,577 61,372 72,663 80,755 82,764
Loans acquired, covered by FDIC loss share (net of discount) 145,742 156,392 172,415 196,190 218,135
Net loans 2,113,982 1,895,233 1,832,895 1,837,245 1,905,949
FDIC indemnification asset 57,587 65,478 70,442 74,205 66,994
Premises and equipment 87,310 88,044 88,210 87,571 87,784
Premises held for sale 212 -- -- -- --
Foreclosed assets not covered by FDIC loss share 50,680 27,368 29,399 32,102 34,883
Foreclosed assets covered by FDIC loss share 22,529 22,392 25,603 27,812 29,779
Interest receivable 15,707 13,739 12,524 13,370 15,154
Bank owned life insurance 60,209 59,878 59,523 52,706 51,864
Goodwill 60,804 60,605 60,605 60,605 60,605
Other intangible assets 5,526 3,439 3,554 3,693 2,955
Other assets 33,324 12,122 13,435 20,827 3,574
Total assets $ 3,883,085 $ 3,423,420 $ 3,482,610 $ 3,538,816 $ 3,534,218
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing transaction accounts $ 665,644 $ 559,461 $ 560,804 $ 567,588 $ 570,800
Interest bearing transaction accounts and savings deposits 1,620,244 1,444,058 1,456,258 1,446,533 1,405,956
Time deposits less than $100,000 517,603 461,101 475,428 494,196 523,050
Time deposits greater than $100,000 409,361 358,307 359,155 364,496 380,843
Total deposits 3,212,852 2,822,927 2,851,645 2,872,813 2,880,649
Federal funds purchased and securities sold under agreements to repurchase 98,359 67,924 89,879 118,131 101,815
Other borrowings 108,693 75,704 80,090 83,872 89,617
Subordinated debentures 20,620 20,620 20,620 20,620 20,620
Accrued interest and other liabilities 33,117 31,867 32,146 34,486 33,227
Total liabilities 3,473,641 3,019,042 3,074,380 3,129,922 3,125,928
Total stockholders' equity 409,444 404,378 408,230 408,894 408,290
Total liabilities and stockholders' equity $ 3,883,085 $ 3,423,420 $ 3,482,610 $ 3,538,816 $ 3,534,218
Simmons First National Corporation SFNC
Consolidated Statements of Income - Quarter-to-Date
For the Quarters Ended Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
(Unaudited) 2013 2013 2013 2013 2012
(in thousands, except per share data)
INTEREST INCOME
Legacy loans $ 22,463 $ 22,332 $ 21,207 $ 22,590 $ 23,231
Loans acquired 16,151 8,283 7,864 7,281 7,440
Federal funds sold 5 6 5 3 4
Investment securities 3,951 3,428 3,019 2,902 3,106
Mortgage loans held for sale 72 122 118 155 149
Assets held in trading accounts 6 6 6 11 11
Interest bearing balances due from banks 251 234 352 290 301
TOTAL INTEREST INCOME 42,899 34,411 32,571 33,232 34,242
INTEREST EXPENSE
Time deposits 1,479 1,392 1,479 1,588 1,807
Other deposits 646 601 603 611 652
Federal funds purchased and securities sold under agreements to repurchase 55 46 53 65 65
Other borrowings 929 646 692 734 948
Subordinated debentures 161 162 162 159 163
TOTAL INTEREST EXPENSE 3,270 2,847 2,989 3,157 3,635
NET INTEREST INCOME 39,629 31,564 29,582 30,075 30,607
Provision for loan losses 1,084 1,081 1,034 919 1,295
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 38,545 30,483 28,548 29,156 29,312
NON-INTEREST INCOME
Trust income 1,608 1,448 1,342 1,444 1,484
Service charges on deposit accounts 5,497 4,603 4,474 4,241 4,645
Other service charges and fees 1,164 728 791 775 747
Mortgage lending income 916 1,122 1,338 1,216 1,553
Investment banking income 421 240 696 454 337
Credit card fees 4,592 4,400 4,341 4,039 4,655
Bank owned life insurance income 347 328 366 278 385
Gain on sale of securities, net 42 -- (193) -- 2
Gain on FDIC-assisted transactions -- -- -- -- 2,291
Net (loss) gain on assets covered by FDIC loss share agreements (7,988) (3,443) (2,615) (2,142) (2,286)
Other income 1,118 887 733 1,008 930
TOTAL NON-INTEREST INCOME 7,717 10,313 11,273 11,313 14,743
NON-INTEREST EXPENSE
Salaries and employee benefits 19,933 17,701 17,937 18,507 17,674
Occupancy expense, net 2,544 2,485 2,450 2,555 2,311
Furniture and equipment expense 2,257 1,613 2,030 1,723 1,835
Other real estate and foreclosure expense 562 385 59 331 311
Deposit insurance 620 595 492 775 614
Merger related costs 6,413 190 (467) 240 1,081
Other operating expenses 9,349 7,934 7,818 7,781 8,340
TOTAL NON-INTEREST EXPENSE 41,678 30,903 30,319 31,912 32,166
NET INCOME BEFORE INCOME TAXES 4,584 9,893 9,502 8,557 11,889
Provision for income taxes 798 2,961 2,926 2,620 3,856
NET INCOME $ 3,786 $ 6,932 $ 6,576 $ 5,937 $ 8,033
BASIC EARNINGS PER SHARE $ 0.23 $ 0.43 $ 0.40 $ 0.36 $ 0.48
DILUTED EARNINGS PER SHARE $ 0.23 $ 0.43 $ 0.40 $ 0.36 $ 0.48
Simmons First National Corporation SFNC
Consolidated Statements of Income - Year-to-Date
For the Quarters Ended Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
(Unaudited) 2013 2013 2013 2013 2012
(in thousands, except per share data)
INTEREST INCOME
Legacy loans $ 88,594 $ 66,129 $ 43,797 $ 22,590 $ 91,053
Loans acquired 39,577 23,428 15,145 7,281 23,448
Federal funds sold 19 14 8 3 7
Investment securities 13,300 9,349 5,921 2,902 12,721
Mortgage loans held for sale 467 395 273 155 637
Assets held in trading accounts 29 23 17 11 48
Interest bearing balances due from banks 1,127 875 642 290 1,220
TOTAL INTEREST INCOME 143,113 100,213 65,803 33,232 129,134
INTEREST EXPENSE
Time deposits 5,938 4,460 3,067 1,588 7,943
Other deposits 2,461 1,814 1,214 611 2,682
Federal funds purchased and securities sold under agreements to repurchase 219 165 118 65 310
Other borrowings 3,001 2,072 1,426 734 3,354
Subordinated debentures 644 483 321 159 1,328
TOTAL INTEREST EXPENSE 12,263 8,994 6,146 3,157 15,617
NET INTEREST INCOME 130,850 91,219 59,657 30,075 113,517
Provision for loan losses 4,118 3,034 1,953 919 4,140
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 126,732 88,185 57,704 29,156 109,377
NON-INTEREST INCOME
Trust income 5,842 4,234 2,786 1,444 5,473
Service charges on deposit accounts 18,815 13,318 8,715 4,241 16,808
Other service charges and fees 3,458 2,294 1,566 775 2,961
Mortgage lending income 4,592 3,677 2,554 1,216 5,997
Investment banking income 1,811 1,390 1,150 454 2,038
Credit card fees 17,372 12,779 8,380 4,039 17,045
Bank owned life insurance income 1,319 974 644 278 1,463
Gain on sale of securities, net (151) (193) (193) -- 2
Gain on FDIC-assisted transactions -- -- -- -- 3,411
Net (loss) gain on assets covered by FDIC loss share agreements (16,188) (8,200) (4,757) (2,142) (9,793)
Other income 3,746 2,626 1,741 1,008 2,966
TOTAL NON-INTEREST INCOME 40,616 32,899 22,586 11,313 48,371
NON-INTEREST EXPENSE
Salaries and employee benefits 74,078 54,146 36,444 18,507 66,999
Occupancy expense, net 10,034 7,490 5,005 2,555 8,603
Furniture and equipment expense 7,623 5,367 3,753 1,723 6,882
Other real estate and foreclosure expense 1,337 775 390 331 992
Deposit insurance 2,482 1,862 1,267 775 2,086
Merger related costs 6,376 (37) (227) 240 1,896
Other operating expenses 32,882 23,529 15,599 7,781 30,275
TOTAL NON-INTEREST EXPENSE 134,812 93,132 62,231 31,912 117,733
NET INCOME BEFORE INCOME TAXES 32,536 27,952 18,059 8,557 40,015
Provision for income taxes 9,305 8,507 5,546 2,620 12,331
NET INCOME $ 23,231 $ 19,445 $ 12,513 $ 5,937 $ 27,684
BASIC EARNINGS PER SHARE $ 1.42 $ 1.19 $ 0.76 $ 0.36 $ 1.64
DILUTED EARNINGS PER SHARE $ 1.42 $ 1.19 $ 0.76 $ 0.36 $ 1.64
Simmons First National Corporation SFNC
Consolidated Risk-Based Capital
For the Quarters Ended Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
(Unaudited) 2013 2013 2013 2013 2012
(in thousands)
Tier 1 capital
Stockholders' equity $ 403,832 $ 403,034 $ 401,850 $ 406,454 $ 406,062
Trust preferred securities, net allowable 20,000 20,000 20,000 20,000 20,000
Disallowed intangible assets, net of deferred tax (75,501) (49,727) (48,091) (48,529) (48,966)
Unrealized gain on AFS securities 3,002 2,601 2,410 (45) (257)
Total Tier 1 capital 351,333 375,908 376,169 377,880 376,839
Tier 2 capital
Qualifying unrealized gain on AFS equity securities 45 40 35 28 19
Qualifying allowance for loan losses 28,967 25,633 24,818 24,129 24,743
Total Tier 2 capital 29,012 25,673 24,853 24,157 24,762
Total risk-based capital $ 380,345 $ 401,581 $ 401,022 $ 402,037 $ 401,601
Risk weighted assets $ 2,697,630 $ 2,047,198 $ 1,981,341 $ 1,925,199 $ 1,974,800
Adjusted average assets for leverage ratio $ 3,811,793 $ 3,378,676 $ 3,434,844 $ 3,490,102 $ 3,484,504
Ratios at end of quarter
Equity to assets 9.21% 11.71% 11.74% 11.47% 11.51%
Tangible common equity to tangible assets 7.23% 9.98% 10.06% 9.84% 9.87%
Tier 1 leverage ratio 9.22% 11.13% 10.95% 10.83% 10.81%
Tier 1 risk-based capital ratio 13.02% 18.36% 18.99% 19.63% 19.08%
Total risk-based capital ratio 14.10% 19.62% 20.24% 20.88% 20.34%
Simmons First National Corporation SFNC
Consolidated Loans and Investments
For the Quarters Ended Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
(Unaudited) 2013 2013 2013 2013 2012
(in thousands)
Legacy Loan Portfolio - End of Period (1)
Consumer
Credit cards $ 184,935 $ 177,463 $ 173,536 $ 171,599 $ 185,536
Student loans 25,906 28,392 30,106 31,835 34,145
Other consumer 98,851 101,399 103,765 102,297 105,319
Total consumer 309,692 307,254 307,407 305,731 325,000
Real Estate
Construction 146,458 161,024 142,902 136,099 138,132
Single-family residential 392,285 375,703 364,239 355,479 356,907
Other commercial 626,333 602,463 572,110 569,686 568,166
Total real estate 1,165,076 1,139,190 1,079,251 1,061,264 1,063,205
Commercial
Commercial 164,329 154,508 152,122 150,427 141,336
Agricultural 98,886 135,633 107,113 68,028 93,805
Total commercial 263,215 290,141 259,235 218,455 235,141
Other 4,655 4,576 4,502 3,627 5,167
Total Loans $ 1,742,638 $ 1,741,161 $ 1,650,395 $ 1,589,077 $ 1,628,513
(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 $ 395,198 $ 313,052 $ 313,050 $ 288,480 $ 288,098
Mortgage-backed securities 34,425 41 43 45 49
State and political subdivisions 315,445 268,055 241,751 199,368 207,374
Other securities 620 620 620 620 620
Total held-to-maturity 745,688 581,768 555,464 488,513 496,141
Available-for-Sale
U.S. Treasury 3,985 -- -- -- --
U.S. Government agencies 178,217 163,127 159,390 159,846 152,481
Mortgage-backed securities 1,891 1,994 2,078 15,891 20,634
State and political subdivisions 7,861 1,263 1,262 1,417 2,988
FHLB stock 6,002 5,085 5,353 5,325 5,498
Other securities 14,321 8,468 9,448 9,686 9,741
Total available-for-sale 212,277 179,937 177,531 192,165 191,342
Total investment securities $ 957,965 $ 761,705 $ 732,995 $ 680,678 $ 687,483
Fair value - HTM investment securities $ 731,705 $ 570,703 $ 543,154 $ 491,556 $ 500,578
Investment Securities - QTD Average
Taxable securities $ 583,389 $ 490,801 $ 478,946 $ 485,711 $ 495,917
Tax exempt securities 294,639 255,129 214,289 203,422 210,101
Total investment securities - QTD average $ 878,028 $ 745,930 $ 693,235 $ 689,133 $ 706,018
Simmons First National Corporation SFNC
Consolidated Allowance and Asset Quality
For the Quarters Ended Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
(Unaudited) 2013 2013 2013 2013 2012
(in thousands)
Allowance for Loan Losses
Balance, beginning of quarter $ 27,533 $ 27,398 $ 27,735 $ 27,882 $ 28,145
Loans charged off
Credit cards 841 770 743 909 884
Other consumer 428 449 310 374 362
Real estate 255 247 887 239 705
Commercial 133 20 133 96 163
Total loans charged off 1,657 1,486 2,073 1,618 2,114
Recoveries of loans previously charged off
Credit cards 226 235 204 236 194
Other consumer 166 114 116 195 177
Real estate 78 151 295 68 144
Commercial 12 40 87 53 41
Total recoveries 482 540 702 552 556
Net loans charged off 1,175 946 1,371 1,066 1,558
Provision for loan losses 1,084 1,081 1,034 919 1,295
Balance, end of quarter $ 27,442 $ 27,533 $ 27,398 $ 27,735 $ 27,882
Non-performing assets (1) (2)
Non-performing loans
Nonaccrual loans
Real estate $ 4,799 $ 4,157 $ 4,327 $ 6,963 $ 7,135
Commercial 495 525 526 602 618
Consumer 967 1,293 1,410 1,203 1,370
Total nonaccrual loans 6,261 5,975 6,263 8,768 9,123
Loans past due 90 days or more
Government guaranteed student loans 2,264 2,966 2,254 2,283 2,234
Other loans 687 725 879 661 681
Total loans past due 90 days or more 2,951 3,691 3,133 2,944 2,915
Total non-performing loans 9,212 9,666 9,396 11,712 12,038
Other non-performing assets
Foreclosed assets held for sale 19,361 20,493 21,804 21,253 21,556
Acquired foreclosed assets held for sale, not covered by FDIC loss share agreements 45,459 5,710 8,586 9,461 11,796
Other non-performing assets 75 60 80 238 221
Total other non-performing assets 64,895 26,263 30,470 30,952 33,573
Total non-performing assets $ 74,107 $ 35,929 $ 39,866 $ 42,664 $ 45,611
Performing TDRs (troubled debt restructurings) $ 9,497 $ 9,584 $ 10,473 $ 10,745 $ 11,015
Ratios (1) (2)
Allowance for loan losses to total loans 1.57% 1.58% 1.66% 1.75% 1.71%
Allowance for loan losses to non-performing loans 298% 285% 292% 237% 232%
Non-performing loans to total loans 0.53% 0.56% 0.57% 0.74% 0.74%
Non-performing assets (including performing TDRs) to total assets 1.91% 1.32% 1.47% 1.51% 1.61%
Non-performing assets to total assets 1.69% 1.04% 1.17% 1.20% 1.29%
Non-performing assets to total assets
(excluding Gov't guaranteed student loans) 1.64% 0.96% 1.10% 1.14% 1.23%
Annualized net charge offs to total loans 0.27% 0.22% 0.34% 0.27% 0.38%
Annualized net credit card charge offs to total credit card loans 1.31% 1.21% 1.25% 1.53% 1.54%
Annualized net charge offs to total loans
(excluding credit cards) 0.14% 0.11% 0.23% 0.11% 0.24%
Past due loans > 30 days (excluding nonaccrual) 0.57% 0.62% 0.54% 0.64% 0.63%
Past due loans > 30 days (excluding nonaccrual)
(excluding Gov't guaranteed student loans) 0.41% 0.36% 0.35% 0.40% 0.44%
(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 Loans and Credit Coverage (non-GAAP)
For the Quarters Ended Dec 31 Dec 31
(Unaudited) 2013 2012
(in thousands)
LOANS
Legacy loans $ 1,742,638 $ 1,628,513
Allowance for loan losses (27,442) (27,882)
Legacy loans (net of allowance) 1,715,196 1,600,631
Loans acquired, not covered by FDIC loss share 554,242 101,713
Credit discount (38,598) (18,949)
Loans acquired, not covered (net of discount) 515,644 82,764
Loans acquired, covered by FDIC loss share 209,459 303,932
Credit discount (62,806) (93,090)
Loans acquired, covered (net of discount) 146,653 210,842
Net loans $ 2,377,493 $ 1,894,237
Loan Coverage Ratios
Allowance for loan losses to legacy loans 1.57% 1.71%
Discount for credit losses on loans acquired, not covered, to total loans acquired, not covered, plus discount for credit losses on loans acquired, not covered (non-GAAP) 6.96% 18.63%
Discount for credit losses on loans acquired, covered, to total loans acquired, covered, plus discount for credit losses on loans acquired, covered (non-GAAP) 29.98% 30.63%
Total allowance and credit coverage (non-GAAP) 5.14% 6.88%
Simmons First National Corporation SFNC
Consolidated - Net Interest Income Analysis
For the Quarters Ended Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
(Unaudited) 2013 2013 2013 2013 2012
ASSETS
Earning Assets
Interest bearing balances due from banks 0.23% 0.25% 0.27% 0.21% 0.24%
Investment securities 2.44% 2.52% 2.37% 2.33% 2.39%
Mortgage loans held for sale 4.29% 3.98% 3.34% 3.23% 3.33%
Assets held in trading accounts 0.27% 0.27% 0.29% 0.52% 0.57%
Loans, including acquired loans 7.16% 6.32% 6.27% 6.50% 6.31%
Total interest earning assets 5.08% 4.63% 4.35% 4.41% 4.45%
LIABILITIES
Interest bearing liabilities
Interest bearing transaction and savings accounts 0.16% 0.17% 0.17% 0.17% 0.18%
Time deposits 0.63% 0.67% 0.71% 0.75% 0.80%
Total interest bearing deposits 0.33% 0.35% 0.36% 0.39% 0.42%
Federal funds purchased and securities sold under agreement to repurchase 0.22% 0.27% 0.24% 0.22% 0.25%
Other borrowings 3.39% 3.39% 3.47% 3.55% 4.21%
Subordinated debentures 3.10% 3.12% 3.15% 3.13% 3.14%
Total interest bearing liabilities 0.47% 0.47% 0.48% 0.51% 0.57%
NET INTEREST MARGIN/SPREAD
Net interest spread 4.61% 4.16% 3.87% 3.90% 3.88%
Net interest margin - quarter-to-date 4.70% 4.27% 3.96% 4.01% 3.99%
Net interest margin - year-to-date 4.21% 4.08% 3.98% 4.01% 3.93%
Simmons First National Corporation SFNC
Consolidated - Selected Financial Data
For the Quarters Ended Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
(Unaudited) 2013 2013 2013 2013 2012
($ in thousands, except share data)
QUARTER-TO-DATE
Diluted earnings per share $ 0.23 $ 0.43 $ 0.40 $ 0.36 $ 0.48
Core earnings (excludes nonrecurring items) (non-GAAP) 7,749 7,371 6,409 6,083 7,404
Diluted core earnings per share (non-GAAP) 0.48 0.45 0.39 0.37 0.44
Cash dividends declared per common share 0.21 0.21 0.21 0.21 0.20
Cash dividends declared - amount 3,403 3,401 3,434 3,469 3,323
Return on average stockholders' equity 3.67% 6.80% 6.46% 5.89% 7.83%
Return on tangible equity 4.51% 8.18% 7.76% 7.09% 9.36%
Return on average assets 0.39% 0.80% 0.76% 0.68% 0.90%
Net interest margin (FTE) 4.70% 4.27% 3.96% 4.01% 3.99%
FTE adjustment - investments 1,442 1,313 1,083 1,062 1,134
FTE adjustment - loans 17 11 12 11 11
Amortization of intangibles 192 135 137 137 126
Amortization of intangibles, net of taxes 117 82 83 83 77
Average shares outstanding 16,210,480 16,220,199 16,414,893 16,516,438 16,624,637
Average earning assets 3,466,530 3,059,023 3,106,504 3,151,590 3,165,595
Average interest bearing liabilities 2,774,880 2,427,714 2,481,430 2,527,848 2,521,901
YEAR-TO-DATE
Diluted earnings per share $ 1.42 $ 1.19 $ 0.76 $ 0.36 $ 1.64
Core earnings (excludes nonrecurring items) (non-GAAP) 27,612 19,863 12,492 6,083 26,870
Diluted core earnings per share (non-GAAP) 1.69 1.21 0.76 0.37 1.59
Cash dividends declared per common share 0.84 0.63 0.42 0.21 0.80
Cash dividends declared - amount 13,707 10,304 6,903 3,469 13,496
Return on average stockholders' equity 5.33% 6.39% 6.18% 5.89% 6.77%
Return on tangible equity 6.36% 7.68% 7.43% 7.09% 8.05%
Return on average assets 0.64% 0.75% 0.72% 0.68% 0.83%
Net interest margin (FTE) 4.21% 4.08% 3.98% 4.01% 3.93%
FTE adjustment - investments 4,900 3,458 2,145 1,062 4,660
FTE adjustment - loans 51 34 23 11 45
Amortization of intangibles 601 409 274 137 348
Amortization of intangibles, net of taxes 365 248 166 83 212
Average shares outstanding 16,339,335 16,382,758 16,465,385 16,516,438 16,908,904
Average diluted shares outstanding 16,352,167 16,388,393 16,468,814 16,520,398 16,911,363
Average earning assets 3,224,094 3,105,706 3,129,048 3,151,590 3,008,840
Average interest bearing liabilities 2,551,653 2,477,899 2,503,992 2,527,848 2,378,748
END OF PERIOD
Book value per share $ 24.89 $ 24.88 $ 24.67 $ 24.62 $ 24.55
Tangible book value per share 19.10 20.80 20.74 20.73 20.66
Shares outstanding 16,226,256 16,198,964 16,289,239 16,509,666 16,542,778
Full-time equivalent employees 1,343 1,097 1,114 1,112 1,068
Total number of ATM's 157 106 110 110 110
Total number of financial centers 131 87 92 92 92
Parent company only - investment in subsidiaries 452,688 371,531 369,965 370,728 368,847
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 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
(Unaudited) 2013 2013 2013 2013 2012
(in thousands, except per share data)
QUARTER-TO-DATE
Net Income $ 3,786 $ 6,932 $ 6,576 $ 5,937 $ 8,033
Nonrecurring items
Gain on FDIC assisted transactions -- -- -- -- (2,291)
Merger related costs 6,413 190 (467) 240 1,081
Loss on sale of securities -- -- 193 -- --
FHLB prepayment penalties -- -- -- -- 175
Branch right sizing 108 533 -- -- --
Tax effect (2,558) (284) 107 (94) 406
Net nonrecurring items 3,963 439 (167) 146 (629)
Core earnings (non-GAAP) $ 7,749 $ 7,371 $ 6,409 $ 6,083 $ 7,404
Diluted earnings per share $ 0.23 $ 0.43 $ 0.40 $ 0.36 $ 0.48
Nonrecurring items
Gain on FDIC assisted transactions -- -- -- -- (0.14)
Merger related costs 0.40 0.01 (0.03) 0.01 0.07
Loss on sale of securities -- -- 0.01 -- --
FHLB prepayment penalties -- -- -- -- 0.01
Branch right sizing 0.01 0.03 -- -- --
Tax effect (0.16) (0.02) 0.01 -- 0.02
Net nonrecurring items 0.25 0.02 (0.01) 0.01 (0.04)
Diluted core earnings per share (non-GAAP) $ 0.48 $ 0.45 $ 0.39 $ 0.37 $ 0.44
YEAR-TO-DATE
Net Income $ 23,231 $ 19,445 $ 12,513 $ 5,937 $ 27,684
Nonrecurring items
Gain on FDIC assisted transactions -- -- -- -- (3,411)
Merger related costs 6,376 (37) (227) 240 1,896
Loss on sale of securities 193 193 193 -- --
FHLB prepayment penalties -- -- -- -- 175
Branch right sizing 641 533 -- -- --
Tax effect (2,829) (271) 13 (94) 526
Net nonrecurring items 4,381 418 (21) 146 (814)
Core earnings (non-GAAP) $ 27,612 $ 19,863 $ 12,492 $ 6,083 $ 26,870
Diluted earnings per share $ 1.42 $ 1.19 $ 0.76 $ 0.36 $ 1.64
Nonrecurring items
Gain on FDIC assisted transactions -- -- -- -- (0.21)
Merger related costs 0.39 (0.01) (0.02) 0.01 0.12
Loss on sale of securities 0.01 0.01 0.01 -- --
FHLB prepayment penalties -- -- -- -- 0.01
Branch right sizing 0.04 0.03 -- -- --
Tax effect (0.17) (0.01) 0.01 -- 0.03
Net nonrecurring items 0.27 0.02 -- 0.01 (0.05)
Diluted core earnings per share (non-GAAP) $ 1.69 $ 1.21 $ 0.76 $ 0.37 $ 1.59

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

Source:Simmons First National Corporation