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CORRECTING and REPLACING -- Simmons First Announces 43% Increase in Core Earnings

Simmons First National Corporation

PINE BLUFF, Ark., July 17, 2014 (GLOBE NEWSWIRE) -- In a release issued earlier today by Simmons First National Corporation (Nasdaq:SFNC), the fourth table titled "Consolidated Statements of Income - Year-to-Date" was mistakenly skipped as a result of editorial oversight.

The corrected release follows:

Simmons First National Corporation (Nasdaq:SFNC) today announced record core earnings of $9.2 million for the second quarter of 2014, an increase of $2.7 million, or 42.8%, compared to the same quarter last year. Diluted core earnings per share were a record $0.56, an increase of $0.17, or 43.6%. Core earnings exclude $755,000 in net after-tax earnings. Including the non-core items, net income was $9.9 million and diluted earnings per share were $0.60.

Year-to-date core earnings were $16.6 million, an increase of $4.1 million, or 33.2%, compared to the same period of 2013. Year-to-date diluted core earnings per share were $1.02, an increase of $0.26, or 34.2%. Year-to-date net income was $14.2 million, or $0.87 diluted earnings per share.

"The second quarter was a landmark quarter for Simmons. We announced two acquisitions totaling approximately $3 billion in assets and reported record core earnings and record core earnings per share for the quarter," commented George A. Makris, Jr., Chairman and CEO.

Loans

Total loans, including those acquired, were $2.4 billion at June 30, 2014, an increase of $512 million, or 27.3%, compared to the same period in 2013. Acquired loans increased by $293 million, net of discounts, while legacy loans (all loans excluding acquired loans) grew $218 million, or 13.2%. "We are encouraged by the double digit legacy loan growth during the second quarter. We continue to achieve nice loan growth in virtually every market we serve," added Makris.

Deposits

At June 30, 2014, total deposits were $3.6 billion, an increase of $829 million, or 29.5%, compared to the same period in 2013. Total non-time deposits totaled $2.6 billion, or 72% of total deposits.

Net Interest Income

The Company's net interest income for the second quarter of 2014 was $40.4 million, an increase of $10.8 million, or 36.7%, from the same period of 2013. This increase was driven by growth in the legacy loan portfolio and earning assets acquired through the Metropolitan transaction, offset by a decrease in accretable yield on acquired loans. Net interest margin was 4.34% for the quarter ended June 30, 2014, a 38 basis point increase from the same quarter of 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 Six Months Ended
(In thousands) June 30 June 30
2014 2013 2014 2013
Impact on net interest income $ 5,856 $ 3,150 $ 13,247 $ 6,097
Non-interest income (6,410) (3,062) (13,850) (5,890)
Net impact to pre-tax income $ (554) $ 88 $ (603) $ 207

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 $25.1 million and the remaining adjustment to the indemnification assets that will reduce non-interest income is $18.6 million. Of the remaining adjustments, we expect to recognize $9.6 million of interest income and a $10.6 million reduction of non-interest income, for a net reduction to pre-tax income of approximately $1.0 million during the remainder of 2014. 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 second quarter was $15.4 million, an increase of $4.1 million compared to the second quarter of 2013. Included in non-interest income were $2.3 million in gains from the sale of branches that were closed as part the integration of Metropolitan and a $1.0 million dollar gain from the sale of the Company's merchant services business. Offsetting these gains was a $3.3 million incremental reduction in non-interest income from the adjustment to the indemnification assets. Normalized for the nonrecurring gains and the indemnification asset adjustments, non-interest income for the second quarter increased by $3.9 million, primarily from additional service charge and fee income from the Metropolitan acquisition.

Non-Interest Expense

Non-interest expense for the second quarter of 2014 was $39.8 million, an increase of $9.5 million compared to the same period in 2013. Merger related costs for the quarter exceeded those of the same period last year by $1.8 million. Also included in the quarter were $300 thousand of expenses associated with the maintenance of closed branches and $414 thousand of charter consolidation costs from the systems conversion of the three subsidiary banks that were merged into Simmons First National Bank in May. Excluding the nonrecurring expenses, non-interest expense increased by $7.0 million compared to last year, primarily due to incremental operating expenses from the Metropolitan acquisition.

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 June 30, 2014, acquired loans covered by loss share were carried at $122 million, OREO covered by loss share was carried at $17 million and the FDIC loss share indemnification asset was carried at $31 million. Acquired loans and OREO not covered by loss share were carried at $399 million and $37 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 June 30, 2014, the allowance for loan losses was $27.5 million and the loan credit mark was $88.8 million, for a total of $116.3 million of coverage. This equates to a total coverage ratio of 4.7% of gross loans. The ratio of credit mark to acquired loans was 14.6%." The Company's allowance for loan losses at June 30, 2014, was 1.47% of total loans and 245% of non-performing loans. Non-performing loans as a percent of total loans were 0.60%. Non-performing assets decreased $5.4 million from the previous quarter to $64.7 million. Through the second quarter of 2014, the year-to-date annualized net charge-off ratio, excluding credit cards, was 0.17%, and the year-to-date annualized credit card charge-off ratio was 1.17%.

Capital

At June 30, 2014, stockholders' equity was $414 million, book value per share was $25.36 and tangible book value per share was $19.69. The Company's ratio of stockholders' equity to total assets was 9.6% and its ratio of tangible common equity to tangible assets was 7.6%.

Simmons First National Corporation

Simmons First National Corporation is an Arkansas based financial holding company with pro forma assets totaling $8.0 billion and conducting financial operations throughout Arkansas, Kansas, Missouri and Tennessee. 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, July 17, 2014. Interested persons can listen to this call by dialing toll-free 1-866-298-7926 (United States and Canada only) and asking for the Simmons First National Corporation conference call, conference ID 64281536. 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 Jun 30 Mar 31 Dec 31 Sep 30 Jun 30
(Unaudited) 2014 2014 2013 2013 2013
(in thousands)
ASSETS
Cash and non-interest bearing balances due from banks $ 44,805 $ 48,018 $ 69,827 $ 37,752 $ 38,494
Interest bearing balances due from banks 377,855 474,118 469,553 320,368 420,740
Federal funds sold -- -- -- 18,365 --
Cash and cash equivalents 422,660 522,136 539,380 376,485 459,234
Investment securities - held-to-maturity 799,963 776,615 745,688 581,768 555,464
Investment securities - available-for-sale 270,336 264,974 212,277 179,937 177,531
Mortgage loans held for sale 20,409 16,717 9,494 10,605 14,454
Assets held in trading accounts 6,881 6,865 8,978 8,744 8,739
Loans:
Legacy loans 1,868,842 1,779,609 1,742,638 1,741,161 1,650,395
Allowance for loan losses (27,530) (26,983) (27,442) (27,533) (27,398)
Loans acquired, not covered by FDIC loss share (net of discount) 398,967 450,289 515,644 68,133 63,500
Loans acquired, covered by FDIC loss share (net of discount) 121,524 137,879 146,653 148,884 163,736
Net loans 2,361,803 2,340,794 2,377,493 1,930,645 1,850,233
FDIC indemnification asset 30,508 39,239 48,791 61,500 67,744
Premises and equipment 113,541 111,888 119,614 87,065 88,164
Premises held for sale 14,145 23,779 19,466 -- --
Foreclosed assets not covered by FDIC loss share 53,342 57,476 64,820 26,203 30,390
Foreclosed assets covered by FDIC loss share 16,951 18,171 20,585 23,260 22,990
Interest receivable 14,254 15,102 15,654 15,635 12,637
Bank owned life insurance 61,115 60,714 60,384 60,040 59,710
Goodwill 78,529 78,529 78,906 60,605 60,605
Other intangible assets 14,094 14,519 14,972 5,420 3,487
Other assets 47,310 49,129 46,598 13,797 10,387
Total assets $ 4,325,841 $ 4,396,647 $ 4,383,100 $ 3,441,709 $ 3,421,769
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing transaction accounts $ 838,543 $ 838,050 $ 718,438 $ 580,063 $ 565,433
Interest bearing transaction accounts and savings deposits 1,784,040 1,793,330 1,862,618 1,453,139 1,428,422
Time deposits less than $100,000 559,597 589,798 611,729 454,325 467,778
Time deposits greater than $100,000 459,545 485,870 504,782 351,271 351,486
Total deposits 3,641,725 3,707,048 3,697,567 2,838,798 2,813,119
Federal funds purchased and securities sold under agreements to repurchase 98,226 104,643 107,887 62,311 79,063
Other borrowings 115,602 116,970 117,090 75,987 77,659
Subordinated debentures 20,620 20,620 20,620 20,620 20,620
Accrued interest and other liabilities 35,533 40,694 36,104 40,959 29,458
Total liabilities 3,911,706 3,989,975 3,979,268 3,038,675 3,019,919
Stockholders' equity:
Common stock 163 163 162 162 163
Surplus 90,010 89,274 88,095 87,279 89,434
Undivided profits 325,371 319,354 318,577 318,194 314,663
Accumulated other comprehensive income
Unrealized appreciation on AFS securities (1,409) (2,119) (3,002) (2,601) (2,410)
Total stockholders' equity 414,135 406,672 403,832 403,034 401,850
Total liabilities and stockholders' equity $ 4,325,841 $ 4,396,647 $ 4,383,100 $ 3,441,709 $ 3,421,769
Simmons First National Corporation SFNC
Consolidated Average Quarter-to-Date Balance Sheets
For the Quarters Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30
(Unaudited) 2014 2014 2013 2013 2013
(in thousands)
ASSETS
Cash and non-interest bearing balances due from banks $ 44,671 $ 68,770 $ 50,473 $ 39,067 $ 41,030
Interest bearing balances due from banks 456,931 507,936 428,551 365,504 527,787
Federal funds sold 985 385 2,616 3,719 1,922
Cash and cash equivalents 502,587 577,091 481,640 408,290 570,739
Investment securities - held-to-maturity 782,900 749,126 657,736 567,579 511,008
Investment securities - available-for-sale 265,194 223,203 220,292 178,351 182,227
Mortgage loans held for sale 15,299 6,668 6,666 12,171 14,154
Assets held in trading accounts 6,850 7,212 8,881 8,731 8,292
Loans:
Legacy loans 1,817,429 1,719,294 1,734,469 1,705,204 1,616,036
Allowance for loan losses (27,287) (27,771) (27,806) (27,735) (28,219)
Loans acquired, not covered by FDIC loss share (net of discount) 418,515 505,031 261,577 61,372 72,663
Loans acquired, covered by FDIC loss share (net of discount) 128,099 142,777 145,742 156,392 172,415
Net loans 2,336,756 2,339,331 2,113,982 1,895,233 1,832,895
FDIC indemnification asset 35,940 46,154 57,587 65,478 70,442
Premises and equipment 112,994 119,626 87,310 88,044 88,210
Premises held for sale 21,142 19,514 212 -- --
Foreclosed assets not covered by FDIC loss share 55,304 63,453 50,680 27,368 29,399
Foreclosed assets covered by FDIC loss share 18,330 19,901 22,529 22,392 25,603
Interest receivable 15,076 14,882 15,707 13,739 12,524
Bank owned life insurance 60,895 60,552 60,209 59,878 59,523
Goodwill 78,529 78,901 60,804 60,605 60,605
Other intangible assets 14,299 14,765 5,526 3,439 3,554
Other assets 48,583 45,458 33,324 12,122 13,435
Total assets $ 4,370,678 $ 4,385,837 $ 3,883,085 $ 3,423,420 $ 3,482,610
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing transaction accounts $ 823,552 $ 735,101 $ 665,644 $ 559,461 $ 560,804
Interest bearing transaction accounts and savings deposits 1,810,436 1,854,510 1,620,244 1,444,058 1,456,258
Time deposits less than $100,000 577,856 601,046 517,603 461,101 475,428
Time deposits greater than $100,000 472,009 495,574 409,361 358,307 359,155
Total deposits 3,683,853 3,686,231 3,212,852 2,822,927 2,851,645
Federal funds purchased and securities sold under agreements to repurchase 101,537 115,018 98,359 67,924 89,879
Other borrowings 116,082 117,588 108,693 75,704 80,090
Subordinated debentures 20,620 20,620 20,620 20,620 20,620
Accrued interest and other liabilities 34,637 36,967 33,117 31,867 32,146
Total liabilities 3,956,729 3,976,424 3,473,641 3,019,042 3,074,380
Total stockholders' equity 413,949 409,413 409,444 404,378 408,230
Total liabilities and stockholders' equity $ 4,370,678 $ 4,385,837 $ 3,883,085 $ 3,423,420 $ 3,482,610
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) 2014 2014 2013 2013 2013
(in thousands, except per share data)
INTEREST INCOME
Legacy loans $ 22,733 $ 21,554 $ 22,463 $ 22,332 $ 21,207
Loans acquired 15,889 18,577 16,151 8,283 7,864
Federal funds sold 2 1 5 6 5
Investment securities 4,766 4,549 3,951 3,428 3,019
Mortgage loans held for sale 168 69 72 122 118
Assets held in trading accounts 5 5 6 6 6
Interest bearing balances due from banks 279 279 251 234 352
TOTAL INTEREST INCOME 43,842 45,034 42,899 34,411 32,571
INTEREST EXPENSE
Time deposits 1,515 1,577 1,479 1,392 1,479
Other deposits 720 692 646 601 603
Federal funds purchased and securities sold under agreements to repurchase 31 53 55 46 53
Other borrowings 988 1,010 929 646 692
Subordinated debentures 160 157 161 162 162
TOTAL INTEREST EXPENSE 3,414 3,489 3,270 2,847 2,989
NET INTEREST INCOME 40,428 41,545 39,629 31,564 29,582
Provision for loan losses 1,602 908 1,084 1,081 1,034
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 38,826 40,637 38,545 30,483 28,548
NON-INTEREST INCOME
Trust income 1,553 1,537 1,608 1,448 1,342
Service charges on deposit accounts 6,792 6,068 5,497 4,603 4,474
Other service charges and fees 859 1,866 1,164 728 791
Mortgage lending income 1,262 810 916 1,122 1,338
Investment banking income 154 181 421 240 696
Credit card fees 5,801 4,600 4,592 4,400 4,341
Bank owned life insurance income 377 330 347 328 366
Gain on sale of securities, net 38 -- 42 -- (193)
Net (loss) gain on assets covered by FDIC loss share agreements (6,268) (7,370) (7,988) (3,443) (2,615)
Other income 4,820 1,176 1,118 887 733
TOTAL NON-INTEREST INCOME 15,388 9,198 7,717 10,313 11,273
NON-INTEREST EXPENSE
Salaries and employee benefits 20,982 22,464 19,933 17,701 17,937
Occupancy expense, net 3,285 3,890 2,544 2,485 2,450
Furniture and equipment expense 2,215 2,014 2,257 1,613 2,030
Other real estate and foreclosure expense 375 873 562 385 59
Deposit insurance 1,085 668 620 595 492
Merger related costs 1,354 1,272 6,413 190 (467)
Other operating expenses 10,546 13,370 9,349 7,934 7,818
TOTAL NON-INTEREST EXPENSE 39,842 44,551 41,678 30,903 30,319
NET INCOME BEFORE INCOME TAXES 14,372 5,284 4,584 9,893 9,502
Provision for income taxes 4,464 932 798 2,961 2,926
NET INCOME $ 9,908 $ 4,352 $ 3,786 $ 6,932 $ 6,576
BASIC EARNINGS PER SHARE $ 0.61 $ 0.27 $ 0.23 $ 0.43 $ 0.40
DILUTED EARNINGS PER SHARE $ 0.60 $ 0.27 $ 0.23 $ 0.43 $ 0.40
Simmons First National Corporation SFNC
Consolidated Statements of Income - Year-to-Date
For the Quarters Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30
(Unaudited) 2014 2014 2013 2013 2013
(in thousands, except per share data)
INTEREST INCOME
Legacy loans $ 44,285 $ 21,554 $ 88,594 $ 66,129 $ 43,797
Loans acquired 34,468 18,577 39,577 23,428 15,145
Federal funds sold 3 1 19 14 8
Investment securities 9,315 4,549 13,300 9,349 5,921
Mortgage loans held for sale 237 69 467 395 273
Assets held in trading accounts 10 5 29 23 17
Interest bearing balances due from banks 558 279 1,127 875 642
TOTAL INTEREST INCOME 88,876 45,034 143,113 100,213 65,803
INTEREST EXPENSE
Time deposits 3,091 1,577 5,938 4,460 3,067
Other deposits 1,414 692 2,461 1,814 1,214
Federal funds purchased and securities sold under agreements to repurchase 84 53 219 165 118
Other borrowings 1,998 1,010 3,001 2,072 1,426
Subordinated debentures 317 157 644 483 321
TOTAL INTEREST EXPENSE 6,904 3,489 12,263 8,994 6,146
NET INTEREST INCOME 81,972 41,545 130,850 91,219 59,657
Provision for loan losses 2,510 908 4,118 3,034 1,953
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 79,462 40,637 126,732 88,185 57,704
NON-INTEREST INCOME
Trust income 3,091 1,537 5,842 4,234 2,786
Service charges on deposit accounts 12,860 6,068 18,815 13,318 8,715
Other service charges and fees 2,727 1,866 3,458 2,294 1,566
Mortgage lending income 2,074 810 4,592 3,677 2,554
Investment banking income 336 181 1,811 1,390 1,150
Credit card fees 10,401 4,600 17,372 12,779 8,380
Bank owned life insurance income 705 330 1,319 974 644
Gain on sale of securities, net 38 -- (151) (193) (193)
Net (loss) gain on assets covered by FDIC loss share agreements (13,639) (7,370) (16,188) (8,200) (4,757)
Other income 5,984 1,176 3,746 2,626 1,741
TOTAL NON-INTEREST INCOME 24,577 9,198 40,616 32,899 22,586
NON-INTEREST EXPENSE
Salaries and employee benefits 43,447 22,464 74,078 54,146 36,444
Occupancy expense, net 7,155 3,890 10,034 7,490 5,005
Furniture and equipment expense 4,229 2,014 7,623 5,367 3,753
Other real estate and foreclosure expense 1,248 873 1,337 775 390
Deposit insurance 1,753 668 2,482 1,862 1,267
Merger related costs 2,627 1,272 6,376 (37) (227)
Other operating expenses 23,923 13,370 32,882 23,529 15,599
TOTAL NON-INTEREST EXPENSE 84,382 44,551 134,812 93,132 62,231
NET INCOME BEFORE INCOME TAXES 19,657 5,284 32,536 27,952 18,059
Provision for income taxes 5,396 932 9,305 8,507 5,546
NET INCOME $ 14,261 $ 4,352 $ 23,231 $ 19,445 $ 12,513
BASIC EARNINGS PER SHARE $ 0.88 $ 0.27 $ 1.42 $ 1.19 $ 0.76
DILUTED EARNINGS PER SHARE $ 0.87 $ 0.27 $ 1.42 $ 1.19 $ 0.76
Simmons First National Corporation SFNC
Consolidated Risk-Based Capital
For the Quarters Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30
(Unaudited) 2014 2014 2013 2013 2013
($ in thousands)
Tier 1 capital
Stockholders' equity $ 414,135 $ 406,672 $ 403,832 $ 403,034 $ 401,850
Trust preferred securities, net allowable 20,000 20,000 20,000 20,000 20,000
Disallowed intangible assets, net of deferred tax (74,003) (74,477) (75,501) (49,727) (48,091)
Unrealized gain on AFS securities 1,409 2,119 3,002 2,601 2,410
Total Tier 1 capital 361,541 354,314 351,333 375,908 376,169
Tier 2 capital
Qualifying unrealized gain on AFS equity securities 47 42 45 40 35
Qualifying allowance for loan losses 29,621 28,846 28,967 25,633 24,818
Total Tier 2 capital 29,668 28,888 29,012 25,673 24,853
Total risk-based capital $ 391,209 $ 383,202 $ 380,345 $ 401,581 $ 401,022
Risk weighted assets $ 2,652,474 $ 2,651,970 $ 2,697,630 $ 2,047,198 $ 1,981,341
Adjusted average assets for leverage ratio $ 4,299,379 $ 4,315,279 $ 3,811,793 $ 3,378,676 $ 3,434,844
Ratios at end of quarter
Equity to assets 9.57% 9.25% 9.21% 11.71% 11.74%
Tangible common equity to tangible assets 7.59% 7.29% 7.23% 9.98% 10.06%
Tier 1 leverage ratio 8.41% 8.21% 9.22% 11.13% 10.95%
Tier 1 risk-based capital ratio 13.63% 13.36% 13.02% 18.36% 18.99%
Total risk-based capital ratio 14.75% 14.45% 14.10% 19.62% 20.24%
Simmons First National Corporation SFNC
Consolidated Loans and Investments
For the Quarters Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30
(Unaudited) 2014 2014 2013 2013 2013
(in thousands)
Legacy Loan Portfolio - End of Period (1)
Consumer
Credit cards $ 176,239 $ 172,609 $ 184,935 $ 177,463 $ 173,536
Student loans 398 24,415 25,906 28,392 30,106
Other consumer 105,998 104,185 98,851 101,399 103,765
Total consumer 282,635 301,209 309,692 307,254 307,407
Real Estate
Construction 163,412 168,147 146,458 161,024 142,902
Single-family residential 417,187 402,588 392,285 375,703 364,239
Other commercial 653,734 644,772 626,333 602,463 572,110
Total real estate 1,234,333 1,215,507 1,165,076 1,139,190 1,079,251
Commercial
Commercial 233,510 186,303 164,329 154,508 152,122
Agricultural 111,567 72,239 98,886 135,633 107,113
Total commercial 345,077 258,542 263,215 290,141 259,235
Other 6,796 4,351 4,655 4,576 4,502
Total Loans $ 1,868,841 $ 1,779,609 $ 1,742,638 $ 1,741,161 $ 1,650,395
(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 $ 449,201 $ 425,616 $ 395,198 $ 313,052 $ 313,050
Mortgage-backed securities 32,204 33,323 34,425 41 43
State and political subdivisions 317,938 317,056 315,445 268,055 241,751
Other securities 620 620 620 620 620
Total held-to-maturity 799,963 776,615 745,688 581,768 555,464
Available-for-Sale
U.S. Treasury $ 3,994 $ 3,981 $ 3,985 $ -- $ --
U.S. Government agencies 238,411 231,949 178,217 163,127 159,390
Mortgage-backed securities 1,958 1,833 1,891 1,994 2,078
State and political subdivisions 6,920 7,367 7,861 1,263 1,262
FHLB stock 4,966 5,168 6,002 5,085 5,353
Other securities 14,087 14,676 14,321 8,468 9,448
Total available-for-sale 270,336 264,974 212,277 179,937 177,531
Total investment securities $ 1,070,299 $ 1,041,589 $ 957,965 $ 761,705 $ 732,995
Fair value - HTM investment securities $ 802,597 $ 771,114 $ 731,705 $ 570,703 $ 543,154
Investment Securities - QTD Average
Taxable securities $ 722,084 $ 649,329 $ 583,389 $ 490,801 $ 478,946
Tax exempt securities 326,010 323,000 294,639 255,129 214,289
Total investment securities - QTD average $ 1,048,094 $ 972,329 $ 878,028 $ 745,930 $ 693,235
Simmons First National Corporation SFNC
Consolidated Loans and Credit Coverage
For the Quarters Ended Jun 30 Mar 31 Dec 31
(Unaudited) 2014 2014 2013
($ in thousands)
LOANS
Legacy loans $ 1,868,842 $ 1,779,609 $ 1,742,638
Allowance for loan losses (27,530) (26,983) (27,442)
Legacy loans (net of allowance) 1,841,312 1,752,626 1,715,196
Loans acquired, not covered by FDIC loss share 445,515 495,915 566,895
Credit discount (46,548) (45,626) (51,251)
Loans acquired, not covered (net of discount) 398,967 450,289 515,644
Loans acquired, covered by FDIC loss share 163,775 188,755 209,459
Credit discount (42,251) (50,876) (62,806)
Loans acquired, covered (net of discount) 121,524 137,879 146,653
Net loans $ 2,361,803 $ 2,340,794 $ 2,377,493
Loan Coverage Ratios
Allowance for loan losses to legacy loans 1.47% 1.52% 1.57%
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 10.45% 9.20% 9.04%
Discount for credit losses on loans acquired, covered, to total loans acquired, covered, plus discount for credit losses on loans acquired, covered 25.80% 26.95% 29.98%
Total allowance and credit coverage 4.69% 5.01% 5.62%
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) 2014 2014 2013 2013 2013
($ in thousands)
Allowance for Loan Losses
Balance, beginning of quarter $ 26,983 $ 27,442 $ 27,533 $ 27,398 $ 27,735
Loans charged off
Credit cards 725 816 841 770 743
Other consumer 426 148 428 449 310
Real estate 1,144 1,035 255 247 887
Commercial 186 82 133 20 133
Total loans charged off 2,481 2,081 1,657 1,486 2,073
Recoveries of loans previously charged off
Credit cards 215 271 226 235 204
Other consumer 133 121 166 114 116
Real estate 1,062 308 78 151 295
Commercial 16 14 12 40 87
Total recoveries 1,426 714 482 540 702
Net loans charged off 1,055 1,367 1,175 946 1,371
Provision for loan losses 1,602 908 1,084 1,081 1,034
Balance, end of quarter $ 27,530 $ 26,983 $ 27,442 $ 27,533 $ 27,398
Non-performing assets (1) (2)
Non-performing loans
Nonaccrual loans
Real estate $ 8,166 $ 8,075 $ 4,799 $ 4,157 $ 4,327
Commercial 1,110 1,054 495 525 526
Consumer 877 883 967 1,293 1,410
Total nonaccrual loans 10,153 10,012 6,261 5,975 6,263
Loans past due 90 days or more
Government guaranteed student loans 323 1,965 2,264 2,966 2,254
Other loans 757 517 687 725 879
Total loans past due 90 days or more 1,080 2,482 2,951 3,691 3,133
Total non-performing loans 11,233 12,494 9,212 9,666 9,396
Other non-performing assets
Foreclosed assets held for sale 16,745 17,357 19,361 20,493 21,804
Acquired foreclosed assets held for sale, not covered by FDIC loss share agreements 36,597 40,119 45,459 5,710 8,586
Other non-performing assets 80 60 75 60 80
Total other non-performing assets 53,422 57,536 64,895 26,263 30,470
Total non-performing assets $ 64,655 $ 70,030 $ 74,107 $ 35,929 $ 39,866
Performing TDRs (troubled debt restructurings) $ 2,776 $ 8,655 $ 9,497 $ 9,584 $ 10,473
Ratios (1) (2)
Allowance for loan losses to total loans 1.47% 1.52% 1.57% 1.58% 1.66%
Allowance for loan losses to non-performing loans 245% 216% 298% 285% 292%
Non-performing loans to total loans 0.60% 0.70% 0.53% 0.56% 0.57%
Non-performing assets (including performing TDRs) to total assets 1.56% 1.79% 1.91% 1.32% 1.47%
Non-performing assets to total assets 1.49% 1.59% 1.69% 1.04% 1.17%
Non-performing assets to total assets (excluding Gov't guaranteed student loans) 1.49% 1.55% 1.64% 0.96% 1.10%
Annualized net charge offs to total loans 0.23% 0.32% 0.27% 0.22% 0.34%
Annualized net credit card charge offs to total credit card loans 1.14% 1.20% 1.31% 1.21% 1.25%
Annualized net charge offs to total loans (excluding credit cards) 0.13% 0.22% 0.14% 0.11% 0.23%
Past due loans >30 days (excluding nonaccrual) 0.34% 0.61% 0.57% 0.62% 0.54%
Past due loans >30 days (excluding nonaccrual) (excluding Gov't guaranteed student loans) 0.32% 0.45% 0.41% 0.36% 0.35%
(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 Jun 30 Mar 31 Dec 31 Sep 30 Jun 30
(Unaudited) 2014 2014 2013 2013 2013
ASSETS
Earning Assets
Interest bearing balances due from banks 0.24% 0.22% 0.23% 0.25% 0.27%
Investment securities 2.47% 2.60% 2.44% 2.52% 2.37%
Mortgage loans held for sale 4.40% 4.20% 4.29% 3.98% 3.34%
Assets held in trading accounts 0.29% 0.28% 0.27% 0.27% 0.29%
Loans, including acquired loans 6.55% 6.88% 7.16% 6.32% 6.27%
Total interest earning assets 4.69% 4.91% 5.08% 4.63% 4.35%
LIABILITIES
Interest bearing liabilities
Interest bearing transaction and savings accounts 0.16% 0.15% 0.16% 0.17% 0.17%
Time deposits 0.58% 0.58% 0.63% 0.67% 0.71%
Total interest bearing deposits 0.31% 0.31% 0.33% 0.35% 0.36%
Federal funds purchased and securities sold under agreement to repurchase 0.12% 0.19% 0.22% 0.27% 0.24%
Other borrowings 3.41% 3.48% 3.39% 3.39% 3.47%
Subordinated debentures 3.11% 3.09% 3.10% 3.12% 3.15%
Total interest bearing liabilities 0.44% 0.44% 0.47% 0.47% 0.48%
NET INTEREST MARGIN/SPREAD
Net interest spread 4.25% 4.47% 4.61% 4.16% 3.87%
Net interest margin - quarter-to-date 4.34% 4.54% 4.70% 4.27% 3.96%
Net interest margin - year-to-date 4.44% 4.54% 4.21% 4.08% 3.98%
Simmons First National Corporation SFNC
Consolidated - Selected Financial Data
For the Quarters Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30
(Unaudited) 2014 2014 2013 2013 2013
($ in thousands, except share data)
QUARTER-TO-DATE
Diluted earnings per share $ 0.60 $ 0.27 $ 0.23 $ 0.43 $ 0.40
Core earnings (excludes nonrecurring items) (non-GAAP) 9,153 7,482 7,749 7,371 6,409
Diluted core earnings per share (non-GAAP) 0.56 0.46 0.48 0.45 0.39
Cash dividends declared per common share 0.22 0.22 0.21 0.21 0.21
Cash dividends declared - amount 3,589 3,575 3,403 3,401 3,434
Return on average stockholders' equity 9.60% 4.31% 3.67% 6.80% 6.46%
Return on tangible equity 12.72% 5.94% 4.51% 8.18% 7.76%
Return on average assets 0.91% 0.40% 0.39% 0.80% 0.76%
Net interest margin (FTE) 4.34% 4.54% 4.70% 4.27% 3.96%
FTE adjustment - investments 1,687 1,682 1,442 1,313 1,083
FTE adjustment - loans 8 10 17 11 12
Amortization of intangibles 452 453 192 135 137
Amortization of intangibles, net of taxes 275 275 117 82 83
Average shares outstanding 16,318,003 16,270,149 16,210,480 16,220,199 16,414,893
Average earning assets 3,892,202 3,861,632 3,466,530 3,059,023 3,106,504
Average interest bearing liabilities 3,098,540 3,204,356 2,774,880 2,427,714 2,481,430
YEAR-TO-DATE
Diluted earnings per share $ 0.87 $ 0.27 $ 1.42 $ 1.19 $ 0.76
Core earnings (excludes nonrecurring items) (non-GAAP) 16,635 7,482 27,612 19,863 12,492
Diluted core earnings per share (non-GAAP) 1.02 0.46 1.69 1.21 0.76
Cash dividends declared per common share 0.44 0.22 0.84 0.63 0.42
Cash dividends declared - amount 7,164 3,575 13,707 10,304 6,903
Return on average stockholders' equity 6.99% 4.31% 5.33% 6.39% 6.18%
Return on tangible equity 9.38% 5.94% 6.36% 7.68% 7.43%
Return on average assets 0.66% 0.40% 0.64% 0.75% 0.72%
Net interest margin (FTE) 4.44% 4.54% 4.21% 4.08% 3.98%
FTE adjustment - investments 3,369 1,682 4,900 3,458 2,145
FTE adjustment - loans 18 10 51 34 23
Amortization of intangibles 905 453 601 409 274
Amortization of intangibles, net of taxes 550 275 365 248 166
Average shares outstanding 16,294,208 16,270,149 16,339,335 16,382,758 16,465,385
Average diluted shares outstanding 16,336,901 16,309,868 16,352,167 16,388,393 16,468,814
Average earning assets 3,876,918 3,861,632 3,224,094 3,105,706 3,129,048
Average interest bearing liabilities 3,151,446 3,204,356 2,551,653 2,477,899 2,503,992
END OF PERIOD
Book value per share $ 25.36 $ 24.93 $ 24.89 $ 24.88 $ 24.67
Tangible book value per share 19.69 19.23 19.10 20.80 20.74
Shares outstanding 16,331,341 16,311,263 16,226,256 16,198,964 16,289,239
Full-time equivalent employees 1,281 1,321 1,343 1,097 1,114
Total number of ATM's 120 120 157 106 110
Total number of financial centers 104 104 131 87 92
Parent company only - investment in subsidiaries 449,591 453,067 452,688 371,531 369,965
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 Jun 30 Mar 31 Dec 31 Sep 30 Jun 30
(Unaudited) 2014 2014 2013 2013 2013
(in thousands, except per share data)
QUARTER-TO-DATE
Net Income $ 9,908 $ 4,352 $ 3,786 $ 6,932 $ 6,576
Nonrecurring items
Gain on sale of merchant services (1,000) -- -- -- --
Merger related costs 1,354 1,272 6,413 190 (467)
Loss on sale of securities -- -- -- -- 193
Branch right sizing (2,011) 3,878 108 533 --
Charter consolidation costs 414 -- -- -- --
Tax effect 488 (2,020) (2,558) (284) 107
Net nonrecurring items (755) 3,130 3,963 439 (167)
Core earnings (non-GAAP) $ 9,153 $ 7,482 $ 7,749 $ 7,371 $ 6,409
Diluted earnings per share $ 0.60 $ 0.27 $ 0.23 $ 0.43 $ 0.40
Nonrecurring items
Gain on sale of merchant services (0.06) -- -- -- --
Merger related costs 0.08 0.08 0.40 0.01 (0.03)
Loss on sale of securities -- -- -- -- 0.01
Branch right sizing (0.12) 0.24 0.01 0.03 --
Charter consolidation costs 0.03 -- -- -- --
Tax effect 0.03 (0.13) (0.16) (0.02) 0.01
Net nonrecurring items (0.04) 0.19 0.25 0.02 (0.01)
Diluted core earnings per share (non-GAAP) $ 0.56 $ 0.46 $ 0.48 $ 0.45 $ 0.39
YEAR-TO-DATE
Net Income $ 14,260 $ 4,352 $ 23,231 $ 19,445 $ 12,513
Nonrecurring items
Gain on sale of merchant services (1,000) -- -- -- --
Merger related costs 2,626 1,272 6,376 (37) (227)
Loss on sale of securities -- -- 193 193 193
Branch right sizing 1,867 3,878 641 533 --
Charter consolidation costs 414 -- -- -- --
Tax effect (1,532) (2,020) (2,829) (271) 13
Net nonrecurring items 2,375 3,130 4,381 418 (21)
Core earnings (non-GAAP) $ 16,635 $ 7,482 $ 27,612 $ 19,863 $ 12,492
Diluted earnings per share $ 0.87 $ 0.27 $ 1.42 $ 1.19 $ 0.76
Nonrecurring items
Gain on sale of merchant services (0.06) -- -- -- --
Merger related costs 0.16 0.08 0.39 (0.01) (0.02)
Loss on sale of securities -- -- 0.01 0.01 0.01
Branch right sizing 0.12 0.24 0.04 0.03 --
Charter consolidation costs 0.03 -- -- -- --
Tax effect (0.10) (0.13) (0.17) (0.01) 0.01
Net nonrecurring items 0.15 0.19 0.27 0.02 --
Diluted core earnings per share (non-GAAP) $ 1.02 $ 0.46 $ 1.69 $ 1.21 $ 0.76

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

Source:Simmons First National Corporation