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Simmons First Announces 45% Increase in Core Earnings

PINE BLUFF, Ark., Oct. 23, 2014 (GLOBE NEWSWIRE) -- Simmons First National Corporation (Nasdaq:SFNC) today announced record core earnings of $10.7 million for the third quarter of 2014, an increase of $3.3 million, or 45.0%, compared to the same quarter last year. Diluted core earnings per share were a record $0.63, an increase of $0.18, or 40.0%. Core earnings exclude $1.9 million in net after-tax expenses. Including the non-core items, net income was $8.8 million and diluted earnings per share were $0.52.

Year-to-date core earnings were $27.3 million, an increase of $7.5 million, or 37.6%, compared to the same period of 2013. Year-to-date diluted core earnings per share were $1.65, an increase of $0.44, or 36.4%. Year-to-date net income was $23.0 million, or $1.39 diluted earnings per share.

"We are pleased with the financial results from another active quarter. We closed our acquisition of Delta Trust & Bank at the end of August and have our systems conversion scheduled tomorrow. We completed our legacy charter consolidation into Simmons Bank, and again reported record core earnings and record core earnings per share," commented George A. Makris, Jr., Chairman and CEO.

Loans

Total loans, including those acquired, were $2.8 billion at September 30, 2014, an increase of $799 million, or 40.8%, compared to the same period in 2013. Acquired loans increased by $577 million, net of discounts, while legacy loans (all loans excluding acquired loans) grew $222 million, or 12.8%. "We remain encouraged by the consistent double digit legacy loan growth we have seen this year. We continue to achieve nice loan growth in virtually every market we serve, specifically in St. Louis, Wichita, Central Arkansas and in our national equipment finance program," added Makris.

Deposits

At September 30, 2014, total deposits were $3.9 billion, an increase of $1.1 billion, or 37.7%, compared to the same period in 2013. Total non-time deposits totaled $2.9 billion, or 73% of total deposits.

Net Interest Income

The Company's net interest income for the third quarter of 2014 was $41.8 million, an increase of $10.2 million, or 32.3%, from the same period of 2013. This increase was driven by growth in the legacy loan portfolio and earning assets acquired through the Metropolitan and Delta Trust transactions. Net interest margin was 4.36% for the quarter ended September 30, 2014, a 9 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 Nine Months Ended
(In thousands) September 30 September 30
2014 2013 2014 2013
Impact on net interest income $ 4,974 $ 4,005 $ 18,216 $ 10,102
Non-interest income (3,724) (3,844) (17,570) (9,734)
Net impact to pre-tax income $ 1,250 $ 161 $ 646 $ 368

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 $19.3 million and the remaining adjustment to the indemnification assets that will reduce non-interest income is $10.5 million. Of the remaining adjustments, we expect to recognize $3.6 million of interest income and a $2.9 million reduction of non-interest income, for a net increase to pre-tax income of approximately $0.7 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 third quarter was $16.0 million, an increase of $5.7 million compared to the third quarter of 2013. Included in non-interest income were $0.9 million in gains from the sale of branches that were closed as part the integration of Metropolitan and $0.8 million from the recovery of Metropolitan loans that were charged off prior to acquisition. The remaining increase in non-interest income was primarily due to additional trust income, service charge and fee income and mortgage lending income resulting from the Metropolitan and Delta Trust acquisitions.

Non-Interest Expense

Non-interest expense for the second quarter of 2014 was $44.4 million, an increase of $13.5 million compared to the same period in 2013. Due to the closing of the Delta Trust acquisition during the quarter, merger related costs for the quarter exceeded those of the same period last year by $3.4 million. Also included in the quarter were $196 thousand of charter consolidation costs from the systems conversion of the three remaining subsidiary banks that were merged into Simmons First National Bank in August. OREO expense increase by $1.5 million, primarily from the write-down of OREO properties to updated appraised values and from property taxes on acquired OREO. The remaining increase in non-interest expense was primarily due to incremental operating expenses of acquired Metropolitan and Delta Trust locations.

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, 2014, acquired loans covered by loss share were carried at $118 million, OREO covered by loss share was carried at $15 million and the FDIC loss share indemnification asset was carried at $26 million. Acquired loans and OREO not covered by loss share were carried at $676 million and $38 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 September 30, 2014, the allowance for loan losses was $27.1 million and the loan credit mark was $93.9 million, for a total of $121.0 million of coverage. This equates to a total coverage ratio of 4.2% of gross loans. The ratio of credit mark to acquired loans was 10.6%." The Company's allowance for loan losses at September 30, 2014, was 1.38% of total loans and 227% of non-performing loans. Non-performing loans as a percent of total loans were 0.61%. Non-performing assets decreased $1.9 million from the previous quarter to $62.8 million. Through the third quarter of 2014, the year-to-date annualized net charge-off ratio, excluding credit cards, was 0.19%, and the year-to-date annualized credit card charge-off ratio was 1.22%.

Capital

At September 30, 2014, stockholders' equity was $483 million, book value per share was $26.82 and tangible book value per share was $19.72. The Company's ratio of stockholders' equity to total assets was 10.3% and its ratio of tangible common equity to tangible assets was 7.8%.

Simmons First National Corporation

Simmons First National Corporation is an Arkansas based financial holding company with total assets of $4.7 billion and conducting financial operations throughout Arkansas, Kansas and Missouri. 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 23, 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 17056028. 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) 2014 2014 2014 2013 2013
(in thousands)
ASSETS
Cash and non-interest bearing balances due from banks $ 73,554 $ 44,805 $ 48,018 $ 69,827 $ 37,752
Interest bearing balances due from banks 210,742 377,855 474,118 469,553 320,368
Federal funds sold 10,000 -- -- -- 18,365
Cash and cash equivalents 294,296 422,660 522,136 539,380 376,485
Investment securities - held-to-maturity 822,730 799,963 776,615 745,688 581,768
Investment securities - available-for-sale 317,473 270,336 264,974 212,277 179,937
Mortgage loans held for sale 22,003 20,409 16,717 9,494 10,605
Assets held in trading accounts 6,819 6,881 6,865 8,978 8,744
Loans:
Legacy loans 1,963,378 1,868,842 1,779,609 1,742,638 1,741,161
Allowance for loan losses (27,076) (27,530) (26,983) (27,442) (27,533)
Loans acquired, not covered by FDIC loss share
(net of discount) 676,056 398,967 450,289 515,644 68,133
Loans acquired, covered by FDIC loss share (net of discount) 118,158 121,524 137,879 146,653 148,884
Net loans 2,730,516 2,361,803 2,340,794 2,377,493 1,930,645
FDIC indemnification asset 25,694 30,508 39,239 48,791 61,500
Premises and equipment 115,639 113,541 111,888 119,614 87,065
Premises held for sale 15,856 14,145 23,779 19,466 --
Foreclosed assets not covered by FDIC loss share 50,770 53,342 57,476 64,820 26,203
Foreclosed assets covered by FDIC loss share 15,212 16,951 18,171 20,585 23,260
Interest receivable 18,006 14,254 15,102 15,654 15,635
Bank owned life insurance 75,357 61,115 60,714 60,384 60,040
Goodwill 109,859 78,529 78,529 78,906 60,605
Other intangible assets 17,947 14,094 14,519 14,972 5,420
Other assets 51,682 47,310 49,129 46,598 13,797
Total assets $ 4,689,859 $ 4,325,841 $ 4,396,647 $ 4,383,100 $ 3,441,709
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing transaction accounts $ 884,064 $ 838,543 $ 838,050 $ 718,438 $ 580,063
Interest bearing transaction accounts and savings deposits 1,984,422 1,784,040 1,793,330 1,862,618 1,453,139
Time deposits less than $100,000 565,957 559,597 589,798 611,729 454,325
Time deposits greater than $100,000 474,472 459,545 485,870 504,782 351,271
Total deposits 3,908,915 3,641,725 3,707,048 3,697,567 2,838,798
Federal funds purchased and securities sold under agreements to repurchase 112,977 98,226 104,643 107,887 62,311
Other borrowings 123,396 115,602 116,970 117,090 75,987
Subordinated debentures 20,620 20,620 20,620 20,620 20,620
Accrued interest and other liabilities 41,309 35,533 40,694 36,104 40,959
Total liabilities 4,207,217 3,911,706 3,989,975 3,979,268 3,038,675
Stockholders' equity:
Common stock 180 163 163 162 162
Surplus 155,592 90,010 89,274 88,095 87,279
Undivided profits 328,822 325,371 319,354 318,577 318,194
Accumulated other comprehensive income
Unrealized appreciation on AFS securities (1,952) (1,409) (2,119) (3,002) (2,601)
Total stockholders' equity 482,642 414,135 406,672 403,832 403,034
Total liabilities and stockholders' equity $ 4,689,859 $ 4,325,841 $ 4,396,647 $ 4,383,100 $ 3,441,709
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) 2014 2014 2014 2013 2013
(in thousands)
ASSETS
Cash and non-interest bearing balances due from banks $ 50,980 $ 44,671 $ 68,770 $ 50,473 $ 39,067
Interest bearing balances due from banks 288,258 456,931 507,936 428,551 365,504
Federal funds sold 6,794 985 385 2,616 3,719
Cash and cash equivalents 346,032 502,587 577,091 481,640 408,290
Investment securities - held-to-maturity 810,085 782,900 749,126 657,736 567,579
Investment securities - available-for-sale 300,927 265,194 223,203 220,292 178,351
Mortgage loans held for sale 24,942 15,299 6,668 6,666 12,171
Assets held in trading accounts 6,841 6,850 7,212 8,881 8,731
Loans:
Legacy loans 1,917,155 1,817,429 1,719,294 1,734,469 1,705,204
Allowance for loan losses (27,470) (27,287) (27,771) (27,806) (27,735)
Loans acquired, not covered by FDIC loss share
(net of discount) 481,658 418,515 505,031 261,577 61,372
Loans acquired, covered by FDIC loss share (net of discount) 119,372 128,099 142,777 145,742 156,392
Net loans 2,490,715 2,336,756 2,339,331 2,113,982 1,895,233
FDIC indemnification asset 28,311 35,940 46,154 57,587 65,478
Premises and equipment 115,577 112,994 119,626 87,310 88,044
Premises held for sale 12,521 21,142 19,514 212 --
Foreclosed assets not covered by FDIC loss share 51,097 55,304 63,453 50,680 27,368
Foreclosed assets covered by FDIC loss share 16,073 18,330 19,901 22,529 22,392
Interest receivable 15,743 15,076 14,882 15,707 13,739
Bank owned life insurance 63,798 60,895 60,552 60,209 59,878
Goodwill 88,590 78,529 78,901 60,804 60,605
Other intangible assets 15,321 14,299 14,765 5,526 3,439
Other assets 52,234 48,583 45,458 33,324 12,122
Total assets $ 4,438,807 $ 4,370,678 $ 4,385,837 $ 3,883,085 $ 3,423,420
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing transaction accounts $ 828,340 $ 823,552 $ 735,101 $ 665,644 $ 559,461
Interest bearing transaction accounts and savings deposits 1,869,095 1,810,436 1,854,510 1,620,244 1,444,058
Time deposits less than $100,000 555,837 577,856 601,046 517,603 461,101
Time deposits greater than $100,000 457,489 472,009 495,574 409,361 358,307
Total deposits 3,710,761 3,683,853 3,686,231 3,212,852 2,822,927
Federal funds purchased and securities sold under agreements to repurchase 108,357 101,537 115,018 98,359 67,924
Other borrowings 117,664 116,082 117,588 108,693 75,704
Subordinated debentures 20,620 20,620 20,620 20,620 20,620
Accrued interest and other liabilities 38,950 34,637 36,967 33,117 31,867
Total liabilities 3,996,352 3,956,729 3,976,424 3,473,641 3,019,042
Total stockholders' equity 442,455 413,949 409,413 409,444 404,378
Total liabilities and stockholders' equity $ 4,438,807 $ 4,370,678 $ 4,385,837 $ 3,883,085 $ 3,423,420
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) 2014 2014 2014 2013 2013
(in thousands, except per share data)
INTEREST INCOME
Legacy loans $ 23,841 $ 22,733 $ 21,554 $ 22,463 $ 22,332
Loans acquired 16,241 15,889 18,577 16,151 8,283
Federal funds sold 12 2 1 5 6
Investment securities 4,717 4,766 4,549 3,951 3,428
Mortgage loans held for sale 269 168 69 72 122
Assets held in trading accounts 3 5 5 6 6
Interest bearing balances due from banks 132 279 279 251 234
TOTAL INTEREST INCOME 45,215 43,842 45,034 42,899 34,411
INTEREST EXPENSE
Time deposits 1,461 1,515 1,577 1,479 1,392
Other deposits 771 720 692 646 601
Federal funds purchased and securities sold under agreements to repurchase 55 31 53 55 46
Other borrowings 996 988 1,010 929 646
Subordinated debentures 160 160 157 161 162
TOTAL INTEREST EXPENSE 3,443 3,414 3,489 3,270 2,847
NET INTEREST INCOME 41,772 40,428 41,545 39,629 31,564
Provision for loan losses 1,128 1,602 908 1,084 1,081
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 40,644 38,826 40,637 38,545 30,483
NON-INTEREST INCOME
Trust income 1,838 1,553 1,537 1,608 1,448
Service charges on deposit accounts 6,238 6,792 6,068 5,497 4,603
Other service charges and fees 808 859 823 1,164 728
Mortgage lending income 1,812 1,262 810 916 1,122
Investment banking income 284 154 181 421 240
Credit card fees 5,769 5,801 5,643 4,592 4,400
Bank owned life insurance income 411 377 330 347 328
Gain on sale of securities, net (18) 38 -- 42 --
Net (loss) gain on assets covered by FDIC loss share agreements (3,744) (6,268) (7,370) (7,988) (3,443)
Other income 2,637 4,820 1,176 1,118 887
TOTAL NON-INTEREST INCOME 16,035 15,388 9,198 7,717 10,313
NON-INTEREST EXPENSE
Salaries and employee benefits 20,892 20,982 22,464 19,933 17,701
Occupancy expense, net 3,204 3,285 3,890 2,544 2,485
Furniture and equipment expense 2,363 2,215 2,014 2,257 1,613
Other real estate and foreclosure expense 1,864 375 873 562 385
Deposit insurance 877 1,085 668 620 595
Merger related costs 3,628 1,354 1,272 6,413 190
Other operating expenses 11,526 10,546 13,370 9,349 7,934
TOTAL NON-INTEREST EXPENSE 44,354 39,842 44,551 41,678 30,903
NET INCOME BEFORE INCOME TAXES 12,325 14,372 5,284 4,584 9,893
Provision for income taxes 3,537 4,464 932 798 2,961
NET INCOME $ 8,788 $ 9,908 $ 4,352 $ 3,786 $ 6,932
BASIC EARNINGS PER SHARE $ 0.52 $ 0.61 $ 0.27 $ 0.23 $ 0.43
DILUTED EARNINGS PER SHARE $ 0.52 $ 0.60 $ 0.27 $ 0.23 $ 0.43
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) 2014 2014 2014 2013 2013
(in thousands, except per share data)
INTEREST INCOME
Legacy loans $ 68,124 $ 44,285 $ 21,554 $ 88,594 $ 66,129
Loans acquired 50,710 34,468 18,577 39,577 23,428
Federal funds sold 16 3 1 19 14
Investment securities 14,032 9,315 4,549 13,300 9,349
Mortgage loans held for sale 506 237 69 467 395
Assets held in trading accounts 13 10 5 29 23
Interest bearing balances due from banks 691 558 279 1,127 875
TOTAL INTEREST INCOME 134,092 88,876 45,034 143,113 100,213
INTEREST EXPENSE
Time deposits 4,552 3,091 1,577 5,938 4,460
Other deposits 2,185 1,414 692 2,461 1,814
Federal funds purchased and securities sold under agreements to repurchase 194 84 53 219 165
Other borrowings 2,995 1,998 1,010 3,001 2,072
Subordinated debentures 477 317 157 644 483
TOTAL INTEREST EXPENSE 10,403 6,904 3,489 12,263 8,994
NET INTEREST INCOME 123,689 81,972 41,545 130,850 91,219
Provision for loan losses 3,638 2,510 908 4,118 3,034
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 120,051 79,462 40,637 126,732 88,185
NON-INTEREST INCOME
Trust income 4,929 3,091 1,537 5,842 4,234
Service charges on deposit accounts 19,098 12,860 6,068 18,815 13,318
Other service charges and fees 2,490 1,684 823 3,458 2,294
Mortgage lending income 3,885 2,074 810 4,592 3,677
Investment banking income 620 336 181 1,811 1,390
Credit card fees 17,213 11,444 5,643 17,372 12,779
Bank owned life insurance income 1,117 705 330 1,319 974
Gain on sale of securities, net 20 38 -- (151) (193)
Net (loss) gain on assets covered by FDIC loss share agreements (17,303) (13,639) (7,370) (16,188) (8,200)
Other income 8,619 5,984 1,176 3,746 2,626
TOTAL NON-INTEREST INCOME 40,688 24,577 9,198 40,616 32,899
NON-INTEREST EXPENSE
Salaries and employee benefits 64,338 43,447 22,464 74,078 54,146
Occupancy expense, net 10,338 7,155 3,890 10,034 7,490
Furniture and equipment expense 6,592 4,229 2,014 7,623 5,367
Other real estate and foreclosure expense 3,112 1,248 873 1,337 775
Deposit insurance 2,630 1,753 668 2,482 1,862
Merger related costs 6,255 2,627 1,272 6,376 (37)
Other operating expenses 35,492 23,923 13,370 32,882 23,529
TOTAL NON-INTEREST EXPENSE 128,757 84,382 44,551 134,812 93,132
NET INCOME BEFORE INCOME TAXES 31,982 19,657 5,284 32,536 27,952
Provision for income taxes 8,933 5,396 932 9,305 8,507
NET INCOME $ 23,049 $ 14,261 $ 4,352 $ 23,231 $ 19,445
BASIC EARNINGS PER SHARE $ 1.40 $ 0.88 $ 0.27 $ 1.42 $ 1.19
DILUTED EARNINGS PER SHARE $ 1.39 $ 0.87 $ 0.27 $ 1.42 $ 1.19
Simmons First National Corporation SFNC
Consolidated Risk-Based Capital
For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
(Unaudited) 2014 2014 2014 2013 2013
($ in thousands)
Tier 1 capital
Stockholders' equity $ 482,642 $ 414,135 $ 406,672 $ 403,832 $ 403,034
Trust preferred securities, net allowable 20,000 20,000 20,000 20,000 20,000
Disallowed intangible assets, net of deferred tax (109,698) (74,003) (74,477) (75,501) (49,727)
Unrealized gain on AFS securities 1,952 1,409 2,119 3,002 2,601
Total Tier 1 capital 394,896 361,541 354,314 351,333 375,908
Tier 2 capital
Qualifying unrealized gain on AFS equity securities -- 47 42 45 40
Qualifying allowance for loan losses 29,167 29,621 28,846 28,967 25,633
Total Tier 2 capital 29,167 29,668 28,888 29,012 25,673
Total risk-based capital $ 424,063 $ 391,209 $ 383,202 $ 380,345 $ 401,581
Risk weighted assets $ 3,063,801 $ 2,652,474 $ 2,651,970 $ 2,697,630 $ 2,047,198
Adjusted average assets for leverage ratio $ 4,331,488 $ 4,299,379 $ 4,315,279 $ 3,811,793 $ 3,378,676
Ratios at end of quarter
Equity to assets 10.29% 9.57% 9.25% 9.21% 11.71%
Tangible common equity to tangible assets 7.78% 7.59% 7.29% 7.23% 9.98%
Tier 1 leverage ratio 9.12% 8.41% 8.21% 9.22% 11.13%
Tier 1 risk-based capital ratio 12.89% 13.63% 13.36% 13.02% 18.36%
Total risk-based capital ratio 13.84% 14.75% 14.45% 14.10% 19.62%
Simmons First National Corporation SFNC
Consolidated Loans and Investments
For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
(Unaudited) 2014 2014 2014 2013 2013
(in thousands)
Legacy Loan Portfolio - End of Period (1)
Consumer
Credit cards $ 175,822 $ 176,239 $ 172,609 $ 184,935 $ 177,463
Student loans -- 398 24,415 25,906 28,392
Other consumer 105,508 105,998 104,185 98,851 101,399
Total consumer 281,330 282,635 301,209 309,692 307,254
Real Estate
Construction 163,364 163,412 168,147 146,458 161,024
Single-family residential 436,925 417,187 402,588 392,285 375,703
Other commercial 681,848 653,734 644,772 626,333 602,463
Total real estate 1,282,137 1,234,333 1,215,507 1,165,076 1,139,190
Commercial
Commercial 249,186 233,510 186,303 164,329 154,508
Agricultural 145,157 111,567 72,239 98,886 135,633
Total commercial 394,343 345,077 258,542 263,215 290,141
Other 5,568 6,796 4,351 4,655 4,576
Total Loans $ 1,963,378 $ 1,868,841 $ 1,779,609 $ 1,742,638 $ 1,741,161
(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 $ 455,827 $ 449,201 $ 425,616 $ 395,198 $ 313,052
Mortgage-backed securities 30,954 32,204 33,323 34,425 41
State and political subdivisions 335,329 317,938 317,056 315,445 268,055
Other securities 620 620 620 620 620
Total held-to-maturity 822,730 799,963 776,615 745,688 581,768
Available-for-Sale
U.S. Treasury $ 3,991 $ 3,994 $ 3,981 $ 3,985 $ --
U.S. Government agencies 280,321 238,411 231,949 178,217 163,127
Mortgage-backed securities 32 1,958 1,833 1,891 1,994
State and political subdivisions 8,903 6,920 7,367 7,861 1,263
FHLB stock 5,623 4,966 5,168 6,002 5,085
Other securities 18,603 14,087 14,676 14,321 8,468
Total available-for-sale 317,473 270,336 264,974 212,277 179,937
Total investment securities $ 1,140,203 $ 1,070,299 $ 1,041,589 $ 957,965 $ 761,705
Fair value - HTM investment securities $ 825,584 $ 802,597 $ 771,114 $ 731,705 $ 570,703
Investment Securities - QTD Average
Taxable securities $ 781,685 $ 722,084 $ 649,329 $ 583,389 $ 490,801
Tax exempt securities 329,327 326,010 323,000 294,639 255,129
Total investment securities - QTD average $ 1,111,012 $ 1,048,094 $ 972,329 $ 878,028 $ 745,930
Simmons First National Corporation SFNC
Consolidated Loans and Credit Coverage
For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31
(Unaudited) 2014 2014 2014 2013
($ in thousands)
LOANS
Legacy loans $ 1,963,378 $ 1,868,841 $ 1,779,609 $ 1,742,638
Allowance for loan losses (27,076) (27,530) (26,983) (27,442)
Legacy loans (net of allowance) 1,936,302 1,841,311 1,752,626 1,715,196
Loans acquired, not covered by FDIC loss share 733,914 445,515 495,915 566,895
Credit discount (57,858) (46,548) (45,626) (51,251)
Loans acquired, not covered (net of discount) 676,056 398,967 450,289 515,644
Loans acquired, covered by FDIC loss share 154,183 163,775 188,755 209,459
Credit discount (36,025) (42,251) (50,876) (62,806)
Loans acquired, covered (net of discount) 118,158 121,524 137,879 146,653
Net loans $ 2,730,516 $ 2,361,802 $ 2,340,794 $ 2,377,493
Loan Coverage Ratios
Allowance for loan losses to legacy loans 1.38% 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 7.88% 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 23.37% 25.80% 26.95% 29.98%
Total allowance and credit coverage 4.24% 4.69% 5.01% 5.62%
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) 2014 2014 2014 2013 2013
($ in thousands)
Allowance for Loan Losses
Balance, beginning of quarter $ 27,530 $ 26,983 $ 27,442 $ 27,533 $ 27,398
Loans charged off
Credit cards 788 725 816 841 770
Other consumer 648 426 148 428 449
Real estate 534 1,144 1,035 255 247
Commercial 474 186 82 133 20
Total loans charged off 2,444 2,481 2,081 1,657 1,486
Recoveries of loans previously charged off
Credit cards 190 215 271 226 235
Other consumer 122 133 121 166 114
Real estate 379 1,062 308 78 151
Commercial 171 16 14 12 40
Total recoveries 862 1,426 714 482 540
Net loans charged off 1,582 1,055 1,367 1,175 946
Provision for loan losses 1,128 1,602 908 1,084 1,081
Balance, end of quarter $ 27,076 $ 27,530 $ 26,983 $ 27,442 $ 27,533
Non-performing assets (1) (2)
Non-performing loans
Nonaccrual loans
Real estate $ 9,374 $ 8,166 $ 8,075 $ 4,799 $ 4,157
Commercial 1,174 1,110 1,054 495 525
Consumer 664 877 883 967 1,293
Total nonaccrual loans 11,212 10,153 10,012 6,261 5,975
Loans past due 90 days or more
Government guaranteed student loans -- 323 1,965 2,264 2,966
Other loans 713 757 517 687 725
Total loans past due 90 days or more 713 1,080 2,482 2,951 3,691
Total non-performing loans 11,925 11,233 12,494 9,212 9,666
Other non-performing assets
Foreclosed assets held for sale 13,167 16,745 17,357 19,361 20,493
Acquired foreclosed assets held for sale, not covered by FDIC loss share agreements 37,603 36,597 40,119 45,459 5,710
Other non-performing assets 72 80 60 75 60
Total other non-performing assets 50,842 53,422 57,536 64,895 26,263
Total non-performing assets $ 62,767 $ 64,655 $ 70,030 $ 74,107 $ 35,929
Performing TDRs (troubled debt restructurings) $ 2,234 $ 2,776 $ 8,655 $ 9,497 $ 9,584
Ratios (1) (2)
Allowance for loan losses to total loans 1.38% 1.47% 1.52% 1.57% 1.58%
Allowance for loan losses to non-performing loans 227% 245% 216% 298% 285%
Non-performing loans to total loans 0.61% 0.60% 0.70% 0.53% 0.56%
Non-performing assets (including performing TDRs) to total assets 1.39% 1.56% 1.79% 1.91% 1.32%
Non-performing assets to total assets 1.34% 1.49% 1.59% 1.69% 1.04%
Non-performing assets to total assets
(excluding Gov't guaranteed student loans) 1.34% 1.49% 1.55% 1.64% 0.96%
Annualized net charge offs to total loans 0.33% 0.23% 0.32% 0.27% 0.22%
Annualized net credit card charge offs to total credit card loans 1.31% 1.14% 1.20% 1.31% 1.21%
Annualized net charge offs to total loans
(excluding credit cards) 0.22% 0.13% 0.22% 0.14% 0.11%
Past due loans >30 days (excluding nonaccrual) 0.33% 0.34% 0.61% 0.57% 0.62%
Past due loans >30 days (excluding nonaccrual)
(excluding Gov't guaranteed student loans) 0.33% 0.32% 0.45% 0.41% 0.36%
(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) 2014 2014 2014 2013 2013
ASSETS
Earning Assets
Interest bearing balances due from banks 0.18% 0.24% 0.22% 0.23% 0.25%
Investment securities 2.29% 2.47% 2.60% 2.44% 2.52%
Mortgage loans held for sale 4.28% 4.40% 4.20% 4.29% 3.98%
Assets held in trading accounts 0.17% 0.29% 0.28% 0.27% 0.27%
Loans, including acquired loans 6.32% 6.55% 6.88% 7.16% 6.32%
Total interest earning assets 4.71% 4.69% 4.91% 5.08% 4.63%
LIABILITIES
Interest bearing liabilities
Interest bearing transaction and savings accounts 0.16% 0.16% 0.15% 0.16% 0.17%
Time deposits 0.57% 0.58% 0.58% 0.63% 0.67%
Total interest bearing deposits 0.31% 0.31% 0.31% 0.33% 0.35%
Federal funds purchased and securities sold under agreement to repurchase 0.20% 0.12% 0.19% 0.22% 0.27%
Other borrowings 3.36% 3.41% 3.48% 3.39% 3.39%
Subordinated debentures 3.08% 3.11% 3.09% 3.10% 3.12%
Total interest bearing liabilities 0.44% 0.44% 0.44% 0.47% 0.47%
NET INTEREST MARGIN/SPREAD
Net interest spread 4.27% 4.25% 4.47% 4.61% 4.16%
Net interest margin - quarter-to-date 4.36% 4.34% 4.54% 4.70% 4.27%
Net interest margin - year-to-date 4.41% 4.44% 4.54% 4.21% 4.08%
Simmons First National Corporation SFNC
Consolidated - Selected Financial Data
For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
(Unaudited) 2014 2014 2014 2013 2013
($ in thousands, except share data)
QUARTER-TO-DATE
Diluted earnings per share $ 0.52 $ 0.60 $ 0.27 $ 0.23 $ 0.43
Core earnings (excludes nonrecurring items) (non-GAAP) 10,684 9,153 7,482 7,749 7,371
Diluted core earnings per share (non-GAAP) 0.63 0.56 0.46 0.48 0.45
Cash dividends declared per common share 0.22 0.22 0.22 0.21 0.21
Cash dividends declared - amount 3,954 3,589 3,575 3,403 3,401
Return on average stockholders' equity 7.88% 9.60% 4.31% 3.67% 6.80%
Return on tangible equity 10.62% 12.72% 5.94% 4.51% 8.18%
Return on average assets 0.79% 0.91% 0.40% 0.39% 0.80%
Net interest margin (FTE) 4.36% 4.34% 4.54% 4.70% 4.27%
FTE adjustment - investments 1,695 1,687 1,682 1,442 1,313
FTE adjustment - loans 7 8 10 17 11
Amortization of intangibles 454 452 453 192 135
Amortization of intangibles, net of taxes 276 275 275 117 82
Average shares outstanding 16,873,504 16,318,003 16,270,149 16,210,480 16,220,199
Average earning assets 3,956,032 3,892,202 3,861,632 3,466,530 3,059,023
Average interest bearing liabilities 3,129,062 3,098,540 3,204,356 2,774,880 2,427,714
YEAR-TO-DATE
Diluted earnings per share $ 1.39 $ 0.87 $ 0.27 $ 1.42 $ 1.19
Core earnings (excludes nonrecurring items) (non-GAAP) 27,319 16,635 7,482 27,612 19,863
Diluted core earnings per share (non-GAAP) 1.65 1.02 0.46 1.69 1.21
Cash dividends declared per common share 0.66 0.44 0.22 0.84 0.63
Cash dividends declared - amount 11,118 7,164 3,575 13,707 10,304
Return on average stockholders' equity 7.30% 6.95% 4.31% 5.33% 6.39%
Return on tangible equity 9.82% 9.33% 5.94% 6.36% 7.68%
Return on average assets 0.70% 0.65% 0.40% 0.64% 0.75%
Net interest margin (FTE) 4.41% 4.44% 4.54% 4.21% 4.08%
FTE adjustment - investments 5,064 3,369 1,682 4,900 3,458
FTE adjustment - loans 25 18 10 51 34
Amortization of intangibles 1,359 905 453 601 409
Amortization of intangibles, net of taxes 826 550 275 365 248
Average shares outstanding 16,489,429 16,294,208 16,270,149 16,339,335 16,382,758
Average diluted shares outstanding 16,532,689 16,336,901 16,309,868 16,352,167 16,388,393
Average earning assets 3,903,290 3,876,918 3,861,632 3,224,094 3,105,706
Average interest bearing liabilities 3,143,984 3,151,446 3,204,356 2,551,653 2,477,899
END OF PERIOD
Book value per share $ 26.82 $ 25.36 $ 24.93 $ 24.89 $ 24.88
Tangible book value per share 19.72 19.69 19.23 19.10 20.80
Shares outstanding 17,992,261 16,331,341 16,311,263 16,226,256 16,198,964
Full-time equivalent employees 1,397 1,281 1,321 1,343 1,097
Total number of ATM's 129 120 120 157 106
Total number of financial centers 113 104 104 131 87
Parent company only - investment in subsidiaries 516,801 449,591 453,067 452,688 371,531
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) 2014 2014 2014 2013 2013
(in thousands, except per share data)
QUARTER-TO-DATE
Net Income $ 8,788 $ 9,908 $ 4,352 $ 3,786 $ 6,932
Nonrecurring items
Gain on sale of merchant services -- (1,000) -- -- --
Merger related costs 3,628 1,354 1,272 6,413 190
Branch right sizing (705) (2,011) 3,878 108 533
Charter consolidation costs 196 414 -- -- --
Tax effect (1,223) 488 (2,020) (2,558) (284)
Net nonrecurring items 1,896 (755) 3,130 3,963 439
Core earnings (non-GAAP) $ 10,684 $ 9,153 $ 7,482 $ 7,749 $ 7,371
Diluted earnings per share $ 0.52 $ 0.60 $ 0.27 $ 0.23 $ 0.43
Nonrecurring items
Gain on sale of merchant services -- (0.06) -- -- --
Merger related costs 0.21 0.08 0.08 0.40 0.01
Branch right sizing (0.04) (0.12) 0.24 0.01 0.03
Charter consolidation costs 0.01 0.03 -- -- --
Tax effect (0.07) 0.03 (0.13) (0.16) (0.02)
Net nonrecurring items 0.11 (0.04) 0.19 0.25 0.02
Diluted core earnings per share (non-GAAP) $ 0.63 $ 0.56 $ 0.46 $ 0.48 $ 0.45
YEAR-TO-DATE
Net Income $ 23,049 $ 14,261 $ 4,352 $ 23,231 $ 19,445
Nonrecurring items
Gain on sale of merchant services (1,000) (1,000) -- -- --
Merger related costs 6,254 2,626 1,272 6,376 (37)
Loss on sale of securities -- -- -- 193 193
Branch right sizing 1,162 1,867 3,878 641 533
Charter consolidation costs 610 414 -- -- --
Tax effect (2,745) (1,533) (2,020) (2,829) (271)
Net nonrecurring items 4,281 2,374 3,130 4,381 418
Core earnings (non-GAAP) $ 27,330 $ 16,635 $ 7,482 $ 27,612 $ 19,863
Diluted earnings per share $ 1.39 $ 0.87 $ 0.27 $ 1.42 $ 1.19
Nonrecurring items
Gain on sale of merchant services (0.06) (0.06) -- -- --
Merger related costs 0.37 0.16 0.08 0.39 (0.01)
Loss on sale of securities -- -- -- 0.01 0.01
Branch right sizing 0.08 0.12 0.24 0.04 0.03
Charter consolidation costs 0.04 0.03 -- -- --
Tax effect (0.17) (0.10) (0.13) (0.17) (0.01)
Net nonrecurring items 0.26 0.15 0.19 0.27 0.02
Diluted core earnings per share (non-GAAP) $ 1.65 $ 1.02 $ 0.46 $ 1.69 $ 1.21

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

Source:Simmons First National Corporation