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Simmons First Announces 47% Increase in Core Earnings

PINE BLUFF, Ark., Jan. 22, 2015 (GLOBE NEWSWIRE) -- Simmons First National Corporation (Nasdaq:SFNC) today announced record core earnings of $11.4 million for the fourth quarter of 2014, an increase of $3.6 million, or 47%, compared to the same quarter last year. Diluted core earnings per share were $0.64, an increase of $0.16. Core earnings exclude $1.2 million in net after-tax earnings. Adjusted for the non-core items, net income was $12.6 million for the fourth quarter of 2014, an increase of $8.9 million, or 234%, compared to the same quarter last year.

Year-to-date core earnings were $38.7 million, an increase of $11.1 million, or 40%, compared to 2013. Year-to-date diluted core earnings per share were $2.29, an increase of $0.60, or 36%. Year-to-date net income was $35.7 million, an increase of $12.5 million, or 54%, compared to 2013. Year-to-date diluted earnings per share were $2.11, an increase of $0.69, or 49%.

"We are pleased with our ability to integrate our acquisitions and continue to make good progress with our efficiency initiatives, both in revenue enhancement and in expense control," commented George A. Makris, Jr., Chairman and CEO.

Loans

Total loans, including those acquired, were $2.7 billion at December 31, 2014, an increase of $333 million, or 13.8%, compared to the same period in 2013. Legacy loans (all loans excluding acquired loans) grew $311 million, or 17.9%. Acquired loans increased by $22 million, net of discounts.

Deposits

At December 31, 2014, total deposits were $3.9 billion, an increase of $163 million, or 4.4%, compared to the same period in 2013. Total non-time deposits totaled $2.9 billion, or 75% of total deposits.

Net Interest Income

The Company's net interest income for the fourth quarter of 2014 was $47.4 million, an increase of $7.8 million, or 19.6%, 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 4.65% for the quarter ended December 31, 2014, a 5 basis point decline 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 acquired loans. Each quarter, the Company estimates the cash flows expected to be collected from the acquired loans, and adjustments may or may not be required. The cash flows estimate has increased based on payment histories and reduced loss expectations of the loans. This resulted in increased interest income recognized during the quarter on certain loans and interest income that is spread on a level-yield basis over the remaining expected lives of 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
2014 2013 2014 2013
Impact on net interest income $ 8,185 $ 8,802 $ 26,400 $ 18,905
Non-interest income (2,971) (8,371) (20,540) (18,106)
Net impact to pre-tax income $ 5,214 $ 431 $ 5,860 $ 799

Because these adjustments will be recognized over the remaining lives of the loans 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 $17.0 million and the remaining adjustment to the indemnification assets that will reduce non-interest income is $10.6 million. Of the remaining adjustments, we expect to recognize $9.1 million of interest income and a $7.9 million reduction of non-interest income, for a net increase to pre-tax income of approximately $1.2 million during 2015. The accretable yield adjustments recorded in future periods will change as the Company continues to evaluate expected cash flows from the acquired loans.

Non-Interest Income

Non-interest income for the fourth quarter was $21.5 million, an increase of $13.8 million compared to the fourth quarter of 2013. Losses on FDIC covered assets decreased $5.0 million primarily due to lower indemnification asset amortization. Included in non-interest income were $4.6 million in gains from the sale of branch facilities that were closed as part the integration of Metropolitan. 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 a full quarter impact of the Metropolitan and Delta Trust acquisitions.

Non-Interest Expense

Non-interest expense for the fourth quarter of 2014 was $47.0 million, an increase of $5.3 million compared to the same period in 2013. Included in the quarter were $1.2 million of various merger related costs for the Company's acquisition of Delta Trust. During the fourth quarter of 2013, the Company recorded $6.4 million in merger related costs for acquisition of Metropolitan, resulting in a decrease in merger related expenses of $5.2 million. The Company recorded $2.5 million during the quarter for one-time compensation related accruals and change-in-control payments. The Company also funded an endowment for the Simmons First Foundation with a $1.0 million contribution. OREO write-downs resulted in an $833 increase in expense compared to the previous year. The remaining increase in non-interest expense was primarily due to incremental operating expenses of the 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 December 31, 2014, acquired loans covered by loss share were carried at $107 million, OREO covered by loss share was carried at $12 million and the FDIC loss share indemnification asset was carried at $23 million. Acquired loans and OREO not covered by loss share were carried at $576 million and $33 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, 2014, the allowance for loan losses was $29.0 million on legacy loans and $1.0 million on covered loans, and the loan credit mark was $77.2 million, for a total of $107.2 million of coverage. This equates to a total coverage ratio of 3.8% of gross loans. The ratio of credit mark and related allowance to acquired loans was 10.3%." The Company's allowance for loan losses at December 31, 2014, was 1.41% of total loans and 223% of non-performing loans. Non-performing loans as a percent of total loans were 0.63%. Non-performing assets decreased $4.8 million from the previous quarter to $58.0 million. For 2014, the year-to-date net charge-off ratio, excluding credit cards, was 0.20%, and the year-to-date credit card charge-off ratio was 1.27%.

Capital

At December 31, 2014, stockholders' equity was $494 million, book value per share was $27.38 and tangible book value per share was $20.15. The Company's ratio of stockholders' equity to total assets was 10.7% and its ratio of tangible common equity to tangible assets was 8.1%.

Simmons First National Corporation

Simmons First National Corporation is an Arkansas based financial holding company with total assets of $4.6 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, January 22, 2015. 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 61558218. 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) 2014 2014 2014 2014 2013
(in thousands)
ASSETS
Cash and non-interest bearing balances due from banks $ 54,347 $ 73,554 $ 44,805 $ 48,018 $ 69,827
Interest bearing balances due from banks 281,562 210,742 377,855 474,118 469,553
Federal funds sold -- 10,000 -- -- --
Cash and cash equivalents 335,909 294,296 422,660 522,136 539,380
Investment securities - held-to-maturity 777,587 822,730 799,963 776,615 745,688
Investment securities - available-for-sale 305,283 317,473 270,336 264,974 212,277
Mortgage loans held for sale 21,265 22,003 20,409 16,717 9,494
Assets held in trading accounts 6,987 6,819 6,881 6,865 8,978
Loans:
Legacy loans 2,053,721 1,963,378 1,868,842 1,779,609 1,742,638
Allowance for loan losses (29,028) (27,076) (27,530) (26,983) (27,442)
Loans acquired, not covered by FDIC loss share
(net of discount) 575,980 676,056 398,967 450,289 515,644
Loans acquired, covered by FDIC loss share
(net of discount and allowance) 106,933 118,158 121,524 137,879 146,653
Net loans 2,707,606 2,730,516 2,361,803 2,340,794 2,377,493
FDIC indemnification asset 22,663 25,694 30,508 39,239 48,791
Premises and equipment 122,966 115,639 113,541 111,888 119,614
Premises held for sale 6,126 15,856 14,145 23,779 19,466
Foreclosed assets not covered by FDIC loss share 44,856 50,770 53,342 57,476 64,820
Foreclosed assets covered by FDIC loss share 11,793 15,212 16,951 18,171 20,585
Interest receivable 16,774 18,006 14,254 15,102 15,654
Bank owned life insurance 77,592 75,357 61,115 60,714 60,384
Goodwill 108,095 108,095 78,529 78,529 78,906
Other intangible assets 22,526 22,988 14,094 14,519 14,972
Other assets 55,326 49,768 47,310 49,129 46,598
Total assets $ 4,643,354 $ 4,691,222 $ 4,325,841 $ 4,396,647 $ 4,383,100
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing transaction accounts $ 889,260 $ 884,064 $ 838,543 $ 838,050 $ 718,438
Interest bearing transaction accounts and savings deposits 2,006,271 1,984,422 1,784,040 1,793,330 1,862,618
Time deposits less than $100,000 530,890 565,957 559,597 589,798 611,729
Time deposits greater than $100,000 434,297 474,472 459,545 485,870 504,782
Total deposits 3,860,718 3,908,915 3,641,725 3,707,048 3,697,567
Federal funds purchased and securities sold under agreements to repurchase 110,586 112,977 98,226 104,643 107,887
Other borrowings 114,682 123,396 115,602 116,970 117,090
Subordinated debentures 20,620 20,620 20,620 20,620 20,620
Accrued interest and other liabilities 42,429 41,309 35,533 40,694 36,104
Total liabilities 4,149,035 4,207,217 3,911,706 3,989,975 3,979,268
Stockholders' equity:
Common stock 181 180 163 163 162
Surplus 156,568 155,592 90,010 89,274 88,095
Undivided profits 338,906 330,185 325,371 319,354 318,577
Accumulated other comprehensive loss
Unrealized depreciation on AFS securities (1,336) (1,952) (1,409) (2,119) (3,002)
Total stockholders' equity 494,319 484,005 414,135 406,672 403,832
Total liabilities and stockholders' equity $ 4,643,354 $ 4,691,222 $ 4,325,841 $ 4,396,647 $ 4,383,100
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) 2014 2014 2014 2014 2013
(in thousands)
ASSETS
Cash and non-interest bearing balances due from banks $ 54,485 $ 50,980 $ 44,671 $ 68,770 $ 50,473
Interest bearing balances due from banks 299,054 288,258 456,931 507,936 428,551
Federal funds sold 6,486 6,794 985 385 2,616
Cash and cash equivalents 360,025 346,032 502,587 577,091 481,640
Investment securities - held-to-maturity 806,069 810,085 782,900 749,126 657,736
Investment securities - available-for-sale 318,879 300,927 265,194 223,203 220,292
Mortgage loans held for sale 17,241 24,942 15,299 6,668 6,666
Assets held in trading accounts 6,848 6,841 6,850 7,212 8,881
Loans:
Legacy loans 2,008,550 1,917,155 1,817,429 1,719,294 1,734,469
Allowance for loan losses (28,474) (27,470) (27,287) (27,771) (27,806)
Loans acquired, not covered by FDIC loss share
(net of discount) 620,505 481,658 418,515 505,031 261,577
Loans acquired, covered by FDIC loss share
(net of discount and allowance) 111,618 119,372 128,099 142,777 145,742
Net loans 2,712,199 2,490,715 2,336,756 2,339,331 2,113,982
FDIC indemnification asset 24,457 28,311 35,940 46,154 57,587
Premises and equipment 117,018 115,577 112,994 119,626 87,310
Premises held for sale 6,794 12,521 21,142 19,514 212
Foreclosed assets not covered by FDIC loss share 48,745 51,097 55,304 63,453 50,680
Foreclosed assets covered by FDIC loss share 13,964 16,073 18,330 19,901 22,529
Interest receivable 17,738 15,743 15,076 14,882 15,707
Bank owned life insurance 76,578 63,798 60,895 60,552 60,209
Goodwill 109,837 88,590 78,529 78,901 60,804
Other intangible assets 17,748 15,321 14,299 14,765 5,526
Other assets 50,566 52,234 48,583 45,458 33,324
Total assets $ 4,704,706 $ 4,438,807 $ 4,370,678 $ 4,385,837 $ 3,883,085
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing transaction accounts $ 895,470 $ 828,340 $ 823,552 $ 735,101 $ 665,644
Interest bearing transaction accounts and savings deposits 2,010,827 1,869,095 1,810,436 1,854,510 1,620,244
Time deposits less than $100,000 545,986 555,837 577,856 601,046 517,603
Time deposits greater than $100,000 458,117 457,489 472,009 495,574 409,361
Total deposits 3,910,400 3,710,761 3,683,853 3,686,231 3,212,852
Federal funds purchased and securities sold under agreements to repurchase 117,661 108,357 101,537 115,018 98,359
Other borrowings 121,691 117,664 116,082 117,588 108,693
Subordinated debentures 20,620 20,620 20,620 20,620 20,620
Accrued interest and other liabilities 38,869 38,950 34,637 36,967 33,117
Total liabilities 4,209,241 3,996,352 3,956,729 3,976,424 3,473,641
Total stockholders' equity 495,465 442,455 413,949 409,413 409,444
Total liabilities and stockholders' equity $ 4,704,706 $ 4,438,807 $ 4,370,678 $ 4,385,837 $ 3,883,085
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) 2014 2014 2014 2014 2013
(in thousands, except per share data)
INTEREST INCOME
Loans $ 45,248 $ 40,082 $ 38,622 $ 40,131 $ 38,614
Federal funds sold 13 12 2 1 5
Investment securities 5,325 4,717 4,766 4,549 3,951
Mortgage loans held for sale 188 269 168 69 72
Assets held in trading accounts 4 3 5 5 6
Interest bearing balances due from banks 167 132 279 279 251
TOTAL INTEREST INCOME 50,945 45,215 43,842 45,034 42,899
INTEREST EXPENSE
Time deposits 1,470 1,461 1,515 1,577 1,479
Other deposits 872 771 720 692 646
Federal funds purchased and securities sold under agreements to repurchase 61 55 31 53 55
Other borrowings 992 996 988 1,010 929
Subordinated debentures 160 160 160 157 161
TOTAL INTEREST EXPENSE 3,555 3,443 3,414 3,489 3,270
NET INTEREST INCOME 47,390 41,772 40,428 41,545 39,629
Provision for loan losses 3,607 1,128 1,602 908 1,084
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 43,783 40,644 38,826 40,637 38,545
NON-INTEREST INCOME
Trust income 2,182 1,838 1,553 1,537 1,608
Service charges on deposit accounts 6,552 6,238 6,792 6,068 5,497
Other service charges and fees 1,083 808 859 823 703
Mortgage lending income 1,457 1,812 1,262 810 916
Investment banking income 451 284 154 181 421
Credit card fees 5,653 5,769 5,801 5,643 5,053
Bank owned life insurance income 727 411 377 330 347
Gain on sale of securities, net (12) (18) 38 -- 42
Net (loss) gain on assets covered by FDIC loss share agreements (3,013) (3,744) (6,268) (7,370) (7,988)
Other income 6,424 2,637 4,820 1,176 1,118
TOTAL NON-INTEREST INCOME 21,504 16,035 15,388 9,198 7,717
NON-INTEREST EXPENSE
Salaries and employee benefits 25,126 20,892 20,982 22,464 19,933
Occupancy expense, net 2,494 3,204 3,285 3,890 2,544
Furniture and equipment expense 2,732 2,363 2,215 2,014 2,257
Other real estate and foreclosure expense 1,395 1,864 375 873 562
Deposit insurance 724 877 1,085 668 620
Merger related costs 1,214 3,628 1,354 1,272 6,413
Other operating expenses 13,293 11,526 10,546 13,370 9,349
TOTAL NON-INTEREST EXPENSE 46,978 44,354 39,842 44,551 41,678
NET INCOME BEFORE INCOME TAXES 18,309 12,325 14,372 5,284 4,584
Provision for income taxes 5,669 3,537 4,464 932 798
NET INCOME $ 12,640 $ 8,788 $ 9,908 $ 4,352 $ 3,786
BASIC EARNINGS PER SHARE $ 0.72 $ 0.52 $ 0.61 $ 0.27 $ 0.23
DILUTED EARNINGS PER SHARE $ 0.72 $ 0.52 $ 0.60 $ 0.27 $ 0.23
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) 2014 2014 2014 2014 2013
(in thousands, except per share data)
INTEREST INCOME
Loans $ 164,082 $ 118,834 $ 78,753 $ 40,131 $ 128,171
Federal funds sold 27 16 3 1 19
Investment securities 19,357 14,032 9,315 4,549 13,300
Mortgage loans held for sale 695 506 237 69 467
Assets held in trading accounts 17 13 10 5 29
Interest bearing balances due from banks 857 691 558 279 1,127
TOTAL INTEREST INCOME 185,035 134,092 88,876 45,034 143,113
INTEREST EXPENSE
Time deposits 6,022 4,552 3,091 1,577 5,938
Other deposits 3,057 2,185 1,414 692 2,461
Federal funds purchased and securities sold under agreements to repurchase 269 194 84 53 219
Other borrowings 3,986 2,995 1,998 1,010 3,001
Subordinated debentures 637 477 317 157 644
TOTAL INTEREST EXPENSE 13,971 10,403 6,904 3,489 12,263
NET INTEREST INCOME 171,064 123,689 81,972 41,545 130,850
Provision for loan losses 7,245 3,638 2,510 908 4,118
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 163,819 120,051 79,462 40,637 126,732
NON-INTEREST INCOME
Trust income 7,111 4,929 3,091 1,537 5,842
Service charges on deposit accounts 25,650 19,098 12,860 6,068 18,815
Other service charges and fees 3,574 2,490 1,684 823 2,997
Mortgage lending income 5,342 3,885 2,074 810 4,592
Investment banking income 1,070 620 336 181 1,811
Credit card fees 22,866 17,213 11,444 5,643 17,833
Bank owned life insurance income 1,843 1,117 705 330 1,319
Gain on sale of securities, net 8 20 38 -- (151)
Net (loss) gain on assets covered by FDIC loss share agreements (20,316) (17,303) (13,639) (7,370) (16,188)
Other income 15,044 8,619 5,984 1,176 3,746
TOTAL NON-INTEREST INCOME 62,192 40,688 24,577 9,198 40,616
NON-INTEREST EXPENSE
Salaries and employee benefits 89,210 64,338 43,447 22,464 74,078
Occupancy expense, net 12,833 10,338 7,155 3,890 10,034
Furniture and equipment expense 9,325 6,592 4,229 2,014 7,623
Other real estate and foreclosure expense 4,507 3,112 1,248 873 1,337
Deposit insurance 3,354 2,630 1,753 668 2,482
Merger related costs 7,470 6,255 2,627 1,272 6,376
Other operating expenses 49,022 35,492 23,923 13,370 32,882
TOTAL NON-INTEREST EXPENSE 175,721 128,757 84,382 44,551 134,812
NET INCOME BEFORE INCOME TAXES 50,290 31,982 19,657 5,284 32,536
Provision for income taxes 14,602 8,933 5,396 932 9,305
NET INCOME $ 35,688 $ 23,049 $ 14,261 $ 4,352 $ 23,231
BASIC EARNINGS PER SHARE $ 2.11 $ 1.40 $ 0.88 $ 0.27 $ 1.42
DILUTED EARNINGS PER SHARE $ 2.11 $ 1.39 $ 0.87 $ 0.27 $ 1.42
Simmons First National Corporation SFNC
Consolidated Risk-Based Capital
For the Quarters Ended Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
(Unaudited) 2014 2014 2014 2014 2013
($ in thousands)
Tier 1 capital
Stockholders' equity $ 494,319 $ 482,642 $ 414,135 $ 406,672 $ 403,832
Trust preferred securities, net allowable 20,000 20,000 20,000 20,000 20,000
Disallowed intangible assets, net of deferred tax (112,545) (109,698) (74,003) (74,477) (75,501)
Unrealized loss on AFS securities 1,336 1,952 1,409 2,119 3,002
Total Tier 1 capital 403,110 394,896 361,541 354,314 351,333
Tier 2 capital
Qualifying unrealized gain on AFS equity securities 2 -- 47 42 45
Qualifying allowance for loan losses and reserve for unfunded commitments 32,073 29,167 29,621 28,846 28,967
Total Tier 2 capital 32,075 29,167 29,668 28,888 29,012
Total risk-based capital $ 435,185 $ 424,063 $ 391,209 $ 383,202 $ 380,345
Risk weighted assets $ 3,002,270 $ 3,063,801 $ 2,652,474 $ 2,651,970 $ 2,697,630
Adjusted average assets for leverage ratio $ 4,593,924 $ 4,331,488 $ 4,299,379 $ 4,315,279 $ 3,811,793
Ratios at end of quarter
Equity to assets 10.65% 10.29% 9.57% 9.25% 9.21%
Tangible common equity to tangible assets 8.06% 7.78% 7.59% 7.29% 7.23%
Tier 1 leverage ratio 8.77% 9.12% 8.41% 8.21% 9.22%
Tier 1 risk-based capital ratio 13.43% 12.89% 13.63% 13.36% 13.02%
Total risk-based capital ratio 14.50% 13.84% 14.75% 14.45% 14.10%
Simmons First National Corporation SFNC
Consolidated Loans and Investments
For the Quarters Ended Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
(Unaudited) 2014 2014 2014 2014 2013
(in thousands)
Legacy Loan Portfolio - End of Period (1)
Consumer
Credit cards $ 185,380 $ 175,822 $ 176,239 $ 172,609 $ 184,935
Student loans -- -- 398 24,415 25,906
Other consumer 103,402 105,508 105,998 104,185 98,851
Total consumer 288,782 281,330 282,635 301,209 309,692
Real Estate
Construction 181,968 163,364 163,412 168,147 146,458
Single-family residential 455,563 436,925 417,187 402,588 392,285
Other commercial 714,797 681,848 653,734 644,772 626,333
Total real estate 1,352,328 1,282,137 1,234,333 1,215,507 1,165,076
Commercial
Commercial 291,820 249,186 233,510 186,303 164,329
Agricultural 115,658 145,157 111,567 72,239 98,886
Total commercial 407,478 394,343 345,077 258,542 263,215
Other 5,133 5,568 6,796 4,351 4,655
Total Loans $ 2,053,721 $ 1,963,378 $ 1,868,841 $ 1,779,609 $ 1,742,638
(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 $ 418,914 $ 455,827 $ 449,201 $ 425,616 $ 395,198
Mortgage-backed securities 29,743 30,954 32,204 33,323 34,425
State and political subdivisions 328,310 335,329 317,938 317,056 315,445
Other securities 620 620 620 620 620
Total held-to-maturity 777,587 822,730 799,963 776,615 745,688
Available-for-Sale
U.S. Treasury $ 3,992 $ 3,991 $ 3,994 $ 3,981 $ 3,985
U.S. Government agencies 272,816 280,321 238,411 231,949 178,217
Mortgage-backed securities 1,572 32 1,958 1,833 1,891
State and political subdivisions 6,540 8,903 6,920 7,367 7,861
FHLB stock 5,126 5,623 4,966 5,168 6,002
Other securities 15,237 18,603 14,087 14,676 14,321
Total available-for-sale 305,283 317,473 270,336 264,974 212,277
Total investment securities $ 1,082,870 $ 1,140,203 $ 1,070,299 $ 1,041,589 $ 957,965
Fair value - HTM investment securities $ 780,534 $ 823,446 $ 802,597 $ 771,114 $ 731,705
Investment Securities - QTD Average
Taxable securities $ 782,062 $ 781,685 $ 722,084 $ 649,329 $ 583,389
Tax exempt securities 342,886 329,327 326,010 323,000 294,639
Total investment securities - QTD average $ 1,124,948 $ 1,111,012 $ 1,048,094 $ 972,329 $ 878,028
Simmons First National Corporation SFNC
Consolidated Loans and Credit Coverage
For the Quarters Ended Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
(Unaudited) 2014 2014 2014 2014 2013
($ in thousands)
LOANS
Legacy loans $ 2,053,721 $ 1,963,378 $ 1,868,841 $ 1,779,609 $ 1,742,638
Allowance for loan losses (legacy loans) (29,028) (27,076) (27,530) (26,983) (27,442)
Legacy loans (net of allowance) 2,024,693 1,936,302 1,841,311 1,752,626 1,715,196
Loans acquired, not covered by FDIC loss share 621,020 733,914 445,515 495,915 566,895
Credit discount (45,040) (57,858) (46,548) (45,626) (51,251)
Loans acquired, not covered (net of discount) 575,980 676,056 398,967 450,289 515,644
Loans acquired, covered by FDIC loss share 140,038 154,183 163,775 188,755 209,459
Credit discount (32,151) (36,025) (42,251) (50,876) (62,806)
Allowance for loan losses (acquired covered loans) (954) -- -- -- --
Loans acquired, covered (net of discount and allowance) 106,933 118,158 121,524 137,879 146,653
Net loans $ 2,707,606 $ 2,730,516 $ 2,361,802 $ 2,340,794 $ 2,377,493
Loan Coverage Ratios
Allowance for loan losses to legacy loans 1.41% 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 7.25% 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 23.64% 23.37% 25.80% 26.95% 29.98%
Total allowance and credit coverage 3.81% 4.24% 4.69% 5.01% 5.62%
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) 2014 2014 2014 2014 2013
($ in thousands)
Allowance for Loan Losses (Legacy Loans)
Balance, beginning of quarter $ 27,076 $ 27,530 $ 26,983 $ 27,442 $ 27,533
Loans charged off
Credit cards 859 788 725 816 841
Other consumer 781 648 426 148 428
Real estate 200 534 1,144 1,035 255
Commercial 310 474 186 82 133
Total loans charged off 2,150 2,444 2,481 2,081 1,657
Recoveries of loans previously charged off
Credit cards 220 190 215 271 226
Other consumer 94 122 133 121 166
Real estate 56 379 1,062 308 78
Commercial 125 171 16 14 12
Total recoveries 495 862 1,426 714 482
Net loans charged off 1,655 1,582 1,055 1,367 1,175
Provision for loan losses 3,607 1,128 1,602 908 1,084
Balance, end of quarter $ 29,028 $ 27,076 $ 27,530 $ 26,983 $ 27,442
Non-performing assets (1) (2)
Non-performing loans
Nonaccrual loans
Real estate $ 10,152 $ 9,374 $ 8,166 $ 8,075 $ 4,799
Commercial 1,481 1,174 1,110 1,054 495
Consumer 405 664 877 883 967
Total nonaccrual loans 12,038 11,212 10,153 10,012 6,261
Loans past due 90 days or more
Government guaranteed student loans -- -- 323 1,965 2,264
Other loans 961 713 757 517 687
Total loans past due 90 days or more 961 713 1,080 2,482 2,951
Total non-performing loans 12,999 11,925 11,233 12,494 9,212
Other non-performing assets
Foreclosed assets held for sale 11,803 13,167 16,745 17,357 19,361
Acquired foreclosed assets held for sale, not covered by FDIC loss share agreements 33,053 37,603 36,597 40,119 45,459
Other non-performing assets 97 72 80 60 75
Total other non-performing assets 44,953 50,842 53,422 57,536 64,895
Total non-performing assets $ 57,952 $ 62,767 $ 64,655 $ 70,030 $ 74,107
Performing TDRs (troubled debt restructurings) $ 2,233 $ 2,234 $ 2,776 $ 8,655 $ 9,497
Ratios (1) (2)
Allowance for loan losses to total loans 1.41% 1.38% 1.47% 1.52% 1.57%
Allowance for loan losses to non-performing loans 223% 227% 245% 216% 298%
Non-performing loans to total loans 0.63% 0.61% 0.60% 0.70% 0.53%
Non-performing assets (including performing TDRs) to total assets 1.30% 1.39% 1.56% 1.79% 1.91%
Non-performing assets to total assets 1.25% 1.34% 1.49% 1.59% 1.69%
Non-performing assets to total assets
(excluding Gov't guaranteed student loans) 1.25% 1.34% 1.49% 1.55% 1.64%
Annualized net charge offs to total loans 0.33% 0.33% 0.23% 0.32% 0.27%
Annualized net credit card charge offs to total credit card loans 1.41% 1.31% 1.14% 1.20% 1.31%
Annualized net charge offs to total loans
(excluding credit cards) 0.22% 0.22% 0.13% 0.22% 0.14%
Past due loans >30 days (excluding nonaccrual) 0.48% 0.33% 0.34% 0.61% 0.57%
Past due loans >30 days (excluding nonaccrual)
(excluding Gov't guaranteed student loans) 0.48% 0.33% 0.32% 0.45% 0.41%
(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 Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
(Unaudited) 2014 2014 2014 2014 2013
ASSETS
Earning Assets
Interest bearing balances due from banks 0.22% 0.18% 0.24% 0.22% 0.23%
Investment securities 2.49% 2.29% 2.47% 2.60% 2.44%
Mortgage loans held for sale 4.33% 4.28% 4.40% 4.20% 4.29%
Assets held in trading accounts 0.23% 0.17% 0.29% 0.28% 0.27%
Loans, including acquired loans 6.55% 6.32% 6.55% 6.88% 7.16%
Total interest earning assets 4.98% 4.71% 4.69% 4.91% 5.08%
LIABILITIES
Interest bearing liabilities
Interest bearing transaction and savings accounts 0.17% 0.16% 0.16% 0.15% 0.16%
Time deposits 0.58% 0.57% 0.58% 0.58% 0.63%
Total interest bearing deposits 0.31% 0.31% 0.31% 0.31% 0.33%
Federal funds purchased and securities sold under agreement to repurchase 0.21% 0.20% 0.12% 0.19% 0.22%
Other borrowings 3.23% 3.36% 3.41% 3.48% 3.39%
Subordinated debentures 3.08% 3.08% 3.11% 3.09% 3.10%
Total interest bearing liabilities 0.43% 0.44% 0.44% 0.44% 0.47%
NET INTEREST MARGIN/SPREAD
Net interest spread 4.55% 4.27% 4.25% 4.47% 4.61%
Net interest margin - quarter-to-date 4.65% 4.36% 4.34% 4.54% 4.70%
Net interest margin - year-to-date 4.47% 4.41% 4.44% 4.54% 4.21%
Simmons First National Corporation SFNC
Consolidated - Selected Financial Data
For the Quarters Ended Dec 31 Sep 30 Jun 30 Mar 31 Dec 31
(Unaudited) 2014 2014 2014 2014 2013
($ in thousands, except share data)
QUARTER-TO-DATE
Diluted earnings per share $ 0.72 $ 0.52 $ 0.60 $ 0.27 $ 0.23
Core earnings (excludes nonrecurring items) (non-GAAP) 11,387 10,684 9,153 7,482 7,749
Diluted core earnings per share (non-GAAP) 0.64 0.63 0.56 0.46 0.48
Cash dividends declared per common share 0.22 0.22 0.22 0.22 0.21
Cash dividends declared - amount 3,965 3,954 3,589 3,575 3,403
Return on average stockholders' equity 10.12% 7.88% 9.60% 4.31% 3.67%
Return on tangible equity 14.00% 10.62% 12.72% 5.94% 4.51%
Return on average assets 1.07% 0.79% 0.91% 0.40% 0.39%
Net interest margin (FTE) 4.65% 4.36% 4.34% 4.54% 4.70%
FTE adjustment - investments 1,744 1,695 1,687 1,682 1,442
FTE adjustment - loans 7 7 8 10 17
Amortization of intangibles 565 454 452 453 192
Amortization of intangibles, net of taxes 343 276 275 275 117
Average shares outstanding 18,031,669 16,873,504 16,318,003 16,270,149 16,210,480
Average earning assets 4,195,250 3,956,032 3,892,202 3,861,632 3,466,530
Average interest bearing liabilities 3,274,902 3,129,062 3,098,540 3,204,356 2,774,880
YEAR-TO-DATE
Diluted earnings per share $ 2.11 $ 1.39 $ 0.87 $ 0.27 $ 1.42
Core earnings (excludes nonrecurring items) (non-GAAP) 38,706 27,319 16,635 7,482 27,612
Diluted core earnings per share (non-GAAP) 2.29 1.65 1.02 0.46 1.69
Cash dividends declared per common share 0.88 0.66 0.44 0.22 0.84
Cash dividends declared - amount 15,083 11,118 7,164 3,575 13,707
Return on average stockholders' equity 8.11% 7.30% 6.95% 4.31% 5.33%
Return on tangible equity 10.99% 9.82% 9.33% 5.94% 6.36%
Return on average assets 0.80% 0.70% 0.65% 0.40% 0.64%
Net interest margin (FTE) 4.47% 4.41% 4.44% 4.54% 4.21%
FTE adjustment - investments 6,808 5,064 3,369 1,682 4,900
FTE adjustment - loans 32 25 18 10 51
Amortization of intangibles 1,979 1,359 905 453 601
Amortization of intangibles, net of taxes 1,203 826 550 275 365
Average shares outstanding 16,878,766 16,489,429 16,294,208 16,270,149 16,339,335
Average diluted shares outstanding 16,922,026 16,532,689 16,336,901 16,309,868 16,352,167
Average earning assets 3,975,903 3,903,290 3,876,918 3,861,632 3,224,094
Average interest bearing liabilities 3,176,716 3,143,984 3,151,446 3,204,356 2,551,653
END OF PERIOD
Book value per share $ 27.38 $ 26.82 $ 25.36 $ 24.93 $ 24.89
Tangible book value per share 20.15 19.72 19.69 19.23 19.10
Shares outstanding 18,052,488 17,992,261 16,331,341 16,311,263 16,226,256
Full-time equivalent employees 1,338 1,397 1,281 1,321 1,343
Total number of ATM's 124 129 120 120 157
Total number of financial centers 109 113 104 104 131
Parent company only - investment in subsidiaries 522,841 516,801 449,591 453,067 452,688
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) 2014 2014 2014 2014 2013
(in thousands, except per share data)
QUARTER-TO-DATE
Net Income $ 12,640 $ 8,788 $ 9,908 $ 4,352 $ 3,786
Nonrecurring items
Gain on sale of merchant services -- -- (1,000) -- --
Merger related costs 1,218 3,628 1,354 1,272 6,413
Change-in-control payments 885 -- -- -- --
Branch right sizing (4,221) (705) (2,011) 3,878 108
Charter consolidation costs 42 196 414 -- --
Tax effect (1) 824 (1,223) 488 (2,020) (2,558)
Net nonrecurring items (1,252) 1,896 (755) 3,130 3,963
Core earnings (non-GAAP) $ 11,388 $ 10,684 $ 9,153 $ 7,482 $ 7,749
Diluted earnings per share $ 0.72 $ 0.52 $ 0.60 $ 0.27 $ 0.23
Nonrecurring items
Gain on sale of merchant services -- -- (0.06) -- --
Merger related costs 0.07 0.21 0.08 0.08 0.40
Change-in-control payments 0.05 -- -- -- --
Branch right sizing (0.24) (0.04) (0.12) 0.24 0.01
Charter consolidation costs -- 0.01 0.03 -- --
Tax effect (1) 0.04 (0.07) 0.03 (0.13) (0.16)
Net nonrecurring items (0.08) 0.11 (0.04) 0.19 0.25
Diluted core earnings per share (non-GAAP) $ 0.64 $ 0.63 $ 0.56 $ 0.46 $ 0.48
YEAR-TO-DATE
Net Income $ 35,688 $ 23,049 $ 14,261 $ 4,352 $ 23,231
Nonrecurring items
Gain on sale of merchant services (1,000) (1,000) (1,000) -- --
Merger related costs 7,472 6,254 2,626 1,272 6,376
Change-in-control payments 885 -- -- -- --
Loss on sale of securities -- -- -- -- 193
Branch right sizing (3,059) 1,162 1,867 3,878 641
Charter consolidation costs 652 610 414 -- --
Tax effect (1) (1,931) (2,745) (1,533) (2,020) (2,829)
Net nonrecurring items 3,019 4,281 2,374 3,130 4,381
Core earnings (non-GAAP) $ 38,707 $ 27,330 $ 16,635 $ 7,482 $ 27,612
Diluted earnings per share $ 2.11 $ 1.39 $ 0.87 $ 0.27 $ 1.42
Nonrecurring items
Gain on sale of merchant services (0.06) (0.06) (0.06) -- --
Merger related costs 0.44 0.37 0.16 0.08 0.39
Change-in-control payments 0.05 -- -- -- --
Loss on sale of securities -- -- -- -- 0.01
Branch right sizing (0.16) 0.08 0.12 0.24 0.04
Charter consolidation costs 0.04 0.04 0.03 -- --
Tax effect (1) (0.13) (0.17) (0.10) (0.13) (0.17)
Net nonrecurring items 0.18 0.26 0.15 0.19 0.27
Diluted core earnings per share (non-GAAP) $ 2.29 $ 1.65 $ 1.02 $ 0.46 $ 1.69
(1) Effective tax rate of 39.225%

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

Source:Simmons First National Corporation