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Simmons First Announces 139 Percent Increase in Core Earnings

PINE BLUFF, Ark., Oct. 22, 2015 (GLOBE NEWSWIRE) -- Simmons First National Corporation (NASDAQ:SFNC) today announced record core earnings of $25.6 million for the third quarter of 2015, an increase of $14.9 million, or 139 percent, compared with the same quarter last year. Diluted core earnings per share were $0.85, an increase of $0.22, or 34.9 percent. Including the non-core items, net income was $21.6 million for the third quarter of 2015, an increase of $12.8 million, or 146 percent, compared with the same quarter last year. Diluted earnings per share were $0.72, an increase of $0.20, or 38.5 percent.

Year-to-date core earnings were $63.7 million, an increase of $36.4 million, or 133 percent, compared with the same period of 2014. Year-to-date diluted core earnings per share were $2.32, an increase of $0.67, or 40.6 percent. Year-to-date net income was $50.3 million, or $1.83 diluted earnings per share.

"We continue to make good progress with our efficiency initiatives, both in revenue enhancement and in expense control," said George A. Makris, Jr., chairman and CEO. "Our core efficiency ratio was 57.5 percent for the quarter and our core ROA was 1.33 percent."

Loans

Total loans, including those acquired, were $4.9 billion at Sept. 30, 2015, an increase of $2.1 billion, or 76.0 percent, compared with the same period in 2014. Legacy loans (all loans excluding acquired loans) grew $876 million, or 44.6 percent. Acquired loans increased by $1.2 billion, net of discounts.

Deposits

At Sept. 30, 2015, total deposits were $6.1 billion, an increase of $2.2 billion, or 55.8 percent, compared with the same period in 2014. Total non-time deposits were $4.7 billion, or 78 percent of total deposits.

Net Interest Income

The company's net interest income for the third quarter of 2015 was $78.7 million, an increase of $36.9 million, or 88.4 percent, from the same period of 2014. This increase was driven by growth in the legacy loan portfolio and earning assets acquired through the Delta Trust, Community First and Liberty transactions. Net interest margin was 4.82 percent for the quarter ended Sept. 30, 2015, a 46 basis-point increase from the same quarter of 2014.

Included in interest income was the yield accretion recognized on acquired loans of $14.9 million and $8.5 million for the third quarter of 2015 and 2014, respectively. The company's core net interest margin, excluding the accretion, was 3.93 percent for the third quarter of 2015, a 42 basis-point increase from the same quarter of 2014.

Non-Interest Income

Non-interest income for the third quarter was $23.5 million, an increase of $7.5 million compared with the third quarter of 2014. The increase in non-interest income was primarily due to additional trust income, service charge and fee income, mortgage lending and investment banking income resulting from the acquisitions, gains on sale of other real estate and gain on the sale of our Salina, Kan., banking operations. Losses on FDIC-covered assets increased $5.3 million primarily due to a $7.5 million charge for termination of the loss-share agreements, partially offset by a $2.1 million decrease in indemnification asset amortization.

Non-Interest Expense

Non-interest expense for the third quarter of 2015 was $67.9 million, an increase of $23.6 million compared with the same period in 2014. Included in the quarter were $1.2 million of merger-related and branch right-sizing expenses. The increase in non-interest expense was primarily due to incremental operating expenses of the acquired Delta Trust, Community First and Liberty franchises, somewhat offset by the company's ongoing efficiency initiatives.

Asset Quality

During the third quarter, the company entered into an agreement with the FDIC to terminate all of its remaining loss-sharing agreements. As a result, all FDIC-acquired assets are now classified as non-covered. All acquired loans are recorded at their discounted net present value; therefore, they are excluded from the computations of the asset quality ratios for the legacy loan portfolio, except for their inclusion in total assets.

At Sept. 30, 2015, the allowance for loan losses for legacy loans was $30.4 million and $1.0 million for acquired loans. The loan discount credit mark was $70.4 million, for a total of $101.8 million of coverage. This equates to a total coverage ratio of 2.1 percent of gross loans. The ratio of credit mark and related allowance to acquired loans was 3.4 percent.

The company's allowance for loan losses on legacy loans at Sept. 30, 2015, was 1.07 percent of total loans and 181 percent of non-performing loans. In the legacy portfolio, non-performing loans as a percent of total loans were 0.59 percent. Through the third quarter of 2015, the year-to-date annualized net charge-off ratio, excluding credit cards, was 0.12 percent, and the year-to-date annualized credit card charge-off ratio was 1.30 percent.

Capital

At Sept. 30, 2015, common stockholders' equity was $1.0 billion, book value per share was $33.89 and tangible book value per share was $21.89. The company's ratio of stockholders' equity to total assets was 13.8 percent and its ratio of tangible common equity to tangible assets was 9.1 percent.

Simmons First National Corporation

Simmons First National Corporation is an Arkansas-based financial holding company with total assets of $7.6 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 p.m. CDT on Thursday, Oct. 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 48225101. 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 news 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 news 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) 2015 2015 2015 2014 2014
($ in thousands)
ASSETS
Cash and non-interest bearing balances due from banks $ 106,678 $ 69,770 $ 83,424 $ 54,347 $ 73,554
Interest bearing balances due from banks 284,645 173,130 423,986 281,562 210,742
Federal funds sold 9,675 49,570 178,418 -- 10,000
Cash and cash equivalents 400,998 292,470 685,828 335,909 294,296
Interest bearing balances due from banks 16,504 24,189 25,000 -- --
Investment securities - held-to-maturity 776,294 861,596 902,423 777,587 822,730
Investment securities - available-for-sale 703,347 747,701 707,383 305,283 317,473
Mortgage loans held for sale 15,556 48,094 25,513 21,265 22,003
Assets held in trading accounts 6,292 6,481 6,528 6,987 6,819
Loans:
Legacy loans 2,839,278 2,611,229 2,115,380 2,053,721 1,963,378
Allowance for loan losses (30,380) (30,567) (29,183) (29,028) (27,076)
Loans acquired, not covered by FDIC loss share
(net of discount and allowance) 2,013,816 2,108,306 2,418,440 575,980 676,056
Loans acquired, covered by FDIC loss share
(net of discount and allowance) -- 93,121 102,468 106,933 118,158
Net loans 4,822,714 4,782,089 4,607,105 2,707,606 2,730,516
FDIC indemnification asset -- 13,020 15,965 22,663 25,694
Premises and equipment 190,182 191,335 198,106 122,966 115,639
Premises held for sale 923 6,587 -- 6,126 15,856
Foreclosed assets not covered by FDIC loss share 48,073 42,666 50,723 44,856 50,770
Foreclosed assets covered by FDIC loss share -- 12,833 12,010 11,793 15,212
Interest receivable 26,873 24,129 24,719 16,774 18,006
Bank owned life insurance 118,922 118,073 117,296 77,592 75,357
Goodwill 314,282 314,282 314,282 108,095 108,095
Other intangible assets 44,904 46,605 47,960 22,526 22,988
Other assets 73,830 82,208 74,959 55,326 49,768
Total assets $ 7,559,694 $ 7,614,358 $ 7,815,800 $ 4,643,354 $ 4,691,222
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing transaction accounts $ 1,212,724 $ 1,141,285 $ 1,123,966 $ 889,260 $ 884,064
Interest bearing transaction accounts and savings deposits 3,521,840 3,581,049 3,627,870 2,006,271 1,984,422
Time deposits less than $100,000 673,651 719,606 756,978 530,890 565,957
Time deposits greater than $100,000 681,585 728,082 765,894 434,297 474,472
Total deposits 6,089,800 6,170,022 6,274,708 3,860,718 3,908,915
Federal funds purchased and securities sold under agreements to repurchase 110,437 111,792 111,484 110,586 112,977
Other borrowings 173,426 171,321 284,386 114,682 123,396
Subordinated debentures 61,906 61,794 61,644 20,620 20,620
Accrued interest and other liabilities 78,684 74,324 69,841 42,429 41,309
Total liabilities 6,514,253 6,589,253 6,802,063 4,149,035 4,207,217
Stockholders' equity:
Preferred stock 30,852 30,852 30,852 -- --
Common stock 299 299 299 181 180
Surplus 642,400 640,895 639,493 156,568 155,592
Undivided profits 369,172 354,459 341,238 338,906 330,185
Accumulated other comprehensive income (loss):
Unrealized (depreciation) appreciation on AFS securities 2,718 (1,400) 1,855 (1,336) (1,952)
Total stockholders' equity 1,045,441 1,025,105 1,013,737 494,319 484,005
Total liabilities and stockholders' equity $ 7,559,694 $ 7,614,358 $ 7,815,800 $ 4,643,354 $ 4,691,222
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) 2015 2015 2015 2014 2014
($ in thousands)
ASSETS
Cash and non-interest bearing balances due from banks $ 94,695 $ 69,137 $ 59,711 $ 54,485 $ 50,980
Interest bearing balances due from banks 206,467 308,756 371,195 299,054 288,258
Federal funds sold 19,086 75,922 56,846 6,486 6,794
Cash and cash equivalents 320,248 453,815 487,752 360,025 346,032
Interest bearing balances due from banks 20,251 26,817 8,611 -- --
Investment securities - held-to-maturity 728,437 922,877 915,405 806,069 810,085
Investment securities - available-for-sale 838,596 732,949 370,102 318,879 300,927
Mortgage loans held for sale 26,379 37,656 14,655 17,241 24,942
Assets held in trading accounts 6,401 6,592 6,782 6,848 6,841
Loans:
Legacy loans 2,725,254 2,363,305 2,084,551 2,008,550 1,917,155
Allowance for loan losses (31,709) (31,275) (30,072) (28,474) (27,470)
Loans acquired, not covered by FDIC loss share
(net of discount and allowance) 2,020,236 2,228,841 1,197,601 620,505 481,658
Loans acquired, covered by FDIC loss share
(net of discount and allowance) 89,578 97,795 104,701 111,618 119,372
Net loans 4,803,359 4,658,666 3,356,781 2,712,199 2,490,715
FDIC indemnification asset 10,838 15,448 21,515 24,457 28,311
Premises and equipment 191,107 200,875 150,564 117,018 115,577
Premises held for sale 5,775 6,131 6,126 6,794 12,521
Foreclosed assets not covered by FDIC loss share 40,273 42,994 44,059 48,745 51,097
Foreclosed assets covered by FDIC loss share 12,345 12,313 11,902 13,964 16,073
Interest receivable 24,403 23,260 19,181 17,738 15,743
Bank owned life insurance 118,489 117,662 91,760 76,578 63,798
Goodwill 314,282 314,060 175,901 109,837 88,590
Other intangible assets 45,712 47,302 31,102 17,748 15,321
Other assets 100,872 76,275 58,536 50,566 52,234
Total assets $ 7,607,767 $ 7,695,692 $ 5,770,734 $ 4,704,706 $ 4,438,807
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing transaction accounts $ 1,121,078 $ 1,088,474 $ 946,979 $ 895,470 $ 828,340
Interest bearing transaction accounts and savings deposits 3,600,930 3,621,060 2,601,046 2,010,827 1,869,095
Time deposits less than $100,000 694,872 739,748 573,867 545,986 555,837
Time deposits greater than $100,000 703,056 748,460 580,625 458,117 457,489
Total deposits 6,119,936 6,197,742 4,702,517 3,910,400 3,710,761
Federal funds purchased and securities sold under agreements to repurchase 109,311 116,258 121,568 117,661 108,357
Other borrowings 197,832 179,080 183,953 121,691 117,664
Subordinated debentures 61,851 62,981 35,686 20,620 20,620
Accrued interest and other liabilities 74,696 70,312 43,825 38,869 38,950
Total liabilities 6,563,626 6,626,373 5,087,549 4,209,241 3,996,352
Stockholders' equity:
Preferred stock 30,852 30,885 10,970 -- --
Common stock 299 299 223 180 169
Surplus 641,738 640,172 328,830 155,672 111,551
Undivided profits 371,291 396,609 343,973 341,042 332,184
Accumulated other comprehensive income (loss):
Unrealized appreciation (depreciation) on AFS securities (39) 1,354 (811) (1,429) (1,449)
Total stockholders' equity 1,044,141 1,069,319 683,185 495,465 442,455
Total liabilities and stockholders' equity $ 7,607,767 $ 7,695,692 $ 5,770,734 $ 4,704,706 $ 4,438,807
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) 2015 2015 2015 2014 2014
($ in thousands, except per share data)
INTEREST INCOME
Loans $ 76,432 $ 70,438 $ 50,986 $ 45,248 $ 40,082
Federal funds sold 15 73 29 13 12
Investment securities 8,335 8,050 5,879 5,325 4,717
Mortgage loans held for sale 291 375 148 188 269
Assets held in trading accounts 4 4 3 4 3
Interest bearing balances due from banks 122 229 210 167 132
TOTAL INTEREST INCOME 85,199 79,169 57,255 50,945 45,215
INTEREST EXPENSE
Time deposits 1,936 2,064 1,596 1,470 1,461
Other deposits 2,222 2,131 1,348 872 771
Federal funds purchased and securities sold under agreements to repurchase 55 57 64 61 55
Other borrowings 1,812 1,151 1,051 992 996
Subordinated debentures 498 559 234 160 160
TOTAL INTEREST EXPENSE 6,523 5,962 4,293 3,555 3,443
NET INTEREST INCOME 78,676 73,207 52,962 47,390 41,772
Provision for loan losses 1,615 3,006 1,171 3,607 1,128
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 77,061 70,201 51,791 43,783 40,644
NON-INTEREST INCOME
Trust income 2,215 2,070 2,251 2,182 1,838
Service charges on deposit accounts 8,488 8,031 6,363 6,552 6,238
Other service charges and fees 3,089 3,130 1,827 1,083 808
Mortgage lending income 3,446 3,449 2,262 1,457 1,812
Investment banking income 663 593 894 451 284
Debit and credit card fees 6,879 6,486 5,648 5,653 5,769
Bank owned life insurance income 748 746 572 727 411
Gain on sale of securities, net 40 -- (38) (12) (18)
Net (loss) gain on assets covered by FDIC loss-share agreements (9,085) (3,056) (2,671) (3,013) (3,744)
Other income 7,006 3,863 1,390 6,424 2,637
TOTAL NON-INTEREST INCOME 23,489 25,312 18,498 21,504 16,035
NON-INTEREST EXPENSE
Salaries and employee benefits 37,417 35,475 26,771 25,126 20,892
Occupancy expense, net 4,812 5,051 3,557 2,494 3,204
Furniture and equipment expense 4,202 3,241 3,268 2,732 2,363
Other real estate and foreclosure expense 2,297 1,017 381 1,395 1,864
Deposit insurance 1,013 1,096 870 724 877
Merger-related costs 857 1,247 10,419 1,214 3,628
Other operating expenses 17,314 18,041 12,106 13,294 11,526
TOTAL NON-INTEREST EXPENSE 67,912 65,168 57,372 46,979 44,354
NET INCOME BEFORE INCOME TAXES 32,638 30,345 12,917 18,308 12,325
Provision for income taxes 10,963 10,250 4,182 5,669 3,537
NET INCOME 21,675 20,095 8,735 12,639 8,788
Preferred stock dividends 77 77 26 -- --
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS $ 21,598 $ 20,018 $ 8,709 $ 12,639 $ 8,788
BASIC EARNINGS PER SHARE $ 0.72 $ 0.67 $ 0.39 $ 0.72 $ 0.52
DILUTED EARNINGS PER SHARE $ 0.72 $ 0.67 $ 0.39 $ 0.72 $ 0.52
Simmons First National Corporation SFNC
Consolidated Risk-Based Capital
For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
(Unaudited) 2015 2015 2015 2014 2014
($ in thousands)
Tier 1 capital
Stockholders' equity $ 1,045,441 $ 1,025,105 $ 1,013,737 $ 494,319 $ 482,642
Trust preferred securities, net allowable 61,906 61,794 61,410 20,000 20,000
Disallowed intangible assets, net of deferred tax (314,735) (342,590) (344,140) (112,545) (109,698)
Unrealized (gain) loss on AFS securities (2,718) 1,400 (1,855) 1,336 1,952
Other -- (10,297) (4,789) -- --
Total Tier 1 capital 789,894 735,412 724,363 403,110 394,896
Tier 2 capital
Qualifying unrealized gain on AFS equity securities -- -- -- 2 --
Qualifying allowance for loan losses and reserve for unfunded commitments 34,097 34,284 32,600 32,073 29,167
Total Tier 2 capital 34,097 34,284 32,600 32,075 29,167
Total risk-based capital $ 823,991 $ 769,696 $ 756,963 $ 435,185 $ 424,063
Common equity
Tier 1 capital $ 789,894 $ 735,412 $ 724,363 -- --
Less: Non-cumulative preferred stock (30,852) (30,852) (30,852) -- --
Less: Trust preferred securities (61,906) (61,794) (61,410) -- --
Total common equity $ 697,136 $ 642,766 $ 632,101 -- --
Risk weighted assets $ 4,986,641 $ 4,714,852 $ 4,659,065 $ 3,002,270 $ 3,063,801
Adjusted average assets for leverage ratio $ 7,293,113 $ 7,350,900 $ 5,428,706 $ 4,593,924 $ 4,331,488
Ratios at end of quarter
Equity to assets 13.83% 13.46% 12.97% 10.65% 10.29%
Tangible common equity to tangible assets 9.10% 8.73% 8.32% 8.06% 7.78%
Common equity Tier 1 ratio (CET1) 13.98% 13.63% 13.57% -- --
Tier 1 leverage ratio 10.83% 10.00% 13.34% 8.77% 9.12%
Tier 1 risk-based capital ratio 15.84% 15.60% 15.55% 13.43% 12.89%
Total risk-based capital ratio 16.52% 16.32% 16.25% 14.50% 13.84%
Simmons First National Corporation SFNC
Consolidated Loans and Investments
For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
(Unaudited) 2015 2015 2015 2014 2014
($ in thousands)
Legacy Loan Portfolio - End of Period (1)
Consumer
Credit cards $ 171,701 $ 174,074 $ 171,413 $ 185,380 $ 175,822
Student loans -- -- -- -- --
Other consumer 182,472 160,828 107,486 103,402 105,508
Total consumer 354,173 334,902 278,899 288,782 281,330
Real Estate
Construction 253,761 199,707 178,929 181,968 163,364
Single-family residential 623,089 662,954 507,351 455,563 436,925
Other commercial 1,037,559 878,109 716,021 714,797 681,848
Total real estate 1,914,409 1,740,770 1,402,301 1,352,328 1,282,137
Commercial
Commercial 394,422 388,869 324,815 291,820 249,186
Agricultural 170,257 141,502 105,228 115,658 145,157
Total commercial 564,679 530,371 430,043 407,478 394,343
Other 6,017 5,186 4,137 5,133 5,568
Total Loans $ 2,839,278 $ 2,611,229 $ 2,115,380 $ 2,053,721 $ 1,963,378
(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 $ 285,071 $ 361,744 $ 390,625 $ 418,914 $ 455,827
Mortgage-backed securities 25,913 27,146 28,535 29,743 30,954
State and political subdivisions 464,245 471,631 482,316 328,310 335,329
Other securities 1,065 1,075 947 620 620
Total held-to-maturity 776,294 861,596 902,423 777,587 822,730
Available-for-Sale
U.S. Treasury $ 4,008 $ 4,005 $ 4,008 $ 3,992 $ 3,991
U.S. Government agencies 153,576 236,003 346,315 272,816 280,321
Mortgage-backed securities 502,344 464,857 312,011 1,572 32
State and political subdivisions 10,976 10,971 13,452 6,540 8,903
FHLB stock 14,275 13,619 15,256 5,126 5,623
Other securities 18,168 18,246 16,341 15,237 18,603
Total available-for-sale 703,347 747,701 707,383 305,283 317,473
Total investment securities $ 1,479,641 $ 1,609,297 $ 1,609,806 $ 1,082,870 $ 1,140,203
Fair value - HTM investment securities $ 785,030 $ 863,349 $ 913,037 $ 780,534 $ 823,446
Investment Securities - QTD Average
Taxable securities $ 1,088,597 $ 1,163,708 $ 893,946 $ 782,062 $ 781,685
Tax exempt securities 478,436 492,118 391,561 342,886 329,327
Total investment securities - QTD average $ 1,567,033 $ 1,655,826 $ 1,285,507 $ 1,124,948 $ 1,111,012
Simmons First National Corporation SFNC
Consolidated Loans and Credit Coverage
For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
(Unaudited) 2015 2015 2015 2014 2014
($ in thousands)
LOANS
Legacy loans $ 2,839,278 $ 2,611,229 $ 2,115,380 $ 2,053,721 $ 1,963,378
Allowance for loan losses (legacy loans) (30,380) (30,567) (29,183) (29,028) (27,076)
Legacy loans (net of allowance) 2,808,898 2,580,662 2,086,197 2,024,693 1,936,302
Loans acquired, not covered by FDIC loss share 2,085,211 2,171,388 2,491,316 621,020 733,914
Credit discount (70,441) (63,082) (72,876) (45,040) (57,858)
Allowance for loan losses (loans acquired, not covered) (954) -- -- -- --
Loans acquired, not covered (net of discount and allowance) 2,013,816 2,108,306 2,418,440 575,980 676,056
Loans acquired, covered by FDIC loss share -- 114,296 126,629 140,038 154,183
Credit discount -- (20,221) (23,207) (32,151) (36,025)
Allowance for loan losses (acquired covered loans) -- (954) (954) (954) --
Loans acquired, covered (net of discount and allowance) -- 93,121 102,468 106,933 118,158
Net loans $ 4,822,714 $ 4,782,089 $ 4,607,105 $ 2,707,606 $ 2,730,516
Loan Coverage Ratios
Allowance for loan losses to legacy loans 1.07% 1.17% 1.38% 1.41% 1.38%
Discount for credit losses and allowance on loans acquired to total loans acquired plus discount for credit losses and allowance on loans acquired (non-GAAP) 3.42% 3.69% 3.71% 10.27% 10.57%
Total allowance and credit coverage (non-GAAP) 2.07% 2.34% 2.67% 3.81% 4.24%
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) 2015 2015 2015 2014 2014
($ in thousands)
Allowance for Loan Losses (Legacy Loans)
Balance, beginning of quarter $ 30,567 $ 29,183 $ 29,028 $ 27,076 $ 27,530
Loans charged off
Credit cards 763 802 785 859 788
Other consumer 597 366 220 781 648
Real estate 109 333 293 200 534
Commercial 516 -- 245 310 474
Total loans charged off 1,985 1,501 1,543 2,150 2,444
Recoveries of loans previously charged off
Credit cards 213 241 213 220 190
Other consumer 78 187 133 94 122
Real estate 25 46 12 56 379
Commercial -- 9 169 125 171
Total recoveries 316 483 527 495 862
Net loans charged off 1,669 1,018 1,016 1,655 1,582
Provision for loan losses 1,482 2,402 1,171 3,607 1,128
Balance, end of quarter $ 30,380 $ 30,567 $ 29,183 $ 29,028 $ 27,076
Non-performing assets (1) (2)
Non-performing loans
Nonaccrual loans 15,305 15,565 14,511 12,038 11,212
Loans past due 90 days or more 1,506 1,375 498 961 713
Total non-performing loans 16,811 16,940 15,009 12,999 11,925
Other non-performing assets
Foreclosed assets held for sale, not covered 48,073 42,666 50,723 44,856 50,770
Other non-performing assets 172 242 215 97 72
Total other non-performing assets 48,245 42,908 50,938 44,953 50,842
Total non-performing assets $ 65,056 $ 59,848 $ 65,947 $ 57,952 $ 62,767
Performing TDRs (troubled debt restructurings) $ 1,955 $ 1,959 $ 2,227 $ 2,233 $ 2,234
Ratios (1) (2)
Allowance for loan losses to total loans 1.07% 1.17% 1.38% 1.41% 1.38%
Allowance for loan losses to non-performing loans 181% 180% 194% 223% 227%
Non-performing loans to total loans 0.59% 0.65% 0.71% 0.63% 0.61%
Non-performing assets (including performing TDRs) to total assets 0.89% 0.81% 0.87% 1.30% 1.39%
Non-performing assets to total assets 0.86% 0.79% 0.84% 1.25% 1.34%
Annualized net charge offs to total loans 0.24% 0.17% 0.20% 0.33% 0.33%
Annualized net credit card charge offs to total credit card loans 1.26% 1.31% 1.32% 1.41% 1.31%
Annualized net charge offs to total loans (excluding credit cards) 0.17% 0.08% 0.09% 0.22% 0.22%
(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) 2015 2015 2015 2014 2014
ASSETS
Earning Assets
Interest bearing balances due from banks 0.23% 0.30% 0.23% 0.22% 0.18%
Investment securities 2.65% 2.50% 2.44% 2.49% 2.29%
Mortgage loans held for sale 4.38% 3.99% 4.10% 4.33% 4.28%
Assets held in trading accounts 0.25% 0.24% 0.18% 0.23% 0.17%
Loans, including acquired loans 6.27% 6.03% 6.11% 6.55% 6.32%
Total interest earning assets 5.20% 4.82% 4.68% 4.98% 4.71%
LIABILITIES
Interest bearing liabilities
Interest bearing transaction and savings accounts 0.24% 0.24% 0.21% 0.17% 0.16%
Time deposits 0.55% 0.56% 0.56% 0.58% 0.57%
Total interest bearing deposits 0.33% 0.33% 0.32% 0.31% 0.31%
Federal funds purchased and securities sold under agreement to repurchase 0.20% 0.20% 0.21% 0.21% 0.20%
Other borrowings 3.63% 2.58% 2.32% 3.23% 3.36%
Subordinated debentures 3.19% 3.56% 2.66% 3.08% 3.08%
Total interest bearing liabilities 0.48% 0.44% 0.42% 0.43% 0.44%
NET INTEREST MARGIN/SPREAD
Net interest spread 4.72% 4.38% 4.26% 4.55% 4.27%
Net interest margin - quarter-to-date 4.82% 4.47% 4.34% 4.65% 4.36%
Net interest margin - year-to-date 4.58% 4.42% 4.34% 4.47% 4.41%
Simmons First National Corporation SFNC
Consolidated - Selected Financial Data
For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30
(Unaudited) 2015 2015 2015 2014 2014
($ in thousands, except share data)
QUARTER-TO-DATE
Financial Highlights - Core (non-GAAP)
Core earnings (excludes nonrecurring items) (1) $ 25,565 $ 22,444 $ 15,700 $ 11,387 $ 10,684
Diluted core earnings per share (1) 0.85 0.75 0.70 0.64 0.63
Core net interest margin (FTE) (2) 3.93% 3.87% 3.55% 3.63% 3.51%
Core efficiency ratio (1) 57.54% 58.51% 62.24% 64.32% 64.89%
Core return on average assets (1) 1.33% 1.17% 1.10% 0.96% 0.95%
Core return on average common equity (1) 10.01% 8.67% 9.47% 9.12% 9.58%
Core return on tangible common equity (1) 15.99% 13.80% 14.16% 12.65% 12.84%
Financial Highlights - GAAP
Net Income $ 21,598 $ 20,018 $ 8,709 $ 12,639 $ 8,788
Diluted earnings per share 0.72 0.67 0.39 0.72 0.52
Return on average assets 1.13% 1.04% 0.61% 1.07% 0.79%
Return on average common equity 8.46% 7.73% 5.25% 10.12% 7.88%
Return on tangible common equity 13.58% 12.36% 8.07% 14.00% 10.62%
Net interest margin (FTE) 4.82% 4.47% 4.34% 4.65% 4.36%
FTE adjustment 2,172 2,303 1,857 1,751 1,702
Amortization of intangibles 1,265 1,388 899 565 454
Amortization of intangibles, net of taxes 769 844 546 343 276
Average earning assets 6,660,434 6,774,693 5,121,838 4,195,250 3,956,032
Average interest bearing liabilities 5,367,852 5,467,587 4,096,745 3,274,902 3,129,062
Average diluted shares outstanding 30,046,062 29,987,471 22,350,272 18,075,537 16,916,764
Cash dividends declared per common share 0.23 0.23 0.23 0.22 0.22
YEAR-TO-DATE
Financial Highlights - Core (non-GAAP)
Core earnings (excludes nonrecurring items) (1) $ 63,709 $ 38,144 $ 15,700 $ 38,706 $ 27,319
Diluted core earnings per share (1) 2.32 1.46 0.70 2.29 1.65
Core net interest margin (FTE) (2) 3.82% 3.74% 3.55% 3.53% 3.49%
Core efficiency ratio (1) 59.05% 60.08% 62.24% 67.22% 68.41%
Core return on average assets (1) 1.21% 1.14% 1.10% 0.86% 0.83%
Core return on average common equity (1) 9.39% 8.99% 9.47% 8.79% 8.66%
Core return on tangible common equity (1) 14.73% 13.96% 14.16% 11.89% 11.57%
Financial Highlights - GAAP
Net Income $ 50,325 $ 28,727 $ 8,709 $ 35,688 $ 23,049
Diluted earnings per share 1.83 1.10 0.39 2.11 1.39
Return on average assets 0.96% 0.86% 0.61% 0.80% 0.70%
Return on average common equity 7.41% 6.77% 5.25% 8.11% 7.30%
Return on tangible common equity 11.73% 10.63% 8.07% 10.99% 9.82%
Net interest margin (FTE) 4.58% 4.42% 4.34% 4.47% 4.41%
FTE adjustment 6,332 4,160 1,857 6,840 5,089
Amortization of intangibles 3,552 2,287 899 1,979 1,359
Amortization of intangibles, net of taxes 2,159 1,390 546 1,203 826
Average earning assets 6,170,521 5,948,265 5,121,838 3,975,903 3,903,290
Average interest bearing liabilities 4,977,397 4,782,167 4,096,745 3,176,716 3,143,984
Average diluted shares outstanding 27,497,813 26,203,942 22,350,272 16,922,026 16,532,689
Cash dividends declared per common share 0.69 0.46 0.23 0.88 0.66
END OF PERIOD
Book value per share $ 33.89 $ 33.26 $ 32.93 $ 27.38 $ 26.82
Tangible book value per share 21.89 21.19 20.79 20.15 19.72
Shares outstanding 29,939,698 29,894,903 29,850,034 18,052,488 17,992,261
Full-time equivalent employees 1,967 2,043 2,076 1,338 1,397
Total number of ATM's 183 186 179 124 129
Total number of financial centers 149 152 164 109 113
(1) Core earnings exclude nonrecurring items, which is a non-GAAP measurement
(2) Excludes accretable yield adjustment on loans, which is a non-GAAP measurement
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) 2015 2015 2015 2014 2014
($ in thousands, except per share data)
QUARTER-TO-DATE
Net Income $ 21,598 $ 20,018 $ 8,709 $ 12,639 $ 8,788
Nonrecurring items
Gain on sale of banking operations (2,110) -- -- -- --
Loss on FDIC loss-share termination 7,476 -- -- -- --
Merger-related costs 857 1,247 10,418 1,218 3,628
Change-in-control payments -- -- -- 885 --
Branch right-sizing 304 2,745 35 (4,221) (705)
Charter consolidation costs -- -- -- 42 196
Tax effect (1) (2,560) (1,566) (3,462) 824 (1,223)
Net nonrecurring items 3,967 2,426 6,991 (1,252) 1,896
Core earnings (non-GAAP) $ 25,565 $ 22,444 $ 15,700 $ 11,387 $ 10,684
Diluted earnings per share $ 0.72 $ 0.67 $ 0.39 $ 0.72 $ 0.52
Nonrecurring items
Gain on sale of banking operations (0.07) -- -- -- --
Loss on FDIC loss-share termination 0.25 -- -- -- --
Merger-related costs 0.03 0.04 0.47 0.07 0.21
Change-in-control payments -- -- -- 0.05 --
Branch right-sizing 0.01 0.09 -- (0.24) (0.04)
Charter consolidation costs -- -- -- -- 0.01
Tax effect (1) (0.09) (0.05) (0.16) 0.04 (0.07)
Net nonrecurring items 0.13 0.08 0.31 (0.08) 0.11
Core earnings (non-GAAP) $ 0.85 $ 0.75 $ 0.70 $ 0.64 $ 0.63
YEAR-TO-DATE
Net Income $ 50,325 $ 28,727 $ 8,709 $ 35,687 $ 23,049
Nonrecurring items
Gain on sale of merchant services -- -- -- (1,000) (1,000)
Gain on sale of banking operations (2,110) -- -- -- --
Loss on FDIC loss-share termination 7,476 -- -- -- --
Merger-related costs 12,522 11,665 10,418 7,472 6,254
Change-in-control payments -- -- -- 885 --
Branch right-sizing 3,084 2,780 35 (3,059) 1,162
Charter consolidation costs -- -- -- 652 610
Tax effect (1) (7,588) (5,028) (3,462) (1,931) (2,745)
Net nonrecurring items 13,384 9,417 6,991 3,019 4,281
Core earnings (non-GAAP) $ 63,709 $ 38,144 $ 15,700 $ 38,706 $ 27,330
Diluted earnings per share $ 1.83 $ 1.10 $ 0.39 $ 2.11 $ 1.39
Nonrecurring items
Gain on sale of merchant services -- -- -- (0.06) (0.06)
Gain on sale of banking operations (0.07) -- -- -- --
Loss on FDIC loss-share termination 0.27 -- -- -- --
Merger-related costs 0.46 0.45 0.47 0.44 0.37
Change-in-control payments -- -- -- 0.05 --
Branch right-sizing 0.11 0.11 -- (0.16) 0.08
Charter consolidation costs -- -- -- 0.04 0.04
Tax effect (1) (0.28) (0.20) (0.16) (0.13) (0.17)
Net nonrecurring items 0.49 0.36 0.31 0.18 0.26
Core earnings (non-GAAP) $ 2.32 $ 1.46 $ 0.70 $ 2.29 $ 1.65
(1) Effective tax rate of 39.225%, adjusted for non-deductible merger-related costs.

CONTACT: FOR MORE INFORMATION CONTACT: J. BURTON HICKS Chief of Staff and Investor Relations Officer Simmons First National Corporation (870) 541-1000

Source:Simmons First National Corporation