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Simmons First Announces 145 Percent Increase in Core Earnings

20:00 EDT 22 Jul 2015 | Globe Newswire

PINE BLUFF, Ark., July 23, 2015 (GLOBE NEWSWIRE) -- Simmons First National Corporation (NASDAQ:SFNC) today announced record core earnings of $22.4 million for the second quarter of 2015, an increase of $13.3 million, or 145 percent, compared with the same quarter last year. Diluted core earnings per share were $0.76, an increase of $0.20, or 35.7 percent. Including the non-core items, net income was $20.0 million for the second quarter of 2015, an increase of $10.1 million, or 102 percent, compared with the same quarter last year. Diluted earnings per share were $0.71, an increase of $0.11, or 18.3 percent.

Year-to-date core earnings were $38.1 million, an increase of $21.5 million, or 129 percent, compared with the same period of 2014. Year-to-date diluted core earnings per share were $1.46, an increase of $0.44, or 43.1 percent. Year-to-date net income was $28.7 million, or $1.10 diluted earnings per share.

"We 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. "Our core efficiency ratio was 58.5 percent for the quarter and our core ROA was 1.17 percent."

Loans

Total loans, including those acquired, were $4.8 billion at June 30, 2015, an increase of $2.4 billion, or 101 percent, compared with the same period in 2014. Legacy loans (all loans excluding acquired loans) grew $742 million, or 40.0 percent. Acquired loans increased by $1.7 billion, net of discounts.

Deposits

At June 30, 2015, total deposits were $6.2 billion, an increase of $2.5 billion, or 69.4 percent, compared with the same period in 2014. Total non-time deposits were $4.7 billion, or 77 percent of total deposits.

Net Interest Income

The company's net interest income for the second quarter of 2015 was $73.2 million, an increase of $32.8 million, or 81.1 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 4.47 percent for the quarter ended June 30, 2015, a 13 basis-point increase from the same quarter of 2014. 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 impaired loans. Each quarter, the company estimates the cash flows expected to be collected from the acquired impaired 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 the loans or loan pools. For loans covered under loss-sharing agreements with the FDIC, the increases in expected cash flows also reduce the amount of expected reimbursements, which are recorded as indemnification assets.

The impact of the adjustments on the company's financial results for the current reporting period is shown below:

 

  Three Months Ended Six Months Ended
  June 30 June 30
(In thousands) 2015 2014 2015 2014
Impact on net interest income $ 3,223 $ 5,856 $ 9,325 $ 13,247
Non-interest income (2,941) (6,410) (5,686) (13,850)
Net impact to pre-tax income $ 282 $ (554) $ 3,639 $ (603)

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 $15.3 million and the remaining adjustment to the indemnification assets that will reduce non-interest income is $6.6 million. For the remainder of 2015, we expect to recognize $5.8 million of interest income and a $5.4 million reduction of non-interest income, for a net increase to pre-tax income of approximately $0.4 million. 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 second quarter was $25.3 million, an increase of $9.9 million compared with the second quarter of 2014. Losses on FDIC-covered assets decreased $3.2 million primarily due to lower indemnification asset amortization. The remaining 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.

Non-Interest Expense

Non-interest expense for the second quarter of 2015 was $65.2 million, an increase of $25.3 million compared with the same period in 2014. Included in the quarter were $2.7 million of branch right sizing expenses related to the closing of several underperforming branches. The remaining increase in non-interest expense was primarily due to incremental operating expenses of the acquired Delta Trust, Community First and Liberty franchises.

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 percent of the losses incurred on the disposition of covered loans and OREO. The acquired loans and OREO and any related FDIC loss share indemnification asset were presented in the company's financial reports with a carrying value equal to the discounted net present value of expected future proceeds. At June 30, 2015, acquired loans covered by loss share were carried at $93.1 million, OREO covered by loss share was carried at $12.8 million and the FDIC loss share indemnification asset was carried at $13.0 million. Acquired loans and OREO not covered by loss share were carried at $2.1 billion and $29.6 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.

At June 30, 2015, the allowance for loan losses was $30.6 million on legacy loans and $1.0 million on covered loans, and the loan credit mark was $83.3 million, for a total of $114.9 million of coverage. This equates to a total coverage ratio of 2.3 percent of gross loans. The ratio of credit mark and related allowance to acquired loans was 3.7 percent. The company's allowance for loan losses on legacy loans at June 30, 2015, was 1.17 percent of total loans and 180 percent of non-performing loans. Non-performing loans as a percent of total loans were 0.65 percent. Through the second quarter of 2015, the year-to-date annualized net charge-off ratio, excluding credit cards, was 0.09 percent, and the year-to-date annualized credit card charge-off ratio was 1.32 percent.

Capital

At June 30, 2015, common stockholders' equity was $1.0 billion, book value per share was $32.23 and tangible book value per share was $20.15. The company's ratio of stockholders' equity to total assets was 13.5 percent and its ratio of tangible common equity to tangible assets was 8.7 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, July 23, 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 71641971. In addition, the call will be available live or in recorded version on the company's website at www.simmonsfirst.com.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles (GAAP). The company's management uses these non-GAAP financial measures in their analysis of the company's performance. These measures typically adjust GAAP performance measures to include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant activities or nonrecurring transactions. Since the presentation of these GAAP performance measures and their impact differ between companies, management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the company's core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Forward Looking Statements

Statements in this press release that are not historical facts should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements of this type speak only as of the date of this news release. By nature, forward-looking statements involve inherent risk and uncertainties. Various factors, including, but not limited to, economic conditions, credit quality, interest rates, loan demand and changes in the assumptions used in making the forward-looking statements, could cause actual results to differ materially from those contemplated by the forward-looking statements. Additional information on factors that might affect Simmons First National Corporation's financial results is included in its Form 10-K filing with the Securities and Exchange Commission.

 

           
Simmons First National Corporation          SFNC 
Consolidated End of Period Balance Sheets          
For the Quarters Ended  Jun 30   Mar 31   Dec 31   Sep 30   Jun 30 
(Unaudited)  2015   2015   2014   2014   2014 
(in thousands)          
ASSETS           
Cash and non-interest bearing balances due from banks   $ 93,959  $ 108,424  $ 54,347  $ 73,554  $ 44,805
Interest bearing balances due from banks   173,130  423,986  281,562  210,742  377,855
Federal funds sold   49,570  178,418  --  10,000  --
Cash and cash equivalents   316,659  710,828  335,909  294,296  422,660
Investment securities - held-to-maturity   860,664  902,423  777,587  822,730  799,963
Investment securities - available-for-sale   748,633  707,383  305,283  317,473  270,336
Mortgage loans held for sale   48,094  25,513  21,265  22,003  20,409
Assets held in trading accounts   6,481  6,528  6,987  6,819  6,881
Loans:           
Legacy loans   2,611,229  2,115,380  2,053,721  1,963,378  1,868,842
Allowance for loan losses   (30,567)  (29,183)  (29,028)  (27,076)  (27,530)
Loans acquired, not covered by FDIC loss share (net of discount and allowance)   2,108,306  2,418,440  575,980  676,056  398,967
Loans acquired, covered by FDIC loss share (net of discount and allowance)   93,121  102,468  106,933  118,158  121,524
Net loans   4,782,089  4,607,105  2,707,606  2,730,516  2,361,803
FDIC indemnification asset   13,020  15,965  22,663  25,694  30,508
Premises and equipment   191,335  198,106  122,966  115,639  113,541
Premises held for sale   6,587  --  6,126  15,856  14,145
Foreclosed assets not covered by FDIC loss share   42,666  50,723  44,856  50,770  53,342
Foreclosed assets covered by FDIC loss share   12,833  12,010  11,793  15,212  16,951
Interest receivable   24,129  24,719  16,774  18,006  14,254
Bank owned life insurance   118,073  117,296  77,592  75,357  61,115
Goodwill   314,282  314,282  108,095  108,095  78,529
Other intangible assets   46,605  47,960  22,526  22,988  14,094
Other assets   82,208  74,959  55,326  49,768  47,310
Total assets   $ 7,614,358  $ 7,815,800  $ 4,643,354  $ 4,691,222  $ 4,325,841
           
LIABILITIES AND STOCKHOLDERS' EQUITY           
Deposits:           
Non-interest bearing transaction accounts   $ 1,141,285  $ 1,123,966  $ 889,260  $ 884,064  $ 838,543
Interest bearing transaction accounts and savings deposits   3,581,049  3,627,870  2,006,271  1,984,422  1,784,040
Time deposits less than $100,000   1,007,895  1,058,602  530,890  565,957  559,597
Time deposits greater than $100,000   439,793  464,270  434,297  474,472  459,545
Total deposits   6,170,022  6,274,708  3,860,718  3,908,915  3,641,725
Federal funds purchased and securities sold under agreements to repurchase   111,792  111,484  110,586  112,977  98,226
Other borrowings   171,321  284,386  114,682  123,396  115,602
Subordinated debentures   61,794  61,644  20,620  20,620  20,620
Accrued interest and other liabilities   74,324  69,841  42,429  41,309  35,533
Total liabilities   6,589,253  6,802,063  4,149,035  4,207,217  3,911,706
           
Stockholders' equity:           
Preferred stock   30,852  30,852  --  --  --
Common stock   299  299  181  180  163
Surplus   640,895  639,493  156,568  155,592  90,010
Undivided profits   354,459  341,238  338,906  330,185  325,371
Accumulated other comprehensive income (loss)           
Unrealized (depreciation) appreciation on AFS securities   (1,400)  1,855  (1,336)  (1,952)  (1,409)
Total stockholders' equity   1,025,105  1,013,737  494,319  484,005  414,135
Total liabilities and stockholders' equity   $ 7,614,358  $ 7,815,800  $ 4,643,354  $ 4,691,222  $ 4,325,841

 

           
Simmons First National Corporation          SFNC 
Consolidated Average Quarter-to-Date Balance Sheets        
For the Quarters Ended  Jun 30   Mar 31   Dec 31   Sep 30   Jun 30 
(Unaudited)  2015   2015   2014   2014   2014 
(in thousands)          
ASSETS          
Cash and non-interest bearing balances due from banks  $ 95,954  $ 68,322  $ 54,485  $ 50,980  $ 44,671
Interest bearing balances due from banks  308,756  371,195  299,054  288,258  456,931
Federal funds sold  75,922  56,846  6,486  6,794  985
Cash and cash equivalents  480,632  496,363  360,025  346,032  502,587
Investment securities - held-to-maturity  922,411  915,405  806,069  810,085  782,900
Investment securities - available-for-sale  733,415  370,102  318,879  300,927  265,194
Mortgage loans held for sale  37,656  14,655  17,241  24,942  15,299
Assets held in trading accounts  6,592  6,782  6,848  6,841  6,850
Loans:          
Legacy loans  2,363,305  2,084,551  2,008,550  1,917,155  1,817,429
Allowance for loan losses  (31,275)  (30,072)  (28,474)  (27,470)  (27,287)
Loans acquired, not covered by FDIC loss share (net of discount and allowance)  2,228,841  1,197,601  620,505  481,658  418,515
Loans acquired, covered by FDIC loss share (net of discount and allowance)  97,795  104,701  111,618  119,372  128,099
Net loans  4,658,666  3,356,781  2,712,199  2,490,715  2,336,756
FDIC indemnification asset  15,448  21,515  24,457  28,311  35,940
Premises and equipment  200,875  150,564  117,018  115,577  112,994
Premises held for sale  6,131  6,126  6,794  12,521  21,142
Foreclosed assets not covered by FDIC loss share  42,994  44,059  48,745  51,097  55,304
Foreclosed assets covered by FDIC loss share  12,313  11,902  13,964  16,073  18,330
Interest receivable  23,260  19,181  17,738  15,743  15,076
Bank owned life insurance  117,662  91,760  76,578  63,798  60,895
Goodwill  314,060  175,901  109,837  88,590  78,529
Other intangible assets  47,302  31,102  17,748  15,321  14,299
Other assets  76,275  58,536  50,566  52,234  48,583
Total assets  $ 7,695,692  $ 5,770,734  $ 4,704,706  $ 4,438,807  $ 4,370,678
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
Deposits:          
Non-interest bearing transaction accounts  $ 1,088,474  $ 946,979  $ 895,470  $ 828,340  $ 823,552
Interest bearing transaction accounts and savings deposits  3,621,060  2,601,046  2,010,827  1,869,095  1,810,436
Time deposits less than $100,000  1,037,025  715,710  545,986  555,837  577,856
Time deposits greater than $100,000  451,183  438,782  458,117  457,489  472,009
Total deposits  6,197,742  4,702,517  3,910,400  3,710,761  3,683,853
Federal funds purchased and securities sold under agreements to repurchase  116,258  121,568  117,661  108,357  101,537
Other borrowings  179,080  183,953  121,691  117,664  116,082
Subordinated debentures  62,981  35,686  20,620  20,620  20,620
Accrued interest and other liabilities  70,312  43,825  38,869  38,950  34,637
Total liabilities  6,626,373  5,087,549  4,209,241  3,996,352  3,956,729
           
Stockholders' equity:          
Preferred stock  30,885  10,970  --  --  --
Common stock  299  223  180  169  163
Surplus  640,172  328,830  155,672  111,551  89,552
Undivided profits  396,609  343,973  341,042  332,184  325,878
Accumulated other comprehensive income (loss)          
Unrealized appreciation (depreciation) on AFS securities  1,354  (811)  (1,429)  (1,449)  (1,644)
Total stockholders' equity  1,069,319  683,185  495,465  442,455  413,949
Total liabilities and stockholders' equity  $ 7,695,692  $ 5,770,734  $ 4,704,706  $ 4,438,807  $ 4,370,678

 

           
Simmons First National Corporation          SFNC 
Consolidated Statements of Income - Quarter-to-Date          
For the Quarters Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30
(Unaudited)  2015   2015   2014   2014   2014 
(in thousands, except per share data)          
INTEREST INCOME          
Loans  $ 70,438  $ 50,986  $ 45,248  $ 40,082  $ 38,622
Federal funds sold  73  29  13  12  2
Investment securities  8,050  5,879  5,325  4,717  4,766
Mortgage loans held for sale  375  148  188  269  168
Assets held in trading accounts  4  3  4  3  5
Interest bearing balances due from banks  229  210  167  132  279
TOTAL INTEREST INCOME  79,169  57,255  50,945  45,215  43,842
INTEREST EXPENSE          
Time deposits  2,064  1,596  1,470  1,461  1,515
Other deposits  2,131  1,348  872  771  720
Federal funds purchased and securities sold under agreements to repurchase  57  64  61  55  31
Other borrowings  1,151  1,051  992  996  988
Subordinated debentures  559  234  160  160  160
TOTAL INTEREST EXPENSE  5,962  4,293  3,555  3,443  3,414
NET INTEREST INCOME  73,207  52,962  47,390  41,772  40,428
Provision for loan losses  3,006  1,171  3,607  1,128  1,602
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES  70,201  51,791  43,783  40,644  38,826
NON-INTEREST INCOME          
Trust income  2,070  2,251  2,182  1,838  1,553
Service charges on deposit accounts  8,031  6,363  6,552  6,238  6,792
Other service charges and fees  3,130  1,827  1,083  808  859
Mortgage lending income  3,449  2,262  1,457  1,812  1,262
Investment banking income  593  894  451  284  154
Debit and credit card fees  6,486  5,648  5,653  5,769  5,801
Bank owned life insurance income  746  572  727  411  377
Gain on sale of securities, net  --  (38)  (12)  (18)  38
Net (loss) gain on assets covered by FDIC loss share agreements  (3,056)  (2,671)  (3,013)  (3,744)  (6,268)
Other income  3,863  1,390  6,424  2,637  4,820
TOTAL NON-INTEREST INCOME  25,312  18,498  21,504  16,035  15,388
NON-INTEREST EXPENSE          
Salaries and employee benefits  35,475  26,771  25,126  20,892  20,982
Occupancy expense, net  5,051  3,557  2,494  3,204  3,285
Furniture and equipment expense  3,241  3,268  2,732  2,363  2,215
Other real estate and foreclosure expense  1,017  381  1,395  1,864  375
Deposit insurance  1,096  870  724  877  1,085
Merger related costs  1,247  10,419  1,214  3,628  1,354
Other operating expenses  18,041  12,106  13,294  11,526  10,546
TOTAL NON-INTEREST EXPENSE  65,168  57,372  46,979  44,354  39,842
NET INCOME BEFORE INCOME TAXES  30,345  12,917  18,308  12,325  14,372
Provision for income taxes  10,250  4,182  5,669  3,537  4,464
NET INCOME  20,095  8,735  12,639  8,788  9,908
Preferred stock dividends  77  26  --  --  --
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS  $ 20,018  $ 8,709  $ 12,639  $ 8,788  $ 9,908
BASIC EARNINGS PER SHARE  $ 0.71  $ 0.39  $ 0.72  $ 0.52  $ 0.61
DILUTED EARNINGS PER SHARE  $ 0.71  $ 0.39  $ 0.72  $ 0.52  $ 0.60

 

           
Simmons First National Corporation        SFNC 
Consolidated Risk-Based Capital          
For the Quarters Ended  Jun 30   Mar 31   Dec 31   Sep 30   Jun 30 
(Unaudited)  2015   2015   2014   2014   2014 
($ in thousands)          
Tier 1 capital          
Stockholders' equity  $ 1,025,105  $ 1,013,737  $ 494,319  $ 482,642  $ 414,135
Trust preferred securities, net allowable  61,794  61,410  20,000  20,000  20,000
Disallowed intangible assets, net of deferred tax  (342,590)  (344,140)  (112,545)  (109,698)  (74,003)
Unrealized (gain) loss on AFS securities  1,400  (1,855)  1,336  1,952  1,409
Other  (10,297)  (4,789)  --  --  --
Total Tier 1 capital  735,412  724,363  403,110  394,896  361,541
           
Tier 2 capital          
Qualifying unrealized gain on AFS equity securities  --  --  2  --  47
Qualifying allowance for loan losses and reserve for unfunded commitments  34,284  32,600  32,073  29,167  29,621
Total Tier 2 capital  34,284  32,600  32,075  29,167  29,668
Total risk-based capital  $ 769,696  $ 756,963  $ 435,185  $ 424,063  $ 391,209
           
Common equity          
Tier 1 capital  $ 735,412  $ 724,363  --  --  --
Less: Non-cumulative preferred stock  (30,852)  (30,852)  --  --  --
Less: Trust preferred securities  (61,794)  (61,410)  --  --  --
Total common equity  $ 642,766  $ 632,101  --  --  --
           
Risk weighted assets  $ 4,714,852  $ 4,659,065  $ 3,002,270  $ 3,063,801  $ 2,652,474
           
Adjusted average assets for leverage ratio  $ 7,350,900  $ 5,428,706  $ 4,593,924  $ 4,331,488  $ 4,299,379
           
Ratios at end of quarter          
Equity to assets 13.46% 12.97% 10.65% 10.29% 9.57%
Tangible common equity to tangible assets 8.73% 8.32% 8.06% 7.78% 7.59%
Common equity Tier 1 ratio (CET1) 13.63% 13.57%  --  --  --
Tier 1 leverage ratio 10.00% 13.34% 8.77% 9.12% 8.41%
Tier 1 risk-based capital ratio 15.60% 15.55% 13.43% 12.89% 13.63%
Total risk-based capital ratio 16.32% 16.25% 14.50% 13.84% 14.75%

 

           
Simmons First National Corporation        SFNC 
Consolidated Loans and Investments          
For the Quarters Ended  Jun 30   Mar 31   Dec 31   Sep 30   Jun 30 
(Unaudited)  2015   2015   2014   2014   2014 
(in thousands)          
Legacy Loan Portfolio - End of Period (1)          
Consumer          
Credit cards  $ 174,074  $ 171,413  $ 185,380  $ 175,822  $ 176,239
Student loans  --  --  --  --  398
Other consumer  160,828  107,486  103,402  105,508  105,998
Total consumer  334,902  278,899  288,782  281,330  282,635
Real Estate          
Construction  199,707  178,929  181,968  163,364  163,412
Single-family residential  662,954  507,351  455,563  436,925  417,187
Other commercial  878,109  716,021  714,797  681,848  653,734
Total real estate  1,740,770  1,402,301  1,352,328  1,282,137  1,234,333
Commercial          
Commercial  388,869  324,815  291,820  249,186  233,510
Agricultural  141,502  105,228  115,658  145,157  111,567
Total commercial  530,371  430,043  407,478  394,343  345,077
Other  5,186  4,137  5,133  5,568  6,796
Total Loans  $ 2,611,229  $ 2,115,380  $ 2,053,721  $ 1,963,378  $ 1,868,841
           
(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  $ 361,744  $ 390,625  $ 418,914  $ 455,827  $ 449,201
Mortgage-backed securities  27,147  28,535  29,743  30,954  32,204
State and political subdivisions  470,698  482,316  328,310  335,329  317,938
Other securities  1,075  947  620  620  620
Total held-to-maturity  860,664  902,423  777,587  822,730  799,963
Available-for-Sale          
U.S. Treasury  $ 4,005  $ 4,008  $ 3,992  $ 3,991  $ 3,994
U.S. Government agencies  236,003  346,315  272,816  280,321  238,411
Mortgage-backed securities  464,857  312,011  1,572  32  1,958
State and political subdivisions  11,903  13,452  6,540  8,903  6,920
FHLB stock  13,619  15,256  5,126  5,623  4,966
Other securities  18,246  16,341  15,237  18,603  14,087
Total available-for-sale  748,633  707,383  305,283  317,473  270,336
Total investment securities  $ 1,609,297  $ 1,609,806  $ 1,082,870  $ 1,140,203  $ 1,070,299
Fair value - HTM investment securities  $ 863,513  $ 913,037  $ 780,534  $ 823,446  $ 802,597
           
Investment Securities - QTD Average          
Taxable securities  $ 1,163,708  $ 893,946  $ 782,062  $ 781,685  $ 722,084
Tax exempt securities  492,118  391,561  342,886  329,327  326,010
Total investment securities - QTD average  $ 1,655,826  $ 1,285,507  $ 1,124,948  $ 1,111,012  $ 1,048,094

 

           
Simmons First National Corporation          SFNC 
Consolidated Loans and Credit Coverage          
For the Quarters Ended  Jun 30   Mar 31   Dec 31   Sep 30   Jun 30 
(Unaudited)  2015   2015   2014   2014   2014 
($ in thousands)          
LOANS          
Legacy loans  $ 2,611,229  $ 2,115,380  $ 2,053,721  $ 1,963,378  $ 1,868,841
Allowance for loan losses (legacy loans)  (30,567)  (29,183)  (29,028)  (27,076)  (27,530)
Legacy loans (net of allowance)  2,580,662  2,086,197  2,024,693  1,936,302  1,841,311
Loans acquired, not covered by FDIC loss share  2,171,388  2,491,316  621,020  733,914  445,515
Credit discount  (63,082)  (72,876)  (45,040)  (57,858)  (46,548)
Loans acquired, not covered (net of discount)  2,108,306  2,418,440  575,980  676,056  398,967
Loans acquired, covered by FDIC loss share  114,296  126,629  140,038  154,183  163,775
Credit discount  (20,221)  (23,207)  (32,151)  (36,025)  (42,251)
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  121,524
Net loans  $ 4,782,089  $ 4,607,105  $ 2,707,606  $ 2,730,516  $ 2,361,802
           
           
Loan Coverage Ratios          
Allowance for loan losses to legacy loans 1.17% 1.38% 1.41% 1.38% 1.47%
           
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 2.91% 2.93% 7.25% 7.88% 10.45%
           
Discount for credit losses on loans acquired, covered, to total loans acquired, covered, plus discount for credit losses on loans acquired, covered 18.53% 19.08% 23.64% 23.37% 25.80%
           
Total allowance and credit coverage 2.34% 2.67% 3.81% 4.24% 4.69%

 

           
Simmons First National Corporation        SFNC 
Consolidated Allowance and Asset Quality          
For the Quarters Ended  Jun 30   Mar 31   Dec 31   Sep 30   Jun 30 
(Unaudited)  2015   2015   2014   2014   2014 
($ in thousands)          
Allowance for Loan Losses (Legacy Loans)          
Balance, beginning of quarter  $ 29,183  $ 29,028  $ 27,076  $ 27,530  $ 26,983
Loans charged off          
Credit cards  802  785  859  788  725
Other consumer  366  220  781  648  426
Real estate  333  293  200  534  1,144
Commercial  --  245  310  474  186
Total loans charged off  1,501  1,543  2,150  2,444  2,481
           
Recoveries of loans previously charged off          
Credit cards  241  213  220  190  215
Other consumer  187  133  94  122  133
Real estate  46  12  56  379  1,062
Commercial  9  169  125  171  16
Total recoveries  483  527  495  862  1,426
Net loans charged off  1,018  1,016  1,655  1,582  1,055
Provision for loan losses  2,402  1,171  3,607  1,128  1,602
Balance, end of quarter  $ 30,567  $ 29,183  $ 29,028  $ 27,076  $ 27,530
           
Non-performing assets (1) (2)          
Non-performing loans          
Nonaccrual loans          
Real estate  $ 12,726  $ 12,460  $ 10,152  $ 9,374  $ 8,166
Commercial  2,531  1,650  1,481  1,174  1,110
Consumer  308  401  405  664  877
Total nonaccrual loans  15,565  14,511  12,038  11,212  10,153
Loans past due 90 days or more          
Government guaranteed student loans  --  --  --  --  323
Other loans  1,375  498  961  713  757
Total loans past due 90 days or more  1,375  498  961  713  1,080
Total non-performing loans  16,940  15,009  12,999  11,925  11,233
Other non-performing assets          
Foreclosed assets held for sale  13,022  19,644  11,803  13,167  16,745
Acquired foreclosed assets held for sale, not covered by FDIC loss share agreements  29,644  31,079  33,053  37,603  36,597
Other non-performing assets  242  215  97  72  80
Total other non-performing assets  42,908  50,938  44,953  50,842  53,422
Total non-performing assets  $ 59,848  $ 65,947  $ 57,952  $ 62,767  $ 64,655
Performing TDRs (troubled debt restructurings)  $ 1,959  $ 2,227  $ 2,233  $ 2,234  $ 2,776
           
Ratios (1) (2)          
Allowance for loan losses to total loans 1.17% 1.38% 1.41% 1.38% 1.47%
Allowance for loan losses to non-performing loans 180% 194% 223% 227% 245%
Non-performing loans to total loans 0.65% 0.71% 0.63% 0.61% 0.60%
Non-performing assets (including performing TDRs) to total assets 0.81% 0.87% 1.30% 1.39% 1.56%
Non-performing assets to total assets 0.79% 0.84% 1.25% 1.34% 1.49%
Non-performing assets to total assets (excluding Gov't guaranteed student loans) 0.79% 0.84% 1.25% 1.34% 1.49%
Annualized net charge offs to total loans 0.17% 0.20% 0.33% 0.33% 0.23%
Annualized net credit card charge offs to total credit card loans 1.31% 1.32% 1.41% 1.31% 1.14%
Annualized net charge offs to total loans (excluding credit cards) 0.08% 0.09% 0.22% 0.22% 0.13%
Past due loans >30 days (excluding nonaccrual) 0.43% 0.37% 0.48% 0.33% 0.34%
Past due loans >30 days (excluding nonaccrual) (excluding Gov't guaranteed student loans) 0.41% 0.37% 0.48% 0.33% 0.32%
           
(1) Excludes all acquired loans, including those covered by FDIC loss share agreements, except for their inclusion in total assets.
(2) Excludes acquired foreclosed assets covered by FDIC loss share agreements, except for their inclusion in total assets.

 

           
Simmons First National Corporation        SFNC 
Consolidated - Net Interest Income Analysis        
For the Quarters Ended  Jun 30   Mar 31   Dec 31   Sep 30   Jun 30 
(Unaudited)  2015   2015   2014   2014   2014 
           
ASSETS          
           
Earning Assets          
Interest bearing balances due from banks 0.30% 0.23% 0.22% 0.18% 0.24%
Investment securities 2.50% 2.44% 2.49% 2.29% 2.47%
Mortgage loans held for sale 3.99% 4.10% 4.33% 4.28% 4.40%
Assets held in trading accounts 0.24% 0.18% 0.23% 0.17% 0.29%
Loans, including acquired loans 6.03% 6.11% 6.55% 6.32% 6.55%
Total interest earning assets 4.82% 4.68% 4.98% 4.71% 4.69%
           
LIABILITIES          
           
Interest bearing liabilities          
Interest bearing transaction and savings accounts 0.24% 0.21% 0.17% 0.16% 0.16%
Time deposits 0.56% 0.56% 0.58% 0.57% 0.58%
Total interest bearing deposits 0.33% 0.32% 0.31% 0.31% 0.31%
Federal funds purchased and securities sold under agreement to repurchase 0.20% 0.21% 0.21% 0.20% 0.12%
Other borrowings 2.58% 2.32% 3.23% 3.36% 3.41%
Subordinated debentures 3.56% 2.66% 3.08% 3.08% 3.11%
Total interest bearing liabilities 0.44% 0.42% 0.43% 0.44% 0.44%
           
NET INTEREST MARGIN/SPREAD          
           
Net interest spread 4.38% 4.26% 4.55% 4.27% 4.25%
Net interest margin - quarter-to-date 4.47% 4.34% 4.65% 4.36% 4.34%
Net interest margin - year-to-date 4.42% 4.34% 4.47% 4.41% 4.44%

 

           
Simmons First National Corporation        SFNC 
Consolidated - Selected Financial Data          
For the Quarters Ended  Jun 30   Mar 31   Dec 31   Sep 30   Jun 30 
(Unaudited)  2015   2015   2014   2014   2014 
($ in thousands, except share data)          
QUARTER-TO-DATE          
Financial Highlights - Core (non-GAAP)          
Core earnings (excludes nonrecurring items) (1)  $ 22,444  $ 15,700  $ 11,387  $ 10,684  $ 9,153
Diluted core earnings per share (1)  0.76  0.70  0.64  0.63  0.56
Core net interest margin (FTE) (2) 3.87% 3.55% 3.63% 3.51% 3.49%
Core efficiency ratio (1) 58.51% 62.24% 64.32% 64.89% 68.15%
Core return on average assets (1) 1.17% 1.10% 0.96% 0.95% 0.84%
Core return on average common equity (1) 8.67% 9.47% 9.12% 9.58% 8.87%
Core return on tangible common equity (1) 13.80% 14.16% 12.65% 12.84% 11.78%
Financial Highlights - GAAP          
Net Income  $ 20,018  $ 8,709  $ 12,639  $ 8,788  $ 9,908
Diluted earnings per share  0.71  0.39  0.72  0.52  0.60
Return on average assets 1.04% 0.61% 1.07% 0.79% 0.91%
Return on average common equity 7.73% 5.25% 10.12% 7.88% 9.60%
Return on tangible common equity 12.36% 8.07% 14.00% 10.62% 12.72%
Net interest margin (FTE) 4.47% 4.34% 4.65% 4.36% 4.34%
FTE adjustment  2,303  1,857  1,751  1,702  1,695
Amortization of intangibles  1,388  899  565  454  452
Amortization of intangibles, net of taxes  844  546  343  276  275
Average earning assets  6,774,693  5,121,838  4,195,250  3,956,032  3,892,202
Average interest bearing liabilities  5,467,587  4,096,745  3,274,902  3,129,062  3,098,540
Average diluted shares outstanding  29,987,471  22,350,272  18,075,537  16,916,764  16,360,696
Cash dividends declared per common share  0.23  0.23  0.22  0.22  0.22
YEAR-TO-DATE          
Financial Highlights - Core (non-GAAP)          
Core earnings (excludes nonrecurring items) (1)  $ 38,144  $ 15,700  $ 38,706  $ 27,319  $ 16,635
Diluted core earnings per share (1)  1.46  0.70  2.29  1.65  1.02
Core net interest margin (FTE) (2) 3.74% 3.55% 3.53% 3.49% 3.49%
Core efficiency ratio (1) 60.08% 62.24% 67.22% 68.41% 70.35%
Core return on average assets (1) 1.14% 1.10% 0.86% 0.83% 0.77%
Core return on average common equity (1) 8.99% 9.47% 8.79% 8.66% 8.15%
Core return on tangible common equity (1) 13.96% 14.16% 11.89% 11.57% 10.88%
Financial Highlights - GAAP          
Net Income  $ 28,727  $ 8,709  $ 35,688  $ 23,049  $ 14,261
Diluted earnings per share  1.10  0.39  2.11  1.39  0.87
Return on average assets 0.86% 0.61% 0.80% 0.70% 0.65%
Return on average common equity 6.77% 5.25% 8.11% 7.30% 6.95%
Return on tangible common equity 10.63% 8.07% 10.99% 9.82% 9.33%
Net interest margin (FTE) 4.42% 4.34% 4.47% 4.41% 4.44%
FTE adjustment  4,160  1,857  6,840  5,089  3,387
Amortization of intangibles  2,287  899  1,979  1,359  905
Amortization of intangibles, net of taxes  1,390  546  1,203  826  550
Average earning assets  5,948,265  5,121,838  3,975,903  3,903,290  3,876,918
Average interest bearing liabilities  4,782,167  4,096,745  3,176,716  3,143,984  3,151,446
Average diluted shares outstanding  26,203,942  22,350,272  16,922,026  16,532,689  16,336,901
Cash dividends declared per common share  0.46  0.23  0.88  0.66  0.44
END OF PERIOD          
Book value per share  $ 32.23  $ 31.89  $ 27.38  $ 26.82  $ 25.36
Tangible book value per share  20.15  19.76  20.15  19.72  19.69
Shares outstanding  29,894,903  29,850,034  18,052,488  17,992,261  16,331,341
Full-time equivalent employees  2,043  2,076  1,338  1,397  1,281
Total number of ATM's  186  179  124  129  120
Total number of financial centers  152  164  109  113  104
           
(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  Jun 30   Mar 31   Dec 31   Sep 30   Jun 30 
(Unaudited)  2015   2015   2014   2014   2014 
(in thousands, except per share data)          
QUARTER-TO-DATE          
Net Income  $ 20,018  $ 8,709  $ 12,639  $ 8,788  $ 9,908
Nonrecurring items          
Gain on sale of merchant services  --   --   --   --   (1,000)
Merger related costs  1,247  10,419  1,218  3,628  1,354
Change-in-control payments  --   --   885  --   -- 
Branch right sizing  2,745  35  (4,221)  (705)  (2,011)
Charter consolidation costs  --   --   42  196  414
Tax effect (1)  (1,566)  (3,463)  824  (1,223)  488
Net nonrecurring items  2,426  6,991  (1,252)  1,896  (755)
Core earnings (non-GAAP)  $ 22,444  $ 15,700  $ 11,387  $ 10,684  $ 9,153
           
Diluted earnings per share  $ 0.71  $ 0.39  $ 0.72  $ 0.52  $ 0.60
Nonrecurring items          
Gain on sale of merchant services  --   --   --   --   (0.06)
Merger related costs  0.03  0.47  0.07  0.21  0.08
Change-in-control payments  --   --   0.05  --   -- 
Branch right sizing  0.06  --   (0.24)  (0.04)  (0.12)
Charter consolidation costs  --   --   --   0.01  0.03
Tax effect (1)  (0.04)  (0.16)  0.04  (0.07)  0.03
Net nonrecurring items  0.05  0.31  (0.08)  0.11  (0.04)
Diluted core earnings per share (non-GAAP)  $ 0.76  $ 0.70  $ 0.64  $ 0.63  $ 0.56
           
YEAR-TO-DATE          
Net Income  $ 28,727  $ 8,709  $ 35,687  $ 23,049  $ 14,261
Nonrecurring items          
Gain on sale of merchant services  --   --   (1,000)  (1,000)  (1,000)
Merger related costs  11,665  10,419  7,472  6,254  2,626
Change-in-control payments  --   --   885  --   -- 
Branch right sizing  2,780  35  (3,059)  1,162  1,867
Charter consolidation costs  --   --   652  610  414
Tax effect (1)  (5,028)  (3,463)  (1,931)  (2,745)  (1,533)
Net nonrecurring items  9,417  6,991  3,019  4,281  2,374
Core earnings (non-GAAP)  $ 38,144  $ 15,700  $ 38,706  $ 27,330  $ 16,635
           
Diluted earnings per share  $ 1.10  $ 0.39  $ 2.11  $ 1.39  $ 0.87
Nonrecurring items          
Gain on sale of merchant services  --   --   (0.06)  (0.06)  (0.06)
Merger related costs  0.45  0.47  0.44  0.37  0.16
Change-in-control payments  --   --   0.05  --   -- 
Branch right sizing  0.11  --   (0.16)  0.08  0.12
Charter consolidation costs  --   --   0.04  0.04  0.03
Tax effect (1)  (0.20)  (0.16)  (0.13)  (0.17)  (0.10)
Net nonrecurring items  0.36  0.31  0.18  0.26  0.15
Diluted core earnings per share (non-GAAP)  $ 1.46  $ 0.70  $ 2.29  $ 1.65  $ 1.02
           
(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

Simmons First National Corporation

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