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Simmons Reports First Quarter 2021 Earnings
Источник: Nasdaq GlobeNewswire / 20 апр 2021 07:00:05 America/Chicago
PINE BLUFF, Ark., April 20, 2021 (GLOBE NEWSWIRE) -- Simmons First National Corporation (NASDAQ: SFNC) (the “Company” or “Simmons”) today announced net income of $67.4 million for the quarter ended March 31, 2021, compared to $77.2 million for the same period in 2020, a decrease of $9.8 million, or 12.7%, due in significant part to the difference in the gains on sale of securities recognized during the periods. Diluted earnings per share were $0.62, a decrease of $0.06, or 8.8%, compared to the same period in the prior year. Included in first quarter 2021 results were $634,000 in net after-tax merger-related and net branch right-sizing costs as well as a $4.0 million after-tax gain primarily associated with the sale of branches in Illinois.
Excluding the impact of these items, core earnings were $64.0 million for the quarter ended March 31, 2021, compared to $73.8 million for the quarter ended March 31, 2020, a decrease of $9.8 million, or 13.3%. Core diluted earnings per share were $0.59, a decrease of $0.06, or 9.2%, from the same period in 2020.
“We are very pleased with our solid performance in the first quarter. It reflects the benefit of our diverse operating model,” said George A. Makris, Jr., chairman and CEO of Simmons First National Corporation. “We are still feeling the effects of COVID in the economy. Some industries are still struggling to return to pre-COVID levels of performance and the government’s economic stimulus packages have created a rapid rise in liquidity. Loan demand has been well below historical levels, but we are encouraged by the rebuilding of the pipeline during the first quarter. Asset quality has improved as compared to 2020 and we are optimistic that trend will continue. Based on our current levels of capital and liquidity, we have lending capacity that we have not seen in several years, so Simmons is poised to do our part as the economy continues to return to normal.”
Selected Highlights: 1st Qtr 2021 4th Qtr 2020 1st Qtr 2020 Net income $67.4 million $53.0 million $77.2 million Diluted earnings per share $0.62 $0.49 $0.68 Return on avg assets 1.20% 0.96% 1.48% Return on avg common equity 9.20% 7.13% 10.83% Return on tangible common equity (1) 15.85% 12.48% 19.00% Core earnings (2) $64.0 million $62.0 million $73.8 million Core diluted earnings per share (2) $0.59 $0.57 $0.65 Core return on avg assets (2) 1.14% 1.13% 1.42% Core return on avg common equity (2) 8.73% 8.34% 10.35% Core return on tangible common equity (1)(2) 15.08% 14.51% 18.19% Efficiency ratio (3) 57.77% 55.27% 57.79% Adjusted pre-tax, pre-provision earnings (2) $73.1 million $83.1 million $84.4 million (1) Return on tangible common equity excludes goodwill and other intangible assets and is a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below. (2) Core figures exclude non-core items and are non-GAAP measurements. Adjusted pre-tax, pre-provision earnings excludes provision for income taxes, provisions for credit losses and unfunded commitments, gains on sales of securities, and other pre-tax, non-core items, and is also a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below. (3) Efficiency ratio is core non-interest expense before foreclosed property expense and amortization of intangibles, as a percent of net interest income (fully taxable equivalent) and non-interest revenues, excluding gains and losses from securities transactions and non-core items, and is a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below. Loans
($ in billions) 1st Qtr 2021 4th Qtr 2020 1st Qtr 2020 Total loans $12.20 $12.90 $14.37 Total loans were $12.2 billion at March 31, 2021, a decrease of $705.0 million on a linked-quarter basis. Of this decrease, $228.7 million was related to declines in seasonal credit card and agricultural portfolios ($33.4 million), Paycheck Protection Program (“PPP”) loans ($107.1 million) and mortgage warehouse line of credit ($88.2 million). The remaining decrease was related in significant part to planned loan payoffs, normal paydowns and weakened loan demand as a result of the economic uncertainty stemming from the COVID-19 pandemic.
Loan demand appears to be recovering going into the second quarter of 2021. The Company’s total loan pipeline consisting of all loan opportunities was $1.2 billion at March 31, 2021 compared to $674 million at December 31, 2020. Loans approved and ready to close were $284 million as of March 31, 2021.
As of March 31, 2021, the Company had $797.6 million in loans outstanding under the PPP. The change in the total PPP loan balance during the first quarter of 2021 was as follows:
($ in millions) PPP Round 1 PPP Round 2 Total PPP Loans Beginning balance, January 1, 2021 $904.7 $ - $904.7 PPP loan originations - 227.9 227.9 PPP loan forgiveness and repayments (335.0) - (335.0) Ending balance, March 31, 2021 $569.7 $227.9 $797.6 Deposits
($ in billions) 1st Qtr 2021 4th Qtr 2020 1st Qtr 2020 Total deposits $18.2 $17.0 $15.6 Non-interest bearing deposits $4.9 $4.5 $3.6 Interest bearing deposits $10.3 $9.7 $8.8 Time deposits $3.0 $2.8 $3.2 Total deposits were $18.2 billion at March 31, 2021, representing increases of $2.6 billion, or 16.9%, since March 31, 2020 and $1.2 billion, or 7.1% since last quarter. The increase in deposit balances was driven in significant part by multiple rounds of economic stimulus legislation and changes in customer spending as a result of the ongoing COVID-19 pandemic. Trends affected by the increasing customer cash balances are paydowns on loans, decreased loan demand, reduced credit card balances and fewer overdraft activities.
Net Interest Income
1st Qtr
20214th Qtr
20203rd Qtr
20202nd Qtr
20201st Qtr
2020Loan yield (1) 4.75% 4.74% 4.54% 4.84% 5.19% Core loan yield (1) (2) 4.53% 4.47% 4.29% 4.52% 4.86% Security yield (1) 2.36% 2.48% 2.60% 2.50% 2.63% Cost of interest bearing deposits 0.41% 0.47% 0.54% 0.59% 1.03% Cost of deposits (3) 0.30% 0.34% 0.39% 0.44% 0.80% Cost of borrowed funds 1.91% 1.88% 1.85% 1.84% 2.06% Net interest margin (1) 2.99% 3.22% 3.21% 3.42% 3.68% Core net interest margin (1) (2) 2.86% 3.04% 3.02% 3.18% 3.42% (1) Fully tax equivalent using an effective tax rate of 26.135%. (2) Core loan yield and core net interest margin exclude accretion and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below. (3) Includes non-interest bearing deposits. The Company’s net interest income for the first quarter of 2021 was $146.7 million, a decrease of $20.8 million, or 12.4%, from the same period in 2020. The decrease in net interest income was primarily due to the decline in the loan yield of 44 basis points and the lower average loan balance during the current period. This decrease was partially offset by the 50 basis point decline in the cost of deposits. Loan and deposits yields were impacted by the continuing low interest rate environment during the first quarter of 2021. Included in interest income was the yield accretion recognized on loans acquired of $6.6 million and $11.8 million for the first quarters of 2021 and 2020, respectively.
The loan yield essentially remained flat for the quarter ended March 31, 2021, compared to the fourth quarter of 2020 at 4.75%. The core loan yield, which excludes accretion on acquired loans, was 4.53%, an increase of 6 basis points for the same period. The yield on PPP loans was approximately 5.26% during the first quarter of 2021 (including accretion of net fees), which increased the Company’s overall loan yield by approximately 4 basis points.
Net interest margin (FTE) was 2.99% for the quarter ended March 31, 2021, while core net interest margin, which excludes the accretion, was 2.86% for the same period. The decline in the net interest margin during the first quarter of 2021 was primarily due to an $804 million increase in average cash and cash equivalents. The Company added $1.1 billion to its average investment security portfolio balance during the quarter. The net interest margin during the first quarter of 2021 was affected by additional liquidity and the PPP loans, which decreased the net interest margin by approximately 35 basis points.
Non-Interest Income
Non-interest income for the first quarter of 2021 was $51.9 million, a decrease of $30.5 million compared to the same period in the previous year. The decline in non-interest income was primarily related to the incremental gains on the sale of securities recognized during the first quarter of last year. During the first quarter of 2020, the Company sold approximately $1.0 billion in securities resulting in a gain of $30.1 million, to begin creating additional liquidity in response to the unfolding COVID-19 pandemic. During the first quarter of 2021, the Company generated a gain of $5.5 million on sales of securities.
Debit and credit card fees for the first quarter of 2021 were $9.0 million, an increase of $1.1 million, or 13.3%, compared to the first quarter of 2020. Makris stated, “This increase appears to highlight new consumer habits and the effects of the government economic impact payments.”
Selected Non-Interest Income Items
($ in millions)1st Qtr
20214th Qtr
20203rd Qtr
20202nd Qtr
20201st Qtr
2020Service charges on deposit accounts $9.7 $10.8 $10.4 $8.6 $13.3 Mortgage lending income $6.4 $3.0 $14.0 $12.5 $5.0 SBA lending income $0.2 $0.5 $0.3 $0.2 $0.3 Debit and credit card fees $9.0 $8.7 $8.9 $8.0 $7.9 Gain on sale of securities $5.5 - $22.3 $0.4 $32.1 Other income $10.3 $10.6 $5.4 $9.8 $12.8 Core other income (1) $4.8 $10.3 $5.0 $7.6 $6.9 (1) Core figures exclude non-core items and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below. Non-Interest Expense
Non-interest expense for the first quarter of 2021 was $115.4 million, a decrease of $13.5 million compared to the first quarter of 2020. Included in this quarter were $858,000 of pre-tax non-core items for merger-related expenses and branch right-sizing costs. Excluding these expenses, core non-interest expense was $114.5 million for the first quarter of 2021, a decrease of $13.0 million compared to the same period in 2020. The decrease in other operating expenses is related to the realization of expected synergies from the continuous evaluation of the Company’s branch network and the branch sales and closures that began in 2020 and have continued in 2021.
The efficiency ratio for the first quarter of 2021 was 57.77% compared to 57.79% for the same period in 2020.
Selected Non-Interest Expense Items
($ in millions)1st Qtr
20214th Qtr
20203rd Qtr
20202nd Qtr
20201st Qtr
2020Salaries and employee benefits $60.3 $55.8 $61.1 $57.6 $67.9 Merger related costs $0.2 $0.7 $0.9 $1.8 $1.1 Other operating expenses $38.4 $54.3 $38.2 $39.7 $41.8 Core salaries and employee benefits(1) $60.3 $55.6 $58.7 $57.2 $67.9 Core merger related costs(1) - - - - - Core other operating expenses(1) $38.2 $44.1 $38.2 $38.0 $41.6 (1) Core figures exclude non-core items and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below. Asset Quality
($ in millions)1st Qtr
20214th Qtr
20203rd Qtr
20202nd Qtr
20201st Qtr
2020Allowance for credit losses on loans to total loans 1.93% 1.85% 1.77% 1.59% 1.69% Allowance for credit losses on loans to non-performing loans 204% 193% 148% 176% 155% Non-performing loans to total loans 0.95% 0.96% 1.20% 0.90% 1.09% Net charge-off ratio (annualized) 0.10% 0.52% 0.16% 1.04% 0.07% Net charge-off ratio YTD (annualized) 0.10% 0.45% 0.43% 0.56% 0.07% Total non-performing loans $115.5 $123.5 $167.9 $131.9 $157.0 Total other non-performing assets $12.4 $20.4 $14.6 $16.1 $23.0 At March 31, 2021, the allowance for credit losses was $235.1 million. Total non-performing assets at March 31, 2021 decreased $52.1 million from the first quarter of 2020 and decreased $16.0 million from year end. Provision for credit losses for the first quarter of 2021 was $1.4 million, a decrease of $5.5 million, or 79.2%, from the previous quarter.
Foreclosed Assets and Other Real Estate Owned
At March 31, 2021, foreclosed assets and other real estate owned were $11.2 million, a decrease of $9.6 million, or 46.3%, compared to the same period in 2020 and a decrease of $7.2 million, or 39.3% from December 31, 2020. The composition of these assets is divided into three types:
($ in millions)1st Qtr
20214th Qtr
20203rd Qtr
20202nd Qtr
20201st Qtr
2020Closed bank branches and branch sites $0.5 $0.6 $0.6 $2.7 $8.8 Foreclosed assets – acquired $7.7 $15.3 $9.3 $9.2 $9.2 Foreclosed assets – legacy $3.0 $2.5 $2.7 $2.2 $2.8 Capital
1st Qtr
20214th Qtr
20203rd Qtr
20202nd Qtr
20201st Qtr
2020Stockholders’ equity to total assets 12.6% 13.3% 13.7% 13.3% 13.7% Tangible common equity to tangible assets (1) 7.9% 8.5% 8.7% 8.3% 8.4% Regulatory common equity tier 1 ratio 14.1% 13.4% 12.6% 11.9% 11.1% Regulatory tier 1 leverage ratio 9.0% 9.1% 9.1% 8.8% 9.0% Regulatory tier 1 risk-based capital ratio 14.1% 13.4% 12.6% 11.9% 11.1% Regulatory total risk-based capital ratio 17.5% 16.8% 15.8% 14.9% 14.1% (1) Tangible common equity to tangible assets is a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below. At March 31, 2021, common stockholders' equity was $2.9 billion. Book value per share was $27.04 and tangible book value per share was $16.13 at March 31, 2021, compared to $27.53 and $16.56, respectively, at December 31, 2020. The ratio of stockholders’ equity to total assets was 12.6% at March 31, 2021, compared to 13.3% at December 31, 2020, while tangible common equity to tangible assets was 7.9% at March 31, 2021, compared to 8.5% at the previous year-end.
During the first quarter of 2021, the Company repurchased approximately 131,000 shares of its common stock at an average price per share of $23.53. Market conditions and capital needs will drive the decisions regarding additional, future stock repurchases.
Simmons First National Corporation
Simmons First National Corporation is a financial holding company headquartered in Pine Bluff, Arkansas, with total consolidated assets of approximately $23.3 billion as of March 31, 2021. The Company, through its subsidiaries, conducts financial operations in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas and offers comprehensive financial solutions delivered with a client-centric approach. The Company’s common stock is listed on the NASDAQ Global Select Market under the symbol “SFNC.”
Conference Call
Management will conduct a live conference call to review this information beginning at 9:00 a.m. CDT today, Tuesday, April 20, 2021. 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 1443639. In addition, the call will be available live or in recorded version on the Company’s website at www.simmonsbank.com for at least 60 days.
Non-GAAP Financial Measures
This press release contains financial information determined by methods other than in accordance with U.S. 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 adjust GAAP performance measures to, among other things, include the tax benefit associated with revenue items that are tax-exempt, as well as exclude from income available to common shareholders, non-interest income, and non-interest expense certain income and expenses related to significant non-core activities, including merger-related expenses, gain on sale of branches, early retirement program expenses and net branch right-sizing expenses. In addition, the Company also presents certain figures based on tangible common stockholders’ equity, tangible assets and tangible book value, which exclude goodwill and other intangible assets. The Company further presents certain figures that are exclusive of the impact of PPP loans. The Company’s management believes that these non-GAAP financial measures are useful to investors because they, among other things, present the results of the Company’s ongoing operations without the effect of mergers or other items not central to the Company’s ongoing business, as well as normalize for tax effects. Management, therefore, 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, and management uses these non-GAAP financial measures to assess the performance of the Company’s core businesses as related to prior financial periods. 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. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the tables of this release.
Forward-Looking Statements
Some of the statements in this news release may not be based on historical facts and should be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, including, without limitation, statements made in Mr. Makris’s quotes, may be identified by reference to future periods or by the use of forward-looking terminology, such as “believe,” “budget,” “expect,” “foresee,” “anticipate,” “intend,” “indicate,” “target,” “estimate,” “plan,” “project,” “continue,” “contemplate,” “positions,” “prospects,” “predict,” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could,” “might” or “may,” or by variations of such words or by similar expressions. These forward-looking statements include, without limitation, statements relating to Simmons’ future growth, lending capacity and lending activity, revenue, assets, asset quality, profitability, net interest margin, non-interest revenue, share repurchase program, acquisition strategy, digital banking initiatives, the Company’s ability to recruit and retain key employees, the benefits associated with the Company’s early retirement program, branch closures and branch sales, the adequacy of the allowance for credit losses, the ability of the Company to manage the impact of the COVID-19 pandemic, and the impacts of the Company’s and its customers participation in the PPP. Any forward-looking statement speaks only as of the date of this news release, and Simmons undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release. By nature, forward-looking statements are based on various assumptions and involve inherent risk and uncertainties. Various factors, including, but not limited to, changes in economic conditions, credit quality, interest rates, loan demand, deposit flows, real estate values, the assumptions used in making the forward-looking statements, the securities markets generally or the price of Simmons common stock specifically, and information technology affecting the financial industry; the effect of steps the Company takes and has taken in response to the COVID-19 pandemic; the severity and duration of the pandemic, including the effectiveness of vaccination efforts; the pace of recovery when the pandemic subsides and the heightened impact it has on many of the risks described herein; the effects of the COVID-19 pandemic on, among other things, the Company’s operations, liquidity, and credit quality; general economic and market conditions; unemployment; claims, damages, and fines related to litigation or government actions, including litigation or actions arising from the Company’s participation in and administration of programs related to the COVID-19 pandemic (including, among other things, the PPP loan program authorized by the Coronavirus Aid, Relief and Economic Security Act); changes in accounting principles relating to loan loss recognition (current expected credit losses, or CECL); the Company’s ability to manage and successfully integrate its mergers and acquisitions; cyber threats, attacks or events; reliance on third parties for key services; government legislation; and other factors, many of which are beyond the control of the Company, could cause actual results to differ materially from those contemplated by the forward-looking statements. Additional information on factors that might affect the Company’s financial results is included in the Company’s Form 10-K for the year ended December 31, 2020, which has been filed with, and is available from, the U.S. Securities and Exchange Commission.
FOR MORE INFORMATION CONTACT:
Stephen C. Massanelli
EVP, Chief Administrative Officer
Simmons First National Corporation
steve.massanelli@simmonsbank.comSimmons First National Corporation SFNC Consolidated End of Period Balance Sheets For the Quarters Ended Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 (Unaudited) 2021 2020 2020 2020 2020 ($ in thousands) ASSETS Cash and non-interest bearing balances due from banks $ 227,713 $ 217,499 $ 382,691 $ 234,998 $ 244,123 Interest bearing balances due from banks and federal funds sold 3,677,750 3,254,653 2,139,440 2,310,162 1,493,076 Cash and cash equivalents 3,905,463 3,472,152 2,522,131 2,545,160 1,737,199 Interest bearing balances due from banks - time 1,334 1,579 4,061 4,561 4,309 Investment securities - held-to-maturity 609,500 333,031 47,102 51,720 53,968 Investment securities - available-for-sale 4,528,348 3,473,598 2,607,288 2,496,896 2,466,640 Mortgage loans held for sale 63,655 137,378 192,729 120,034 49,984 Other assets held for sale 100 100 389 399 115,315 Loans: Loans 12,195,873 12,900,897 14,017,442 14,606,900 14,374,277 Allowance for credit losses on loans (235,116 ) (238,050 ) (248,251 ) (231,643 ) (243,195 ) Net loans 11,960,757 12,662,847 13,769,191 14,375,257 14,131,082 Premises and equipment 427,540 441,692 470,491 478,896 484,990 Premises held for sale 13,613 15,008 4,486 4,576 - Foreclosed assets and other real estate owned 11,168 18,393 12,590 14,111 20,805 Interest receivable 71,359 72,597 77,352 79,772 57,039 Bank owned life insurance 257,152 255,630 257,718 256,643 255,197 Goodwill 1,075,305 1,075,305 1,075,305 1,064,765 1,064,978 Other intangible assets 107,091 111,110 114,460 117,823 121,673 Other assets 315,732 289,332 282,102 293,071 278,173 Total assets $ 23,348,117 $ 22,359,752 $ 21,437,395 $ 21,903,684 $ 20,841,352 LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Non-interest bearing transaction accounts $ 4,884,667 $ 4,482,091 $ 4,451,385 $ 4,608,098 $ 3,572,244 Interest bearing transaction accounts and savings deposits 10,279,997 9,672,608 8,993,255 8,978,045 8,840,678 Time deposits 3,024,724 2,832,327 2,802,007 3,029,975 3,146,811 Total deposits 18,189,388 16,987,026 16,246,647 16,616,118 15,559,733 Federal funds purchased and securities sold under agreements to repurchase 323,053 299,111 313,694 387,025 377,859 Other borrowings 1,340,467 1,342,067 1,342,769 1,393,689 1,396,829 Subordinated notes and debentures 383,008 382,874 382,739 382,604 388,396 Other liabilities held for sale - 154,620 - - 58,405 Accrued interest and other liabilities 181,426 217,398 209,305 219,545 214,730 Total liabilities 20,417,342 19,383,096 18,495,154 18,998,981 17,995,952 Stockholders' equity: Preferred stock 767 767 767 767 767 Common stock 1,083 1,081 1,090 1,090 1,090 Surplus 2,017,188 2,014,076 2,032,372 2,029,383 2,026,420 Undivided profits 948,913 901,006 866,503 819,153 778,893 Accumulated other comprehensive income (loss): Unrealized (depreciation) accretion on AFS securities (37,176 ) 59,726 41,509 54,310 38,230 Total stockholders' equity 2,930,775 2,976,656 2,942,241 2,904,703 2,845,400 Total liabilities and stockholders' equity $ 23,348,117 $ 22,359,752 $ 21,437,395 $ 21,903,684 $ 20,841,352 Simmons First National Corporation SFNC Consolidated Statements of Income - Quarter-to-Date For the Quarters Ended Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 (Unaudited) 2021 2020 2020 2020 2020 ($ in thousands, except per share data) INTEREST INCOME Loans (including fees) $ 146,424 $ 160,115 $ 163,180 $ 176,910 $ 187,566 Interest bearing balances due from banks and federal funds sold 798 716 623 603 2,441 Investment securities 21,573 17,207 14,910 13,473 18,943 Mortgage loans held for sale 639 1,070 1,012 668 281 TOTAL INTEREST INCOME 169,434 179,108 179,725 191,654 209,231 INTEREST EXPENSE Time deposits 7,091 7,835 9,437 10,803 13,323 Other deposits 6,088 6,536 6,769 7,203 17,954 Federal funds purchased and securities sold under agreements to repurchase 245 284 335 337 759 Other borrowings 4,802 4,869 4,943 4,963 4,877 Subordinated notes and debentures 4,527 4,624 4,631 4,667 4,835 TOTAL INTEREST EXPENSE 22,753 24,148 26,115 27,973 41,748 NET INTEREST INCOME 146,681 154,960 153,610 163,681 167,483 Provision for credit losses 1,445 6,943 22,981 21,915 23,134 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 145,236 148,017 130,629 141,766 144,349 NON-INTEREST INCOME Trust income 6,666 6,557 6,744 7,253 7,151 Service charges on deposit accounts 9,715 10,799 10,385 8,570 13,328 Other service charges and fees 1,922 1,783 1,764 1,489 1,588 Mortgage lending income 6,447 2,993 13,971 12,459 5,046 SBA lending income 240 484 304 245 296 Investment banking income 695 676 557 571 877 Debit and credit card fees 8,964 8,710 8,850 7,996 7,914 Bank owned life insurance income 1,523 1,481 1,591 1,445 1,298 Gain on sale of securities, net 5,471 16 22,305 390 32,095 Other income 10,260 10,557 5,380 9,809 12,801 TOTAL NON-INTEREST INCOME 51,903 44,056 71,851 50,227 82,394 NON-INTEREST EXPENSE Salaries and employee benefits 60,340 55,762 61,144 57,644 67,924 Occupancy expense, net 9,300 9,182 9,647 9,217 9,510 Furniture and equipment expense 5,415 5,940 6,231 6,144 5,723 Other real estate and foreclosure expense 343 551 602 274 325 Deposit insurance 1,308 1,627 2,244 2,838 2,475 Merger-related costs 233 731 902 1,830 1,068 Other operating expenses 38,417 54,342 38,179 39,651 41,788 TOTAL NON-INTEREST EXPENSE 115,356 128,135 118,949 117,598 128,813 NET INCOME BEFORE INCOME TAXES 81,783 63,938 83,531 74,395 97,930 Provision for income taxes 14,363 10,970 17,633 15,593 20,694 NET INCOME 67,420 52,968 65,898 58,802 77,236 Preferred stock dividends 13 13 13 13 13 NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 67,407 $ 52,955 $ 65,885 $ 58,789 $ 77,223 BASIC EARNINGS PER SHARE $ 0.62 $ 0.49 $ 0.60 $ 0.54 $ 0.68 DILUTED EARNINGS PER SHARE $ 0.62 $ 0.49 $ 0.60 $ 0.54 $ 0.68 Simmons First National Corporation SFNC Consolidated Risk-Based Capital For the Quarters Ended Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 (Unaudited) 2021 2020 2020 2020 2020 ($ in thousands) Tier 1 capital Stockholders' equity $ 2,930,775 $ 2,976,656 $ 2,942,241 $ 2,904,703 $ 2,845,400 CECL transition provision (1) 131,637 131,430 134,798 130,480 134,558 Disallowed intangible assets, net of deferred tax (1,159,720 ) (1,163,797 ) (1,167,357 ) (1,160,385 ) (1,164,038 ) Unrealized loss (gain) on AFS securities 37,176 (59,726 ) (41,509 ) (54,310 ) (38,230 ) Total Tier 1 capital 1,939,868 1,884,563 1,868,173 1,820,488 1,777,690 Tier 2 capital Trust preferred securities and subordinated debt 383,008 382,874 382,739 382,604 388,396 Qualifying allowance for loan losses and reserve for unfunded commitments 87,251 89,546 96,734 83,780 96,015 Total Tier 2 capital 470,259 472,420 479,473 466,384 484,411 Total risk-based capital $ 2,410,127 $ 2,356,983 $ 2,347,646 $ 2,286,872 $ 2,262,101 Risk weighted assets $ 13,771,244 $ 14,048,608 $ 14,878,932 $ 15,362,175 $ 16,012,233 Adjusted average assets for leverage ratio $ 21,668,406 $ 20,765,127 $ 20,652,454 $ 20,742,824 $ 19,832,219 Ratios at end of quarter Equity to assets 12.55 % 13.31 % 13.72 % 13.26 % 13.65 % Tangible common equity to tangible assets (2) 7.88 % 8.45 % 8.65 % 8.31 % 8.44 % Common equity Tier 1 ratio (CET1) 14.08 % 13.41 % 12.55 % 11.85 % 11.10 % Tier 1 leverage ratio 8.95 % 9.08 % 9.05 % 8.78 % 8.96 % Tier 1 risk-based capital ratio 14.09 % 13.41 % 12.56 % 11.85 % 11.10 % Total risk-based capital ratio 17.50 % 16.78 % 15.78 % 14.89 % 14.13 % (1) The Company has elected to use the CECL transition provision allowed for in the year of adopting ASC 326. (2) Calculations of tangible common equity to tangible assets and the reconciliations to GAAP are included in the schedules accompanying this release. Simmons First National Corporation SFNC Consolidated Investment Securities For the Quarters Ended Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 (Unaudited) 2021 2020 2020 2020 2020 ($ in thousands) Investment Securities - End of Period Held-to-Maturity U.S. Government agencies $ 77,396 $ - $ - $ - $ - Mortgage-backed securities 47,988 22,354 24,297 25,980 27,121 State and political subdivisions 484,116 310,109 21,930 24,777 25,985 Other securities - 568 875 963 862 Total held-to-maturity (net of credit losses) 609,500 333,031 47,102 51,720 53,968 Available-for-Sale U.S. Treasury $ 600 $ - $ - $ - $ 424,989 U.S. Government agencies 487,679 477,237 471,973 210,921 161,289 Mortgage-backed securities 2,133,086 1,394,936 903,687 1,154,086 1,179,837 State and political subdivisions 1,571,910 1,470,723 1,133,006 1,054,068 678,243 Other securities 335,073 130,702 98,622 77,821 22,282 Total available-for-sale (net of credit losses) 4,528,348 3,473,598 2,607,288 2,496,896 2,466,640 Total investment securities (net of credit losses) $ 5,137,848 $ 3,806,629 $ 2,654,390 $ 2,548,616 $ 2,520,608 Fair value - HTM investment securities $ 597,694 $ 341,925 $ 49,064 $ 53,751 $ 55,714 Investment Securities - QTD Average Taxable securities $ 2,471,291 $ 1,757,234 $ 1,534,742 $ 1,642,083 $ 2,324,188 Tax exempt securities 1,919,919 1,528,127 1,155,099 866,944 900,223 Total investment securities - QTD average $ 4,391,210 $ 3,285,361 $ 2,689,841 $ 2,509,027 $ 3,224,411 Simmons First National Corporation SFNC Consolidated Loans For the Quarters Ended Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 (Unaudited) 2021 2020 2020 2020 2020 ($ in thousands) Loan Portfolio - End of Period Consumer Credit cards $ 175,458 $ 188,845 $ 180,848 $ 184,348 $ 188,596 Other consumer 172,965 202,379 182,768 214,024 267,870 Total consumer 348,423 391,224 363,616 398,372 456,466 Real Estate Construction 1,451,841 1,596,255 1,853,360 2,010,256 2,024,118 Single-family residential 1,730,056 1,880,673 1,997,070 2,207,087 2,343,543 Other commercial real estate 5,638,010 5,746,863 6,132,823 6,316,444 6,466,104 Total real estate 8,819,907 9,223,791 9,983,253 10,533,787 10,833,765 Commercial Commercial 2,444,700 2,574,386 2,907,798 3,038,216 2,314,472 Agricultural 155,921 175,905 241,687 217,715 191,535 Total commercial 2,600,621 2,750,291 3,149,485 3,255,931 2,506,007 Other 426,922 535,591 521,088 418,810 578,039 Total Loans $ 12,195,873 $ 12,900,897 $ 14,017,442 $ 14,606,900 $ 14,374,277 Simmons First National Corporation SFNC Consolidated Allowance and Asset Quality For the Quarters Ended Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 (Unaudited) 2021 2020 2020 2020 2020 ($ in thousands) Allowance for Credit Losses on Loans Beginning balance, prior to adoption of ASC 326 $ 68,244 Impact of adopting ASC 326 (1) $ 151,377 Beginning balance, after adoption of ASC 326 $ 238,050 $ 248,251 $ 231,641 $ 243,195 $ 219,621 Loans charged off Credit cards 1,003 787 832 1,053 1,441 Other consumer 731 960 1,091 592 1,379 Real estate 1,687 10,415 1,153 1,824 396 Commercial 830 8,199 4,327 35,687 523 Total loans charged off 4,251 20,361 7,403 39,156 3,739 Recoveries of loans previously charged off Credit cards 290 241 276 272 225 Other consumer 314 355 366 301 443 Real estate 403 431 120 253 101 Commercial 310 1,835 936 98 347 Total recoveries 1,317 2,862 1,698 924 1,116 Net loans charged off 2,934 17,499 5,705 38,232 2,623 Provision for credit losses on loans - 7,298 22,315 26,678 26,197 Balance, end of quarter $ 235,116 $ 238,050 $ 248,251 $ 231,641 $ 243,195 Non-performing assets Non-performing loans Nonaccrual loans $ 114,856 $ 122,879 $ 167,713 $ 131,383 $ 155,863 Loans past due 90 days or more 635 578 174 494 1,160 Total non-performing loans 115,491 123,457 167,887 131,877 157,023 Other non-performing assets Foreclosed assets and other real estate owned 11,168 18,393 12,590 14,111 20,805 Other non-performing assets 1,229 2,016 1,983 2,008 2,169 Total other non-performing assets 12,397 20,409 14,573 16,119 22,974 Total non-performing assets $ 127,888 $ 143,866 $ 182,460 $ 147,996 $ 179,997 Performing TDRs (troubled debt restructurings) $ 3,804 $ 3,138 $ 3,379 $ 3,960 $ 4,110 Ratios Allowance for credit losses on loans to total loans 1.93 % 1.85 % 1.77 % 1.59 % 1.69 % Allowance for credit losses to non-performing loans 204 % 193 % 148 % 176 % 155 % Non-performing loans to total loans 0.95 % 0.96 % 1.20 % 0.90 % 1.09 % Non-performing assets (including performing TDRs) to total assets 0.56 % 0.66 % 0.87 % 0.69 % 0.88 % Non-performing assets to total assets 0.55 % 0.64 % 0.85 % 0.68 % 0.86 % Annualized net charge offs to total loans 0.10 % 0.52 % 0.16 % 1.04 % 0.07 % Annualized net credit card charge offs to total credit card loans 1.39 % 1.15 % 1.20 % 1.67 % 2.29 % (1) The Company adopted ASC 326.effective January 1, 2020. Simmons First National Corporation SFNC Consolidated - Average Balance Sheet and Net Interest Income Analysis For the Quarters Ended (Unaudited) Three Months Ended
Mar 2021Three Months Ended
Dec 2020Three Months Ended
Mar 2020($ in thousands) Average
BalanceIncome/
ExpenseYield/
RateAverage
BalanceIncome/
ExpenseYield/
RateAverage
BalanceIncome/
ExpenseYield/
RateASSETS Earning assets: Interest bearing balances due from banks and federal funds sold $ 3,477,989 $ 798 0.09 % $ 2,651,938 $ 716 0.11 % $ 764,639 $ 2,441 1.28 % Investment securities - taxable 2,471,291 10,120 1.66 % 1,757,234 7,720 1.75 % 2,324,188 12,752 2.21 % Investment securities - non-taxable (FTE) 1,919,919 15,439 3.26 % 1,528,127 12,778 3.33 % 900,223 8,315 3.71 % Mortgage loans held for sale 97,409 639 2.66 % 179,275 1,070 2.37 % 43,588 281 2.59 % Loans - including fees (FTE) 12,518,300 146,601 4.75 % 13,457,077 160,306 4.74 % 14,548,853 187,747 5.19 % Total interest earning assets (FTE) 20,484,908 173,597 3.44 % 19,573,651 182,590 3.71 % 18,581,491 211,536 4.58 % Non-earning assets 2,253,913 2,278,443 2,338,732 Total assets $ 22,738,821 $ 21,852,094 $ 20,920,223 LIABILITIES AND STOCKHOLDERS' EQUITY Interest bearing liabilities: Interest bearing transaction and savings accounts $ 10,093,868 $ 6,088 0.24 % $ 9,389,570 $ 6,536 0.28 % $ 9,005,701 $ 17,954 0.80 % Time deposits 3,043,000 7,091 0.95 % 2,823,166 7,835 1.10 % 3,150,909 13,323 1.70 % Total interest bearing deposits 13,136,868 13,179 0.41 % 12,212,736 14,371 0.47 % 12,156,610 31,277 1.03 % Federal funds purchased and securities sold under agreement to repurchase 307,540 245 0.32 % 340,333 284 0.33 % 330,902 759 0.92 % Other borrowings 1,341,059 4,802 1.45 % 1,342,403 4,869 1.44 % 1,320,245 4,877 1.49 % Subordinated notes and debentures 382,943 4,527 4.79 % 382,808 4,624 4.81 % 388,330 4,835 5.01 % Total interest bearing liabilities 15,168,410 22,753 0.61 % 14,278,280 24,148 0.67 % 14,196,087 41,748 1.18 % Non-interest bearing liabilities: Non-interest bearing deposits 4,419,136 4,413,168 3,602,678 Other liabilities 177,819 204,014 251,514 Total liabilities 19,765,365 18,895,462 18,050,279 Stockholders' equity 2,973,456 2,956,632 2,869,944 Total liabilities and stockholders' equity $ 22,738,821 $ 21,852,094 $ 20,920,223 Net interest income (FTE) $ 150,844 $ 158,442 $ 169,788 Net interest spread (FTE) 2.83 % 3.04 % 3.40 % Net interest margin (FTE) - quarter-to-date 2.99 % 3.22 % 3.68 % Net interest margin (FTE) - year-to-date 2.99 % 3.38 % 3.68 % Core net interest margin (FTE) - quarter-to-date (1) 2.86 % 3.04 % 3.42 % Core loan yield (FTE) - quarter-to-date (1) 4.53 % 4.47 % 4.86 % Core net interest margin (FTE) - year-to-date (1) 2.86 % 3.16 % 3.42 % Core loan yield (FTE) - year-to-date (1) 4.53 % 4.54 % 4.86 % (1) Calculations of core net interest margin and core loan yield and the reconciliations to GAAP are included in the schedules accompanying this release. Simmons First National Corporation SFNC Consolidated - Selected Financial Data For the Quarters Ended Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 (Unaudited) 2021 2020 2020 2020 2020 ($ in thousands, except share data) QUARTER-TO-DATE Financial Highlights - GAAP Net Income $ 67,407 $ 52,955 $ 65,885 $ 58,789 $ 77,223 Diluted earnings per share 0.62 0.49 0.60 0.54 0.68 Return on average assets 1.20 % 0.96 % 1.20 % 1.08 % 1.48 % Return on average common equity 9.20 % 7.13 % 8.91 % 8.21 % 10.83 % Return on tangible common equity 15.85 % 12.48 % 15.45 % 14.55 % 19.00 % Net interest margin (FTE) 2.99 % 3.22 % 3.21 % 3.42 % 3.68 % FTE adjustment 4,163 3,482 2,864 2,350 2,305 Amortization of intangibles 3,344 3,351 3,362 3,369 3,413 Amortization of intangibles, net of taxes 2,470 2,475 2,483 2,489 2,521 Average diluted shares outstanding 108,655,293 108,888,264 109,207,294 109,130,866 113,137,223 Shares repurchased under plan 130,916 1,034,364 - - 4,922,336 Average price of shares repurchased 23.53 19.36 - - 18.96 Cash dividends declared per common share 0.18 0.17 0.17 0.17 0.17 Financial Highlights - Core (non-GAAP) Core earnings (excludes non-core items) (1) $ 63,995 $ 61,977 $ 68,338 $ 60,147 $ 73,838 Core diluted earnings per share (1) 0.59 0.57 0.63 0.55 0.65 Core net interest margin (FTE) (2) 2.86 % 3.04 % 3.02 % 3.18 % 3.42 % Accretable yield on acquired loans 6,630 8,999 8,948 11,723 11,837 Efficiency ratio (1) 57.77 % 55.27 % 54.12 % 51.46 % 57.79 % Core return on average assets (1) 1.14 % 1.13 % 1.25 % 1.11 % 1.42 % Core return on average common equity (1) 8.73 % 8.34 % 9.24 % 8.40 % 10.35 % Core return on tangible common equity (1) 15.08 % 14.51 % 16.00 % 14.87 % 18.19 % YEAR-TO-DATE Financial Highlights - GAAP Net Income $ 67,407 $ 254,852 $ 201,897 $ 136,012 $ 77,223 Diluted earnings per share 0.62 2.31 1.83 1.22 0.68 Return on average assets 1.20 % 1.18 % 1.25 % 1.28 % 1.48 % Return on average common equity 9.20 % 8.72 % 9.27 % 9.45 % 10.83 % Return on tangible common equity 15.85 % 15.25 % 16.19 % 16.57 % 19.00 % Net interest margin (FTE) 2.99 % 3.38 % 3.43 % 3.55 % 3.68 % FTE adjustment 4,163 11,001 7,519 4,655 2,305 Amortization of intangibles 3,344 13,495 10,144 6,782 3,413 Amortization of intangibles, net of taxes 2,470 9,968 7,493 5,010 2,521 Average diluted shares outstanding 108,655,293 110,173,661 110,480,508 111,083,999 113,137,223 Cash dividends declared per common share 0.18 0.68 0.51 0.34 0.17 Financial Highlights - Core (non-GAAP) Core earnings (excludes non-core items) (1) $ 63,995 $ 264,300 $ 202,323 $ 133,985 $ 73,838 Core diluted earnings per share (1) 0.59 2.40 1.83 1.21 0.65 Core net interest margin (FTE) (2) 2.86 % 3.16 % 3.20 % 3.30 % 3.42 % Accretable yield on acquired loans 6,630 41,507 32,508 23,560 11,837 Efficiency ratio (1) 57.77 % 54.66 % 54.46 % 54.62 % 57.79 % Core return on average assets (1) 1.14 % 1.22 % 1.26 % 1.26 % 1.42 % Core return on average common equity (1) 8.73 % 9.05 % 9.29 % 9.31 % 10.35 % Core return on tangible common equity (1) 15.08 % 15.79 % 16.22 % 16.33 % 18.19 % END OF PERIOD Book value per share $ 27.04 $ 27.53 $ 26.98 $ 26.64 $ 26.11 Tangible book value per share 16.13 16.56 16.07 15.79 15.22 Shares outstanding 108,345,732 108,077,662 109,023,781 108,994,389 108,966,331 Full-time equivalent employees 2,962 2,923 2,904 2,939 3,079 Total number of financial centers 198 204 226 226 240 (1) Core earnings exclude non-core items, which is a non-GAAP measurement. Reconciliations to GAAP are included in the schedules accompanying this release. (2) Excludes accretable yield adjustment on loans, which is a non-GAAP measurement. Reconciliations to GAAP are included in the schedules accompanying this release. Simmons First National Corporation SFNC Reconciliation Of Non-GAAP Financial Measures - Core Earnings - Quarter-to-Date For the Quarters Ended Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 (Unaudited) 2021 2020 2020 2020 2020 ($ in thousands, except per share data) QUARTER-TO-DATE Net Income $ 67,407 $ 52,955 $ 65,885 $ 58,789 $ 77,223 Non-core items Gain on sale of branches (5,477 ) (275 ) - (2,204 ) (5,889 ) Merger-related costs 233 731 902 1,830 1,068 Early retirement program - 62 2,346 493 - Branch right-sizing (net) 625 11,696 72 1,721 238 Tax effect (1) 1,207 (3,192 ) (867 ) (482 ) 1,198 Net non-core items (3,412 ) 9,022 2,453 1,358 (3,385 ) Core earnings (non-GAAP) $ 63,995 $ 61,977 $ 68,338 $ 60,147 $ 73,838 Diluted earnings per share $ 0.62 $ 0.49 $ 0.60 $ 0.54 $ 0.68 Non-core items Gain on sale of branches (0.05 ) - - (0.02 ) (0.05 ) Merger-related costs - - 0.01 0.02 0.01 Early retirement program - - 0.02 - - Branch right-sizing (net) 0.01 0.11 - 0.02 - Tax effect (1) 0.01 (0.03 ) - (0.01 ) 0.01 Net non-core items (0.03 ) 0.08 0.03 0.01 (0.03 ) Core diluted earnings per share (non-GAAP) $ 0.59 $ 0.57 $ 0.63 $ 0.55 $ 0.65 (1) Effective tax rate of 26.135%. Reconciliation of Selected Non-Core Non-Interest Income and Expense Items (non-GAAP) QUARTER-TO-DATE Other income $ 10,260 $ 10,557 $ 5,380 $ 9,809 $ 12,801 Non-core items (1) (5,477 ) (275 ) (370 ) (2,204 ) (5,889 ) Core other income (non-GAAP) $ 4,783 $ 10,282 $ 5,010 $ 7,605 $ 6,912 Non-interest expense $ 115,356 $ 128,135 $ 118,949 $ 117,598 $ 128,813 Non-core items (1) (858 ) (12,489 ) (3,690 ) (4,044 ) (1,306 ) Core non-interest expense (non-GAAP) $ 114,498 $ 115,646 $ 115,259 $ 113,554 $ 127,507 Salaries and employee benefits $ 60,340 $ 55,762 $ 61,144 $ 57,644 $ 67,924 Non-core items (1) - (144 ) (2,448 ) (493 ) - Core salaries and employee benefits (non-GAAP) $ 60,340 $ 55,618 $ 58,696 $ 57,151 $ 67,924 Merger related costs $ 233 $ 731 $ 902 $ 1,830 $ 1,068 Non-core items (1) (233 ) (731 ) (902 ) (1,830 ) (1,068 ) Core merger related costs (non-GAAP) $ - $ - $ - $ - $ - Other operating expenses $ 38,417 $ 54,342 $ 38,179 $ 39,651 $ 41,788 Non-core items (1) (208 ) (10,270 ) (11 ) (1,662 ) (212 ) Core other operating expenses (non-GAAP) $ 38,209 $ 44,072 $ 38,168 $ 37,989 $ 41,576 (1) Non-core items include gain on sale of branches, merger related costs, early retirement program expenses and branch right-sizing costs. Simmons First National Corporation SFNC Reconciliation Of Non-GAAP Financial Measures - Core Earnings - Year-to-Date For the Quarters Ended Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 (Unaudited) 2021 2020 2020 2020 2020 ($ in thousands, except per share data) YEAR-TO-DATE Net Income $ 67,407 $ 254,852 $ 201,897 $ 136,012 $ 77,223 Non-core items Gain on sale of branches (5,477 ) (8,368 ) (8,093 ) (8,093 ) (5,889 ) Merger-related costs 233 4,531 3,800 2,898 1,068 Early retirement program - 2,901 2,839 493 - Branch right-sizing (net) 625 13,727 2,031 1,959 238 Tax effect (1) 1,207 (3,343 ) (151 ) 716 1,198 Net non-core items (3,412 ) 9,448 426 (2,027 ) (3,385 ) Core earnings (non-GAAP) $ 63,995 $ 264,300 $ 202,323 $ 133,985 $ 73,838 Diluted earnings per share $ 0.62 $ 2.31 $ 1.83 $ 1.22 $ 0.68 Non-core items Gain on sale of branches (0.05 ) (0.07 ) (0.07 ) (0.07 ) (0.05 ) Merger-related costs - 0.04 0.03 0.03 0.01 Early retirement program - 0.03 0.02 - - Branch right-sizing (net) 0.01 0.12 0.02 0.02 - Tax effect (1) 0.01 (0.03 ) - 0.01 0.01 Net non-core items (0.03 ) 0.09 - (0.01 ) (0.03 ) Core diluted earnings per share (non-GAAP) $ 0.59 $ 2.40 $ 1.83 $ 1.21 $ 0.65 (1) Effective tax rate of 26.135%. Reconciliation of Selected Non-Core Non-Interest Income and Expense Items (non-GAAP) YEAR-TO-DATE Other income $ 10,260 $ 38,547 $ 27,990 $ 22,610 $ 12,801 Non-core items (1) (5,477 ) (8,738 ) (8,463 ) (8,093 ) (5,889 ) Core other income (non-GAAP) $ 4,783 $ 29,809 $ 19,527 $ 14,517 $ 6,912 Non-interest expense $ 115,356 $ 493,495 $ 365,360 $ 246,411 $ 128,813 Non-core items (1) (858 ) (21,529 ) (9,040 ) (5,350 ) (1,306 ) Core non-interest expense (non-GAAP) $ 114,498 $ 471,966 $ 356,320 $ 241,061 $ 127,507 Salaries and employee benefits $ 60,340 $ 242,474 $ 186,712 $ 125,568 $ 67,924 Non-core items (1) - (3,085 ) (2,941 ) (493 ) - Core salaries and employee benefits (non-GAAP) $ 60,340 $ 239,389 $ 183,771 $ 125,075 $ 67,924 Merger related costs $ 233 $ 4,531 $ 3,800 $ 2,898 $ 1,068 Non-core items (1) (233 ) (4,531 ) (3,800 ) (2,898 ) (1,068 ) Core merger related costs (non-GAAP) $ - $ - $ - $ - $ - Other operating expenses $ 38,417 $ 173,960 $ 119,618 $ 81,439 $ 41,788 Non-core items (1) (208 ) (12,155 ) (1,885 ) (1,874 ) (212 ) Core other operating expenses (non-GAAP) $ 38,209 $ 161,805 $ 117,733 $ 79,565 $ 41,576 (1) Non-core items include gain on sale of branches, merger related costs, early retirement program expenses and branch right-sizing costs. Simmons First National Corporation SFNC Reconciliation Of Non-GAAP Financial Measures - End of Period For the Quarters Ended Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 (Unaudited) 2021 2020 2020 2020 2020 ($ in thousands, except per share data) Calculation of Tangible Common Equity and the Ratio of Tangible Common Equity to Tangible Assets Total common stockholders' equity $ 2,930,008 $ 2,975,889 $ 2,941,474 $ 2,903,936 $ 2,844,633 Intangible assets: Goodwill (1,075,305 ) (1,075,305 ) (1,075,305 ) (1,064,765 ) (1,064,978 ) Other intangible assets (107,091 ) (111,110 ) (114,460 ) (117,823 ) (121,673 ) Total intangibles (1,182,396 ) (1,186,415 ) (1,189,765 ) (1,182,588 ) (1,186,651 ) Tangible common stockholders' equity $ 1,747,612 $ 1,789,474 $ 1,751,709 $ 1,721,348 $ 1,657,982 Total assets $ 23,348,117 $ 22,359,752 $ 21,437,395 $ 21,903,684 $ 20,841,352 Intangible assets: Goodwill (1,075,305 ) (1,075,305 ) (1,075,305 ) (1,064,765 ) (1,064,978 ) Other intangible assets (107,091 ) (111,110 ) (114,460 ) (117,823 ) (121,673 ) Total intangibles (1,182,396 ) (1,186,415 ) (1,189,765 ) (1,182,588 ) (1,186,651 ) Tangible assets $ 22,165,721 $ 21,173,337 $ 20,247,630 $ 20,721,096 $ 19,654,701 Paycheck protection program ("PPP") loans (797,629 ) (904,673 ) (970,488 ) (963,712 ) Total assets excluding PPP loans $ 22,550,488 $ 21,455,079 $ 20,466,907 $ 20,939,972 Tangible assets excluding PPP loans $ 21,368,092 $ 20,268,664 $ 19,277,142 $ 19,757,384 Ratio of equity to assets 12.55 % 13.31 % 13.72 % 13.26 % 13.65 % Ratio of equity to assets excluding PPP loans 13.00 % 13.87 % 14.38 % 13.87 % Ratio of tangible common equity to tangible assets 7.88 % 8.45 % 8.65 % 8.31 % 8.44 % Ratio of tangible common equity to tangible assets excluding PPP loans 8.18 % 8.83 % 9.09 % 8.71 % Calculation of Tangible Book Value per Share Total common stockholders' equity $ 2,930,008 $ 2,975,889 $ 2,941,474 $ 2,903,936 $ 2,844,633 Intangible assets: Goodwill (1,075,305 ) (1,075,305 ) (1,075,305 ) (1,064,765 ) (1,064,978 ) Other intangible assets (107,091 ) (111,110 ) (114,460 ) (117,823 ) (121,673 ) Total intangibles (1,182,396 ) (1,186,415 ) (1,189,765 ) (1,182,588 ) (1,186,651 ) Tangible common stockholders' equity $ 1,747,612 $ 1,789,474 $ 1,751,709 $ 1,721,348 $ 1,657,982 Shares of common stock outstanding 108,345,732 108,077,662 109,023,781 108,994,389 108,966,331 Book value per common share $ 27.04 $ 27.53 $ 26.98 $ 26.64 $ 26.11 Tangible book value per common share $ 16.13 $ 16.56 $ 16.07 $ 15.79 $ 15.22 Calculation of Regulatory Tier 1 Leverage Ratio Excluding Average PPP Loans Total Tier 1 capital $ 1,939,868 $ 1,884,563 $ 1,868,173 $ 1,820,488 Adjusted average assets for leverage ratio $ 21,668,406 $ 20,765,127 $ 20,652,454 $ 20,742,824 Average PPP loans (891,070 ) (937,544 ) (967,152 ) (645,172 ) Adjusted average assets excluding average PPP loans $ 20,777,336 $ 19,827,583 $ 19,685,302 $ 20,097,652 Tier 1 leverage ratio 8.95 % 9.08 % 9.05 % 8.78 % Tier 1 leverage ratio excluding average PPP loans 9.34 % 9.50 % 9.49 % 9.06 % Simmons First National Corporation SFNC Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date For the Quarters Ended Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 (Unaudited) 2021 2020 2020 2020 2020 ($ in thousands) Calculation of Core Return on Average Assets Net income $ 67,407 $ 52,955 $ 65,885 $ 58,789 $ 77,223 Net non-core items, net of taxes, adjustment (3,412 ) 9,022 2,453 1,358 (3,385 ) Core earnings $ 63,995 $ 61,977 $ 68,338 $ 60,147 $ 73,838 Average total assets $ 22,738,821 $ 21,852,094 $ 21,765,321 $ 21,822,273 $ 20,920,223 Return on average assets 1.20 % 0.96 % 1.20 % 1.08 % 1.48 % Core return on average assets 1.14 % 1.13 % 1.25 % 1.11 % 1.42 % Calculation of Return on Tangible Common Equity Net income $ 67,407 $ 52,955 $ 65,885 $ 58,789 $ 77,223 Amortization of intangibles, net of taxes 2,470 2,475 2,483 2,489 2,521 Total income available to common stockholders $ 69,877 $ 55,430 $ 68,368 $ 61,278 $ 79,744 Net non-core items, net of taxes (3,412 ) 9,022 2,453 1,358 (3,385 ) Core earnings 63,995 61,977 68,338 60,147 73,838 Amortization of intangibles, net of taxes 2,470 2,475 2,483 2,489 2,521 Total core income available to common stockholders $ 66,465 $ 64,452 $ 70,821 $ 62,636 $ 76,359 Average common stockholders' equity $ 2,972,689 $ 2,955,865 $ 2,942,045 $ 2,879,337 $ 2,869,177 Average intangible assets: Goodwill (1,075,305 ) (1,075,305 ) (1,064,893 ) (1,064,955 ) (1,055,498 ) Other intangibles (109,850 ) (113,098 ) (116,385 ) (120,111 ) (125,746 ) Total average intangibles (1,185,155 ) (1,188,403 ) (1,181,278 ) (1,185,066 ) (1,181,244 ) Average tangible common stockholders' equity $ 1,787,534 $ 1,767,462 $ 1,760,767 $ 1,694,271 $ 1,687,933 Return on average common equity 9.20 % 7.13 % 8.91 % 8.21 % 10.83 % Return on tangible common equity 15.85 % 12.48 % 15.45 % 14.55 % 19.00 % Core return on average common equity 8.73 % 8.34 % 9.24 % 8.40 % 10.35 % Core return on tangible common equity 15.08 % 14.51 % 16.00 % 14.87 % 18.19 % Calculation of Efficiency Ratio (1) Non-interest expense $ 115,356 $ 128,135 $ 118,949 $ 117,598 $ 128,813 Non-core non-interest expense adjustment (858 ) (12,489 ) (3,690 ) (4,044 ) (1,306 ) Other real estate and foreclosure expense adjustment (343 ) (545 ) (600 ) (242 ) (319 ) Amortization of intangibles adjustment (3,344 ) (3,351 ) (3,362 ) (3,369 ) (3,413 ) Efficiency ratio numerator $ 110,811 $ 111,750 $ 111,297 $ 109,943 $ 123,775 Net-interest income $ 146,681 $ 154,960 $ 153,610 $ 163,681 $ 167,483 Non-interest income 51,903 44,056 71,851 50,227 82,394 Non-core non-interest income adjustment (5,477 ) (275 ) (370 ) (2,204 ) (5,889 ) Fully tax-equivalent adjustment (effective tax rate of 26.135%) 4,163 3,482 2,864 2,350 2,305 Gain on sale of securities (5,471 ) (16 ) (22,305 ) (390 ) (32,095 ) Efficiency ratio denominator $ 191,799 $ 202,207 $ 205,650 $ 213,664 $ 214,198 Efficiency ratio (1) 57.77 % 55.27 % 54.12 % 51.46 % 57.79 % (1) Efficiency ratio is core non-interest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and non-interest revenues, excluding gains and losses from securities transactions and non-core items. Simmons First National Corporation SFNC Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date (continued) For the Quarters Ended Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 (Unaudited) 2021 2020 2020 2020 2020 ($ in thousands) Calculation of Core Net Interest Margin Net interest income $ 146,681 $ 154,960 $ 153,610 $ 163,681 $ 167,483 Fully tax-equivalent adjustment (effective tax rate of 26.135%) 4,163 3,482 2,864 2,350 2,305 Fully tax-equivalent net interest income 150,844 158,442 156,474 166,031 169,788 Total accretable yield (6,630 ) (8,999 ) (8,948 ) (11,723 ) (11,837 ) Core net interest income $ 144,214 $ 149,443 $ 147,526 $ 154,308 $ 157,951 PPP loan and additional liquidity interest income (12,257 ) (6,983 ) (6,131 ) $ (5,623 ) Net interest income adjusted for PPP loans and liquidity $ 138,587 $ 151,459 $ 150,343 $ 160,408 Average earning assets $ 20,484,908 $ 19,573,651 $ 19,415,314 $ 19,517,475 $ 18,581,491 Average PPP loan balance and additional liquidity (3,617,567 ) (2,837,125 ) (2,359,928 ) $ (2,071,411 ) Average earning assets adjusted for PPP loans and liquidity $ 16,867,341 $ 16,736,526 $ 17,055,386 $ 17,446,064 Net interest margin 2.99 % 3.22 % 3.21 % 3.42 % 3.68 % Core net interest margin 2.86 % 3.04 % 3.02 % 3.18 % 3.42 % Net interest margin adjusted for PPP loans and liquidity 3.33 % 3.60 % 3.51 % 3.70 % Calculation of Core Loan Yield Loan interest income (FTE) $ 146,601 $ 160,306 $ 163,379 $ 177,168 $ 187,566 Total accretable yield (6,630 ) (8,999 ) (8,948 ) (11,723 ) (11,837 ) Core loan interest income $ 139,971 $ 151,307 $ 154,431 $ 165,445 $ 175,729 PPP loan interest income (11,652 ) (6,457 ) (5,782 ) $ (3,733 ) Core loan interest income without PPP loans $ 128,319 $ 144,850 $ 148,649 $ 161,712 Average loan balance $ 12,518,300 $ 13,457,077 $ 14,315,014 $ 14,731,306 $ 14,548,853 Average PPP loan balance (891,070 ) (937,544 ) (967,152 ) $ (645,172 ) Average loan balance without PPP loans $ 11,627,230 $ 12,519,533 $ 13,347,862 $ 14,086,134 Core loan yield 4.53 % 4.47 % 4.29 % 4.52 % 4.86 % Core loan yield without PPP loans 4.48 % 4.60 % 4.43 % 4.62 % Calculation of Adjusted Pre-Tax, Pre-Provision (PTPP) Earnings Net income available to common stockholders $ 67,407 $ 52,955 $ 65,885 $ 58,789 $ 77,223 Provision for income taxes 14,363 10,970 17,633 15,593 20,694 Provision for credit losses (including provision for unfunded commitments) 1,445 6,943 22,981 21,915 23,134 (Gain) loss on sale of securities (5,471 ) (16 ) (22,305 ) (390 ) (32,095 ) Net pre-tax non-core items (4,619 ) 12,214 3,320 1,840 (4,583 ) Adjusted Pre-tax, pre-provision (PTPP) earnings $ 73,125 $ 83,066 $ 87,514 $ 97,747 $ 84,373 Simmons First National Corporation SFNC Reconciliation Of Non-GAAP Financial Measures - Year-to-Date For the Quarters Ended Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 (Unaudited) 2021 2020 2020 2020 2020 ($ in thousands) Calculation of Core Return on Average Assets Net income $ 67,407 $ 254,852 $ 201,897 $ 136,012 $ 77,223 Net non-core items, net of taxes, adjustment (3,412 ) 9,448 426 (2,027 ) (3,385 ) Core earnings $ 63,995 $ 264,300 $ 202,323 $ 133,985 $ 73,838 Average total assets $ 22,738,821 $ 21,590,745 $ 21,503,564 $ 21,371,248 $ 20,920,223 Return on average assets 1.20 % 1.18 % 1.25 % 1.28 % 1.48 % Core return on average assets 1.14 % 1.22 % 1.26 % 1.26 % 1.42 % Calculation of Return on Tangible Common Equity Net income $ 67,407 $ 254,852 $ 201,897 $ 136,012 $ 77,223 Amortization of intangibles, net of taxes 2,470 9,968 7,493 5,010 2,521 Total income available to common stockholders $ 69,877 $ 264,820 $ 209,390 $ 141,022 $ 79,744 Net non-core items, net of taxes (3,412 ) 9,448 426 (2,027 ) (3,385 ) Core earnings 63,995 264,300 202,323 133,985 73,838 Amortization of intangibles, net of taxes 2,470 9,968 7,493 5,010 2,521 Total core income available to common stockholders $ 66,465 $ 274,268 $ 209,816 $ 138,995 $ 76,359 Average common stockholders' equity $ 2,972,689 $ 2,921,039 $ 2,910,366 $ 2,894,351 $ 2,869,177 Average intangible assets: Goodwill (1,075,305 ) (1,065,190 ) (1,061,793 ) (1,060,226 ) (1,055,498 ) Other intangibles (109,850 ) (118,812 ) (120,731 ) (122,928 ) (125,746 ) Total average intangibles (1,185,155 ) (1,184,002 ) (1,182,524 ) (1,183,154 ) (1,181,244 ) Average tangible common stockholders' equity $ 1,787,534 $ 1,737,037 $ 1,727,842 $ 1,711,197 $ 1,687,933 Return on average common equity 9.20 % 8.72 % 9.27 % 9.45 % 10.83 % Return on tangible common equity 15.85 % 15.25 % 16.19 % 16.57 % 19.00 % Core return on average common equity 8.73 % 9.05 % 9.29 % 9.31 % 10.35 % Core return on tangible common equity 15.08 % 15.79 % 16.22 % 16.33 % 18.19 % Calculation of Efficiency Ratio (1) Non-interest expense $ 115,356 $ 493,495 $ 365,360 $ 246,411 $ 128,813 Non-core non-interest expense adjustment (858 ) (21,529 ) (9,040 ) (5,350 ) (1,306 ) Other real estate and foreclosure expense adjustment (343 ) (1,706 ) (1,161 ) (561 ) (319 ) Amortization of intangibles adjustment (3,344 ) (13,495 ) (10,144 ) (6,782 ) (3,413 ) Efficiency ratio numerator $ 110,811 $ 456,765 $ 345,015 $ 233,718 $ 123,775 Net-interest income $ 146,681 $ 639,734 $ 484,774 $ 331,164 $ 167,483 Non-interest income 51,903 248,528 204,472 132,621 82,394 Non-core non-interest income adjustment (5,477 ) (8,738 ) (8,463 ) (8,093 ) (5,889 ) Fully tax-equivalent adjustment (effective tax rate of 26.135%) 4,163 11,001 7,519 4,655 2,305 Gain on sale of securities (5,471 ) (54,806 ) (54,790 ) (32,485 ) (32,095 ) Efficiency ratio denominator $ 191,799 $ 835,719 $ 633,512 $ 427,862 $ 214,198 Efficiency ratio (1) 57.77 % 54.66 % 54.46 % 54.62 % 57.79 % (1) Efficiency ratio is core non-interest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and non-interest revenues, excluding gains and losses from securities transactions and non-core items. Simmons First National Corporation SFNC Reconciliation Of Non-GAAP Financial Measures - Year-to-Date (continued) For the Quarters Ended Mar 31 Dec 31 Sep 30 Jun 30 Mar 31 (Unaudited) 2021 2020 2020 2020 2020 ($ in thousands) Calculation of Core Net Interest Margin Net interest income $ 146,681 $ 639,734 $ 484,774 $ 331,164 $ 167,483 Fully tax-equivalent adjustment (effective tax rate of 26.135%) 4,163 11,001 7,519 4,655 2,305 Fully tax-equivalent net interest income 150,844 650,735 492,293 335,819 169,788 Total accretable yield (6,630 ) (41,507 ) (32,508 ) (23,560 ) (11,837 ) Core net interest income $ 144,214 $ 609,228 $ 459,785 $ 312,259 $ 157,951 Average earning assets $ 20,484,908 $ 19,272,886 $ 19,172,318 $ 19,049,487 $ 18,581,491 Net interest margin 2.99 % 3.38 % 3.43 % 3.55 % 3.68 % Core net interest margin 2.86 % 3.16 % 3.20 % 3.30 % 3.42 % Calculation of Core Loan Yield Loan interest income (FTE) $ 146,601 $ 688,600 $ 528,294 $ 364,915 $ 187,566 Total accretable yield (6,630 ) (41,507 ) (32,508 ) (23,560 ) (11,837 ) Core loan interest income $ 139,971 $ 647,093 $ 495,786 $ 341,355 $ 175,729 Average loan balance $ 12,518,300 $ 14,260,689 $ 14,530,938 $ 14,640,082 $ 14,548,853 Core loan yield 4.53 % 4.54 % 4.56 % 4.69 % 4.86 % Calculation of Adjusted Pre-Tax, Pre-Provision (PTPP) Earnings Net income available to common stockholders $ 67,407 $ 254,852 $ 201,897 $ 136,012 $ 77,223 Provision for income taxes 14,363 64,890 53,920 36,287 20,694 Provision for credit losses (including provision for unfunded commitments) 1,445 74,973 68,030 45,049 23,134 (Gain) loss on sale of securities (5,471 ) (54,806 ) (54,790 ) (32,485 ) (32,095 ) Net pre-tax non-core items (4,619 ) 12,791 577 (2,743 ) (4,583 ) Adjusted Pre-tax, pre-provision (PTPP) earnings $ 73,125 $ 352,700 $ 269,634 $ 182,120 $ 84,373 