Simmons Reports Second Quarter 2021 Earnings

Dienstag, 27. Juli 2021 14:00
  • Net income of $74.9 million, up 27 percent from the year ago quarter and up 11 percent compared to the first quarter of 2021

  • Diluted EPS of $0.69, up 28 percent from the year ago quarter and up 11 percent compared to the first quarter of 2021

  • Adjusted pre-tax, pre-provision income of $74.6 million, up 2 percent from first quarter 2021 levels

  • Loan production totaled $1.8 billion during the first half of 2021, on pace to significantly exceed production volume for full-year of 2020

  • Total deposits of $18.3 billion, up $1.3 billion since year-end 2020 while deposits costs dropped 10 bps over the same period

  • Improved macroeconomic scenario models and sharp decline in nonperforming loans (down $34.6 million linked quarter) drive $13.0 million provision expense recapture in the quarter

  • Merger and acquisition activity resumes during the quarter with announced pending acquisitions of Tennessee-based Landmark Community Bank and Triumph Bancshares, Inc.

PINE BLUFF, Ark., July 27, 2021 (GLOBE NEWSWIRE) -- Simmons First National Corporation (NASDAQ: SFNC) (the “Company” or “Simmons”) today reported net income of $74.9 million for the second quarter of 2021 compared to net income of $58.8 million for the second quarter of 2020, an increase of $16.1 million, or 27 percent. Diluted earnings per share for the second quarter of 2021 were $0.69, an increase of $0.15, or 28 percent, compared to the same period in the prior year. Included in second quarter 2021 results were $524,000 in net after-tax merger-related and net branch right-sizing costs. Excluding the impact of these items, core earnings were $75.4 million for the second quarter of 2021, compared to $60.1 million for the second quarter of 2020, an increase of $15.3 million, or 25 percent. Core diluted earnings per share were $0.69, an increase of $0.14, or 25 percent, from the comparable period in 2020.

On a year-to-date basis, net income for the first half of 2021 was $142.3 million, or $1.31 diluted earnings per share, compared to $136.0 million, or $1.22 diluted earnings per share, for the first half of 2020. Excluding $2.9 million in net after-tax merger-related and net branch right-sizing costs and the after-tax gain primarily associated with the sale of branches in Illinois, core earnings for the first half of 2021 were $139.4 million, an increase of $5.4 million compared to the first half of last year. Core diluted earnings per share for the first half of 2021 were $1.28, an increase of $0.07, or 6 percent, from the comparable period of 2020.

“Overall we were very pleased with our results for the quarter as we delivered solid performance in multiple areas while continuing to navigate the challenging environment,” said George A, Makris, Jr., Simmons’ chairman and CEO. “While loan growth throughout the financial services industry continues to be hampered by the significant amounts of government stimulus in the economy that has resulted in sluggish loan demand and historically high levels of paydowns, Simmons generated $1.8 billion in loan originations and advances during the first half of 2021, putting us on pace to significantly exceed loan production volume reported for the full-year of 2020. Our commercial loan pipeline has increased for three consecutive quarters and we are cautiously optimistic that this trend is a positive sign going forward.”

“At the same time, asset quality metrics continued to improve as certain initially anticipated impacts of the COVID-19 pandemic on asset quality have thus far failed to materialize. As such, we recorded the recapture of $13.0 million of provision expense during the quarter while maintaining our nonperforming loan coverage ratio and an appropriate allowance to loan ratio that is reflective of the uncertainty in the economy and associated risk in our loan portfolio. As a result of our solid results in the quarter and our strong asset quality and capital positions, Simmons’ board of directors extended and increased the authorization under our share repurchase program, thus increasing our remaining capacity under the program to approximately $150 million and extending the program’s scheduled expiration to October 2022.”
  

Selected Highlights:2nd Qtr 20211st Qtr 20212nd Qtr 2020
Net income$74.9 million$67.4 million$58.8 million
Diluted earnings per share$0.69$0.62$0.54
Return on avg assets1.29%1.20%1.08%
Return on avg common equity10.08%9.20%8.21%
Return on tangible common equity (1)17.25%15.85%14.55%
    
Core earnings (2)$75.4 million$64.0 million$60.1 million
Core diluted earnings per share (2)$0.69$0.59$0.55
Core return on avg assets (2)1.30%1.14%1.11%
Core return on avg common equity (2)10.15%8.73%8.40%
Core return on tangible common equity (1)(2)17.36%15.08%14.87%
Efficiency ratio (3)56.93%57.43%51.13%
Adjusted pre-tax, pre-provision earnings (2)$74.6 million$73.1 million$97.7 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 exclude 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)2nd Qtr 20211st Qtr 20212nd Qtr 2020
Total loans$11.4$12.2$14.6

Total loans at the end of the second quarter of 2021 were $11.4 billion compared to $12.2 billion at the end of the first quarter of 2021 and $14.6 billion at the end of the second quarter of 2020. Total loan production (loan originations and advances) for the first half of 2021 totaled $1.8 billion. While loan originations and advances are outpacing prior year production, the decline in loan balances reflects the substantial government stimulus to support the economy during the COVID-19 pandemic which contributed to an increase in the level of loan paydowns, payoffs and corresponding sluggish loan demand throughout the financial services industry. The Company’s balance of Paycheck Protection Program (“PPP”) loans totaled $441.4 million at the end of the second quarter of 2021, down $463.3 million during the first half of 2021 as originations under PPP Round 2 have been offset by loan forgiveness.

Despite these headwinds, loan demand appears to be returning to more normalized levels. For the third consecutive quarter, the Company experienced an increase in its commercial loan demand. The Company’s total commercial loan pipeline consisting of all loan opportunities was $1.3 billion compared to $674 million at December 31, 2020. Loans approved and ready to close at the end of the quarter totaled $467 million.

PPP Loans

($ in millions)PPP Round 1PPP Round 2Total PPP Loans
Beginning balance, January 1, 2021$904.7$ -$904.7
PPP loan originations-318.9318.9
PPP loan forgiveness and repayments(763.9)(18.3)(782.2)
Ending balance, June 30, 2021$140.8$300.6$441.4

Deposits

($ in billions)2nd Qtr 20211st Qtr 20212nd Qtr 2020
Total deposits$18.3$18.2$16.6
Noninterest bearing deposits$4.9$4.9$4.6
Interest bearing deposits$10.6$10.3$9.0
Time deposits$2.8$3.0$3.0

Total deposits at the end of the second quarter of 2021 were $18.3 billion, an increase of $1.7 billion or 10 percent from $16.6 billion at the end of the second quarter of 2020. The increase in total deposits from a year ago was driven by a $1.6 billion increase in interest bearing deposits (checking, savings and money market accounts) which totaled $10.6 billion at the end of the second quarter of 2021. Noninterest bearing deposits also contributed to the year-over-year growth in total deposits, increasing $285.9 million or 6 percent while time deposits declined $188.9 million or 6 percent during the same period.

Net Interest Income

 2nd Qtr
2021
1st Qtr
2021
4th Qtr
2020
3rd Qtr
2020
2nd Qtr
2020
Loan yield (1)4.73%4.75%4.74%4.54%4.84%
Core loan yield (1) (2)4.54%4.53%4.47%4.29%4.52%
Security yield (1)1.97%2.36%2.48%2.60%2.50%
Cost of interest bearing deposits0.32%0.41%0.47%0.54%0.59%
Cost of deposits (3)0.24%0.30%0.34%0.39%0.44%
Cost of borrowed funds1.97%1.91%1.88%1.85%1.84%
Net interest margin (1)2.89%2.99%3.22%3.21%3.42%
Core net interest margin (1) (2)2.78%2.86%3.04%3.02%3.18%


(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.

Net interest income for the second quarter of 2021 totaled $146.5 million, compared to $146.7 million in the first quarter of 2021 and $163.7 million in the second quarter of 2020. Included in net interest income is accretion recognized on loans acquired totaling $5.6 million in the second quarter of 2021, $6.6 million in the first quarter of 2021 and $11.7 million in the second quarter of 2020. Excluding the impact of accretion, core net interest income for the second quarter of 2021 increased 1 percent on a linked quarter basis.

The decrease in net interest income from the year ago quarter reflects a lower average loan balance combined with an 11 basis point decrease in loan yields. To offset the expected pressure on net interest income given the current low interest rate environment, the Company has been diligent in its efforts to reduce deposits costs. As a result, cost of deposits for the second quarter of 2021 was 24 basis points, down 6 basis points on a linked quarter basis and 20 basis points compared to the second quarter of 2020.

While loan yields declined from the year ago quarter, on a linked quarter basis loan yields declined only 2 basis points. The core loan yield, which excludes accretion, for the second quarter of 2021 was 4.54 percent, up 1 basis point compared to the first quarter of 2021 and up 2 basis points compared to the second quarter a year ago. The yield on PPP loans was approximately 5.08 percent during the second quarter of 2021 (including accretion of net fees), which increased the overall loan yield by approximately 2 basis points.  

The net interest margin on a fully taxable equivalent basis was 2.89 percent for the second quarter of 2021 compared to 2.99 percent for the first quarter of 2021 and 3.42 percent for the second quarter of 2020. Core net interest margin (excluding accretion on acquired loans) was 2.78 percent compared to 2.86 percent for the first quarter of 2021 and 3.18 percent for the second quarter of 2020. During the second quarter of 2021, the Company purchased $2.5 billion of investment securities. This included the strategic redeployment of excess liquidity through the purchase of variable rate investment securities totaling approximately $1.1 billion. Consequently, the duration of the investment securities portfolio shortened from 6.5 years at March 31, 2021 to 4.9 years at June 30, 2021.

Noninterest Income
Noninterest income for the second quarter of 2021 was $47.9 million compared to $50.3 million in the first quarter of 2021 and $48.8 million in the second quarter of 2020. Gains on the sale of investment securities totaled $5.1 million in the second quarter of 2021, $5.5 million in the first quarter of 2021 and $390,000 in the second quarter of 2020. Core noninterest income totaled $47.5 million in the second quarter of 2021 compared to $44.9 million in the first quarter of 2021 and $46.6 million in the second quarter of 2020. Core noninterest income excludes gains on the sale of branches which totaled $445,000 in the second quarter of 2021, $5.5 million in the first quarter of 2021 and $2.2 million in the second quarter of 2020.

Select Noninterest Income Items
($ in millions)
2nd Qtr
2021
1st Qtr
2021
4th Qtr
2020
3rd Qtr
2020
2nd Qtr
2020
Service charges on deposit accounts$10.1$9.7$10.8$10.4$8.6
Trust income$7.2$6.7$6.6$6.7$7.3
Mortgage lending income$4.5$6.4$3.0$14.0$12.5
SBA lending income$0.3$0.2$0.5$0.3$0.2
Debit and credit card fees (1)$7.9$7.4$7.2$7.2$6.6
Gain on sale of securities$5.1$5.5-$22.3$0.4
Other income$8.1$10.3$10.6$5.4$9.8
      
Core other income (2)$7.7$4.8$10.3$5.0$7.6


(1) During the second quarter of 2021, certain debit and credit card transaction fees were reclassified from noninterest expense to noninterest income. Prior periods have been adjusted to reflect this reclassification.
(2) 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.

Noninterest Expense
Noninterest expense for the second quarter of 2021 totaled $115.5 million compared to $113.8 million for the first quarter of 2021 and $116.2 million for the second quarter of 2020. Included in noninterest expense are pre-tax, non- core items for merger-related expenses and branch right sizing costs. Excluding these items, core noninterest expense was $114.3 million for the second quarter of 2021, $112.9 million for the first quarter of 2021 and $112.1 million for the second quarter of 2020. Overall expenses were well contained, increasing 1 percent from first quarter 2021 levels both on a reported basis and on a core basis. The efficiency ratio for the second quarter of 2021 was 56.93 percent compared to 57.43 percent for the first quarter of 2021 and 51.13 percent for the second quarter of 2020. As part of its ongoing branch right sizing initiative, the Company announced plans to close 12 branches during the third quarter of 2021.

Select Noninterest Expense Items
($ in millions)
2nd Qtr
2021
1st Qtr
2021
4th Qtr
2020
3rd Qtr
2020
2nd Qtr
2020
Salaries and employee benefits$60.3$60.3$55.8$61.1$57.6
Merger related costs$0.7$0.2$0.7$0.9$1.8
Other operating expenses (1)$38.0$36.9$52.8$36.5$38.2
      
Core salaries and employee benefits (2)$60.3$60.3$55.6$58.7$57.2
Core merger related costs (2)-----
Core other operating expenses (2)$37.9$36.6$42.6$36.5$36.6


(1) During the second quarter of 2021, certain debit and credit card transaction fees were reclassified from noninterest expense to noninterest income. Prior periods have been adjusted to reflect this reclassification.
(2) 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)
2nd Qtr
2021
1st Qtr
2021
4th Qtr
2020
3rd Qtr
2020
2nd Qtr
2020
Allowance for credit losses on loans to total loans2.00%1.93%1.85%1.77%1.59%
Allowance for credit losses on loans to nonperforming loans281%204%193%148%176%
Nonperforming loans to total loans0.71%0.95%0.96%1.20%0.90%
Net charge-off ratio (annualized)(0.07%)0.10%0.52%0.16%1.04%
Net charge-off ratio YTD (annualized)0.01%0.10%0.45%0.43%0.56%
      
Total nonperforming loans$80.9$115.5$123.5$167.9$131.9
Total other nonperforming assets$16.3$12.4$20.4$14.6$16.1

Asset quality metrics continued to show marked improvement during the quarter. Total nonperforming loans at the end of the quarter totaled $80.9 million, down $34.6 million compared to $115.5 million at the end of the first quarter of 2021 and down $50.9 million from the second quarter of 2020. Net charge-offs as a percentage of average total loans for the quarter were negative 7 basis points, reflecting $2.2 million of loan charge-offs completely offset by $4.3 million of recoveries. Provision for credit losses in the quarter was a credit of $13 million, including $10 million associated with the loan portfolio. The recapture of provision for credit losses reflected continued positive trends in asset quality metrics, combined with improved economic modeling scenarios. As a result, the allowance for credit losses at the end of the second quarter of 2021 totaled $227.2 million compared to $235.1 million at the end of the first quarter of 2021 and $231.6 million at the end of the second quarter of 2020. At the same time, the allowance to loan ratio rose 7 basis points to 2.00 percent compared to 1.93 percent at the end of the first quarter of 2021 and 1.59 percent at the end of the second quarter of 2020. The nonperforming loan coverage ratio remains strong at 281 percent compared to 204 percent at the end of the first quarter of 2021 and 176 percent at the end of the second quarter of 2020.

Foreclosed Assets and Other Real Estate Owned
At June 30, 2021, foreclosed assets and other real estate owned (“OREO”) totaled $15.2 million compared to $11.2 million at the March 31, 2021 and $14.1 million at June 30, 2020. The increase on a linked quarter basis is primarily due to $4.4 million in closed bank branch facilities. A breakdown of the composition of foreclosed assets and OREO is provided in the table below:



($ in millions)
2nd Qtr
2021
1st Qtr
2021
4th Qtr
2020
3rd Qtr
2020
2nd Qtr
2020
Closed bank branches and branch sites$4.4$0.5$0.6$0.6$2.7
Foreclosed assets – acquired$6.7$7.7$15.3$9.3$9.2
Foreclosed assets – legacy$4.1$3.0$2.5$2.7$2.2

Capital

 2nd Qtr
2021
1st Qtr
2021
4th Qtr
2020
3rd Qtr
2020
2nd Qtr
2020
Stockholders’ equity to total assets13.0%12.6%13.3%13.7%13.3%
Tangible common equity to tangible assets (1)8.4%7.9%8.5%8.7%8.3%
Regulatory common equity tier 1 ratio14.2%14.1%13.4%12.6%11.9%
Regulatory tier 1 leverage ratio9.0%9.0%9.1%9.1%8.8%
Regulatory tier 1 risk-based capital ratio14.2%14.1%13.4%12.6%11.9%
Regulatory total risk-based capital ratio17.5%17.5%16.8%15.8%14.9%


(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.

Total common stockholders’ equity at the end of the quarter totaled $3.0 billion compared to $2.9 billion at the end of the first quarter of 2021 and the second quarter of 2020. Book value per share at the end of the quarter was $28.03 compared to $27.04 at the end of the first quarter of 2021 and $26.64 at the end of the second quarter of 2020. Tangible book value per share was $17.16, up $1.03 from $16.13 reported at the end of the first quarter of 2021 and up $1.37 from $15.79 reported at the end of the second quarter of 2020. The ratio of stockholders’ equity to total assets at June 30, 2021 was 13.0 percent while tangible common equity to tangible total assets was 8.4 percent. All of the Company’s regulatory capital ratios continue to exceed the requirements under “well-capitalized” guidelines. The Company did not repurchase shares during the second quarter of 2021 primarily as a result of its merger and acquisition activity.

Share Repurchase Program
The Company’s board of directors approved an amendment to the Company’s stock repurchase program (“Program”) that increases the amount of the Company’s common stock that may be repurchased under the Program from a maximum of $180 million to a maximum of $276.5 million and extends the term of the Program from October 31, 2021, to October 31, 2022 (unless terminated sooner). The Program was originally approved on October 17, 2019 and amended in March 2020, and to date, the Company has repurchased approximately $126.5 million of its common stock under the Program.

The Program permits the Company to repurchase shares of its common stock through open market and privately negotiated transactions or otherwise. The timing, pricing, and amount of any repurchases under the Program will be determined by the Company’s management at its discretion based on a variety of factors, including, but not limited to, trading volume and market price of the common stock, corporate considerations, the Company’s working capital and investment requirements, general market and economic conditions, and legal requirements. The Program does not obligate the Company to repurchase any common stock and may be modified, discontinued, or suspended at any time without prior notice.

Simmons First National Corporation
Simmons First National Corporation (NASDAQ: SFNC) is an approximately $23.4 billion asset Mid-South based financial holding company whose principal subsidiary, Simmons Bank, operates 198 financial centers, including 68 in Arkansas, 48 in Missouri, 33 in Tennessee, 23 in Texas, 20 in Oklahoma and 6 in Kansas. Founded in 1903, Simmons Bank offers comprehensive financial solutions delivered with a client-centric approach. Simmons Bank was recently named to Forbes’ list of “World’s Best Banks” for the second consecutive year and ranked among the top 30 banks in Forbes’ list of “America’s Best Banks” for 2021. Additional information about Simmons and Simmons Bank can be found on our website at simmonsbank.com, by following @Simmons_Bank on Twitter or by visiting our newsroom.

Conference Call
Management will conduct a live conference call to review this information beginning at 9:00 a.m. CDT today, Tuesday, July 27, 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 8482416. In addition, the call will be available live or in recorded version on the Company’s website at 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, loan demand, 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 and developments with respect to COVID-19 variants; 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.

Important Additional Information and Where to Find It
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed transactions (“Proposed Transactions”) with Landmark Community Bank (“Landmark”) and Triumph Bancshares, Inc. (“Triumph”). No offer of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act of 1933, as amended, and no offer to sell or solicitation of an offer to buy shall be made in any jurisdiction in which such offer, solicitation or sale would be unlawful.

In connection with the Proposed Transactions, the Company has filed with the SEC a registration statement on Form S-4 (the “Registration Statement”) that includes proxy statements of each of Landmark and Triumph and a prospectus of the Company (the “Joint Proxy Statement/Prospectus”), and the Company may file with the SEC other relevant documents concerning the Proposed Transactions. The definitive Joint Proxy Statement/Prospectus will be mailed to shareholders of Landmark and Triumph. SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTIONS CAREFULLY AND IN ITS ENTIRETY AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BY THE COMPANY, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS.

Free copies of the Joint Proxy Statement/Prospectus, as well as other filings containing information about the Company, may be obtained at the SEC’s Internet site (http://www.sec.gov), when they are filed by the Company. You will also be able to obtain these documents, when they are filed, free of charge, from the Company at simmonsbank.com under the heading “Investor Relations.” Copies of the Joint Proxy Statement/Prospectus can also be obtained, free of charge, by directing a request to Simmons First National Corporation, 501 Main Street, Pine Bluff, Arkansas 71601, Attention: Ed Bilek, Director of Investor Relations, Email: ed.bilek@simmonsbank.com or ir@simmonsbank.com, Telephone: (870) 541-1000, to Triumph Bancshares, Inc., 5699 Poplar Avenue, Memphis, TN 38119, Attention: Will Chase, President, Telephone: (901) 333-8800, or to Landmark Community Bank, 1015 West Poplar Avenue, Collierville, TN 38017, Attention: Jake Farrell, Chairman, Telephone: (901) 850-0555.

Participants in the Solicitation
The Company, Landmark, Triumph and certain of their directors, executive officers and employees may be deemed to be participants in the solicitation of proxies from the shareholders of Landmark or Triumph in connection with the Proposed Transactions. Information about the Company’s directors and executive officers is available in its proxy statement for its 2021 annual meeting of shareholders, which was filed with the SEC on April 15, 2021. Information regarding all of the persons who may, under the rules of the SEC, be deemed participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, are contained in the Joint Proxy Statement/Prospectus regarding the Proposed Transactions and other relevant materials to be filed with the SEC when they become available. Free copies of these documents may be obtained as described in the preceding paragraph.

FOR MORE INFORMATION CONTACT:
Ed Bilek
EVP, Director of Investor Relations
Simmons First National Corporation
ed.bilek@simmonsbank.com


Simmons First National Corporation    SFNC
Consolidated End of Period Balance Sheets     
For the Quarters EndedJun 30
 Mar 31
 Dec 31
 Sep 30
 Jun 30
(Unaudited)2021
 2021
 2020
 2020
 2020
($ in thousands)     
ASSETS     
Cash and non-interest bearing balances due from banks$215,381  $227,713  $217,499  $382,691  $234,998 
Interest bearing balances due from banks and federal funds sold 2,123,743   3,677,750   3,254,653   2,139,440   2,310,162 
Cash and cash equivalents 2,339,124   3,905,463   3,472,152   2,522,131   2,545,160 
Interest bearing balances due from banks - time 1,335   1,334   1,579   4,061   4,561 
Investment securities - held-to-maturity 931,352   609,500   333,031   47,102   51,720 
Investment securities - available-for-sale 6,556,581   4,528,348   3,473,598   2,607,288   2,496,896 
Mortgage loans held for sale 36,011   63,655   137,378   192,729   120,034 
Other assets held for sale 100   100   100   389   399 
Loans:     
Loans 11,386,352   12,195,873   12,900,897   14,017,442   14,606,900 
Allowance for credit losses on loans (227,239)  (235,116)  (238,050)  (248,251)  (231,643)
Net loans 11,159,113   11,960,757   12,662,847   13,769,191   14,375,257 
Premises and equipment 429,587   427,540   441,692   470,491   478,896 
Premises held for sale 6,090   13,613   15,008   4,486   4,576 
Foreclosed assets and other real estate owned 15,239   11,168   18,393   12,590   14,111 
Interest receivable 67,916   71,359   72,597   77,352   79,772 
Bank owned life insurance 419,198   257,152   255,630   257,718   256,643 
Goodwill 1,075,305   1,075,305   1,075,305   1,075,305   1,064,765 
Other intangible assets 103,759   107,091   111,110   114,460   117,823 
Other assets 282,449   315,732   289,332   282,102   293,071 
Total assets$23,423,159  $23,348,117  $22,359,752  $21,437,395  $21,903,684 
                    
LIABILITIES AND STOCKHOLDERS' EQUITY                   
Deposits:                   
Non-interest bearing transaction accounts$4,893,959  $4,884,667  $4,482,091  $4,451,385  $4,608,098 
Interest bearing transaction accounts and savings deposits 10,569,602   10,279,997   9,672,608   8,993,255   8,978,045 
Time deposits 2,841,052   3,024,724   2,832,327   2,802,007   3,029,975 
Total deposits 18,304,613   18,189,388   16,987,026   16,246,647   16,616,118 
Federal funds purchased and securities sold     
under agreements to repurchase 187,215   323,053   299,111   313,694   387,025 
Other borrowings 1,339,193   1,340,467   1,342,067   1,342,769   1,393,689 
Subordinated notes and debentures 383,143   383,008   382,874   382,739   382,604 
Other liabilities held for sale -   -   154,620   -   - 
Accrued interest and other liabilities 169,629   181,426   217,398   209,305   219,545 
Total liabilities 20,383,793   20,417,342   19,383,096   18,495,154   18,998,981 
                    
Stockholders' equity:                   
Preferred stock 767   767   767   767   767 
Common stock 1,084   1,083   1,081   1,090   1,090 
Surplus 2,021,128   2,017,188   2,014,076   2,032,372   2,029,383 
Undivided profits 1,004,314   948,913   901,006   866,503   819,153 
Accumulated other comprehensive income (loss):     
Unrealized (depreciation) accretion on AFS securities 12,073   (37,176)  59,726   41,509   54,310 
Total stockholders' equity 3,039,366   2,930,775   2,976,656   2,942,241   2,904,703 
Total liabilities and stockholders' equity$23,423,159  $23,348,117  $22,359,752  $21,437,395  $21,903,684 
      


Simmons First National Corporation    SFNC 
Consolidated Statements of Income - Quarter-to-Date     
For the Quarters EndedJun 30
 Mar 31
  Dec 31
  Sep 30
  Jun 30
 
(Unaudited)2021 2021  2020  2020  2020 
($ in thousands, except per share data)                   
INTEREST INCOME                   
Loans (including fees)$138,804  $146,424  $160,115  $163,180  $176,910 
Interest bearing balances due from banks and federal funds sold 651   798   716   623   603 
Investment securities 27,128   21,573   17,207   14,910   13,473 
Mortgage loans held for sale 386   639   1,070   1,012   668 
TOTAL INTEREST INCOME 166,969   169,434   179,108   179,725   191,654 
INTEREST EXPENSE      
Time deposits 6,061   7,091   7,835   9,437   10,803 
Other deposits 4,721   6,088   6,536   6,769   7,203 
Federal funds purchased and securities      
sold under agreements to repurchase 192   245   284   335   337 
Other borrowings 4,897   4,802   4,869   4,943   4,963 
Subordinated notes and debentures 4,565   4,527   4,624   4,631   4,667 
TOTAL INTEREST EXPENSE 20,436   22,753   24,148   26,115   27,973 
NET INTEREST INCOME 146,533   146,681   154,960   153,610   163,681 
Provision for credit losses (12,951)  1,445   6,943   22,981   21,915 
NET INTEREST INCOME AFTER PROVISION                   
   FOR CREDIT LOSSES 159,484   145,236   148,017   130,629   141,766 
NON-INTEREST INCOME                   
Trust income 7,238   6,666   6,557   6,744   7,253 
Service charges on deposit accounts 10,050   9,715   10,799   10,385   8,570 
Other service charges and fees 2,048   1,922   1,783   1,764   1,489 
Mortgage lending income 4,490   6,447   2,993   13,971   12,459 
SBA lending income 287   240   484   304   245 
Investment banking income 654   695   676   557   571 
Debit and credit card fees 7,882   7,401   7,203   7,217   6,575 
Bank owned life insurance income 2,038   1,523   1,481   1,591   1,445 
Gain on sale of securities, net 5,127   5,471   16   22,305   390 
Other income 8,110   10,260   10,557   5,380   9,809 
TOTAL NON-INTEREST INCOME 47,924   50,340   42,549   70,218   48,806 
NON-INTEREST EXPENSE                   
Salaries and employee benefits 60,261   60,340   55,762   61,144   57,644 
Occupancy expense, net 9,103   9,300   9,182   9,647   9,217 
Furniture and equipment expense 4,859   5,415   5,940   6,231   6,144 
Other real estate and foreclosure expense 863   343   551   602   274 
Deposit insurance 1,687   1,308   1,627   2,244   2,838 
Merger-related costs 686   233   731   902   1,830 
Other operating expenses 38,007   36,854   52,835   36,546   38,230 
TOTAL NON-INTEREST EXPENSE 115,466   113,793   126,628   117,316   116,177 
NET INCOME BEFORE INCOME TAXES 91,942   81,783   63,938   83,531   74,395 
Provision for income taxes 17,018   14,363   10,970   17,633   15,593 
NET INCOME 74,924   67,420   52,968   65,898   58,802 
Preferred stock dividends 13   13   13   13   13 
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS$74,911  $67,407  $52,955  $65,885  $58,789 
BASIC EARNINGS PER SHARE$0.69  $0.62  $0.49  $0.60  $0.54 
DILUTED EARNINGS PER SHARE$0.69  $0.62  $0.49  $0.60  $0.54 
       


Simmons First National Corporation   SFNC
Consolidated Risk-Based Capital     
For the Quarters EndedJun 30
 Mar 31
 Dec 31
 Sep 30
 Jun 30
(Unaudited)2021 2021 2020 2020 2020
($ in thousands)                   
Tier 1 capital     
Stockholders' equity$3,039,366  $2,930,775  $2,976,656  $2,942,241  $2,904,703 
CECL transition provision (1) 128,933   131,637   131,430   134,798   130,480 
Disallowed intangible assets, net of deferred tax (1,156,203)  (1,159,720)  (1,163,797)  (1,167,357)  (1,160,385)
Unrealized loss (gain) on AFS securities (12,073)  37,176   (59,726)  (41,509)  (54,310)
Total Tier 1 capital 2,000,023   1,939,868   1,884,563   1,868,173   1,820,488 
                    
Tier 2 capital                   
Trust preferred securities and subordinated debt 383,143   383,008   382,874   382,739   382,604 
Qualifying allowance for loan losses and     
reserve for unfunded commitments 79,138   87,251   89,546   96,734   83,780 
Total Tier 2 capital 462,281   470,259   472,420   479,473   466,384 
Total risk-based capital$2,462,304  $2,410,127  $2,356,983  $2,347,646  $2,286,872 
                    
Risk weighted assets$14,076,975  $13,771,244  $14,048,608  $14,878,932  $15,362,175 
                    
Adjusted average assets for leverage ratio$22,244,118  $21,668,406  $20,765,127  $20,652,454  $20,742,824 
                    
Ratios at end of quarter                   
Equity to assets 12.98%  12.55%  13.31%  13.72%  13.26%
Tangible common equity to tangible assets (2) 8.36%  7.88%  8.45%  8.65%  8.31%
Common equity Tier 1 ratio (CET1) 14.20%  14.08%  13.41%  12.55%  11.85%
Tier 1 leverage ratio 8.99%  8.95%  9.08%  9.05%  8.78%
Tier 1 risk-based capital ratio 14.21%  14.09%  13.41%  12.56%  11.85%
Total risk-based capital ratio 17.49%  17.50%  16.78%  15.78%  14.89%
      
(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 EndedJun 30
 Mar 31
 Dec 31
 Sep 30
 Jun 30
 
(Unaudited)2021 2021 2020 2020 2020 
($ in thousands)      
Investment Securities - End of Period      
Held-to-Maturity      
U.S. Government agencies$77,396 $77,396 $- $- $- 
Mortgage-backed securities 60,649  47,988  22,354  24,297  25,980 
State and political subdivisions 793,307  484,116  310,109  21,930  24,777 
Other securities -  -  568  875  963 
Total held-to-maturity (net of credit losses) 931,352  609,500  333,031  47,102  51,720 
Available-for-Sale               
U.S. Treasury$600 $600 $- $- $- 
U.S. Government agencies 554,937  487,679  477,237  471,973  210,921 
Mortgage-backed securities 3,987,209  2,133,086  1,394,936  903,687  1,154,086 
State and political subdivisions 1,557,497  1,571,910  1,470,723  1,133,006  1,054,068 
Other securities 456,338  335,073  130,702  98,622  77,821 
Total available-for-sale (net of credit losses) 6,556,581  4,528,348  3,473,598  2,607,288  2,496,896 
Total investment securities (net of credit losses)$7,487,933 $5,137,848 $3,806,629 $2,654,390 $2,548,616 
Fair value - HTM investment securities$935,596 $597,694 $341,925 $49,064 $53,751 
                
Investment Securities - QTD Average               
Taxable securities$4,265,545 $2,471,291 $1,757,234 $1,534,742 $1,642,083 
Tax exempt securities 2,157,076  1,919,919  1,528,127  1,155,099  866,944 
Total investment securities - QTD average$6,422,621 $4,391,210 $3,285,361 $2,689,841 $2,509,027 
                


Simmons First National Corporation   SFNC 
Consolidated Loans      
For the Quarters EndedJun 30
 Mar 31
 Dec 31
 Sep 30
 Jun 30 
(Unaudited)2021 2021 2020 2020 2020 
($ in thousands)      
Loan Portfolio - End of Period      
Consumer      
Credit cards$177,634 $175,458 $188,845 $180,848 $184,348 
Other consumer 181,712  172,965  202,379  182,768  214,024 
Total consumer 359,346  348,423  391,224  363,616  398,372 
Real Estate      
Construction 1,428,165  1,451,841  1,596,255  1,853,360  2,010,256 
Single-family residential 1,608,028  1,730,056  1,880,673  1,997,070  2,207,087 
Other commercial real estate 5,332,655  5,638,010  5,746,863  6,132,823  6,316,444 
Total real estate 8,368,848  8,819,907  9,223,791  9,983,253  10,533,787 
Commercial      
Commercial 2,074,729  2,444,700  2,574,386  2,907,798  3,038,216 
Agricultural 193,462  155,921  175,905  241,687  217,715 
Total commercial 2,268,191  2,600,621  2,750,291  3,149,485  3,255,931 
Other 389,967  426,922  535,591  521,088  418,810 
Total Loans$11,386,352 $12,195,873 $12,900,897 $14,017,442 $14,606,900 
       


Simmons First National Corporation   SFNC
Consolidated Allowance and Asset Quality     
For the Quarters EndedJun 30
 Mar 31
 Dec 31
 Sep 30
 Jun 30
(Unaudited)2021 2021 2020 2020 2020
($ in thousands)     
Allowance for Credit Losses on Loans     
Beginning balance, after adoption of ASC 326$235,116  $238,050  $248,251  $231,641  $243,195 
                    
Loans charged off                   
Credit cards 1,046   1,003   787   832   1,053 
Other consumer 411   702   960   1,091   592 
Real estate 439   1,687   10,415   1,153   1,824 
Commercial 309   859   8,199   4,327   35,687 
Total loans charged off 2,205   4,251   20,361   7,403   39,156 
                    
Recoveries of loans previously charged off                   
Credit cards 244   290   241   276   272 
Other consumer 425   304   355   366   301 
Real estate 1,523   403   431   120   253 
Commercial 2,147   320   1,835   936   98 
Total recoveries 4,339   1,317   2,862   1,698   924 
Net loans charged off (2,134)  2,934   17,499   5,705   38,232 
Provision for credit losses on loans (10,011)  -   7,298   22,315   26,678 
Balance, end of quarter$227,239  $235,116  $238,050  $248,251  $231,641 
                    
Non-performing assets                   
Non-performing loans                   
Nonaccrual loans$80,282  $114,856  $122,879  $167,713  $131,383 
Loans past due 90 days or more 653   635   578   174   494 
Total non-performing loans 80,935   115,491   123,457   167,887   131,877 
Other non-performing assets                   
Foreclosed assets and other real estate owned 15,239   11,168   18,393   12,590   14,111 
Other non-performing assets 1,062   1,229   2,016   1,983   2,008 
Total other non-performing assets 16,301   12,397   20,409   14,573   16,119 
Total non-performing assets$97,236  $127,888  $143,866  $182,460  $147,996 
Performing TDRs (troubled debt restructurings)$4,436  $3,805  $3,138  $3,379  $3,960 
      
Ratios     
Allowance for credit losses on loans to total loans 2.00%  1.93%  1.85%  1.77%  1.59%
Allowance for credit losses to non-performing loans 281%  204%  193%  148%  176%
Non-performing loans to total loans 0.71%  0.95%  0.96%  1.20%  0.90%
Non-performing assets (including performing TDRs)     
to total assets 0.43%  0.56%  0.66%  0.87%  0.69%
Non-performing assets to total assets 0.42%  0.55%  0.64%  0.85%  0.68%
Annualized net charge offs to total loans -0.07%  0.10%  0.52%  0.16%  1.04%
Annualized net credit card charge offs to     
total credit card loans 1.78%  1.39%  1.15%  1.20%  1.67%
      


Simmons First National Corporation         SFNC
Consolidated - Average Balance Sheet and Net Interest Income Analysis      
For the Quarters Ended           
(Unaudited)           
 Three Months Ended
Jun 2021
 Three Months Ended
Mar 2021
 Three Months Ended
Jun 2020
($ in thousands)Average
Balance

 Income/
Expense

 Yield/
Rate

 Average
Balance

 Income/
Expense

 Yield/
Rate

 Average
Balance

 Income/
Expense

 Yield/
Rate
ASSETS                          
Earning assets:                          
Interest bearing balances due from banks                          
and federal funds sold$2,703,920 $651 0.10% $3,477,989 $798 0.09% $2,190,878 $603 0.11%
Investment securities - taxable 4,265,545  14,594 1.37%  2,471,291  10,120 1.66%  1,642,083  7,131 1.75%
Investment securities - non-taxable (FTE) 2,157,076  16,899 3.14%  1,919,919  15,439 3.26%  866,944  8,434 3.91%
Mortgage loans held for sale 49,262  386 3.14%  97,409  639 2.66%  86,264  668 3.11%
Loans - including fees (FTE) 11,783,839  138,987 4.73%  12,518,300  146,601 4.75%  14,731,306  177,168 4.84%
Total interest earning assets (FTE) 20,959,642  171,517 3.28%  20,484,908  173,597 3.44%  19,517,475  194,004 4.00%
Non-earning assets 2,298,279     2,253,913     2,304,798   
Total assets$23,257,921    $22,738,821    $21,822,273   
            
LIABILITIES AND STOCKHOLDERS' EQUITY          
Interest bearing liabilities:           
Interest bearing transaction and           
savings accounts$10,403,932 $4,721 0.18% $10,093,868 $6,088 0.24% $9,138,563 $7,203 0.32%
Time deposits 2,930,025  6,061 0.83%  3,043,000  7,091 0.95%  3,057,153  10,803 1.42%
Total interest bearing deposits 13,333,957  10,782 0.32%  13,136,868  13,179 0.41%  12,195,716  18,006 0.59%
Federal funds purchased and securities           
sold under agreement to repurchase 240,876  192 0.32%  307,540  245 0.32%  392,633  337 0.35%
Other borrowings 1,340,008  4,897 1.47%  1,341,059  4,802 1.45%  1,395,109  4,963 1.43%
Subordinated notes and debentures 383,078  4,565 4.78%  382,943  4,527 4.79%  387,422  4,667 4.84%
Total interest bearing liabilities 15,297,919  20,436 0.54%  15,168,410  22,753 0.61%  14,370,880  27,973 0.78%
Non-interest bearing liabilities:                          
Non-interest bearing deposits 4,826,927     4,419,136     4,354,781   
Other liabilities 151,699     177,819     216,508   
Total liabilities 20,276,545     19,765,365     18,942,169   
Stockholders' equity 2,981,376     2,973,456     2,880,104   
Total liabilities and stockholders' equity$23,257,921    $22,738,821    $21,822,273   
Net interest income (FTE) $151,081    $150,844    $166,031  
Net interest spread (FTE)  2.74%   2.83%   3.22%
Net interest margin (FTE) - quarter-to-date  2.89%   2.99%   3.42%
            
Net interest margin (FTE) - year-to-date  2.94%   2.99%   3.55%
            
Core net interest margin (FTE) - quarter-to-date (1) 2.78%   2.86%   3.18%
Core loan yield (FTE) - quarter-to-date (1)  4.54%   4.53%   4.52%
            
Core net interest margin (FTE) - year-to-date (1)  2.82%   2.86%   3.30%
Core loan yield (FTE) - year-to-date (1)  4.54%   4.53%   4.69%
            
(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 EndedJun 30
 Mar 31
 Dec 31
 Sep 30
 Jun 30 
(Unaudited)2021 2021 2020 2020 2020 
($ in thousands, except share data)      
QUARTER-TO-DATE      
Financial Highlights - GAAP      
Net Income$74,911  $67,407  $52,955  $65,885  $58,789  
Diluted earnings per share 0.69   0.62   0.49   0.60   0.54  
Return on average assets 1.29%  1.20%  0.96%  1.20%  1.08% 
Return on average common equity 10.08%  9.20%  7.13%  8.91%  8.21% 
Return on tangible common equity 17.25%  15.85%  12.48%  15.45%  14.55% 
Net interest margin (FTE) 2.89%  2.99%  3.22%  3.21%  3.42% 
FTE adjustment 4,548   4,163   3,482   2,864   2,350  
Amortization of intangibles 3,333   3,344   3,351   3,362   3,369  
Amortization of intangibles, net of taxes 2,462   2,470   2,475   2,483   2,489  
Average diluted shares outstanding 108,822,175   108,655,293   108,888,264   109,207,294   109,130,866  
Shares repurchased under plan -   130,916   1,034,364   -   -  
Average price of shares repurchased -   23.53   19.36   -   -  
Cash dividends declared per common share 0.18   0.18   0.17   0.17   0.17  
Financial Highlights - Core (non-GAAP)      
Core earnings (excludes non-core items) (1)$75,435  $63,995  $61,977  $68,338  $60,147  
Core diluted earnings per share (1) 0.69   0.59   0.57   0.63   0.55  
Core net interest margin (FTE) (2) 2.78%  2.86%  3.04%  3.02%  3.18% 
Accretable yield on acquired loans 5,619   6,630   8,999   8,948   11,723  
Efficiency ratio (1) 56.93%  57.43%  54.93%  53.75%  51.13% 
Core return on average assets (1) 1.30%  1.14%  1.13%  1.25%  1.11% 
Core return on average common equity (1) 10.15%  8.73%  8.34%  9.24%  8.40% 
Core return on tangible common equity (1) 17.36%  15.08%  14.51%  16.00%  14.87% 
YEAR-TO-DATE      
Financial Highlights - GAAP      
Net Income$142,318  $67,407  $254,852  $201,897  $136,012  
Diluted earnings per share 1.31   0.62   2.31   1.83   1.22  
Return on average assets 1.25%  1.20%  1.18%  1.25%  1.28% 
Return on average common equity 9.64%  9.20%  8.72%  9.27%  9.45% 
Return on tangible common equity 16.56%  15.85%  15.25%  16.19%  16.57% 
Net interest margin (FTE) 2.94%  2.99%  3.38%  3.43%  3.55% 
FTE adjustment 4,548   4,163   11,001   7,519   4,655  
Amortization of intangibles 6,677   3,344   13,495   10,144   6,782  
Amortization of intangibles, net of taxes 4,932   2,470   9,968   7,493   5,010  
Average diluted shares outstanding 108,746,439   108,655,293   110,173,661   110,480,508   111,083,999  
Cash dividends declared per common share 0.18   0.18   0.68   0.51   0.34  
Financial Highlights - Core (non-GAAP)      
Core earnings (excludes non-core items) (1)$139,430  $63,995  $264,300  $202,323  $133,985  
Core diluted earnings per share (1) 1.28   0.59   2.40   1.83   1.21  
Core net interest margin (FTE) (2) 2.82%  2.86%  3.16%  3.20%  3.30% 
Accretable yield on acquired loans 12,249   6,630   41,507   32,508   23,560  
Efficiency ratio (1) 57.18%  57.43%  54.33%  54.14%  54.33% 
Core return on average assets (1) 1.22%  1.14%  1.22%  1.26%  1.26% 
Core return on average common equity (1) 9.45%  8.73%  9.05%  9.29%  9.31% 
Core return on tangible common equity (1) 16.23%  15.08%  15.79%  16.22%  16.33% 
END OF PERIOD      
Book value per share$28.03  $27.04  $27.53  $26.98  $26.64  
Tangible book value per share 17.16   16.13   16.56   16.07   15.79  
Shares outstanding 108,386,669   108,345,732   108,077,662   109,023,781   108,994,389  
Full-time equivalent employees 2,783   2,817   2,827   2,840   2,906  
Total number of financial centers 198   198   204   226   226  
       
(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 EndedJun 30
 Mar 31
 Dec 31
 Sep 30
 Jun 30
(Unaudited)2021 2021 2020 2020 2020
($ in thousands, except per share data)                   
QUARTER-TO-DATE     
Net Income$74,911  $67,407  $52,955  $65,885  $58,789 
Non-core items     
Gain on sale of branches (445)  (5,477)  (275)  -   (2,204)
Merger-related costs 686   233   731   902   1,830 
Early retirement program -   -   62   2,346   493 
Branch right-sizing (net) 468   625   11,696   72   1,721 
Tax effect (1) (185)  1,207   (3,192)  (867)  (482)
Net non-core items 524   (3,412)  9,022   2,453   1,358 
Core earnings (non-GAAP)$75,435  $63,995  $61,977  $68,338  $60,147 
                    
Diluted earnings per share$0.69  $0.62  $0.49  $0.60  $0.54 
Non-core items     
Gain on sale of branches (0.01)  (0.05)  -   -   (0.02)
Merger-related costs 0.01   -   -   0.01   0.02 
Early retirement program -   -   -   0.02   - 
Branch right-sizing (net) -   0.01   0.11   -   0.02 
Tax effect (1) -   0.01   (0.03)  -   (0.01)
Net non-core items -   (0.03)  0.08   0.03   0.01 
Core diluted earnings per share (non-GAAP)$0.69  $0.59  $0.57  $0.63  $0.55 
                    
(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$8,110  $10,260  $10,557  $5,380  $9,809 
Non-core items (1) (445)  (5,477)  (275)  (370)  (2,204)
   Core other income (non-GAAP)$7,665  $4,783  $10,282  $5,010  $7,605 
                    
   Non-interest expense$115,466  $113,793  $126,628  $117,316  $116,177 
Non-core items (1) (1,154)  (858)  (12,489)  (3,690)  (4,044)
   Core non-interest expense (non-GAAP)$114,312  $112,935  $114,139  $113,626  $112,133 
                    
   Salaries and employee benefits$60,261  $60,340  $55,762  $61,144  $57,644 
Non-core items (1) -   -   (144)  (2,448)  (493)
   Core salaries and employee benefits (non-GAAP)$60,261  $60,340  $55,618  $58,696  $57,151 
                    
   Merger related costs$686  $233  $731  $902  $1,830 
Non-core items (1) (686)  (233)  (731)  (902)  (1,830)
   Core merger related costs (non-GAAP)$-  $-  $-  $-  $- 
                    
   Other operating expenses$38,007  $36,854  $52,835  $36,546  $38,230 
Non-core items (1) (89)  (208)  (10,270)  (11)  (1,662)
   Core other operating expenses (non-GAAP)$37,918  $36,646  $42,565  $36,535  $36,568 
      
(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 EndedJun 30
 Mar 31
 Dec 31
 Sep 30
 Jun 30
(Unaudited)2021 2021 2020 2020 2020
($ in thousands, except per share data)     
YEAR-TO-DATE     
Net Income$142,318  $67,407  $254,852  $201,897  $136,012 
Non-core items     
Gain on sale of branches (5,922)  (5,477)  (8,368)  (8,093)  (8,093)
Merger-related costs 919   233   4,531   3,800   2,898 
Early retirement program -   -   2,901   2,839   493 
Branch right-sizing (net) 1,093   625   13,727   2,031   1,959 
Tax effect (1) 1,022   1,207   (3,343)  (151)  716 
Net non-core items (2,888)  (3,412)  9,448   426   (2,027)
Core earnings (non-GAAP)$139,430  $63,995  $264,300  $202,323  $133,985 
      
Diluted earnings per share$1.31  $0.62  $2.31  $1.83  $1.22 
Non-core items     
Gain on sale of branches (0.06)  (0.05)  (0.07)  (0.07)  (0.07)
Merger-related costs 0.01   -   0.04   0.03   0.03 
Early retirement program -   -   0.03   0.02   - 
Branch right-sizing (net) 0.01   0.01   0.12   0.02   0.02 
Tax effect (1) 0.01   0.01   (0.03)  -   0.01 
Net non-core items (0.03)  (0.03)  0.09   -   (0.01)
Core diluted earnings per share (non-GAAP)$1.28  $0.59  $2.40  $1.83  $1.21 
                    
(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$18,370  $10,260  $38,547  $27,990  $22,610 
Non-core items (1) (5,922)  (5,477)  (8,738)  (8,463)  (8,093)
   Core other income (non-GAAP)$12,448  $4,783  $29,809  $19,527  $14,517 
                    
   Non-interest expense$229,259  $113,793  $487,585  $360,957  $243,641 
Non-core items (1) (2,012)  (858)  (21,529)  (9,040)  (5,350)
   Core non-interest expense (non-GAAP)$227,247  $112,935  $466,056  $351,917  $238,291 
                    
   Salaries and employee benefits$120,601  $60,340  $242,474  $186,712  $125,568 
Non-core items (1) -   -   (3,085)  (2,941)  (493)
   Core salaries and employee benefits (non-GAAP)$120,601  $60,340  $239,389  $183,771  $125,075 
                    
   Merger related costs$919  $233  $4,531  $3,800  $2,898 
Non-core items (1) (919)  (233)  (4,531)  (3,800)  (2,898)
   Core merger related costs (non-GAAP)$-  $-  $-  $-  $- 
                    
   Other operating expenses$74,861  $36,854  $168,050  $115,215  $78,669 
Non-core items (1) (297)  (208)  (12,155)  (1,885)  (1,874)
   Core other operating expenses (non-GAAP)$74,564  $36,646  $155,895  $113,330  $76,795 
                    
(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 EndedJun 30
 Mar 31
 Dec 31
 Sep 30
 Jun 30
(Unaudited)2021 2021 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$3,038,599  $2,930,008  $2,975,889  $2,941,474  $2,903,936 
Intangible assets:     
Goodwill (1,075,305)  (1,075,305)  (1,075,305)  (1,075,305)  (1,064,765)
Other intangible assets (103,759)  (107,091)  (111,110)  (114,460)  (117,823)
Total intangibles (1,179,064)  (1,182,396)  (1,186,415)  (1,189,765)  (1,182,588)
Tangible common stockholders' equity$1,859,535  $1,747,612  $1,789,474  $1,751,709  $1,721,348 
                    
Total assets$23,423,159  $23,348,117  $22,359,752  $21,437,395  $21,903,684 
Intangible assets:     
Goodwill (1,075,305)  (1,075,305)  (1,075,305)  (1,075,305)  (1,064,765)
Other intangible assets (103,759)  (107,091)  (111,110)  (114,460)  (117,823)
Total intangibles (1,179,064)  (1,182,396)  (1,186,415)  (1,189,765)  (1,182,588)
Tangible assets$22,244,095  $22,165,721  $21,173,337  $20,247,630  $20,721,096 
                    
Paycheck protection program ("PPP") loans (441,353)  (797,629)  (904,673)  (970,488)  (963,712)
Total assets excluding PPP loans$22,981,806  $22,550,488  $21,455,079  $20,466,907  $20,939,972 
Tangible assets excluding PPP loans$21,802,742  $21,368,092  $20,268,664  $19,277,142  $19,757,384 
                    
Ratio of equity to assets 12.98%  12.55%  13.31%  13.72%  13.26%
Ratio of equity to assets excluding PPP loans 13.23%  13.00%  13.87%  14.38%  13.87%
Ratio of tangible common equity to tangible assets 8.36%  7.88%  8.45%  8.65%  8.31%
Ratio of tangible common equity to tangible assets excluding PPP loans 8.53%  8.18%  8.83%  9.09%  8.71%
                    
Calculation of Tangible Book Value per Share     
      
Total common stockholders' equity$3,038,599  $2,930,008  $2,975,889  $2,941,474  $2,903,936 
Intangible assets:     
Goodwill (1,075,305)  (1,075,305)  (1,075,305)  (1,075,305)  (1,064,765)
Other intangible assets (103,759)  (107,091)  (111,110)  (114,460)  (117,823)
Total intangibles (1,179,064)  (1,182,396)  (1,186,415)  (1,189,765)  (1,182,588)
Tangible common stockholders' equity$1,859,535  $1,747,612  $1,789,474  $1,751,709  $1,721,348 
Shares of common stock outstanding 108,386,669   108,345,732   108,077,662   109,023,781   108,994,389 
Book value per common share$28.03  $27.04  $27.53  $26.98  $26.64 
Tangible book value per common share$17.16  $16.13  $16.56  $16.07  $15.79 
      
Calculation of Regulatory Tier 1 Leverage Ratio Excluding Average PPP Loans   
      
Total Tier 1 capital$2,000,023  $1,939,868  $1,884,563  $1,868,173  $1,820,488 
      
Adjusted average assets for leverage ratio$22,244,118  $21,668,406  $20,765,127  $20,652,454  $20,742,824 
Average PPP loans (707,296)  (891,070)  (937,544)  (967,152)  (645,172)
Adjusted average assets excluding average PPP loans$21,536,822  $20,777,336  $19,827,583  $19,685,302  $20,097,652 
                    
Tier 1 leverage ratio 8.99%  8.95%  9.08%  9.05%  8.78%
Tier 1 leverage ratio excluding average PPP loans 9.29%  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 EndedJun 30
 Mar 31
 Dec 31
 Sep 30
 Jun 30
(Unaudited)2021 2021 2020 2020 2020
($ in thousands)                   
Calculation of Core Return on Average Assets     
      
Net income$74,911  $67,407  $52,955  $65,885  $58,789 
Net non-core items, net of taxes, adjustment 524   (3,412)  9,022   2,453   1,358 
Core earnings$75,435  $63,995  $61,977  $68,338  $60,147 
                    
Average total assets$23,257,921  $22,738,821  $21,852,094  $21,765,321  $21,822,273 
      
Return on average assets 1.29%  1.20%  0.96%  1.20%  1.08%
Core return on average assets 1.30%  1.14%  1.13%  1.25%  1.11%
      
Calculation of Return on Tangible Common Equity     
      
Net income$74,911  $67,407  $52,955  $65,885  $58,789 
Amortization of intangibles, net of taxes 2,462   2,470   2,475   2,483   2,489 
Total income available to common stockholders$77,373  $69,877  $55,430  $68,368  $61,278 
                    
Net non-core items, net of taxes 524   (3,412)  9,022   2,453   1,358 
Core earnings 75,435   63,995   61,977   68,338   60,147 
Amortization of intangibles, net of taxes 2,462   2,470   2,475   2,483   2,489 
Total core income available to common stockholders$77,897  $66,465  $64,452  $70,821  $62,636 
                    
Average common stockholders' equity$2,980,609  $2,972,689  $2,955,865  $2,942,045  $2,879,337 
Average intangible assets:     
Goodwill (1,075,305)  (1,075,305)  (1,075,305)  (1,064,893)  (1,064,955)
Other intangibles (105,785)  (109,850)  (113,098)  (116,385)  (120,111)
Total average intangibles (1,181,090)  (1,185,155)  (1,188,403)  (1,181,278)  (1,185,066)
Average tangible common stockholders' equity$1,799,519  $1,787,534  $1,767,462  $1,760,767  $1,694,271 
                    
Return on average common equity 10.08%  9.20%  7.13%  8.91%  8.21%
Return on tangible common equity 17.25%  15.85%  12.48%  15.45%  14.55%
Core return on average common equity 10.15%  8.73%  8.34%  9.24%  8.40%
Core return on tangible common equity 17.36%  15.08%  14.51%  16.00%  14.87%
                    
Calculation of Efficiency Ratio (1)     
      
Non-interest expense$115,466  $113,793  $126,628  $117,316  $116,177 
Non-core non-interest expense adjustment (1,154)  (858)  (12,489)  (3,690)  (4,044)
Other real estate and foreclosure expense adjustment (863)  (343)  (545)  (600)  (242)
Amortization of intangibles adjustment (3,333)  (3,344)  (3,351)  (3,362)  (3,369)
Efficiency ratio numerator$110,116  $109,248  $110,243  $109,664  $108,522 
                    
Net-interest income$146,533  $146,681  $154,960  $153,610  $163,681 
Non-interest income 47,924   50,340   42,549   70,218   48,806 
Non-core non-interest income adjustment (445)  (5,477)  (275)  (370)  (2,204)
Fully tax-equivalent adjustment (effective tax rate of 26.135%) 4,548   4,163   3,482   2,864   2,350 
Gain on sale of securities (5,127)  (5,471)  (16)  (22,305)  (390)
Efficiency ratio denominator$193,433  $190,236  $200,700  $204,017  $212,243 
                    
Efficiency ratio (1) 56.93%  57.43%  54.93%  53.75%  51.13%
      
(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 EndedJun 30
 Mar 31
 Dec 31
 Sep 30
 Jun 30
(Unaudited)2021 2021 2020 2020 2020
($ in thousands)                   
Calculation of Core Net Interest Margin     
      
Net interest income$146,533  $146,681  $154,960  $153,610  $163,681 
Fully tax-equivalent adjustment (effective tax rate of 26.135%) 4,548   4,163   3,482   2,864   2,350 
Fully tax-equivalent net interest income 151,081   150,844   158,442   156,474   166,031 
      
Total accretable yield (5,619)  (6,630)  (8,999)  (8,948)  (11,723)
Core net interest income$145,462  $144,214  $149,443  $147,526  $154,308 
                    
PPP loan and additional liquidity interest income (9,445)  (12,257)  (6,983) $(6,131) $(5,623)
Net interest income adjusted for PPP loans and liquidity$141,636  $138,587  $151,459  $150,343  $160,408 
                    
Average earning assets$20,959,642  $20,484,908  $19,573,651  $19,415,314  $19,517,475 
Average PPP loan balance and additional liquidity (2,659,831)  (3,617,567)  (2,837,125) $(2,359,928) $(2,071,411)
Average earning assets adjusted for PPP loans and liquidity$18,299,811  $16,867,341  $16,736,526  $17,055,386  $17,446,064 
                    
Net interest margin 2.89%  2.99%  3.22%  3.21%  3.42%
Core net interest margin 2.78%  2.86%  3.04%  3.02%  3.18%
Net interest margin adjusted for PPP loans and liquidity 3.10%  3.33%  3.60%  3.51%  3.70%
      
Calculation of Core Loan Yield     
      
Loan interest income (FTE)$138,987  $146,601  $160,306  $163,379  $177,168 
Total accretable yield (5,619)  (6,630)  (8,999)  (8,948)  (11,723)
Core loan interest income$133,368  $139,971  $151,307  $154,431  $165,445 
PPP loan interest income (8,958)  (11,652)  (6,457) $(5,782) $(3,733)
Core loan interest income without PPP loans$124,410  $128,319  $144,850  $148,649  $161,712 
                    
Average loan balance$11,783,839  $12,518,300  $13,457,077  $14,315,014  $14,731,306 
Average PPP loan balance (707,296)  (891,070)  (937,544) $(967,152) $(645,172)
Average loan balance without PPP loans$11,076,543  $11,627,230  $12,519,533  $13,347,862  $14,086,134 
                    
Core loan yield 4.54%  4.53%  4.47%  4.29%  4.52%
Core loan yield without PPP loans 4.51%  4.48%  4.60%  4.43%  4.62%
      
Calculation of Adjusted Pre-Tax, Pre-Provision (PTPP) Earnings    
      
Net income available to common stockholders$74,911  $67,407  $52,955  $65,885  $58,789 
Provision for income taxes 17,018   14,363   10,970   17,633   15,593 
Provision for credit losses (including provision for unfunded commitments) (12,951)  1,445   6,943   22,981   21,915 
(Gain) loss on sale of securities (5,127)  (5,471)  (16)  (22,305)  (390)
Net pre-tax non-core items 709   (4,619)  12,214   3,320   1,840 
Adjusted Pre-tax, pre-provision (PTPP) earnings$74,560  $73,125  $83,066  $87,514  $97,747 
                    


Simmons First National Corporation    SFNC
Reconciliation Of Non-GAAP Financial Measures - Year-to-Date   
For the Quarters EndedJun 30
 Mar 31
 Dec 31
 Sep 30
 Jun 30
(Unaudited)2021 2021 2020 2020 2020
($ in thousands)                   
Calculation of Core Return on Average Assets     
      
Net income$142,318  $67,407  $254,852  $201,897  $136,012 
Net non-core items, net of taxes, adjustment (2,888)  (3,412)  9,448   426   (2,027)
Core earnings$139,430  $63,995  $264,300  $202,323  $133,985 
                    
Average total assets$22,999,805  $22,738,821  $21,590,745  $21,503,564  $21,371,248 
                    
Return on average assets 1.25%  1.20%  1.18%  1.25%  1.28%
Core return on average assets 1.22%  1.14%  1.22%  1.26%  1.26%