EX-99.1 2 exh_991.htm EXHIBIT 99.1

Exhibit 99.1

 

 

January 24, 2023

 

Simmons First National Corporation Reports Record Quarterly Earnings of $83.3 million for the Fourth Quarter of 2022 and Earnings Per Diluted Share of $0.65

 

George A. Makris, Jr., Simmons’ Executive Chairman, commented on financial results

 

During 2022, we completed a number of strategic initiatives, including the successful merger and integration of Spirit of Texas Bancshares, Inc., and delivered solid financial results while also navigating a challenging interest rate environment. First, and foremost, we were able to meet the needs of our customers and the markets we serve as total loans increased $4.1 billion and total deposits increased $3.2 billion during the year. Solid balance sheet growth helped us achieve the highest level of revenue in Simmons’ history. That growth did not come at the expense of maintaining our conservative underwriting standards as credit quality metrics remain at historically low levels.

 

Equally important, Simmons continued to maintain a strong capital position with all of our regulatory capital ratios significantly exceeding “well capitalized” levels. As a result, our Board of Directors approved a 5 percent increase in the cash dividend for the first quarter of 2023. This marks the 114th consecutive year that Simmons has paid cash dividends to its shareholders, a record that less than 25 other U.S. publicly traded companies can match.

 

We have developed an outstanding management team – one that is deep on talent and experience, but also has a long runway ahead of them. Our foundation is strong and our team is prepared to capitalize on the opportunity to grow organically within our footprint and deliver on our “Better Bank” initiative focused on people, processes and systems.

 

 

Financial Highlights    4Q22     3Q22     4Q21   Q4/Full Year 2022 Highlights
Financial Results (in millions)        

· Q4 22 Diluted EPS of $0.65 and adjusted diluted EPS (1) of $0.64

 

· ROA of 1.22%, ROE of 10.27% & ROTCE(1) of 19.29% in Q4 22

 

· Record revenue of $887.4 million in 2022, up 13% versus 2021

 

· Positive operating leverage driven by 13% increase in pre-provision net revenue(1) in FY22

 

· Solid balance sheet growth in 2022. Total loans up 3% and total deposits up 2% in Q4 22 vs Q3 22

 

· Key credit quality metrics remain at historically low levels while adding more than $4.1 billion in loans during 2022, including loans added in connection with the acquisition of Spirit of Texas Bancshares, Inc.

 

· Maintained a strong capital position as all regulatory capital ratios are significantly above “well capitalized” guidelines

 

· Announced 5% increase in the cash dividend for Q1 23. This marks the 114th consecutive year paying cash dividends

Revenue   $237.7   $236.6   $199.7  
Noninterest expense     142.6     138.9     141.6  
Pre-provision net revenue (1)       95.2  97.7 58.4  
Provision for credit losses   —    0.1   (1.3)  
Net income       83.3  80.6       48.2  
Per Share Data        
Diluted earnings   $  0.65   $  0.63   $  0.42  
Adjusted diluted earnings (1)       0.64 0.64 0.67  
Book value     25.73     24.87     28.82  
Tangible book value (1)     14.33     13.51     17.71  
Balance Sheet (in millions)        
Total loans $16,142 $15,607 $12,013  
Total deposits   22,548   22,149   19,367  
Total shareholders’ equity     3,269     3,157     3,249  
Asset Quality        
Net charge-off ratio       0.13%       —%    0.31%  
Nonperforming loan ratio       0.37       0.37 0.57  
Nonperforming assets to total assets       0.23       0.23       0.31  
Allowance for credit losses to total loans       1.22       1.27 1.71  
Nonperforming loan coverage ratio  334        342  300  
Select Ratios        
Return on average assets       1.22%   1.19%  0.77%  
Return on average common equity     10.27       9.71 5.87  
Return on avg. tangible common equity (1)     19.29     17.99       9.98  
Net interest margin (FTE) (2)       3.31       3.34 2.86  
Efficiency ratio     58.33     57.22     68.98  
Adjusted efficiency ratio (1)     56.97     54.41     59.48  
Common equity tier 1 (CET1) ratio     11.90     11.73     13.82  
Total risk-based capital ratio     14.22     14.08     16.75  

 

 

P.O. BOX 7009 501 MAIN STREET PINE BLUFF, ARKANSAS 71611-7009 (870) 541-1000 www.simmonsbank.com

 

 

 

Simmons First National Corporation (NASDAQ: SFNC) (Simmons or Company) today reported record quarterly net income of $83.3 million for the fourth quarter of 2022, compared to $80.6 million in the third quarter of 2022 and $48.2 million in the fourth quarter of 2021. Diluted earnings per share were $0.65 for the fourth quarter of 2022, compared to $0.63 per share in the third quarter of 2022 and $0.42 in the fourth quarter of 2021. Return on average assets was 1.22 percent, return on average common equity was 10.27 percent and return on average tangible common equity was 19.29 percent for the fourth quarter of 2022.

 

For the full year of 2022, earnings were $256.4 million, compared to $271.1 million earned during 2021. Results in 2021 were positively impacted by the recapture of provision for credit losses, gain on sales of securities and lower merger and integration expenses associated with acquisitions. Return on average assets was 0.97 percent, return on average common equity was 7.87 percent and return on average tangible common equity was 14.33 percent for the full year of 2022.

 

Adjusted earnings for the fourth quarter of 2022 were $81.1 million, compared to $82.3 million for the third quarter of 2022 and $76.2 million in the fourth quarter of 2021. Adjusted earnings for the full year of 2022 were a record $298.6 million, compared to $295.1 million for the full year of 2021. The table below provides a summary of certain items, consisting primarily of merger related costs, branch right-sizing costs, Day 2 accounting provision in connection with acquisitions and other items, and their corresponding impact on quarterly and annual results.

 

Total revenue for the fourth quarter of 2022 was $237.7 million, compared to $236.6 million in the third quarter for 2022 and $199.7 million in the fourth quarter of 2021. Pre-provision net revenue totaled $95.2 million, compared to $97.7 million in the third quarter of 2022 and $58.4 million in the fourth quarter of 2021. Total revenue for 2022 was a record $887.4 million and pre-provision net revenue was $320.9 million, up 13 percent compared to $284.3 million recorded in 2021.

 

Impact of Certain Items on Earnings and Diluted EPS

$ in millions, except per share data  Q4 22   Q3 22   Q4 21   FY 22   FY 21 
Net income  $83.3   $80.6   $48.2   $256.4   $271.2 
                          
Merger related costs   -    1.4    13.6    22.5    15.9 
Day 2 CECL provision   -    -    22.7    33.8    22.7 
Branch right sizing costs, net   1.1    1.3    1.6    3.6    (0.9)
Gain on insurance settlement   (4.1)   -    -    (4.1)   - 
Loss from early retirement of TruPS   -    0.4    -    0.4    - 
Gain on sale of intellectual property   -    (0.8)   -    (0.8)   - 
Gain on sale of branches   -    -    -    -    (5.3)
Donation to Simmons First Foundation   -    -    -    1.7    - 
Tax effect (3)   0.8    (0.6)   (9.9)   (14.9)   (8.5)
Total impact on earnings   (2.2)   1.7    28.0    42.2    23.9 
Adjusted earnings (1)  $81.1   $82.3   $76.2   $298.6   $295.1 
                          
Diluted EPS  $0.65   $0.63   $0.42   $2.06   $2.46 
                          
Merger related costs   -    0.01    0.12    0.18    0.15 
Day 2 CECL provision   -    -    0.20    0.28    0.21 
Branch right sizing costs, net   0.01    0.01    0.01    0.03    (0.01)
Gain on insurance settlement   (0.03)   -    -    (0.03)   - 
Loss from early retirement of TruPS   -    -    -    -    - 
Gain on sale of intellectual property   -    (0.1)   -    (0.1)   - 
Gain on sale of branches   -    -    -    -    (0.5)
Donation to Simmons First Foundation   -    -    -    0.01    - 
Tax effect (3)   0.01    -    (0.08)   (0.12)   (0.08)
Total impact on earnings   (0.01)   0.01    0.25    0.34    0.22 
Adjusted diluted EPS(1)  $0.64   $0.64   $0.67   $2.40   $2.68 
                          
Average diluted shares outstanding
(in thousands)		   127,506    128,336    114,491    124,470    110,198 

 

 

 

 

Net Interest Income

Net interest income for the fourth quarter of 2022 totaled $193.0 million, relatively unchanged from third quarter 2022 levels and up 26 percent compared to the fourth quarter of 2021. Included in net interest income is accretion recognized on assets acquired, which totaled $4.5 million in the fourth quarter of 2022 and $5.8 million in both the third quarter of 2022 and fourth quarter of 2021. Also included is net interest income from Paycheck Protection Program (PPP) loans totaling $0.1 million in the fourth quarter of 2022, $0.2 million in the third quarter of 2022 and $5.1 million in the fourth quarter of 2021. On a linked quarter basis, interest income increased $34.0 million, or 15 percent, while interest expense increased $34.5 million. The increase in interest expense reflected the continued impact of higher interest rates, as well as a strategic decision to extend the duration of certain wholesale deposit maturities to reduce funding cost rate sensitivity.

 

The yield on loans for the fourth quarter of 2022 was 5.40 percent, compared to 4.86 percent in the third quarter of 2022 and 4.58 percent in the fourth quarter of 2021. The yield on investment securities for the fourth quarter of 2022 was 2.68 percent, compared to 2.29 percent in the third quarter of 2022 and 1.74 percent in the fourth quarter of 2021. Cost of deposits for the fourth quarter of 2022 was 102 basis points, reflecting the higher interest rate environment, an increase in higher-rate time deposits and the strategic decision to extend the duration of certain wholesale deposit maturities that required prefunding cost to carry for a portion of the quarter. The net interest margin on a fully taxable equivalent basis for the fourth quarter of 2022 was 3.31 percent, compared to 3.34 percent for the third quarter of 2022 and 2.86 percent for the fourth quarter of 2021.

 

   Q4 22   Q3 22   Q2 22   Q1 22   Q4 21 
Loan yield (FTE) (2)   5.40%   4.86%   4.54%   4.34%   4.58%
Investment securities yield (FTE) (2)   2.68    2.29    2.08    1.86    1.74 
Cost of interest bearing deposits   1.41    0.65    0.25    0.19    0.23 
Cost of deposits   1.02    0.47    0.18    0.14    0.17 
Cost of borrowed funds   3.92    2.66    2.13    1.94    1.95 
Net interest spread (FTE) (2)   2.87    3.11    3.11    2.66    2.74 
Net interest margin (FTE) (2)   3.31    3.34    3.24    2.76    2.86 

Net interest margin (FTE)

excluding PPP (1) (2)

   3.31    3.34    3.21    2.74    2.79 

 

Noninterest Income

Noninterest income for the fourth quarter of 2022 was $44.6 million, compared to $43.0 million in the third quarter of 2022 and $46.6 million in the fourth quarter of 2021. Included in fourth quarter 2022 results is a $4.1 million gain on an insurance settlement related to a weather event that caused severe damage to one of our branch locations. The fourth quarter of 2021 included a $3.1 million gain in connection with a legal settlement. Adjusted noninterest income for the fourth quarter of 2022 was $40.6 million, compared to $42.7 million for the third quarter of 2022 and $46.6 million for the fourth quarter of 2021. The decrease in adjusted noninterest income on both a linked quarter basis and a year-over-year basis was primarily attributable to a decline in mortgage lending income, resulting from reduced activity throughout the housing industry given the dramatic increase in interest rates.

 

Noninterest Income

$ in millions

  Q4 22   Q3 22   Q2 22   Q1 22   Q4 21 
Service charges on deposit accounts  $11.9   $12.6   $11.4   $10.7   $11.9 
Wealth management fees   8.2    8.6    7.2    8.0    8.0 
Debit and credit card fees   7.8    7.7    8.2    7.4    7.5 
Mortgage lending income   1.1    2.6    2.2    4.6    5.0 
Other service charges and fees   2.0    2.1    1.9    1.6    1.8 
Bank owned life insurance   3.0    2.9    2.6    2.7    2.8 
Gain (loss) on sale of securities   (0.1)   -    (0.2)   (0.1)   (0.3)
Gain on insurance settlement   4.1    -    -    -    - 
Other income   6.6    6.7    6.8    7.3    10.0 
                          
Adjusted other income (1)   6.6    6.3    6.9    7.3    10.0 

 

 

 

 

 

 

Noninterest Expense

Noninterest expense for the fourth quarter of 2022 was $142.6 million, compared to $138.9 million in the third quarter of 2022 and $141.6 million in the fourth quarter of 2021. Included in noninterest expense are certain items, primarily consisting of merger related and branch right sizing costs, totaling $1.1 million in the fourth quarter of 2022, $2.6 million in the third quarter of 2022 and $15.2 million in the fourth quarter of 2021. Excluding these items (which are described in the “Reconciliation of Non-GAAP Financial Measures” tables below), adjusted noninterest expense was $141.4 million in the fourth quarter of 2022, $136.4 million in the third quarter of 2022 and $126.4 million in the fourth quarter of 2021. The increase in adjusted noninterest expense on a linked quarter basis was primarily due to an increase in FDIC deposit assessment, state banking assessment and salaries and employee benefits which reflected certain incentive compensation accrual adjustments recorded in the third quarter of 2022. Expenses in the fourth quarter also included the amortization of certain tax credits, the offset of which is recorded in provision for income taxes. The increase in adjusted noninterest expense compared to the fourth quarter of 2021 primarily reflects the addition of Spirit of Texas Bancshares, Inc. (Spirit).

 

Noninterest Expense

$ in millions

  Q4 22   Q3 22   Q2 22   Q1 22   Q4 21 
Salaries and employee benefits  $73.0   $71.9   $74.1   $67.9   $63.8 
Occupancy expense, net   11.6    11.7    11.0    10.0    11.0 
Furniture and equipment   5.4    5.4    5.1    4.8    4.7 
Deposit insurance   3.7    3.3    2.8    1.8    2.1 
Other real estate and foreclosure expense   0.4    0.2    0.1    0.3    0.6 
Merger related costs   -    1.4    19.1    1.9    13.6 
Other operating expenses   48.5    45.1    44.5    41.6    45.7 
                          
Adjusted salaries and employee benefits (1)   73.0    71.9    74.1    67.9    63.8 
Adjusted other operating expenses (1)   47.5    44.1    42.7    40.9    45.8 
Efficiency ratio   58.33%   57.22%   67.77%   66.39%   68.98%
Adjusted efficiency ratio (1)   56.97%   54.41%   56.74%   62.95%   59.48%

 

Loans and Unfunded Loan Commitments

Total loans at the end of the fourth quarter of 2022 were $16.1 billion, up $535 million, or 3 percent, compared to $15.6 billion at the end of the third quarter of 2022. On a year-over-year basis, total loans were up $4.1 billion, or 34 percent, reflecting widespread loan growth throughout our geographic markets and in each of our core banking units, coupled with the acquisition of Spirit that was completed early in the second quarter of 2022. The increase in total loans more than offset declines in PPP loans, mortgage warehouse lending and planned declines in our energy portfolio. Loan growth in the fourth quarter of 2022 was weighted toward the latter half of the quarter as period-end loans exceeded average total loans of $15.9 billion for the fourth quarter of 2022.

 

Unfunded commitments at the end of the fourth quarter of 2022 were $5.0 billion, compared to $5.1 billion at the end of the third quarter of 2022 and $2.9 billion at the end of the fourth quarter of 2021. While unfunded commitments are considered a key indicator of future loan growth, softening prospects of economic growth given current market conditions and increased concerns of a potential recession in the U.S. have resulted in lower activity in our commercial loan pipeline. As such, our emphasis remains on maintaining prudent underwriting standards and disciplined pricing strategies. Commercial loans approved and ready to close at the end of the fourth quarter of 2022 totaled $270 million and the rate on ready to close commercial loans was 6.85 percent, up 101 basis points from the rate on ready to close commercial loans at the end of the third quarter of 2022.

 

$ in millions  Q4 22   Q3 22   Q2 22   Q1 22   Q4 21 
Total loans  $16,142   $15,607   $15,110   $12,029   $12,013 
                          
PPP loans  $9   $12   $19   $62   $117 
Mortgage warehouse loans   95    129    168    166    230 
Energy loans   53    55    55    48    105 
                          
Unfunded loan commitments  $5,000   $5,138   $4,473   $3,428   $2,943 

 

 

 

Deposits

Total deposits at the end of the fourth quarter of 2022 were $22.5 billion, compared to $22.1 billion at the end of the third quarter of 2022 and $19.4 billion at the end of the fourth quarter of 2021. Noninterest bearing deposits totaled $6.0 billion at the end of the fourth quarter of 2022, compared to $6.2 billion at the end of the third quarter of 2022 and $5.3 billion at the end of the fourth quarter of 2021. Noninterest bearing deposits represent 27 percent of total deposits at the end of the fourth quarter of 2022, compared to 28 percent at the end of the third quarter of 2022 and 27 percent at the end of the fourth quarter of 2021. Interest bearing transaction accounts (checking, savings and money market accounts) totaled $11.8 billion at the end of the fourth quarter of 2022, compared to $12.1 billion at the end of the third quarter of 2022 and $11.6 billion at the end of the fourth quarter of 2021. Time deposits totaled $4.8 billion at the end of the fourth quarter of 2022, compared to $3.8 billion at the end of the third quarter of 2022 and $2.5 billion at the end of the fourth quarter of 2021. The change in mix of deposits on a linked quarter basis was primarily attributable to a strategic decision to extend the duration of certain wholesale deposit maturities to reduce funding cost rate sensitivity. The loan to deposit ratio ended the fourth quarter of 2022 at 72 percent, compared to 70 percent at the end of the third quarter of 2022 and 62 percent at the end of the fourth quarter of 2021.

 

$ in millions  Q4 22   Q3 22   Q2 22   Q1 22   Q4 21 
Noninterest bearing deposits  $6,017   $6,218   $6,057   $5,224   $5,325 
Interest bearing transaction accounts   11,763    12,104    12,816    12,106    11,589 
Time deposits   4,768    3,827    3,163    2,062    2,453 
Total deposits  $22,548   $22,149   $22,036   $19,392   $19,367 
                          
Noninterest bearing deposits to total deposits   27%   28%   27%   27%   27%
Total loans to total deposits   72    70    69    62    62 

 

Asset Quality

During 2022, we experienced continuous improvement in a number of our key credit quality metrics, while also adding more than $4.1 billion in total loans. Total nonperforming loans at the end of the fourth quarter of 2022 were $58.9 million, compared to $57.8 million at the end of the third quarter of 2022 and $68.6 million at the end of the fourth quarter of 2021. Total nonperforming assets as a percentage of total assets were 0.23 percent at the end of the fourth quarter of 2022, compared to 0.23 percent at the end of the third quarter of 2022 and 0.31 percent at the end of the fourth quarter of 2021. Net charge-offs as a percentage of average loans for the fourth quarter of 2022 were 13 basis points, compared to 31 basis points for the fourth quarter of 2021. Loans acquired through acquisitions accounted for 6 of the 13 basis points of net charge-offs recorded in the fourth quarter of 2022. For the full year of 2022, net charge-offs were 9 basis points, compared to 13 basis points in 2021.

 

During 2022, provision for credit losses totaled $14.1 million, compared to provision recapture of $32.7 million in 2021. The allowance for credit losses on loans at the end of the fourth quarter of 2022 was $197.0 million, compared to $197.6 million at the end of the third quarter of 2022 and $205.3 million at the end of the fourth quarter of 2021. The nonperforming loan coverage ratio ended the quarter at 334 percent, compared to 342 percent at the end of the third quarter of 2022 and 300 percent at the end of the fourth quarter of 2021. The reserve for unfunded commitments totaled $41.9 million at the end of the fourth quarter of 2022, unchanged from third quarter 2022 levels and up from $22.4 million at the end of the fourth quarter of 2021.

 

$ in millions  Q4 22   Q3 22   Q2 22   Q1 22   Q4 21 
Allowance for credit losses on loans to total loans   1.22%   1.27%   1.41%   1.49%   1.71%
Allowance for credit losses on loans to nonperforming loans   334    342    334    278    300 
Nonperforming loans to total loans   0.37    0.37    0.42    0.53    0.57 
Net charge-off ratio (annualized)   0.13    -    0.02    0.22    0.31 
Net charge-off ratio YTD (annualized)   0.09    0.07    0.11    0.22    0.13 
                          
Total nonperforming loans  $58.9   $57.8   $63.6   $64.3   $68.6 
Total other nonperforming assets   3.6    4.7    6.4    6.6    7.7 
Total nonperforming assets  $62.5   $62.5   $70.0   $70.9   $76.3 
                          
Reserve for unfunded commitments  $41.9   $41.9   $25.9   $22.4   $22.4 

 

 

 

Capital

Total common stockholders’ equity at the end of the fourth quarter of 2022 was $3.3 billion, compared to $3.2 billion at the end of both the third quarter of 2022 and the fourth quarter of 2021. The increase in common stockholders’ equity on a linked quarter basis reflected an increase in retained earnings and a decrease in the unrealized losses associated with investment securities classified as available-for-sale. Book value per share at the end of the fourth quarter of 2022 was $25.73, compared to $24.87 at the end of the third quarter of 2022 and $28.82 at the end of the fourth quarter of 2021. Tangible book value per share was $14.33 at the end of the fourth quarter of 2022, compared to $13.51 at the end of the third quarter of 2022 and $17.71 at the end of the fourth quarter of 2021. Stockholders’ equity to total assets at December 31, 2022, was 11.9 percent, compared to 11.7 percent at September 30, 2022 and 13.1 percent at December 31, 2021. Tangible common equity to tangible assets was 7.0 percent at December 31, 2022, compared to 6.7 percent at September 30, 2022 and 8.5 percent at December 31, 2021. All of Simmons’ regulatory capital ratios continue to significantly exceed “well-capitalized” guidelines.

 

   Q4 22   Q3 22   Q2 22   Q1 22   Q4 21 
Stockholders’ equity to total assets   11.9%   11.7%   12.0%   12.1%   13.1%
Tangible common equity to tangible assets (1)   7.0    6.7    7.0    7.4    8.5 
Common equity tier 1 (CET1) ratio   11.9    11.7    12.1    13.5    13.8 
Tier 1 leverage ratio   9.3    9.2    9.2    9.0    9.1 
Tier 1 risk-based capital ratio   11.9    11.7    12.1    13.5    13.8 
Total risk-based capital ratio   14.2    14.1    14.8    16.4    16.8 

 

Share Repurchase Program and Cash Dividend

Simmons has a strong track record of returning capital to its shareholders through a strategic combination of cash dividends and share repurchases. During 2022, Simmons returned $205.1 million of capital to shareholders, including $94.1 million through the payment of cash dividends and $111.0 million through share repurchases. As a result of Simmons’ solid capital position and its ability to organically generate capital, the board of directors declared a cash dividend on Simmons’ Class A common stock for the first quarter of 2023 of $0.20 per share, which represents a 5 percent increase from the cash dividend paid for the same time period last year. The cash dividend is payable on April 3, 2023, to shareholders of record as of March 15, 2023. The indicated annualized cash dividend rate of $0.80 for 2023 represents a ten-year compound annual growth rate of 7 percent and represents the 114th consecutive year that Simmons has paid cash dividends. According to research by Dividend Power, Simmons is one of only 24 U.S. publicly traded companies that have paid dividends for 100+ uninterrupted years. This marks the 12th consecutive year that Simmons has increased its dividend, earning it Dividend Power’s designation as a “Dividend Contender,” a title exclusively for companies that have increased their dividend for 10 to 24 consecutive years. As of December 16, 2022, Dividend Power research noted that Simmons is one of only 347 companies out of nearly 6,000 companies listed on the New York Stock Exchange (NYSE) and NASDAQ in 2022 to achieve this distinction.

 

During the fourth quarter of 2022, Simmons did not repurchase shares under its 2022 stock repurchase program (2022 Program). Remaining authorization under the 2022 Program as of December 31, 2022, was approximately $80 million. Market conditions and our capital needs will drive the decision regarding future stock repurchases; the timing, pricing and amount of any repurchases under the 2022 Program will be determined by Simmons’ management at its discretion; and the 2022 Program does not obligate Simmons to repurchase any common stock and may be modified, discontinued or suspended at any time without prior notice.

__________________________________________________________________________

(1) Non-GAAP measurement. See “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below

(2) FTE – fully taxable equivalent using an effective tax rate of 26.135%

(3) Effective tax rate of 26.135%

 

Conference Call

Management will conduct a live conference call to review this information beginning at 9:00 a.m. Central Time today, Tuesday, January 24, 2023. Interested persons can listen to this call by dialing toll-free 1-844-481-2779 (North America only) and asking for the Simmons First National Corporation conference call, conference ID 10174103. In addition, the call will be available live or in recorded version on Simmons’ website at simmonsbank.com for at least 60 days following the date of the call.

 

 

 

 

 

Simmons First National Corporation

Simmons First National Corporation (NASDAQ: SFNC) is a Mid-South based financial holding company that has paid cash dividends to its shareholders for 114 consecutive years. Its principal subsidiary, Simmons Bank, operates 230 branches in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas. Founded in 1903, Simmons Bank offers comprehensive financial solutions delivered with a client-centric approach. In 2022, Simmons Bank was named to Forbes’ list of “America’s Best Banks” for the second consecutive year and was named to Forbes’ list of “World’s Best Banks” for the third consecutive year. Additional information about Simmons Bank can be found on our website at simmonsbank.com, by following @Simmons_Bank on Twitter or by visiting our newsroom.

 

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 net income (including on a per share diluted basis), pre-tax, pre-provision earnings, net charge-offs, income available to common shareholders, non-interest income, and non-interest expense certain income and expense items attributable to merger activity (primarily including merger-related expenses and Day 2 CECL provisions), gains and/or losses on sale of branches, net branch right-sizing initiatives, loss on redemption of trust preferred securities and gain on sale of intellectual property. 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, deposits and/or loans acquired through acquisitions, mortgage warehouse loans, and/or energy loans, or gains and/or losses on the sale of securities. 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, the effects of the PPP, and certain other 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 ongoing businesses, and management uses these non-GAAP financial measures to assess the performance of the Company’s ongoing 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

Certain 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 quote, 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, business strategies, lending capacity and lending activity, loan demand, revenue, assets, asset quality, profitability, dividends, 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 adequacy of the allowance for credit losses, and future economic conditions and interest rates. 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 and related governmental policies, 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 COVID-19 pandemic 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; market disruptions including pandemics or significant health hazards, severe weather conditions, natural disasters, terrorist activities, financial crises, political crises, war and other military conflicts (including the ongoing military conflict between Russia and Ukraine) or other major events, or the prospect of these events; increased inflation; the loss of key employees; increased competition in the markets in which the Company operates; increased unemployment; labor shortages; claims, damages, and fines related to litigation or government actions; changes in accounting principles relating to loan loss recognition (current expected credit losses); the Company’s ability to manage and successfully integrate its mergers and acquisitions and to fully realize cost savings and other benefits associated with those transactions; 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 projected in or 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, 2021, and other reports that the Company has filed with or furnished to the U.S. Securities and Exchange Commission (the SEC), all of which are available from the SEC on its website, www.sec.gov. In addition, there can be no guarantee that the board of directors of Simmons will approve a quarterly dividend in future quarters, and the timing, payment, and amount of future dividends (if any) may differ significantly from past dividends.

 

FOR MORE INFORMATION CONTACT:

Ed Bilek, EVP, Director of Investor and Media Relations

ed.bilek@simmonsbank.com

205.612.3378 (cell)

 

 

 

 

Simmons First National Corporation                  SFNC 
Consolidated End of Period Balance Sheets                    
For the Quarters Ended  Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
(Unaudited)  2022   2022   2022   2022   2021 
($ in thousands)                    
ASSETS                    
Cash and noninterest bearing balances due from banks  $200,616   $175,547   $193,473   $195,510   $209,190 
Interest bearing balances due from banks and federal funds sold   481,506    503,863    771,374    1,491,507    1,441,463 
Cash and cash equivalents   682,122    679,410    964,847    1,687,017    1,650,653 
Interest bearing balances due from banks - time   795    1,290    1,535    1,857    1,882 
Investment securities - held-to-maturity   3,759,706    3,787,076    3,819,682    1,556,825    1,529,221 
Investment securities - available-for-sale   3,852,854    3,937,543    4,341,647    6,640,069    7,113,545 
Mortgage loans held for sale   3,486    12,759    14,437    18,206    36,356 
Other loans held for sale   -    2,292    16,375    -    100 
Loans:                         
Loans   16,142,124    15,607,135    15,110,344    12,028,593    12,012,503 
Allowance for credit losses on loans   (196,955)   (197,589)   (212,611)   (178,924)   (205,332)
Net loans   15,945,169    15,409,546    14,897,733    11,849,669    11,807,171 
Premises and equipment   548,741    549,932    553,062    486,531    483,469 
Foreclosed assets and other real estate owned   2,887    3,612    4,084    5,118    6,032 
Interest receivable   102,892    86,637    82,332    69,357    72,990 
Bank owned life insurance   491,340    488,364    486,355    448,011    445,305 
Goodwill   1,319,598    1,309,000    1,310,528    1,147,007    1,146,007 
Other intangible assets   128,951    133,059    137,285    102,748    106,235 
Other assets   622,520    675,554    588,707    469,853    325,793 
Total assets  $27,461,061   $27,076,074   $27,218,609   $24,482,268   $24,724,759 
                          
LIABILITIES AND STOCKHOLDERS' EQUITY                         
Deposits:                         
Noninterest bearing transaction accounts  $6,016,651   $6,218,283   $6,057,186   $5,223,862   $5,325,318 
Interest bearing transaction accounts and savings deposits   11,762,885    12,103,994    12,816,198    12,105,948    11,588,770 
Time deposits   4,768,558    3,826,415    3,162,479    2,062,612    2,452,460 
Total deposits   22,548,094    22,148,692    22,035,863    19,392,422    19,366,548 
Federal funds purchased and securities sold                         
under agreements to repurchase   160,403    168,513    155,101    196,828    185,403 
Other borrowings   859,296    964,772    1,060,244    1,337,243    1,337,973 
Subordinated notes and debentures   365,989    365,951    421,693    384,242    384,131 
Accrued interest and other liabilities   257,917    270,995    285,813    209,926    201,863 
Total liabilities   24,191,699    23,918,923    23,958,714    21,520,661    21,475,918 
                          
Stockholders' equity:                         
Preferred stock   -    -    -    -    - 
Common stock   1,270    1,269    1,288    1,125    1,127 
Surplus   2,530,066    2,527,153    2,569,060    2,150,453    2,164,989 
Undivided profits   1,255,586    1,196,459    1,139,975    1,136,990    1,093,270 
Accumulated other comprehensive (loss) income:                         
Unrealized (depreciation) appreciation on AFS securities   (517,560)   (567,730)   (450,428)   (326,961)   (10,545)
Total stockholders' equity   3,269,362    3,157,151    3,259,895    2,961,607    3,248,841 
Total liabilities and stockholders' equity  $27,461,061   $27,076,074   $27,218,609   $24,482,268   $24,724,759 

 

 

 

 Page 1 

 

 

Simmons First National Corporation                  SFNC 
Consolidated Statements of Income - Quarter-to-Date                    
For the Quarters Ended  Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
(Unaudited)  2022   2022   2022   2022   2021 
($ in thousands, except per share data)                         
INTEREST INCOME                         
Loans (including fees)  $216,091   $187,347   $163,578   $127,176   $137,564 
Interest bearing balances due from banks and federal funds sold   2,593    1,141    1,117    649    583 
Investment securities   45,689    40,954    37,848    33,712    32,275 
Mortgage loans held for sale   152    178    200    190    310 
Other loans held for sale   59    998    2,063    -    - 
TOTAL INTEREST INCOME   264,584    230,618    204,806    161,727    170,732 
INTEREST EXPENSE                         
Time deposits   22,434    8,204    2,875    2,503    3,705 
Other deposits   34,615    17,225    6,879    4,314    4,390 
Federal funds purchased and securities                         
sold under agreements to repurchase   449    305    119    68    72 
Other borrowings   9,263    6,048    4,844    4,779    4,903 
Subordinated notes and debentures   4,797    5,251    4,990    4,457    4,581 
TOTAL INTEREST EXPENSE   71,558    37,033    19,707    16,121    17,651 
NET INTEREST INCOME   193,026    193,585    185,099    145,606    153,081 
Provision for credit losses   26    103    33,859    (19,914)   (1,308)
NET INTEREST INCOME AFTER PROVISION                         
FOR CREDIT LOSSES   193,000    193,482    151,240    165,520    154,389 
NONINTEREST INCOME                         
Service charges on deposit accounts   11,892    12,560    11,379    10,696    11,909 
Debit and credit card fees   7,845    7,685    8,224    7,449    7,460 
Wealth management fees   8,151    8,562    7,214    7,968    8,042 
Mortgage lending income   1,139    2,593    2,240    4,550    5,043 
Bank owned life insurance income   2,975    2,902    2,563    2,706    2,768 
Other service charges and fees (includes insurance income)   2,023    2,085    1,871    1,637    1,762 
Gain (loss) on sale of securities   (52)   (22)   (150)   (54)   (348)
Gain on insurance settlement   4,074    -    -    -    - 
Other income   6,600    6,658    6,837    7,266    9,965 
TOTAL NONINTEREST INCOME   44,647    43,023    40,178    42,218    46,601 
NONINTEREST EXPENSE                         
Salaries and employee benefits   73,018    71,923    74,135    67,906    63,832 
Occupancy expense, net   11,620    11,674    11,004    10,023    11,033 
Furniture and equipment expense   5,392    5,394    5,104    4,775    4,721 
Other real estate and foreclosure expense   350    168    142    343    576 
Deposit insurance   3,680    3,278    2,812    1,838    2,108 
Merger-related costs   35    1,422    19,133    1,886    13,591 
Other operating expenses   48,480    45,084    44,483    41,646    45,736 
TOTAL NONINTEREST EXPENSE   142,575    138,943    156,813    128,417    141,597 
NET INCOME BEFORE INCOME TAXES   95,072    97,562    34,605    79,321    59,393 
Provision for income taxes   11,812    16,959    7,151    14,226    11,155 
NET INCOME   83,260    80,603    27,454    65,095    48,238 
Preferred stock dividends   -    -    -    -    8 
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS  $83,260   $80,603   $27,454   $65,095   $48,230 
BASIC EARNINGS PER SHARE  $0.66   $0.63   $0.21   $0.58   $0.42 
DILUTED EARNINGS PER SHARE  $0.65   $0.63   $0.21   $0.58   $0.42 

 

 

 Page 2 

 

 

Simmons First National Corporation              SFNC 
Consolidated Risk-Based Capital                         
For the Quarters Ended    Dec 31      Sep 30      Jun 30      Mar 31      Dec 31  
(Unaudited)   2022    2022    2022    2022    2021 
($ in thousands)                         
Tier 1 capital                         
Stockholders' equity  $3,269,362   $3,157,151   $3,259,895   $2,961,607   $3,248,841 
CECL transition provision (1)   92,619    92,619    92,619    92,619    114,458 
Disallowed intangible assets, net of deferred tax   (1,412,667)   (1,416,453)   (1,423,323)   (1,224,691)   (1,226,686)
Unrealized loss (gain) on AFS securities   517,560    567,730    450,428    326,961    10,545 
Total Tier 1 capital   2,466,874    2,401,047    2,379,619    2,156,496    2,147,158 
                          
Tier 2 capital                         
Subordinated notes and debentures   365,989    365,951    421,693    384,242    384,131 
Qualifying allowance for loan losses and                         
reserve for unfunded commitments   115,627    116,257    114,733    78,057    71,853 
Total Tier 2 capital   481,616    482,208    536,426    462,299    455,984 
Total risk-based capital  $2,948,490   $2,883,255   $2,916,045   $2,618,795   $2,603,142 
                          
Risk weighted assets  $20,738,727   $20,470,918   $19,669,149   $15,953,622   $15,538,967 
                          
Adjusted average assets for leverage ratio  $26,407,061   $25,986,938   $25,807,113   $23,966,206   $23,647,901 
                          
Ratios at end of quarter                         
Equity to assets   11.91%   11.66%   11.98%   12.10%   13.14%
Tangible common equity to tangible assets (2)   7.00%   6.69%   7.03%   7.37%   8.51%
Common equity Tier 1 ratio (CET1)   11.90%   11.73%   12.10%   13.52%   13.82%
Tier 1 leverage ratio   9.34%   9.24%   9.22%   9.00%   9.08%
Tier 1 risk-based capital ratio   11.90%   11.73%   12.10%   13.52%   13.82%
Total risk-based capital ratio   14.22%   14.08%   14.83%   16.42%   16.75%

 

(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.

           

 

 

 Page 3 

 

 

Simmons First National Corporation              SFNC 
Consolidated Investment Securities                         
For the Quarters Ended    Dec 31      Sep 30      Jun 30      Mar 31      Dec 31  
(Unaudited)   2022    2022    2022    2022    2021 
($ in thousands)                         
Investment Securities - End of Period                         
Held-to-Maturity                         
U.S. Government agencies  $448,012   $447,400   $446,789   $232,670   $232,609 
Mortgage-backed securities   1,190,781    1,214,882    1,244,713    112,496    70,342 
State and political subdivisions   1,860,992    1,865,203    1,868,924    1,194,459    1,209,051 
Other securities   259,921    259,591    259,256    17,200    17,219 
Total held-to-maturity (net of credit losses)   3,759,706    3,787,076    3,819,682    1,556,825    1,529,221 
Available-for-Sale                         
U.S. Treasury  $2,197   $2,191   $1,441   $-   $300 
U.S. Government agencies   184,279    188,060    198,333    333,231    364,641 
Mortgage-backed securities   2,542,902    2,670,348    2,963,934    4,166,108    4,448,616 
State and political subdivisions   871,074    822,509    915,255    1,653,694    1,819,658 
Other securities   252,402    254,435    262,684    487,036    480,330 
Total available-for-sale (net of credit losses)   3,852,854    3,937,543    4,341,647    6,640,069    7,113,545 
Total investment securities (net of credit losses)  $7,612,560   $7,724,619   $8,161,329   $8,196,894   $8,642,766 
Fair value - HTM investment securities  $3,063,233   $2,984,040   $3,278,962   $1,307,058   $1,517,378 

 

 

 

 Page 4 

 

 

Simmons First National Corporation              SFNC 
Consolidated Loans                         
For the Quarters Ended    Dec 31      Sep 30      Jun 30      Mar 31      Dec 31  
(Unaudited)   2022    2022    2022    2022    2021 
($ in thousands)                         
Loan Portfolio - End of Period                         
Consumer:                         
Credit cards  $196,928   $192,559   $189,684   $184,372   $187,052 
Other consumer   152,882    180,604    204,692    180,602    168,318 
Total consumer   349,810    373,163    394,376    364,974    355,370 
Real Estate:                         
Construction   2,566,649    2,372,294    2,082,688    1,423,445    1,326,371 
Single-family residential   2,546,115    2,467,008    2,357,942    2,042,978    2,101,975 
Other commercial real estate   7,468,498    7,249,891    7,082,055    5,762,567    5,738,904 
Total real estate   12,581,262    12,089,193    11,522,685    9,228,990    9,167,250 
Commercial:                         
Commercial   2,632,290    2,525,218    2,612,256    2,016,405    1,992,043 
Agricultural   205,623    263,539    218,743    150,465    168,717 
Total commercial   2,837,913    2,788,757    2,830,999    2,166,870    2,160,760 
Other   373,139    356,022    362,284    267,759    329,123 
Total loans  $16,142,124   $15,607,135   $15,110,344   $12,028,593   $12,012,503 

 

 

 

 Page 5 

 

 

Simmons First National Corporation              SFNC 
Consolidated Allowance and Asset Quality                         
For the Quarters Ended    Dec 31      Sep 30      Jun 30      Mar 31      Dec 31  
(Unaudited)   2022    2022    2022    2022    2021 
($ in thousands)                         
Allowance for Credit Losses on Loans                         
Beginning balance  $197,589   $212,611   $178,924   $205,332   $202,508 
                          
Day 1 PCD allowance from acquisitions:                         
Landmark (10/08/2021)   -    -    -    -    2,359 
Triumph (10/08/2021)   -    -    -    -    11,092 
Spirit of Texas (04/08/2022)   4,523    1,057    4,043    -    - 
Total Day 1 PCD allowance   4,523    1,057    4,043    -    13,451 
                          
Loans charged off:                         
Credit cards   1,035    903    1,004    920    865 
Other consumer   439    505    518    414    477 
Real estate   3,392    130    115    485    2,624 
Commercial   5,389    1,874    688    6,319    8,513 
Total loans charged off   10,255    3,412    2,325    8,138    12,479 
                          
Recoveries of loans previously charged off:                         
Credit cards   251    250    249    274    247 
Other consumer   230    278    302    387    267 
Real estate   4,117    1,982    391    426    916 
Commercial   475    720    621    557    1,730 
Total recoveries   5,073    3,230    1,563    1,644    3,160 
Net loans charged off   5,182    182    762    6,494    9,319 
Provision for credit losses on loans   25    (15,897)   30,406    (19,914)   (1,308)
Balance, end of quarter  $196,955   $197,589   $212,611   $178,924   $205,332 
                          
Nonperforming assets                         
Nonperforming loans:                         
Nonaccrual loans  $58,434   $57,534   $62,670   $64,096   $68,204 
Loans past due 90 days or more   507    242    904    240    349 
Total nonperforming loans   58,941    57,776    63,574    64,336    68,553 
Other nonperforming assets:                         
  Foreclosed assets and other real estate owned   2,887    3,612    4,084    5,118    6,032 
Other nonperforming assets   644    1,146    2,314    1,479    1,667 
Total other nonperforming assets   3,531    4,758    6,398    6,597    7,699 
Total nonperforming assets  $62,472   $62,534   $69,972   $70,933   $76,252 
Performing TDRs (troubled debt restructurings)  $1,849   $1,869   $2,655   $3,424   $4,289 
                          
Ratios                         
Allowance for credit losses on loans to total loans   1.22%   1.27%   1.41%   1.49%   1.71%
Allowance for credit losses to nonperforming loans   334%   342%   334%   278%   300%
Nonperforming loans to total loans   0.37%   0.37%   0.42%   0.53%   0.57%
Nonperforming assets (including performing TDRs)                         
to total assets   0.23%   0.24%   0.27%   0.30%   0.33%
Nonperforming assets to total assets   0.23%   0.23%   0.26%   0.29%   0.31%
Annualized net charge offs to average loans (QTD)   0.13%   0.00%   0.02%   0.22%   0.31%
Annualized net charge offs to average loans (YTD)   0.09%   0.07%   0.11%   0.22%   0.13%
Annualized net credit card charge offs to                         
average credit card loans   1.52%   1.30%   1.55%   1.39%   1.29%

 

 

 Page 6 

 

 

Simmons First National Corporation                              SFNC 
Consolidated - Average Balance Sheet and Net Interest Income Analysis
For the Quarters Ended
(Unaudited)
   Three Months Ended
Dec 2022		   Three Months Ended
Sep 2022		   Three Months Ended
Dec 2021		 
($ 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  $361,856   $2,593    2.84%  $327,841   $1,141    1.38%  $1,484,752   $583    0.16%
Investment securities - taxable   5,085,960    29,645    2.31%   5,408,189    24,848    1.82%   5,790,429    17,186    1.18%
Investment securities - non-taxable (FTE)   2,582,050    22,123    3.40%   2,665,515    21,805    3.25%   2,787,301    20,470    2.91%
Mortgage loans held for sale   8,601    152    7.01%   13,280    178    5.32%   42,866    310    2.87%
Other loans held for sale   1,704    59    13.74%   9,439    998    41.95%   -    -    0.00%
Loans - including fees (FTE)   15,929,957    216,782    5.40%   15,320,833    187,851    4.86%   11,924,444    137,762    4.58%
Total interest earning assets (FTE)   23,970,128    271,354    4.49%   23,745,097    236,821    3.96%   22,029,792    176,311    3.18%
Non-earning assets   3,210,447              3,123,634              2,668,230           
Total assets  $27,180,575             $26,868,731             $24,698,022           
                                              
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest bearing liabilities:                                             
Interest bearing transaction and                                             
savings accounts  $11,859,322   $34,615    1.16%  $12,264,655   $17,225    0.56%  $11,413,325   $4,390    0.15%
Time deposits   4,212,271    22,434    2.11%   3,314,948    8,204    0.98%   2,607,011    3,705    0.56%
Total interest bearing deposits   16,071,593    57,049    1.41%   15,579,603    25,429    0.65%   14,020,336    8,095    0.23%
Federal funds purchased and securities                                             
sold under agreement to repurchase   178,948    449    1.00%   196,047    305    0.62%   223,008    72    0.13%
Other borrowings   923,189    9,263    3.98%   1,123,797    6,048    2.14%   1,340,825    4,903    1.45%
Subordinated notes and debentures   365,971    4,797    5.20%   411,018    5,251    5.07%   383,489    4,581    4.74%
Total interest bearing liabilities   17,539,701    71,558    1.62%   17,310,465    37,033    0.85%   15,967,658    17,651    0.44%
Noninterest bearing liabilities:                                             
Noninterest bearing deposits   6,161,732              6,022,899              5,288,933           
Other liabilities   264,230              243,296              179,362           
Total liabilities   23,965,663              23,576,660              21,435,953           
Stockholders' equity   3,214,912              3,292,071              3,262,069           
Total liabilities and stockholders' equity  $27,180,575             $26,868,731             $24,698,022           
Net interest income (FTE)       $199,796             $199,788             $158,660      
Net interest spread (FTE)             2.87%             3.11%             2.74%
Net interest margin (FTE)             3.31%             3.34%             2.86%

 

 

 Page 7 

 

 

Simmons First National Corporation              SFNC 
Consolidated - Selected Financial Data                    
For the Quarters Ended  Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
(Unaudited)  2022   2022   2022   2022   2021 
($ in thousands, except share data)                    
QUARTER-TO-DATE                         
Financial Highlights - As Reported                         
Net Income  $83,260   $80,603   $27,454   $65,095   $48,230 
Diluted earnings per share   0.65    0.63    0.21    0.58    0.42 
Return on average assets   1.22%   1.19%   0.41%   1.06%   0.77%
Return on average common equity   10.27%   9.71%   3.28%   8.33%   5.87%
Return on tangible common equity (non-GAAP) (1)   19.29%   17.99%   6.28%   14.31%   9.98%
Net interest margin (FTE)   3.31%   3.34%   3.24%   2.76%   2.86%
Efficiency ratio (2)   58.33%   57.22%   67.77%   66.39%   68.98%
FTE adjustment   6,770    6,203    6,096    5,602    5,579 
Average diluted shares outstanding   127,505,996    128,336,422    128,720,078    113,026,911    114,491,119 
Shares repurchased under plan   -    1,883,713    2,035,324    513,725    2,625,348 
Average price of shares repurchased   -    23.91    24.59    31.25    29.69 
Cash dividends declared per common share   0.190    0.190    0.190    0.190    0.180 
Accretable yield on acquired loans   4,473    5,834    9,898    3,703    5,758 
Financial Highlights - Adjusted (non-GAAP) (1)                         
Adjusted earnings  $81,093   $82,281   $68,102   $67,159   $76,244 
Adjusted diluted earnings per share   0.64    0.64    0.53    0.59    0.67 
Adjusted return on average assets   1.18%   1.21%   1.02%   1.10%   1.22%
Adjusted return on average common equity   10.01%   9.92%   8.13%   8.59%   9.27%
Adjusted return on tangible common equity   18.81%   18.35%   14.65%   14.74%   15.49%
Adjusted efficiency ratio (2)   56.97%   54.41%   56.74%   62.95%   59.48%
YEAR-TO-DATE                         
Financial Highlights - GAAP                         
Net Income  $256,412   $173,152   $92,549   $65,095   $271,109 
Diluted earnings per share   2.06    1.40    0.77    0.58    2.46 
Return on average assets   0.97%   0.88%   0.72%   1.06%   1.15%
Return on average common equity   7.87%   7.07%   5.71%   8.33%   8.83%
Return on tangible common equity (non-GAAP) (1)   14.33%   12.77%   10.24%   14.31%   14.99%
Net interest margin (FTE)   3.17%   3.12%   3.01%   2.76%   2.89%
Efficiency ratio (2)   62.14%   63.54%   67.14%   66.39%   60.25%
FTE adjustment   24,671    17,901    11,698    5,602    19,231 
Average diluted shares outstanding   124,470,184    123,387,503    120,826,798    113,026,911    110,198,094 
Cash dividends declared per common share   0.760    0.570    0.380    0.190    0.720 
Financial Highlights - Adjusted (non-GAAP) (1)                         
Adjusted earnings  $298,635   $217,542   $135,261   $67,159   $295,024 
Adjusted diluted earnings per share   2.40    1.76    1.12    0.59    2.68 
Adjusted return on average assets   1.13%   1.11%   1.06%   1.10%   1.26%
Adjusted return on average common equity   9.16%   8.88%   8.35%   8.59%   9.61%
Adjusted return on tangible common equity   16.59%   15.89%   14.70%   14.74%   16.27%
Adjusted efficiency ratio (2)   57.50%   57.69%   59.56%   62.95%   57.92%
END OF PERIOD                         
Book value per share  $25.73   $24.87   $25.31   $26.32   $28.82 
Tangible book value per share   14.33    13.51    14.07    15.22    17.71 
Shares outstanding   127,046,654    126,943,467    128,787,764    112,505,555    112,715,444 
Full-time equivalent employees   3,236    3,206    3,233    2,893    2,877 
Total number of financial centers   230    230    233    197    199 
                          

 

(1) Non-GAAP measurement that management believes aids in the understanding and discussion of results. Reconciliations to GAAP are included in the schedules accompanying this release.

(2) Efficiency ratio is noninterest expense as a percent of net interest income (fully taxable equivalent) and noninterest revenues. Adjusted efficiency ratio is noninterest expense before foreclosed property expense, amortization of intangibles and certain adjusting items as a percent of net interest income (fully taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and certain adjusting items, and is a non-GAAP measurement.

             

 

 

 Page 8 

 

 
Simmons First National Corporation              SFNC 
Reconciliation Of Non-GAAP Financial Measures - Adjusted Earnings - Quarter-to-Date    
For the Quarters Ended  Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
(Unaudited)  2022   2022   2022   2022   2021 
(in thousands, except per share data)                    
QUARTER-TO-DATE                    
Net income available to common stockholders  $83,260   $80,603   $27,454   $65,095   $48,230 
Certain items:                         
(Gain) loss from early retirement of TruPS   -    365    -    -    - 
Gain on sale of intellectual property   -    (750)   -    -    - 
Gain on insurance settlement   (4,074)   -    -    -    - 
Donation to Simmons First Foundation   -    -    1,738    -    - 
Merger related costs   35    1,422    19,133    1,886    13,591 
Branch right sizing (net)   1,104    1,235    380    909    1,648 
Day 2 CECL provision   -    -    33,779    -    22,688 
Tax effect (1)   768    (594)   (14,382)   (731)   (9,913)
Certain items, net of tax   (2,167)   1,678    40,648    2,064    28,014 
Adjusted earnings (non-GAAP)  $81,093   $82,281   $68,102   $67,159   $76,244 
                          
Diluted earnings per share  $0.65   $0.63   $0.21   $0.58   $0.42 
Certain items:                         
(Gain) loss from early retirement of TruPS   -    -    -    -    - 
Gain on sale of intellectual property   -    (0.01)   -    -    - 
Gain on insurance settlement   (0.03)                    
Donation to Simmons First Foundation   -    -    0.01    -    - 
Merger related costs   -    0.01    0.15    0.01    0.12 
Branch right sizing (net)   0.01    0.01    -    0.01    0.01 
Day 2 CECL provision   -    -    0.27         0.20 
Tax effect (1)   0.01    -    (0.11)   (0.01)   (0.08)
Certain items, net of tax   (0.01)   0.01    0.32    0.01    0.25 
Adjusted diluted earnings per share (non-GAAP)  $0.64   $0.64   $0.53   $0.59   $0.67 
                          
(1) Effective tax rate of 26.135%.
                          
Reconciliation of Certain Noninterest Income and Expense Items (non-GAAP)
                          
QUARTER-TO-DATE                         
Noninterest income  $44,647   $43,023   $40,178   $42,218   $46,601 
Certain noninterest income items (1)                         
Gain on insurance settlement   (4,074)   -    -    -    - 
(Gain) loss from early retirement of TruPS   -    365    -    -    - 
Gain on sale of intellectual property   -    (750)   -    -    - 
Gain on sale of branches   -    -    -    -    - 
Branch right sizing income   -    65    88    -    (2)
Adjusted noninterest income (non-GAAP)  $40,573   $42,703   $40,266   $42,218   $46,599 
                          
Other income  $6,600   $6,658   $6,837   $7,266   $9,965 
Certain other income items (1)                         
(Gain) loss from early retirement of TruPS   -    365    -    -    - 
Gain on sale of intellectual property   -    (750)   -    -    - 
Gain on sale of branches   -    -    -    -    - 
Branch right sizing income   -    65    88    -    (2)
Adjusted other income (non-GAAP)  $6,600   $6,338   $6,925   $7,266   $9,963 
                          
Noninterest expense  $142,575   $138,943   $156,813   $128,417   $141,597 
Certain noninterest expense items (1)                         
Merger related costs   (35)   (1,422)   (19,133)   (1,886)   (13,591)
Donation to Simmons First Foundation   -    -    (1,738)   -    - 
Branch right sizing expense   (1,104)   (1,170)   (292)   (909)   (1,650)
Adjusted noninterest expense (non-GAAP)  $141,436   $136,351   $135,650   $125,622   $126,356 
                          
Salaries and employee benefits  $73,018   $71,923   $74,135   $67,906   $63,832 
Certain salaries and employee benefits items (1)                         
Early retirement program   -    -    -    -    - 
Change-in-control payments   -    -    -    -    - 
Adjusted salaries and employee benefits (non-GAAP)  $73,018   $71,923   $74,135   $67,906   $63,832 
                          
Other operating expenses  $48,480   $45,084   $44,483   $41,646   $45,736 
Certain other operating expenses items (1)                         
Donation to Simmons First Foundation   -    -    (1,738)   -    - 
Branch right sizing expense   (953)   (973)   (7)   (717)   96 
Adjusted other operating expenses (non-GAAP)  $47,527   $44,111   $42,738   $40,929   $45,832 

 

(1) Certain items include gain from early retirement of trust preferred securities, gain on sale of intellectual property, gain on sale of branches, gain on insurance settlement, merger related costs, branch right sizing costs and Day 2 CECL provision.

           

 

 

 Page 9 

 

 

Simmons First National Corporation              SFNC 
Reconciliation Of Non-GAAP Financial Measures - Adjusted Earnings - Year-to-Date    
For the Quarters Ended  Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
(Unaudited)  2022   2022   2022   2022   2021 
(in thousands, except per share data)                    
YEAR-TO-DATE                    
Net income available to common stockholders  $256,412   $173,152   $92,549   $65,095   $271,109 
Certain items:                         
Gain on sale of branches   -    -    -    -    (5,316)
(Gain) loss from early retirement of TruPS   365    365    -    -    - 
Gain on sale of intellectual property   (750)   (750)   -    -    - 
Gain on insurance settlement   (4,074)   -    -    -    - 
Donation to Simmons First Foundation   1,738    1,738    1,738    -    - 
Merger related costs   22,476    22,441    21,019    1,886    15,911 
Branch right sizing (net)   3,628    2,524    1,289    909    (906)
Day 2 CECL provision   33,779    33,779    33,779    -    22,688 
Tax effect (1)   (14,939)   (15,707)   (15,113)   (731)   (8,462)
Certain items, net of tax   42,223    44,390    42,712    2,064    23,915 
Adjusted earnings (non-GAAP)  $298,635   $217,542   $135,261   $67,159   $295,024 
                          
Diluted earnings per share  $2.06   $1.40   $0.77   $0.58   $2.46 
Certain items:                         
Gain on sale of branches   -    -    -    -    (0.05)
(Gain) loss from early retirement of TruPS   -    -    -    -    - 
Gain on sale of intellectual property   (0.01)   (0.01)   -    -    - 
Gain on insurance settlement   (0.03)   -    -    -    - 
Donation to Simmons First Foundation   0.01    0.01    0.01    -    - 
Merger related costs   0.18    0.18    0.17    0.01    0.15 
Branch right sizing (net)   0.03    0.02    0.01    0.01    (0.01)
Day 2 CECL provision   0.28    0.28    0.28         0.21 
Tax effect (1)   (0.12)   (0.12)   (0.12)   (0.01)   (0.08)
Certain items, net of tax   0.34    0.36    0.35    0.01    0.22 
Adjusted diluted earnings per share (non-GAAP)  $2.40   $1.76   $1.12   $0.59   $2.68 
                          
(1) Effective tax rate of 26.135%.
                          
Reconciliation of Certain Noninterest Income and Expense Items (non-GAAP)
                          
YEAR-TO-DATE                         
Noninterest income  $170,066   $125,419   $82,396   $42,218   $191,815 
Certain noninterest income items (1)                         
Gain on insurance settlement   (4,074)   -    -    -    - 
(Gain) loss from early retirement of TruPS   365    365    -    -    - 
Gain on sale of intellectual property   (750)   (750)   -    -    - 
Gain on sale of branches   -    -    -    -    (5,316)
Branch right sizing income   153    153    88    -    (369)
Adjusted noninterest income (non-GAAP)  $165,760   $125,187   $82,484   $42,218   $186,130 
                          
Other income  $27,361   $20,761   $14,103   $7,266   $35,273 
Certain other income items (1)                         
(Gain) loss from early retirement of TruPS   365    365    -    -    - 
Gain on sale of intellectual property   (750)   (750)   -    -    - 
Gain on sale of branches   -    -    -    -    (5,316)
Branch right sizing income   153    153    88    -    (369)
Adjusted other income (non-GAAP)  $27,129   $20,529   $14,191   $7,266   $29,588 
                          
Noninterest expense  $566,748   $424,173   $285,230   $128,417   $483,589 
Certain noninterest expense items (1)                         
Merger related costs   (22,476)   (22,441)   (21,019)   (1,886)   (15,911)
Donation to Simmons First Foundation   (1,738)   (1,738)   (1,738)   -    - 
Branch right sizing expense   (3,475)   (2,371)   (1,201)   (909)   537 
Adjusted noninterest expense (non-GAAP)  $539,059   $397,623   $261,272   $125,622   $468,215 
                          
Salaries and employee benefits  $286,982   $213,964   $142,041   $67,906   $246,335 
Certain salaries and employee benefits items (1)                         
Early retirement program   -    -    -    -    - 
Change-in-control payments   -    -    -    -    - 
Adjusted salaries and employee benefits (non-GAAP)  $286,982   $213,964   $142,041   $67,906   $246,269 
                          
Other operating expenses  $179,693   $131,213   $86,129   $41,646   $153,562 
Certain other operating expenses items (1)                         
Donation to Simmons First Foundation   (1,738)   (1,738)   (1,738)   -    - 
Branch right sizing expense   (2,650)   (1,697)   (724)   (717)   3,558 
Adjusted other operating expenses (non-GAAP)  $175,305   $127,778   $83,667   $40,929   $157,120 

 

(1) Certain items include gain from early retirement of trust preferred securities, gain on sale of intellectual property, gain on sale of branches, gain on insurance settlement, merger related costs, branch right sizing costs and Day 2 CECL provision.

           

 

 

 Page 10 

 

 

Simmons First National Corporation                  SFNC 
Reconciliation Of Non-GAAP Financial Measures - End of Period                
For the Quarters Ended  Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
(Unaudited)  2022   2022   2022   2022   2021 
($ 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  $3,269,362   $3,157,151   $3,259,895   $2,961,607   $3,248,841 
Intangible assets:                         
Goodwill   (1,319,598)   (1,309,000)   (1,310,528)   (1,147,007)   (1,146,007)
Other intangible assets   (128,951)   (133,059)   (137,285)   (102,748)   (106,235)
Total intangibles   (1,448,549)   (1,442,059)   (1,447,813)   (1,249,755)   (1,252,242)
Tangible common stockholders' equity  $1,820,813   $1,715,092   $1,812,082   $1,711,852   $1,996,599 
                          
Total assets  $27,461,061   $27,076,074   $27,218,609   $24,482,268   $24,724,759 
Intangible assets:                         
Goodwill   (1,319,598)   (1,309,000)   (1,310,528)   (1,147,007)   (1,146,007)
Other intangible assets   (128,951)   (133,059)   (137,285)   (102,748)   (106,235)
Total intangibles   (1,448,549)   (1,442,059)   (1,447,813)   (1,249,755)   (1,252,242)
Tangible assets  $26,012,512   $25,634,015   $25,770,796   $23,232,513   $23,472,517 
                          
Ratio of common equity to assets   11.91%   11.66%   11.98%   12.10%   13.14%
Ratio of tangible common equity to tangible assets   7.00%   6.69%   7.03%   7.37%   8.51%
                          
Calculation of Tangible Book Value per Share                         
                          
Total common stockholders' equity  $3,269,362   $3,157,151   $3,259,895   $2,961,607   $3,248,841 
Intangible assets:                         
Goodwill   (1,319,598)   (1,309,000)   (1,310,528)   (1,147,007)   (1,146,007)
Other intangible assets   (128,951)   (133,059)   (137,285)   (102,748)   (106,235)
Total intangibles   (1,448,549)   (1,442,059)   (1,447,813)   (1,249,755)   (1,252,242)
Tangible common stockholders' equity  $1,820,813   $1,715,092   $1,812,082   $1,711,852   $1,996,599 
Shares of common stock outstanding   127,046,654    126,943,467    128,787,764    112,505,555    112,715,444 
Book value per common share  $25.73   $24.87   $25.31   $26.32   $28.82 
Tangible book value per common share  $14.33   $13.51   $14.07   $15.22   $17.71 

 

 

 Page 11 

 

 

Simmons First National Corporation                  SFNC 
Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date                
For the Quarters Ended  Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
(Unaudited)  2022   2022   2022   2022   2021 
($ in thousands)                    
Calculation of Adjusted Return on Average Assets                    
                     
Net income available to common stockholders  $83,260   $80,603   $27,454   $65,095   $48,230 
Certain items (non-GAAP)                         
(Gain) loss from early retirement of TruPS   -    365    -    -    - 
Gain on sale of intellectual property   -    (750)   -    -    - 
Gain on insurance settlement   (4,074)   -    -    -    - 
Donation to Simmons First Foundation   -    -    1,738    -    - 
Merger related costs   35    1,422    19,133    1,886    13,591 
Branch right sizing (net)   1,104    1,235    380    909    1,648 
Day 2 CECL provision   -    -    33,779    -    22,688 
Tax effect of certain items (2)   768    (594)   (14,382)   (731)   (9,913)
Adjusted earnings (non-GAAP)  $81,093   $82,281   $68,102   $67,159   $76,244 
                          
Average total assets  $27,180,575   $26,868,731   $26,769,032   $24,826,199   $24,698,022 
                          
Return on average assets   1.22%   1.19%   0.41%   1.06%   0.77%
Adjusted return on average assets (non-GAAP)   1.18%   1.21%   1.02%   1.10%   1.22%
                          
Calculation of Return on Tangible Common Equity                         
                          
Net income available to common stockholders  $83,260   $80,603   $27,454   $65,095   $48,230 
Amortization of intangibles, net of taxes   3,035    3,121    3,025    2,575    2,575 
Total income available to common stockholders  $86,295   $83,724   $30,479   $67,670   $50,805 
Certain items (non-GAAP)                         
(Gain) loss from early retirement of TruPS   -    365    -    -    - 
Gain on sale of intellectual property   -    (750)   -    -    - 
Gain on insurance settlement   (4,074)   -    -    -    - 
Donation to Simmons First Foundation   -    -    1,738    -    - 
Merger related costs   35    1,422    19,133    1,886    13,591 
Branch right sizing (net)   1,104    1,235    380    909    1,648 
Day 2 CECL provision   -    -    33,779    -    22,688 
Tax effect of certain items (2)   768    (594)   (14,382)   (731)   (9,913)
Adjusted earnings (non-GAAP)   81,093    82,281    68,102    67,159    76,244 
Amortization of intangibles, net of taxes   3,035    3,121    3,025    2,575    2,575 
Total adjusted earnings available to common stockholders (non-GAAP)  $84,128   $85,402   $71,127   $69,734   $78,819 
                          
Average common stockholders' equity  $3,214,912   $3,292,071   $3,361,703   $3,169,108   $3,261,627 
Average intangible assets:                         
Goodwill   (1,309,124)   (1,309,804)   (1,299,821)   (1,146,034)   (1,137,441)
Other intangibles   (131,229)   (135,718)   (114,195)   (104,905)   (105,155)
Total average intangibles   (1,440,353)   (1,445,522)   (1,414,016)   (1,250,939)   (1,242,596)
Average tangible common stockholders' equity (non-GAAP)  $1,774,559   $1,846,549   $1,947,687   $1,918,169   $2,019,031 
                          
Return on average common equity   10.27%   9.71%   3.28%   8.33%   5.87%
Return on tangible common equity   19.29%   17.99%   6.28%   14.31%   9.98%
Adjusted return on average common equity (non-GAAP)   10.01%   9.92%   8.13%   8.59%   9.27%
Adjusted return on tangible common equity (non-GAAP)   18.81%   18.35%   14.65%   14.74%   15.49%
                          
Calculation of Efficiency Ratio and Adjusted Efficiency Ratio (1)
                          
Noninterest expense (efficiency ratio numerator)  $142,575   $138,943   $156,813   $128,417   $141,597 
Certain noninterest expense items (non-GAAP)                         
Merger related costs   (35)   (1,422)   (19,133)   (1,886)   (13,591)
Donation to Simmons First Foundation   -    -    (1,738)   -    - 
Branch right sizing expense   (1,104)   (1,170)   (292)   (909)   (1,650)
Other real estate and foreclosure expense adjustment   (350)   (168)   (142)   (343)   (576)
Amortization of intangibles adjustment   (4,108)   (4,225)   (4,096)   (3,486)   (3,486)
Adjusted efficiency ratio numerator  $136,978   $131,958   $131,412   $121,793   $122,294 
                          
Net interest income  $193,026   $193,585   $185,099   $145,606   $153,081 
Noninterest income   44,647    43,023    40,178    42,218    46,601 
Fully tax-equivalent adjustment (effective tax rate of 26.135%)   6,770    6,203    6,096    5,602    5,579 
Efficiency ratio denominator   244,443    242,811    231,373    193,426    205,261 
                          
Certain noninterest income items (non-GAAP)                         
Gain on insurance settlement   (4,074)   -    -    -    - 
(Gain) loss from early retirement of TruPS   -    365    -    -    - 
Gain on sale of intellectual property   -    (750)   -    -    - 
Branch right sizing income   -    65    88    -    (2)
(Gain) loss on sale of securities   52    22    150    54    348 
Adjusted efficiency ratio denominator  $240,421   $242,513   $231,611   $193,480   $205,607 
                          
Efficiency ratio (1)   58.33%   57.22%   67.77%   66.39%   68.98%
Adjusted efficiency ratio (non-GAAP) (1)   56.97%   54.41%   56.74%   62.95%   59.48%

 

(1) Efficiency ratio is noninterest expense as a percent of net interest income (fully taxable equivalent) and noninterest revenues.  Adjusted efficiency ratio is noninterest expense before foreclosed property expense, amortization of intangibles and certain adjusting items as a percent of net interest income (fully taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and certain adjusting items, and is a non-GAAP measurement.

(2) Effective tax rate of 26.135%.

 Page 12 

 

 

Simmons First National Corporation                  SFNC 
Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date (continued)
For the Quarters Ended  Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
(Unaudited)  2022   2022   2022   2022   2021 
($ in thousands)                    
Calculation of Adjusted Net Interest Margin                         
                          
Net interest income  $193,026   $193,585   $185,099   $145,606   $153,081 
Fully tax-equivalent adjustment (effective tax rate of 26.135%)   6,770    6,203    6,096    5,602    5,579 
Fully tax-equivalent net interest income   199,796    199,788    191,195    151,208    158,660 
                          
Total accretable yield   (4,473)   (5,834)   (9,898)   (3,703)   (5,758)
Adjusted net interest income  $195,323   $193,954   $181,297   $147,505   $152,902 
                          
PPP loan interest income   (103)  $(191)  $(1,648)  $(2,113)  $(5,107)
Net interest income adjusted for PPP loans  $199,693   $199,597   $189,547   $149,095   $153,553 
                          
Average earning assets  $23,970,128   $23,745,097   $23,694,648   $22,185,215   $22,029,792 
Average PPP loan balance   (11,325)   (18,179)   (43,329)   (89,757)   (172,130)
Average earning assets adjusted for PPP loans  $23,958,803   $23,726,918   $23,651,319   $22,095,458   $21,857,662 
                          
Net interest margin   3.31%   3.34%   3.24%   2.76%   2.86%
Net interest margin adjusted for PPP loans   3.31%   3.34%   3.21%   2.74%   2.79%
                          
Calculation of Pre-Provision Net Revenue (PPNR)                         
                          
Net interest income  $193,026   $193,585   $185,099   $145,606   $153,081 
Noninterest income   44,647    43,023    40,178    42,218    46,601 
Revenue   237,673    236,608    225,277    187,824    199,682 
Less: Gain (loss) on sale of securities   (52)   (22)   (150)   (54)   (348)
Less: Noninterest expense   142,575    138,943    156,813    128,417    141,597 
Pre-Provision Net Revenue (PPNR)  $95,150   $97,687   $68,614   $59,461   $58,433 
                          
Calculation of Adjusted Pre-Provision Net Revenue                         
                          
Pre-Provision Net Revenue (PPNR)  $95,150   $97,687   $68,614   $59,461   $58,433 
Plus: Loss from early retirement of TruPS   -    365    -    -    - 
Less: Gain on sale of intellectual property   -    (750)   -    -    - 
Less: Gain on insurance settlement   (4,074)   -    -    -    - 
Plus: Donation to Simmons First Foundation   -    -    1,738    -    - 
Plus: Merger related costs   35    1,422    19,133    1,886    13,591 
Plus: Branch right sizing costs   1,104    1,235    380    909    1,648 
Adjusted Pre-Provision Net Revenue  $92,215   $99,959   $89,865   $62,256   $73,672 

 

 

 Page 13 

 

 

Simmons First National Corporation                  SFNC 
Reconciliation Of Non-GAAP Financial Measures - Year-to-Date
For the Quarters Ended  Dec 31   Sep 30   Jun 30   Mar 31   Dec 31 
(Unaudited)  2022   2022   2022   2022   2021 
($ in thousands)                    
Calculation of Adjusted Return on Average Assets                    
                     
Net income available to common stockholders  $256,412   $173,152   $92,549   $65,095   $271,109 
Certain items (non-GAAP)                         
Gain on sale of branches   -    -    -    -    (5,316)
(Gain) loss from early retirement of TruPS   365    365    -    -    - 
Gain on sale of intellectual property   (750)   (750)   -    -    - 
Gain on insurance settlement   (4,074)   -    -    -    - 
Donation to Simmons First Foundation   1,738    1,738    1,738    -    - 
Merger related costs   22,476    22,441    21,019    1,886    15,911 
Branch right sizing (net)   3,628    2,524    1,289    909    (906)
Day 2 CECL provision   33,779    33,779    33,779    -    22,688 
Tax effect of certain items (2)   (14,939)   (15,707)   (15,113)   (731)   (8,462)
Adjusted earnings (non-GAAP)  $298,635   $217,542   $135,261   $67,159   $295,024 
                          
Average total assets  $26,418,838   $26,162,136   $25,802,982   $24,826,199   $23,492,308 
                          
Return on average assets   0.97%   0.88%   0.72%   1.06%   1.15%
Adjusted return on average assets (non-GAAP)   1.13%   1.11%   1.06%   1.10%   1.26%
                          
Calculation of Return on Tangible Common Equity                         
                          
Net income available to common stockholders  $256,412   $173,152   $92,549   $65,095   $271,109 
Amortization of intangibles, net of taxes   11,756    8,721    5,600    2,575    9,967 
Total income available to common stockholders  $268,168   $181,873   $98,149   $67,670   $281,076 
Certain items (non-GAAP)                         
Gain on sale of branches   -    -    -    -    (5,316)
(Gain) loss from early retirement of TruPS   365    365    -    -    - 
Gain on sale of intellectual property   (750)   (750)   -    -    - 
Gain on insurance settlement   (4,074)   -    -    -    - 
Donation to Simmons First Foundation   1,738    1,738    1,738    -    - 
Merger related costs   22,476    22,441    21,019    1,886    15,911 
Branch right sizing (net)   3,628    2,524    1,289    909    (906)
Day 2 CECL provision   33,779    33,779    33,779    -    22,688 
Tax effect of certain items (2)   (14,939)   (15,707)   (15,113)   (731)   (8,462)
Adjusted earnings (non-GAAP)   298,635    217,542    135,261    67,159    295,024 
Amortization of intangibles, net of taxes   11,756    8,721    5,600    2,575    9,967 
Total adjusted earnings available to common stockholders (non-GAAP)  $310,391   $226,263   $140,861   $69,734   $288,233 
                          
Average common stockholders' equity  $3,259,664   $3,274,743   $3,265,935   $3,169,108   $3,071,313 
Average intangible assets:                         
Goodwill   (1,266,762)   (1,252,486)   (1,223,352)   (1,146,034)   (1,090,967)
Other intangibles   (121,622)   (118,385)   (109,575)   (104,905)   (105,820)
Total average intangibles   (1,388,384)   (1,370,871)   (1,332,927)   (1,250,939)   (1,196,787)
Average tangible common stockholders' equity (non-GAAP)  $1,871,280   $1,903,872   $1,933,008   $1,918,169   $1,874,526 
                          
Return on average common equity   7.87%   7.07%   5.71%   8.33%   8.83%
Return on tangible common equity   14.33%   12.77%   10.24%   14.31%   14.99%
Adjusted return on average common equity (non-GAAP)   9.16%   8.88%   8.35%   8.59%   9.61%
Adjusted return on tangible common equity (non-GAAP)   16.59%   15.89%   14.70%   14.74%   16.27%
                          
Calculation of Efficiency Ratio and Adjusted Efficiency Ratio (1)                         
                          
Noninterest expense (efficiency ratio numerator)  $566,748   $424,173   $285,230   $128,417   $483,589 
Certain noninterest expense items (non-GAAP)                         
Merger related costs   (22,476)   (22,441)   (21,019)   (1,886)   (15,911)
Donation to Simmons First Foundation   (1,738)   (1,738)   (1,738)   -    - 
Branch right sizing expense   (3,475)   (2,371)   (1,201)   (909)   537 
Other real estate and foreclosure expense adjustment   (1,003)   (653)   (485)   (343)   (2,121)
Amortization of intangibles adjustment   (15,915)   (11,807)   (7,582)   (3,486)   (13,494)
Adjusted efficiency ratio numerator  $522,141   $385,163   $253,205   $121,793   $452,600 
                          
Net interest income  $717,316   $524,290   $330,705   $145,606   $591,532 
Noninterest income   170,066    125,419    82,396    42,218    191,815 
Fully tax-equivalent adjustment (effective tax rate of 26.135%)   24,671    17,901    11,698    5,602    19,231 
Efficiency ratio denominator   912,053    667,610    424,799    193,426    802,578 
                          
Certain noninterest income items (non-GAAP)                         
Gain on insurance settlement   (4,074)   -    -    -    - 
(Gain) loss from early retirement of TruPS   365    365    -    -    - 
Gain on sale of intellectual property   (750)   (750)   -    -    - 
Gain on sale of branches   -    -    -    -    (5,316)
Branch right sizing income   153    153    88    -    (369)
(Gain) loss on sale of securities   278    226    204    54    (15,498)
Adjusted efficiency ratio denominator  $908,025   $667,604   $425,091   $193,480   $781,395 
                          
Efficiency ratio (1)   62.14%   63.54%   67.14%   66.39%   60.25%
Adjusted efficiency ratio (non-GAAP) (1)   57.50%   57.69%   59.56%   62.95%   57.92%
                          
Calculation of Pre-Provision Net Revenue (PPNR)                         
                          
Net interest income  $717,316   $524,290   $330,705   $145,606   $591,532 
Noninterest income   170,066    125,419    82,396    42,218    191,815 
Revenue   887,382    649,709    413,101    187,824    783,347 
Less: Gain (loss) on sale of securities   (278)   (226)   (204)   (54)   15,498 
Less: Noninterest expense   566,748    424,173    285,230    128,417    483,589 
Pre-Provision Net Revenue (PPNR)  $320,912   $225,762   $128,075   $59,461   $284,260 

 

(1) Efficiency ratio is noninterest expense as a percent of net interest income (fully taxable equivalent) and noninterest revenues.  Adjusted efficiency ratio is noninterest expense before foreclosed property expense, amortization of intangibles and certain adjusting items as a percent of net interest income (fully taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and certain adjusting items, and is a non-GAAP measurement.

(2) Effective tax rate of 26.135%.

 

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