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Simmons Reports Third Quarter 2021 Earnings
Source: Nasdaq GlobeNewswire / 26 Oct 2021 08:00:06 America/New_York
Acquisitions and conversions of Landmark Community Bank and Triumph Bancshares, Inc. completed shortly after end of the quarter – approximately four months after announcement
- Net income of $80.6 million for the third quarter of 2021, up 22 percent from the year ago quarter and up 8 percent compared to the second quarter of 2021
- Diluted EPS of $0.74 for the quarter, up 23 percent from the year ago quarter and up 7 percent compared to the second quarter of 2021
- Loan production tops $1.5 billion in the quarter while loan yields rise 3 bps on a linked quarter basis
- Total deposits of $18.1 billion at the end of the third quarter of 2021, up $1.1 billion since year-end 2020 while deposit costs dropped 14 bps over the same period
- Nonperforming loans decline for 4th consecutive quarter, down $21.5 million linked quarter; combined with continued improvement in macroeconomic scenario models drives $19.9 million provision expense recapture in the quarter. Nonperforming loan coverage ratio rises to 341 percent
- Strong capital position as all regulatory risk-based capital ratios significantly exceed “well-capitalized” guidelines. Approximately 1.8 million shares of common stock repurchased during the third quarter of 2021
PINE BLUFF, Ark., Oct. 26, 2021 (GLOBE NEWSWIRE) -- Simmons First National Corporation (NASDAQ: SFNC) (the “Company” or “Simmons”) today reported net income of $80.6 million for the third quarter of 2021 compared to net income of $65.9 million for the third quarter of 2020, an increase of $14.7 million, or 22 percent. Diluted earnings per share for the third quarter of 2021 were $0.74, an increase of $0.14, or 23 percent, compared to the same period in the prior year. Included in third quarter 2021 results was a $1.2 million net after-tax credit related to merger and integration expenses and net branch right-sizing activity. Excluding the impact of these items, core earnings were $79.4 million for the third quarter of 2021 compared to $68.3 million for the third quarter of 2020, an increase of $11.0 million, or 16 percent. Core diluted earnings per share were $0.73, an increase of $0.10, or 16 percent, from the comparable period in 2020.
On a year-to-date basis, net income for the first nine months of 2021 was $222.9 million, up 10 percent over the $201.9 million earned for the first nine months of 2020. Diluted earnings per share for the first nine months of 2021 were $2.05, up 12 percent compared to the same period in the prior year. Excluding $4.1 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 nine months of 2021 were $218.8 million, an increase of $16.5 million compared to the first nine months of 2020. Core diluted earnings per share for the first nine months of 2021 were $2.01, an increase of $0.18, or 10 percent, from the comparable period of 2020.
“Simmons once again delivered solid results in the quarter reflecting our ability to execute basic blocking and tackling fundamentals,” said George A. Makris, Jr., Simmons chairman and CEO. “We also announced the completion of the acquisitions of Tennessee-based Landmark Community Bank and Triumph Bancshares, Inc. shortly after the end of the quarter. To be able to obtain all the necessary approvals, close and simultaneously complete the systems conversions of two banks in approximately four months is a remarkable accomplishment and speaks to the outstanding team we have built at Simmons. We’d like to welcome our new customers, associates and shareholders to the Simmons family.”
“While overall loan growth has been challenging given the high levels of liquidity throughout the system and corresponding paydowns, during the quarter we generated $1.5 billion in loan originations and advances, and our commercial loan pipeline rose for the fourth consecutive quarter to $1.5 billion, up 15 percent on a linked quarter basis. Our ability to build upon this positive momentum, coupled with our outstanding capital position and steadfast attention to maintaining a strong credit culture, give us reason to be cautiously optimistic as we enter the final quarter of the year and look forward to 2022.”
Selected Highlights: 3rd Qtr 2021 2nd Qtr 2021 3rd Qtr 2020 Net income $80.6 million $74.9 million $65.9 million Diluted earnings per share $0.74 $0.69 $0.60 Return on avg assets 1.37% 1.29% 1.20% Return on avg common equity 10.42% 10.08% 8.91% Return on tangible common equity (1) 17.43% 17.25% 15.45% Core earnings (2) $79.4 million $75.4 million $68.3 million Core diluted earnings per share (2) $0.73 $0.69 $0.63 Core return on avg assets (2) 1.35% 1.30% 1.25% Core return on avg common equity (2) 10.26% 10.15% 9.24% Core return on tangible common equity (1)(2) 17.18% 17.36% 16.00% Efficiency ratio (3) 58.10% 56.75% 53.58% Adjusted pre-tax, pre-provision earnings (2) $72.6 million $74.6 million $87.5 million (1) Return on tangible common equity excludes goodwill and other intangible assets and is a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below. (2) Core figures exclude non-core items and are non-GAAP measurements. Adjusted pre-tax, pre-provision earnings exclude provision for income taxes, provisions for credit losses and unfunded commitments, gains on sales of securities, and other pre-tax, non-core items, and is also a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below. (3) Efficiency ratio is core non-interest expense before foreclosed property expense and amortization of intangibles, as a percent of net interest income (fully taxable equivalent) and non-interest revenues, excluding gains and losses from securities transactions and non-core items, and is a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below. Loans
($ in billions) 3rd Qtr 2021 2nd Qtr 2021 3rd Qtr 2020 Total loans $10.8 $11.4 $14.0 Total loans at the end of the third quarter of 2021 were $10.8 billion compared to $11.4 billion at the end of the second quarter of 2021 and $14.0 billion at the end of the third quarter of 2020. Loan production increased to $1.5 billion in the third quarter, but was offset by paydowns and payoffs, including higher activity associated with Paycheck Protection Program (“PPP”) loans. PPP loans at the end of the third quarter totaled $212 million, down $229 million from $441 million at the end of the second quarter of 2021.
Despite these headwinds, anecdotal evidence suggests that loan demand may be returning to more normalized levels. For the fourth consecutive quarter, the Company experienced an increase in its commercial loan pipeline. The Company’s total commercial loan pipeline consisting of all loan opportunities was $1.5 billion, up 15 percent on a linked quarter basis, and up substantially from $674 million at December 31, 2020. Loans approved and ready to close at the end of the quarter totaled $493 million.
PPP Loans
($ in millions) PPP Round 1 PPP Round 2 Total PPP Loans Beginning balance, January 1, 2021 $904.7 $ - $904.7 PPP loan originations - 318.9 318.9 PPP loan forgiveness and repayments (882.3) (129.2) (1,011.5) Ending balance, September 30, 2021 $22.4 $189.7 $212.1 Deposits
($ in billions) 3rd Qtr 2021 2nd Qtr 2021 3rd Qtr 2020 Total deposits $18.1 $18.3 $16.2 Noninterest bearing deposits $4.9 $4.9 $4.5 Interest bearing deposits $10.7 $10.6 $9.0 Time deposits $2.5 $2.8 $2.8 Total deposits at the end of the third quarter of 2021 were $18.1 billion, an increase of $1.8 billion or 11 percent from $16.2 billion at the end of the third quarter of 2020. The increase in total deposits from a year ago was fueled by a $1.7 billion increase in interest bearing deposits (checking, savings and money market account) which totaled $10.7 billion at the end of the third quarter of 2021. Growth in noninterest bearing deposits also contributed to the year-over-year increase in total deposits, rising $467 million or 11 percent to $4.9 billion. Time deposits totaled $2.5 billion at the end of the third quarter of 2021, down $346 million from $2.8 billion at the end of the third quarter of 2020.
Net Interest Income
3rd Qtr
20212nd Qtr
20211st Qtr
20214th Qtr
20203rd Qtr
2020Loan yield (1) 4.76 % 4.73 % 4.75 % 4.74 % 4.54 % Core loan yield (1) (2) 4.61 % 4.54 % 4.53 % 4.47 % 4.29 % Security yield (1) 1.77 % 1.97 % 2.36 % 2.48 % 2.60 % Cost of interest bearing deposits 0.27 % 0.32 % 0.41 % 0.47 % 0.54 % Cost of deposits (3) 0.20 % 0.24 % 0.30 % 0.34 % 0.39 % Cost of borrowed funds 1.96 % 1.97 % 1.91 % 1.88 % 1.85 % Net interest margin (1) 2.85 % 2.89 % 2.99 % 3.22 % 3.21 % Core net interest margin (1) (2) 2.77 % 2.78 % 2.86 % 3.04 % 3.02 % (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 noninterest bearing deposits. Net interest income for the third quarter of 2021 totaled $145.2 million compared to $146.5 million in the second quarter of 2021 and $153.6 million in the third quarter of 2020. Included in net interest income is accretion recognized on loans acquired totaling $4.1 million in the third quarter of 2021, $5.6 million in the second quarter of 2021 and $8.9 million in the third quarter of 2020. Excluding the impact of accretion, core net interest income for the third quarter of 2021 was up slightly on a linked quarter basis.
The decrease in net interest income from a year ago reflects lower average loan balance, offset in part by an increase in loan yields. To further offset the expected pressure on net interest income given the current low interest rate environment, the Company has been successful in its efforts to reduce deposit costs. Cost of deposits for the third quarter of 2021 were 20 basis points, down 4 basis points on a linked quarter basis and down 19 basis points compared to the third quarter of 2020.
The yield on loans for the third quarter of 2021 was 4.76 percent, up 3 basis points on a linked quarter basis and up 22 basis points compared to the third quarter of 2020. The core loan yield, which excludes accretion, for the third quarter of 2021 was 4.61 percent, up 7 basis points compared to the second quarter of 2021 and up 32 basis points compared to the third quarter of 2020. The yield on PPP loans (including accretion of net fees) was approximately 10.60 percent during the third quarter of 2021, reflecting a substantial increase in forgiveness and repayment activity compared to prior quarters.
The net interest margin on a fully taxable equivalent basis was 2.85 percent for the third quarter of 2021 compared to 2.89 percent for the second quarter of 2021 and 3.21 percent for the third quarter of 2020. Core net interest margin (excluding accretion on acquired loans) was 2.77 percent compared to 2.78 percent for the second quarter of 2021 and 3.02 percent for the third quarter of 2020. During the third quarter of 2021, the Company strategically redeployed excess liquidity through the purchase of approximately $1.2 billion of investments securities, including $226 million of short-term, variable rate investment securities. The duration of the investment securities portfolio at September 30, 2021 was 5.0 years compared to 4.9 years at June 30, 2021.
Noninterest Income
Noninterest income for the third quarter of 2021 was $48.6 million compared to $47.1 million for the second quarter of 2021 and $69.5 million in the third quarter of 2020. The decrease in noninterest income compared to the third quarter of 2020 is partially attributable to mortgage lending income in the third quarter of 2020, which was aided by strong mortgage production during favorable market conditions. Gains on sales of investment securities totaled $5.2 million in the third quarter of 2021, $5.1 million in the second quarter of 2021 and $22.3 million in the third quarter of 2020. Core noninterest income totaled $48.8 million in the third quarter of 2021 compared to $46.7 million in the second quarter of 2021 and $69.1 million in the third quarter of 2020. Core noninterest income excludes net gains on the sale of branches which totaled $(239,000) in the third quarter of 2021, $445,000 in the second quarter of 2021 and $370,000 in the third quarter of 2020.Select Noninterest Income Items
($ in millions)3rd Qtr
20212nd Qtr
20211st Qtr
20214th Qtr
20203rd Qtr
2020Service charges on deposit accounts $11.6 $10.1 $9.7 $10.8 $10.4 Trust income $7.1 $7.2 $6.7 $6.6 $6.7 Mortgage lending income $5.8 $4.5 $6.4 $3.0 $14.0 SBA lending income $0.2 $0.3 $0.2 $0.5 $0.3 Debit and credit card fees (1) $7.1 $7.1 $6.6 $6.4 $6.5 Gain on sale of securities $5.2 $5.1 $5.5 - $22.3 Other income $6.2 $8.1 $10.3 $10.6 $5.4 Core other income (2) $6.5 $7.7 $4.8 $10.3 $5.0 (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 third quarter of 2021 totaled $114.3 million compared to $114.7 million for the second quarter of 2021 and $116.6 million for the third quarter of 2020. Included in noninterest expense are pre-tax, non-core items for merger-related expenses, early retirement and branch right sizing costs. Excluding these items, core noninterest expense was $116.2 million for the third quarter of 2021, $113.5 million for the second quarter of 2021 and $112.9 million for the third quarter of 2020. During the quarter, the Company recorded in other expense a $3.3 million reversal of mark-to-market adjustment related to branches held for sale. As previously announced, during the quarter the Company closed 13 branches in connection with its branch right sizing initiative.Select Noninterest Expense Items
($ in millions)3rd Qtr
20212nd Qtr
20211st Qtr
20214th Qtr
20203rd Qtr
2020Salaries and employee benefits $61.9 $60.3 $60.3 $55.8 $61.1 Merger related costs $1.4 $0.7 $0.2 $0.7 $0.9 Other operating expenses (1) $34.6 $37.2 $36.1 $52.0 $35.8 Core salaries and employee benefits (2) $61.8 $60.3 $60.3 $55.6 $58.7 Core merger related costs (2) - - - - - Core other operating expenses (2) $38.3 $37.1 $35.9 $41.8 $35.8 (1) During the second quarter of 2021, certain debit and credit card transaction fees were reclassified from noninterest expense to noninterest income. Prior periods have been adjusted to reflect this reclassification. (2) Core figures exclude non-core items and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below. Asset Quality
($ in millions)3rd Qtr
20212nd Qtr
20211st Qtr
20214th Qtr
20203rd Qtr
2020Allowance for credit losses on loans to total loans 1.87% 2.00% 1.93% 1.85% 1.77% Allowance for credit losses on loans to nonperforming loans 341% 281% 204% 193% 148% Nonperforming loans to total loans 0.55% 0.71% 0.95% 0.96% 1.20% Net charge-off ratio (annualized) 0.17% (0.07%) 0.10% 0.52% 0.16% Net charge-off ratio YTD (annualized) 0.06% 0.01% 0.10% 0.45% 0.43% Total nonperforming loans $59.4 $80.9 $115.5 $123.5 $167.9 Total other nonperforming assets $13.5 $16.3 $12.4 $20.4 $14.6 For the fourth consecutive quarter, asset quality metric continued to show marked improvement with nonperforming loans now at their lowest level since the fourth quarter of 2018. Total nonperforming loans at the end of the quarter totaled $59.4 million, down $21.5 million compared to $80.9 million at the end of the second quarter of 2021 and down $108.5 million from the third quarter of 2020. Net charge-offs as a percentage of average total loans for the quarter were 17 basis points, relatively unchanged from the 16 basis points recorded in the third quarter a year ago. The increase in net charge-offs on a linked quarter basis was primarily associated with a single previously identified commercial loan. Provision for credit losses in the quarter was a credit of $19.9 million, reflecting continued positive trends in asset quality metrics and improved economic modeling scenarios. The allowance for credit losses at the end of the third quarter of 2021 totaled $202.5 million compared to $227.2 million at the end of the second quarter of 2021 and $248.3 million at the end of the third quarter of 2020. At the same time, all of our coverage ratios remain strong. The allowance to loan ratio ended the quarter at 1.87 percent compared to 2.00 percent at the end of the second quarter of 2021 and 1.77 percent at the end of the third quarter of 2020. The nonperforming loan coverage ratio rose to 341 percent compared to 281 percent at the end of the second quarter of 2021 and 148 percent at the end of the third quarter of 2020.
Foreclosed Assets and Other Real Estate Owned
At September 30, 2021, foreclosed assets and other real estate owned (“OREO”) totaled $11.8 million compared to $15.2 million at the June 30, 2021 and $12.6 million at September 30, 2020. A breakdown of the composition of foreclosed assets and OREO is provided in the table below:
($ in millions)3rd Qtr
20212nd Qtr
20211st Qtr
20214th Qtr
20203rd Qtr
2020Closed bank branches and branch sites $2.7 $4.4 $0.5 $0.6 $0.6 Foreclosed assets – acquired $6.0 $6.7 $7.7 $15.3 $9.3 Foreclosed assets – legacy $3.1 $4.1 $3.0 $2.5 $2.7 Capital
3rd Qtr
20212nd Qtr
20211st Qtr
20214th Qtr
20203rd Qtr
2020Stockholders’ equity to total assets 13.1% 13.0% 12.6% 13.3% 13.7% Tangible common equity to tangible assets (1) 8.4% 8.4% 7.9% 8.5% 8.7% Regulatory common equity tier 1 ratio 14.3% 14.2% 14.1% 13.4% 12.6% Regulatory tier 1 leverage ratio 9.1% 9.0% 9.0% 9.1% 9.1% Regulatory tier 1 risk-based capital ratio 14.3% 14.2% 14.1% 13.4% 12.6% Regulatory total risk-based capital ratio 17.4% 17.5% 17.5% 16.8% 15.8% (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 second and third quarters of 2021 totaled $3.0 billion compared to $2.9 billion at the end of the third quarter of 2020. Book value per share at the end of the quarter was $28.42 compared to $28.03 at the end of the second quarter of 2021 and $26.98 at the end of the third quarter of 2020. Tangible book value per share was $17.39 compared to $17.16 at the end of the second quarter of 2021 and $16.07 at the end of the third quarter of 2020. The ratio of stockholders’ equity to total assets at September 30, 2021 was 13.1 percent while tangible common equity to tangible total assets was 8.4 percent. The Company continues to maintain an outstanding capital positions with each of its regulatory capital ratios significantly in excess of “well-capitalized” guidelines.
Share Repurchase Program
During the third quarter of 2021, the Company repurchased approximately 1.8 million shares of its common stock at an average price of $28.48 pursuant to the Company’s stock repurchase program (the “Program”), with remaining capacity under the Program totaling approximately $98.5 million. Market conditions and our capital needs will drive the decisions regarding additional, future stock repurchases.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 a Mid-South based financial holding company whose principal subsidiary, Simmons Bank, operates more than 200 financial centers in Arkansas, Missouri, Tennessee, Texas, Oklahoma and Kansas. Founded in 1903, Simmons Bank offers comprehensive financial solutions delivered with a client-centric approach. Simmons Bank was 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, October 26, 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 6606988. 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
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 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 “booster” 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; changes in accounting principles relating to loan loss recognition (current expected credit losses, or CECL); the Company’s ability to manage and successfully integrate its mergers and acquisitions; cyber threats, attacks or events; reliance on third parties for key services; government legislation; and other factors, many of which are beyond the control of the Company, could cause actual results to differ materially from those contemplated by the forward-looking statements. Additional information on factors that might affect the Company’s financial results is included in the Company’s Form 10-K for the year ended December 31, 2020, which has been filed with, and is available from, the U.S. Securities and Exchange Commission.FOR MORE INFORMATION CONTACT:
Ed Bilek
EVP, Director of Investor Relations
Simmons First National Corporation
ed.bilek@simmonsbank.comSimmons First National Corporation SFNC Consolidated End of Period Balance Sheets For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 (Unaudited) 2021 2021 2021 2020 2020 ($ in thousands) ASSETS Cash and non-interest bearing balances due from banks $ 225,500 $ 215,381 $ 227,713 $ 217,499 $ 382,691 Interest bearing balances due from banks and federal funds sold 1,555,913 2,123,743 3,677,750 3,254,653 2,139,440 Cash and cash equivalents 1,781,413 2,339,124 3,905,463 3,472,152 2,522,131 Interest bearing balances due from banks - time 1,780 1,335 1,334 1,579 4,061 Investment securities - held-to-maturity 1,516,797 931,352 609,500 333,031 47,102 Investment securities - available-for-sale 6,822,203 6,556,581 4,528,348 3,473,598 2,607,288 Mortgage loans held for sale 34,628 36,011 63,655 137,378 192,729 Other assets held for sale 100 100 100 100 389 Loans: Loans 10,825,227 11,386,352 12,195,873 12,900,897 14,017,442 Allowance for credit losses on loans (202,508 ) (227,239 ) (235,116 ) (238,050 ) (248,251 ) Net loans 10,622,719 11,159,113 11,960,757 12,662,847 13,769,191 Premises and equipment 463,924 429,587 427,540 441,692 470,491 Premises held for sale - 6,090 13,613 15,008 4,486 Foreclosed assets and other real estate owned 11,759 15,239 11,168 18,393 12,590 Interest receivable 68,405 67,916 71,359 72,597 77,352 Bank owned life insurance 421,762 419,198 257,152 255,630 257,718 Goodwill 1,075,305 1,075,305 1,075,305 1,075,305 1,075,305 Other intangible assets 100,428 103,759 107,091 111,110 114,460 Other assets 304,707 282,449 315,732 289,332 282,102 Total assets $ 23,225,930 $ 23,423,159 $ 23,348,117 $ 22,359,752 $ 21,437,395 LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Non-interest bearing transaction accounts $ 4,918,845 $ 4,893,959 $ 4,884,667 $ 4,482,091 $ 4,451,385 Interest bearing transaction accounts and savings deposits 10,697,451 10,569,602 10,279,997 9,672,608 8,993,255 Time deposits 2,455,774 2,841,052 3,024,724 2,832,327 2,802,007 Total deposits 18,072,070 18,304,613 18,189,388 16,987,026 16,246,647 Federal funds purchased and securities sold under agreements to repurchase 217,276 187,215 323,053 299,111 313,694 Other borrowings 1,338,585 1,339,193 1,340,467 1,342,067 1,342,769 Subordinated notes and debentures 383,278 383,143 383,008 382,874 382,739 Other liabilities held for sale - - - 154,620 - Accrued interest and other liabilities 184,190 169,629 181,426 217,398 209,305 Total liabilities 20,195,399 20,383,793 20,417,342 19,383,096 18,495,154 Stockholders' equity: Preferred stock 767 767 767 767 767 Common stock 1,066 1,084 1,083 1,081 1,090 Surplus 1,974,561 2,021,128 2,017,188 2,014,076 2,032,372 Undivided profits 1,065,566 1,004,314 948,913 901,006 866,503 Accumulated other comprehensive (loss) income: Unrealized (depreciation) accretion on AFS securities (11,429 ) 12,073 (37,176 ) 59,726 41,509 Total stockholders' equity 3,030,531 3,039,366 2,930,775 2,976,656 2,942,241 Total liabilities and stockholders' equity $ 23,225,930 $ 23,423,159 $ 23,348,117 $ 22,359,752 $ 21,437,395
Simmons First National Corporation SFNC Consolidated Statements of Income - Quarter-to-Date For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 (Unaudited) 2021 2021 2021 2020 2020 ($ in thousands, except per share data) INTEREST INCOME Loans (including fees) $ 132,216 $ 138,804 $ 146,424 $ 160,115 $ 163,180 Interest bearing balances due from banks and federal funds sold 763 651 798 716 623 Investment securities 30,717 27,128 21,573 17,207 14,910 Mortgage loans held for sale 230 386 639 1,070 1,012 TOTAL INTEREST INCOME 163,926 166,969 169,434 179,108 179,725 INTEREST EXPENSE Time deposits 4,747 6,061 7,091 7,835 9,437 Other deposits 4,369 4,721 6,088 6,536 6,769 Federal funds purchased and securities sold under agreements to repurchase 70 192 245 284 335 Other borrowings 4,893 4,897 4,802 4,869 4,943 Subordinated notes and debentures 4,610 4,565 4,527 4,624 4,631 TOTAL INTEREST EXPENSE 18,689 20,436 22,753 24,148 26,115 NET INTEREST INCOME 145,237 146,533 146,681 154,960 153,610 Provision for credit losses (19,890 ) (12,951 ) 1,445 6,943 22,981 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 165,127 159,484 145,236 148,017 130,629 NON-INTEREST INCOME Trust income 7,145 7,238 6,666 6,557 6,744 Service charges on deposit accounts 11,557 10,050 9,715 10,799 10,385 Other service charges and fees 1,964 2,048 1,922 1,783 1,764 Mortgage lending income 5,818 4,490 6,447 2,993 13,971 SBA lending income 191 287 240 484 304 Investment banking income 732 654 695 676 557 Debit and credit card fees 7,102 7,073 6,610 6,415 6,478 Bank owned life insurance income 2,573 2,038 1,523 1,481 1,591 Gain on sale of securities, net 5,248 5,127 5,471 16 22,305 Other income 6,220 8,110 10,260 10,557 5,380 TOTAL NON-INTEREST INCOME 48,550 47,115 49,549 41,761 69,479 NON-INTEREST EXPENSE Salaries and employee benefits 61,902 60,261 60,340 55,762 61,144 Occupancy expense, net 9,361 9,103 9,300 9,182 9,647 Furniture and equipment expense 4,895 4,859 5,415 5,940 6,231 Other real estate and foreclosure expense 339 863 343 551 602 Deposit insurance 1,870 1,687 1,308 1,627 2,244 Merger-related costs 1,401 686 233 731 902 Other operating expenses 34,565 37,198 36,063 52,047 35,807 TOTAL NON-INTEREST EXPENSE 114,333 114,657 113,002 125,840 116,577 NET INCOME BEFORE INCOME TAXES 99,344 91,942 81,783 63,938 83,531 Provision for income taxes 18,770 17,018 14,363 10,970 17,633 NET INCOME 80,574 74,924 67,420 52,968 65,898 Preferred stock dividends 13 13 13 13 13 NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 80,561 $ 74,911 $ 67,407 $ 52,955 $ 65,885 BASIC EARNINGS PER SHARE $ 0.75 $ 0.69 $ 0.62 $ 0.49 $ 0.60 DILUTED EARNINGS PER SHARE $ 0.74 $ 0.69 $ 0.62 $ 0.49 $ 0.60
Simmons First National Corporation SFNC Consolidated Risk-Based Capital For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 (Unaudited) 2021 2021 2021 2020 2020 ($ in thousands) Tier 1 capital Stockholders' equity $ 3,030,531 $ 3,039,366 $ 2,930,775 $ 2,976,656 $ 2,942,241 CECL transition provision (1) 122,787 128,933 131,637 131,430 134,798 Disallowed intangible assets, net of deferred tax (1,152,688 ) (1,156,203 ) (1,159,720 ) (1,163,797 ) (1,167,357 ) Unrealized loss (gain) on AFS securities 11,429 (12,073 ) 37,176 (59,726 ) (41,509 ) Total Tier 1 capital 2,012,059 2,000,023 1,939,868 1,884,563 1,868,173 Tier 2 capital Trust preferred securities and subordinated debt 383,278 383,143 383,008 382,874 382,739 Qualifying allowance for loan losses and reserve for unfunded commitments 60,700 79,138 87,251 89,546 96,734 Total Tier 2 capital 443,978 462,281 470,259 472,420 479,473 Total risk-based capital $ 2,456,037 $ 2,462,304 $ 2,410,127 $ 2,356,983 $ 2,347,646 Risk weighted assets $ 14,098,320 $ 14,076,975 $ 13,771,244 $ 14,048,608 $ 14,878,932 Adjusted average assets for leverage ratio $ 22,189,921 $ 22,244,118 $ 21,668,406 $ 20,765,127 $ 20,652,454 Ratios at end of quarter Equity to assets 13.05 % 12.98 % 12.55 % 13.31 % 13.72 % Tangible common equity to tangible assets (2) 8.41 % 8.36 % 7.88 % 8.45 % 8.65 % Common equity Tier 1 ratio (CET1) 14.27 % 14.20 % 14.08 % 13.41 % 12.55 % Tier 1 leverage ratio 9.07 % 8.99 % 8.95 % 9.08 % 9.05 % Tier 1 risk-based capital ratio 14.27 % 14.21 % 14.09 % 13.41 % 12.56 % Total risk-based capital ratio 17.42 % 17.49 % 17.50 % 16.78 % 15.78 % (1) The Company has elected to use the CECL transition provision allowed for in the year of adopting ASC 326. (2) Calculations of tangible common equity to tangible assets and the reconciliations to GAAP are included in the schedules accompanying this release. Simmons First National Corporation SFNC Consolidated Investment Securities For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 (Unaudited) 2021 2021 2021 2020 2020 ($ in thousands) Investment Securities - End of Period Held-to-Maturity U.S. Government agencies $ 232,549 $ 77,396 $ 77,396 $ - $ - Mortgage-backed securities 57,930 60,649 47,988 22,354 24,297 State and political subdivisions 1,209,091 793,307 484,116 310,109 21,930 Other securities 17,227 - - 568 875 Total held-to-maturity (net of credit losses) 1,516,797 931,352 609,500 333,031 47,102 Available-for-Sale U.S. Treasury $ 300 $ 600 $ 600 $ - $ - U.S. Government agencies 354,382 554,937 487,679 477,237 471,973 Mortgage-backed securities 4,421,620 3,987,209 2,133,086 1,394,936 903,687 State and political subdivisions 1,575,208 1,557,497 1,571,910 1,470,723 1,133,006 Other securities 470,693 456,338 335,073 130,702 98,622 Total available-for-sale (net of credit losses) 6,822,203 6,556,581 4,528,348 3,473,598 2,607,288 Total investment securities (net of credit losses) $ 8,339,000 $ 7,487,933 $ 5,137,848 $ 3,806,629 $ 2,654,390 Fair value - HTM investment securities $ 1,487,916 $ 935,596 $ 597,694 $ 341,925 $ 49,064 Investment Securities - QTD Average Taxable securities $ 5,475,932 $ 4,265,545 $ 2,471,291 $ 1,757,234 $ 1,534,742 Tax exempt securities 2,496,958 2,157,076 1,919,919 1,528,127 1,155,099 Total investment securities - QTD average $ 7,972,890 $ 6,422,621 $ 4,391,210 $ 3,285,361 $ 2,689,841 Simmons First National Corporation SFNC Consolidated Loans For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 (Unaudited) 2021 2021 2021 2020 2020 ($ in thousands) Loan Portfolio - End of Period Consumer Credit cards $ 175,884 $ 177,634 $ 175,458 $ 188,845 $ 180,848 Other consumer 182,492 181,712 172,965 202,379 182,768 Total consumer 358,376 359,346 348,423 391,224 363,616 Real Estate Construction 1,229,740 1,428,165 1,451,841 1,596,255 1,853,360 Single-family residential 1,540,701 1,608,028 1,730,056 1,880,673 1,997,070 Other commercial real estate 5,308,902 5,332,655 5,638,010 5,746,863 6,132,823 Total real estate 8,079,343 8,368,848 8,819,907 9,223,791 9,983,253 Commercial Commercial 1,821,905 2,074,729 2,444,700 2,574,386 2,907,798 Agricultural 216,735 193,462 155,921 175,905 241,687 Total commercial 2,038,640 2,268,191 2,600,621 2,750,291 3,149,485 Other 348,868 389,967 426,922 535,591 521,088 Total loans $ 10,825,227 $ 11,386,352 $ 12,195,873 $ 12,900,897 $ 14,017,442 Simmons First National Corporation SFNC Consolidated Allowance and Asset Quality For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 (Unaudited) 2021 2021 2021 2020 2020 ($ in thousands) Allowance for Credit Losses on Loans Beginning balance, after adoption of ASC 326 $ 227,239 $ 235,116 $ 238,050 $ 248,251 $ 231,641 Loans charged off Credit cards 711 1,046 1,003 787 832 Other consumer 463 411 702 960 1,091 Real estate 5,941 439 1,687 10,415 1,153 Commercial 932 309 859 8,199 4,327 Total loans charged off 8,047 2,205 4,251 20,361 7,403 Recoveries of loans previously charged off Credit cards 267 244 290 241 276 Other consumer 408 425 304 355 366 Real estate 2,068 1,523 403 431 120 Commercial 463 2,147 320 1,835 936 Total recoveries 3,206 4,339 1,317 2,862 1,698 Net loans charged off 4,841 (2,134 ) 2,934 17,499 5,705 Provision for credit losses on loans (19,890 ) (10,011 ) - 7,298 22,315 Balance, end of quarter $ 202,508 $ 227,239 $ 235,116 $ 238,050 $ 248,251 Non-performing assets Non-performing loans Nonaccrual loans $ 59,054 $ 80,282 $ 114,856 $ 122,879 $ 167,713 Loans past due 90 days or more 334 653 635 578 174 Total non-performing loans 59,388 80,935 115,491 123,457 167,887 Other non-performing assets Foreclosed assets and other real estate owned 11,759 15,239 11,168 18,393 12,590 Other non-performing assets 1,724 1,062 1,229 2,016 1,983 Total other non-performing assets 13,483 16,301 12,397 20,409 14,573 Total non-performing assets $ 72,871 $ 97,236 $ 127,888 $ 143,866 $ 182,460 Performing TDRs (troubled debt restructurings) $ 4,251 $ 4,436 $ 3,805 $ 3,138 $ 3,379 Ratios Allowance for credit losses on loans to total loans 1.87 % 2.00 % 1.93 % 1.85 % 1.77 % Allowance for credit losses to non-performing loans 341 % 281 % 204 % 193 % 148 % Non-performing loans to total loans 0.55 % 0.71 % 0.95 % 0.96 % 1.20 % Non-performing assets (including performing TDRs) to total assets 0.33 % 0.43 % 0.56 % 0.66 % 0.87 % Non-performing assets to total assets 0.31 % 0.42 % 0.55 % 0.64 % 0.85 % Annualized net charge offs to total loans 0.17 % -0.07 % 0.10 % 0.52 % 0.16 % Annualized net credit card charge offs to total credit card loans 0.96 % 1.78 % 1.39 % 1.15 % 1.20 % Simmons First National Corporation SFNC Consolidated - Average Balance Sheet and Net Interest Income Analysis For the Quarters Ended (Unaudited) Three Months Ended Sep 2021 Three Months Ended Jun 2021 Three Months Ended Sep 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 $ 1,866,530 $ 763 0.16% $ 2,703,920 $ 651 0.10% $ 2,265,233 $ 623 0.11% Investment securities - taxable 5,475,932 17,076 1.24% 4,265,545 14,594 1.37% 1,534,742 7,193 1.86% Investment securities - non-taxable (FTE) 2,496,958 18,399 2.92% 2,157,076 16,899 3.14% 1,155,099 10,382 3.58% Mortgage loans held for sale 32,134 230 2.84% 49,262 386 3.14% 145,226 1,012 2.77% Loans - including fees (FTE) 11,030,438 132,399 4.76% 11,783,839 138,987 4.73% 14,315,014 163,379 4.54% Total interest earning assets (FTE) 20,901,992 168,867 3.21% 20,959,642 171,517 3.28% 19,415,314 182,589 3.74% Non-earning assets 2,353,549 2,298,279 2,350,007 Total assets $ 23,255,541 $ 23,257,921 $ 21,765,321 LIABILITIES AND STOCKHOLDERS' EQUITY Interest bearing liabilities: Interest bearing transaction and savings accounts $ 10,629,142 $ 4,369 0.16% $ 10,403,932 $ 4,721 0.18% $ 8,977,886 $ 6,769 0.30% Time deposits 2,645,896 4,747 0.71% 2,930,025 6,061 0.83% 2,998,091 9,437 1.25% Total interest bearing deposits 13,275,038 9,116 0.27% 13,333,957 10,782 0.32% 11,975,977 16,206 0.54% Federal funds purchased and securities sold under agreement to repurchase 219,604 70 0.13% 240,876 192 0.32% 386,631 335 0.34% Other borrowings 1,338,866 4,893 1.45% 1,340,008 4,897 1.47% 1,357,278 4,943 1.45% Subordinated notes and debentures 383,213 4,610 4.77% 383,078 4,565 4.78% 382,672 4,631 4.81% Total interest bearing liabilities 15,216,721 18,689 0.49% 15,297,919 20,436 0.54% 14,102,558 26,115 0.74% Non-interest bearing liabilities: Non-interest bearing deposits 4,803,171 4,826,927 4,529,782 Other liabilities 167,677 151,699 190,169 Total liabilities 20,187,569 20,276,545 18,822,509 Stockholders' equity 3,067,972 2,981,376 2,942,812 Total liabilities and stockholders' equity $ 23,255,541 $ 23,257,921 $ 21,765,321 Net interest income (FTE) $ 150,178 $ 151,081 $ 156,474 Net interest spread (FTE) 2.72% 2.74% 3.00% Net interest margin (FTE) - quarter-to-date 2.85% 2.89% 3.21% Net interest margin (FTE) - year-to-date 2.91% 2.94% 3.43% Core net interest margin (FTE) - quarter-to-date (1) 2.77% 2.78% 3.02% Core loan yield (FTE) - quarter-to-date (1) 4.61% 4.54% 4.29% Core net interest margin (FTE) - year-to-date (1) 2.80% 2.82% 3.20% Core loan yield (FTE) - year-to-date (1) 4.56% 4.54% 4.56% (1) Calculations of core net interest margin and core loan yield and the reconciliations to GAAP are included in the schedules accompanying this release. Simmons First National Corporation SFNC Consolidated - Selected Financial Data For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 (Unaudited) 2021 2021 2021 2020 2020 ($ in thousands, except share data) QUARTER-TO-DATE Financial Highlights - GAAP Net Income $ 80,561 $ 74,911 $ 67,407 $ 52,955 $ 65,885 Diluted earnings per share 0.74 0.69 0.62 0.49 0.60 Return on average assets 1.37 % 1.29 % 1.20 % 0.96 % 1.20 % Return on average common equity 10.42 % 10.08 % 9.20 % 7.13 % 8.91 % Return on tangible common equity 17.43 % 17.25 % 15.85 % 12.48 % 15.45 % Net interest margin (FTE) 2.85 % 2.89 % 2.99 % 3.22 % 3.21 % FTE adjustment 4,941 4,548 4,163 3,482 2,864 Amortization of intangibles 3,331 3,333 3,344 3,351 3,362 Amortization of intangibles, net of taxes 2,460 2,462 2,470 2,475 2,483 Average diluted shares outstanding 108,359,890 108,822,175 108,655,293 108,888,264 109,207,294 Shares repurchased under plan 1,806,205 - 130,916 1,034,364 - Average price of shares repurchased 28.48 - 23.53 19.36 - Cash dividends declared per common share 0.18 0.18 0.18 0.17 0.17 Financial Highlights - Core (non-GAAP) Core earnings (excludes non-core items) (1) $ 79,350 $ 75,435 $ 63,995 $ 61,977 $ 68,338 Core diluted earnings per share (1) 0.73 0.69 0.59 0.57 0.63 Core net interest margin (FTE) (2) 2.77 % 2.78 % 2.86 % 3.04 % 3.02 % Accretable yield on acquired loans 4,122 5,619 6,630 8,999 8,948 Efficiency ratio (1) 58.10 % 56.75 % 57.25 % 54.75 % 53.58 % Core return on average assets (1) 1.35 % 1.30 % 1.14 % 1.13 % 1.25 % Core return on average common equity (1) 10.26 % 10.15 % 8.73 % 8.34 % 9.24 % Core return on tangible common equity (1) 17.18 % 17.36 % 15.08 % 14.51 % 16.00 % YEAR-TO-DATE Financial Highlights - GAAP Net Income $ 222,879 $ 142,318 $ 67,407 $ 254,852 $ 201,897 Diluted earnings per share 2.05 1.31 0.62 2.31 1.83 Return on average assets 1.29 % 1.25 % 1.20 % 1.18 % 1.25 % Return on average common equity 9.91 % 9.64 % 9.20 % 8.72 % 9.27 % Return on tangible common equity 16.86 % 16.56 % 15.85 % 15.25 % 16.19 % Net interest margin (FTE) 2.91 % 2.94 % 2.99 % 3.38 % 3.43 % FTE adjustment 13,652 8,711 4,163 11,001 7,519 Amortization of intangibles 10,008 6,677 3,344 13,495 10,144 Amortization of intangibles, net of taxes 7,392 4,932 2,470 9,968 7,493 Average diluted shares outstanding 108,667,928 108,746,439 108,655,293 110,173,661 110,480,508 Cash dividends declared per common share 0.54 0.36 0.18 0.68 0.51 Financial Highlights - Core (non-GAAP) Core earnings (excludes non-core items) (1) $ 218,780 $ 139,430 $ 63,995 $ 264,300 $ 202,323 Core diluted earnings per share (1) 2.01 1.28 0.59 2.40 1.83 Core net interest margin (FTE) (2) 2.80 % 2.82 % 2.86 % 3.16 % 3.20 % Accretable yield on acquired loans 16,371 12,249 6,630 41,507 32,508 Efficiency ratio (1) 57.37 % 57.00 % 57.25 % 54.18 % 53.99 % Core return on average assets (1) 1.27 % 1.22 % 1.14 % 1.22 % 1.26 % Core return on average common equity (1) 9.73 % 9.45 % 8.73 % 9.05 % 9.29 % Core return on tangible common equity (1) 16.56 % 16.23 % 15.08 % 15.79 % 16.22 % END OF PERIOD Book value per share $ 28.42 $ 28.03 $ 27.04 $ 27.53 $ 26.98 Tangible book value per share 17.39 17.16 16.13 16.56 16.07 Shares outstanding 106,603,231 108,386,669 108,345,732 108,077,662 109,023,781 Full-time equivalent employees 2,740 2,783 2,817 2,827 2,840 Total number of financial centers 185 198 198 204 226 (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 Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 (Unaudited) 2021 2021 2021 2020 2020 ($ in thousands, except per share data) QUARTER-TO-DATE Net Income $ 80,561 $ 74,911 $ 67,407 $ 52,955 $ 65,885 Non-core items Gain on sale of branches - (16 ) (5,300 ) (275 ) - Merger-related costs 1,401 686 233 731 902 Early retirement program - - - 62 2,346 Branch right-sizing (net) (3,041 ) 39 448 11,696 72 Tax effect (1) 429 (185 ) 1,207 (3,192 ) (867 ) Net non-core items (1,211 ) 524 (3,412 ) 9,022 2,453 Core earnings (non-GAAP) $ 79,350 $ 75,435 $ 63,995 $ 61,977 $ 68,338 Diluted earnings per share $ 0.74 $ 0.69 $ 0.62 $ 0.49 $ 0.60 Non-core items Gain on sale of branches - - (0.05 ) - - Merger-related costs 0.01 0.01 - - 0.01 Early retirement program - - - - 0.02 Branch right-sizing (net) (0.03 ) - 0.01 0.11 - Tax effect (1) 0.01 (0.01 ) 0.01 (0.03 ) - Net non-core items (0.01 ) - (0.03 ) 0.08 0.03 Core diluted earnings per share (non-GAAP) $ 0.73 $ 0.69 $ 0.59 $ 0.57 $ 0.63 (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 $ 6,220 $ 8,110 $ 10,260 $ 10,557 $ 5,380 Non-core items (1) 239 (445 ) (5,477 ) (275 ) (370 ) Core other income (non-GAAP) $ 6,459 $ 7,665 $ 4,783 $ 10,282 $ 5,010 Non-interest expense $ 114,333 $ 114,657 $ 113,002 $ 125,840 $ 116,577 Non-core items (1) 1,879 (1,154 ) (858 ) (12,489 ) (3,690 ) Core non-interest expense (non-GAAP) $ 116,212 $ 113,503 $ 112,144 $ 113,351 $ 112,887 Salaries and employee benefits $ 61,902 $ 60,261 $ 60,340 $ 55,762 $ 61,144 Non-core items (1) (66 ) - - (144 ) (2,448 ) Core salaries and employee benefits (non-GAAP) $ 61,836 $ 60,261 $ 60,340 $ 55,618 $ 58,696 Merger related costs $ 1,401 $ 686 $ 233 $ 731 $ 902 Non-core items (1) (1,401 ) (686 ) (233 ) (731 ) (902 ) Core merger related costs (non-GAAP) $ - $ - $ - $ - $ - Other operating expenses $ 34,565 $ 37,198 $ 36,063 $ 52,047 $ 35,807 Non-core items (1) 3,759 (89 ) (208 ) (10,270 ) (11 ) Core other operating expenses (non-GAAP) $ 38,324 $ 37,109 $ 35,855 $ 41,777 $ 35,796 (1) Non-core items include gain on sale of branches, merger related costs, early retirement program expenses and branch right-sizing costs. Simmons First National Corporation SFNC Reconciliation Of Non-GAAP Financial Measures - Core Earnings - Year-to-Date For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 (Unaudited) 2021 2021 2021 2020 2020 ($ in thousands, except per share data) YEAR-TO-DATE Net Income $ 222,879 $ 142,318 $ 67,407 $ 254,852 $ 201,897 Non-core items Gain on sale of branches (5,316 ) (5,316 ) (5,300 ) (8,368 ) (8,093 ) Merger-related costs 2,320 919 233 4,531 3,800 Early retirement program - - - 2,901 2,839 Branch right-sizing (net) (2,554 ) 487 448 13,727 2,031 Tax effect (1) 1,451 1,022 1,207 (3,343 ) (151 ) Net non-core items (4,099 ) (2,888 ) (3,412 ) 9,448 426 Core earnings (non-GAAP) $ 218,780 $ 139,430 $ 63,995 $ 264,300 $ 202,323 Diluted earnings per share $ 2.05 $ 1.31 $ 0.62 $ 2.31 $ 1.83 Non-core items Gain on sale of branches (0.05 ) (0.05 ) (0.05 ) (0.07 ) (0.07 ) Merger-related costs 0.02 0.01 - 0.04 0.03 Early retirement program - - - 0.03 0.02 Branch right-sizing (net) (0.02 ) - 0.01 0.12 0.02 Tax effect (1) 0.01 0.01 0.01 (0.03 ) - Net non-core items (0.04 ) (0.03 ) (0.03 ) 0.09 - Core diluted earnings per share (non-GAAP) $ 2.01 $ 1.28 $ 0.59 $ 2.40 $ 1.83 (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 $ 24,590 $ 18,370 $ 10,260 $ 38,547 $ 27,990 Non-core items (1) (5,683 ) (5,922 ) (5,477 ) (8,738 ) (8,463 ) Core other income (non-GAAP) $ 18,907 $ 12,448 $ 4,783 $ 29,809 $ 19,527 Non-interest expense $ 341,992 $ 227,659 $ 113,002 $ 484,736 $ 358,896 Non-core items (1) (133 ) (2,012 ) (858 ) (21,529 ) (9,040 ) Core non-interest expense (non-GAAP) $ 341,859 $ 225,647 $ 112,144 $ 463,207 $ 349,856 Salaries and employee benefits $ 182,503 $ 120,601 $ 60,340 $ 242,474 $ 186,712 Non-core items (1) (66 ) - - (3,085 ) (2,941 ) Core salaries and employee benefits (non-GAAP) $ 182,437 $ 120,601 $ 60,340 $ 239,389 $ 183,771 Merger related costs $ 2,320 $ 919 $ 233 $ 4,531 $ 3,800 Non-core items (1) (2,320 ) (919 ) (233 ) (4,531 ) (3,800 ) Core merger related costs (non-GAAP) $ - $ - $ - $ - $ - Other operating expenses $ 107,826 $ 73,261 $ 36,063 $ 165,201 $ 113,154 Non-core items (1) 3,462 (297 ) (208 ) (12,155 ) (1,885 ) Core other operating expenses (non-GAAP) $ 111,288 $ 72,964 $ 35,855 $ 153,046 $ 111,269 (1) Non-core items include gain on sale of branches, merger related costs, early retirement program expenses and branch right-sizing costs. Simmons First National Corporation SFNC Reconciliation Of Non-GAAP Financial Measures - End of Period For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 (Unaudited) 2021 2021 2021 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 $ 3,029,764 $ 3,038,599 $ 2,930,008 $ 2,975,889 $ 2,941,474 Intangible assets: Goodwill (1,075,305 ) (1,075,305 ) (1,075,305 ) (1,075,305 ) (1,075,305 ) Other intangible assets (100,428 ) (103,759 ) (107,091 ) (111,110 ) (114,460 ) Total intangibles (1,175,733 ) (1,179,064 ) (1,182,396 ) (1,186,415 ) (1,189,765 ) Tangible common stockholders' equity $ 1,854,031 $ 1,859,535 $ 1,747,612 $ 1,789,474 $ 1,751,709 Total assets $ 23,225,930 $ 23,423,159 $ 23,348,117 $ 22,359,752 $ 21,437,395 Intangible assets: Goodwill (1,075,305 ) (1,075,305 ) (1,075,305 ) (1,075,305 ) (1,075,305 ) Other intangible assets (100,428 ) (103,759 ) (107,091 ) (111,110 ) (114,460 ) Total intangibles (1,175,733 ) (1,179,064 ) (1,182,396 ) (1,186,415 ) (1,189,765 ) Tangible assets $ 22,050,197 $ 22,244,095 $ 22,165,721 $ 21,173,337 $ 20,247,630 Paycheck protection program ("PPP") loans (212,087 ) (441,353 ) (797,629 ) (904,673 ) (970,488 ) Total assets excluding PPP loans $ 23,013,843 $ 22,981,806 $ 22,550,488 $ 21,455,079 $ 20,466,907 Tangible assets excluding PPP loans $ 21,838,110 $ 21,802,742 $ 21,368,092 $ 20,268,664 $ 19,277,142 Ratio of common equity to assets 13.04 % 12.97 % 12.55 % 13.31 % 13.72 % Ratio of common equity to assets excluding PPP loans 13.16 % 13.22 % 12.99 % 13.87 % 14.37 % Ratio of tangible common equity to tangible assets 8.41 % 8.36 % 7.88 % 8.45 % 8.65 % Ratio of tangible common equity to tangible assets excluding PPP loans 8.49 % 8.53 % 8.18 % 8.83 % 9.09 % Calculation of Tangible Book Value per Share Total common stockholders' equity $ 3,029,764 $ 3,038,599 $ 2,930,008 $ 2,975,889 $ 2,941,474 Intangible assets: Goodwill (1,075,305 ) (1,075,305 ) (1,075,305 ) (1,075,305 ) (1,075,305 ) Other intangible assets (100,428 ) (103,759 ) (107,091 ) (111,110 ) (114,460 ) Total intangibles (1,175,733 ) (1,179,064 ) (1,182,396 ) (1,186,415 ) (1,189,765 ) Tangible common stockholders' equity $ 1,854,031 $ 1,859,535 $ 1,747,612 $ 1,789,474 $ 1,751,709 Shares of common stock outstanding 106,603,231 108,386,669 108,345,732 108,077,662 109,023,781 Book value per common share $ 28.42 $ 28.03 $ 27.04 $ 27.53 $ 26.98 Tangible book value per common share $ 17.39 $ 17.16 $ 16.13 $ 16.56 $ 16.07 Calculation of Regulatory Tier 1 Leverage Ratio Excluding Average PPP Loans Total Tier 1 capital $ 2,012,059 $ 2,000,023 $ 1,939,868 $ 1,884,563 $ 1,868,173 Adjusted average assets for leverage ratio $ 22,199,822 $ 22,244,118 $ 21,668,406 $ 20,765,127 $ 20,652,454 Average PPP loans (359,828 ) (707,296 ) (891,070 ) (937,544 ) (967,152 ) Adjusted average assets excluding average PPP loans $ 21,839,994 $ 21,536,822 $ 20,777,336 $ 19,827,583 $ 19,685,302 Tier 1 leverage ratio 9.06 % 8.99 % 8.95 % 9.08 % 9.05 % Tier 1 leverage ratio excluding average PPP loans 9.21 % 9.29 % 9.34 % 9.50 % 9.49 % Simmons First National Corporation SFNC Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 (Unaudited) 2021 2021 2021 2020 2020 ($ in thousands) Calculation of Core Return on Average Assets Net income $ 80,561 $ 74,911 $ 67,407 $ 52,955 $ 65,885 Net non-core items, net of taxes, adjustment (1,211 ) 524 (3,412 ) 9,022 2,453 Core earnings $ 79,350 $ 75,435 $ 63,995 $ 61,977 $ 68,338 Average total assets $ 23,255,541 $ 23,257,921 $ 22,738,821 $ 21,852,094 $ 21,765,321 Return on average assets 1.37 % 1.29 % 1.20 % 0.96 % 1.20 % Core return on average assets 1.35 % 1.30 % 1.14 % 1.13 % 1.25 % Calculation of Return on Tangible Common Equity Net income $ 80,561 $ 74,911 $ 67,407 $ 52,955 $ 65,885 Amortization of intangibles, net of taxes 2,460 2,462 2,470 2,475 2,483 Total income available to common stockholders $ 83,021 $ 77,373 $ 69,877 $ 55,430 $ 68,368 Net non-core items, net of taxes (1,211 ) 524 (3,412 ) 9,022 2,453 Core earnings 79,350 75,435 63,995 61,977 68,338 Amortization of intangibles, net of taxes 2,460 2,462 2,470 2,475 2,483 Total core income available to common stockholders $ 81,810 $ 77,897 $ 66,465 $ 64,452 $ 70,821 Average common stockholders' equity $ 3,067,205 $ 2,980,609 $ 2,972,689 $ 2,955,865 $ 2,942,045 Average intangible assets: Goodwill (1,075,305 ) (1,075,305 ) (1,075,305 ) (1,075,305 ) (1,064,893 ) Other intangibles (102,576 ) (105,785 ) (109,850 ) (113,098 ) (116,385 ) Total average intangibles (1,177,881 ) (1,181,090 ) (1,185,155 ) (1,188,403 ) (1,181,278 ) Average tangible common stockholders' equity $ 1,889,324 $ 1,799,519 $ 1,787,534 $ 1,767,462 $ 1,760,767 Return on average common equity 10.42 % 10.08 % 9.20 % 7.13 % 8.91 % Return on tangible common equity 17.43 % 17.25 % 15.85 % 12.48 % 15.45 % Core return on average common equity 10.26 % 10.15 % 8.73 % 8.34 % 9.24 % Core return on tangible common equity 17.18 % 17.36 % 15.08 % 14.51 % 16.00 % Calculation of Efficiency Ratio (1) Non-interest expense $ 114,333 $ 114,657 $ 113,002 $ 125,840 $ 116,577 Non-core non-interest expense adjustment 1,879 (1,154 ) (858 ) (12,489 ) (3,690 ) Other real estate and foreclosure expense adjustment (339 ) (863 ) (343 ) (545 ) (600 ) Amortization of intangibles adjustment (3,331 ) (3,333 ) (3,344 ) (3,351 ) (3,362 ) Efficiency ratio numerator $ 112,542 $ 109,307 $ 108,457 $ 109,455 $ 108,925 Net-interest income $ 145,237 $ 146,533 $ 146,681 $ 154,960 $ 153,610 Non-interest income 48,550 47,115 49,549 41,761 69,479 Non-core non-interest income adjustment 239 (445 ) (5,477 ) (275 ) (370 ) Fully tax-equivalent adjustment (effective tax rate of 26.135%) 4,941 4,548 4,163 3,482 2,864 Gain on sale of securities (5,248 ) (5,127 ) (5,471 ) (16 ) (22,305 ) Efficiency ratio denominator $ 193,719 $ 192,624 $ 189,445 $ 199,912 $ 203,278 Efficiency ratio (1) 58.10 % 56.75 % 57.25 % 54.75 % 53.58 % (1) Efficiency ratio is core non-interest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and non-interest revenues, excluding gains and losses from securities transactions and non-core items.
Simmons First National Corporation SFNC Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date (continued) For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 (Unaudited) 2021 2021 2021 2020 2020 ($ in thousands) Calculation of Core Net Interest Margin Net interest income $ 145,237 $ 146,533 $ 146,681 $ 154,960 $ 153,610 Fully tax-equivalent adjustment (effective tax rate of 26.135%) 4,941 4,548 4,163 3,482 2,864 Fully tax-equivalent net interest income 150,178 151,081 150,844 158,442 156,474 Total accretable yield (4,122 ) (5,619 ) (6,630 ) (8,999 ) (8,948 ) Core net interest income $ 146,056 $ 145,462 $ 144,214 $ 149,443 $ 147,526 PPP loan and additional liquidity interest income (10,064 ) (9,445 ) (12,257 ) $ (6,983 ) $ (6,131 ) Net interest income adjusted for PPP loans and liquidity $ 140,114 $ 141,636 $ 138,587 $ 151,459 $ 150,343 Average earning assets $ 20,901,992 $ 20,959,642 $ 20,484,908 $ 19,573,651 $ 19,415,314 Average PPP loan balance and additional liquidity (1,475,098 ) (2,659,831 ) (3,617,567 ) $ (2,837,125 ) $ (2,359,928 ) Average earning assets adjusted for PPP loans and liquidity $ 19,426,894 $ 18,299,811 $ 16,867,341 $ 16,736,526 $ 17,055,386 Net interest margin 2.85 % 2.89 % 2.99 % 3.22 % 3.21 % Core net interest margin 2.77 % 2.78 % 2.86 % 3.04 % 3.02 % Net interest margin adjusted for PPP loans and liquidity 2.86 % 3.10 % 3.33 % 3.60 % 3.51 % Calculation of Core Loan Yield Loan interest income (FTE) $ 132,399 $ 138,987 $ 146,601 $ 160,306 $ 163,379 Total accretable yield (4,122 ) (5,619 ) (6,630 ) (8,999 ) (8,948 ) Core loan interest income $ 128,277 $ 133,368 $ 139,971 $ 151,307 $ 154,431 PPP loan interest income (9,614 ) (8,958 ) (11,652 ) $ (6,457 ) $ (5,782 ) Core loan interest income without PPP loans $ 118,663 $ 124,410 $ 128,319 $ 144,850 $ 148,649 Average loan balance $ 11,030,438 $ 11,783,839 $ 12,518,300 $ 13,457,077 $ 14,315,014 Average PPP loan balance (359,828 ) (707,296 ) (891,070 ) $ (937,544 ) $ (967,152 ) Average loan balance without PPP loans $ 10,670,610 $ 11,076,543 $ 11,627,230 $ 12,519,533 $ 13,347,862 Core loan yield 4.61 % 4.54 % 4.53 % 4.47 % 4.29 % Core loan yield without PPP loans 4.41 % 4.51 % 4.48 % 4.60 % 4.43 % Calculation of Adjusted Pre-Tax, Pre-Provision (PTPP) Earnings Net income available to common stockholders $ 80,561 $ 74,911 $ 67,407 $ 52,955 $ 65,885 Provision for income taxes 18,770 17,018 14,363 10,970 17,633 Provision for credit losses (including provision for unfunded commitments) (19,890 ) (12,951 ) 1,445 6,943 22,981 (Gain) loss on sale of securities (5,248 ) (5,127 ) (5,471 ) (16 ) (22,305 ) Net pre-tax non-core items (1,640 ) 709 (4,619 ) 12,214 3,320 Adjusted Pre-tax, pre-provision (PTPP) earnings $ 72,553 $ 74,560 $ 73,125 $ 83,066 $ 87,514
Simmons First National Corporation SFNC Reconciliation Of Non-GAAP Financial Measures - Year-to-Date For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 (Unaudited) 2021 2021 2021 2020 2020 ($ in thousands) Calculation of Core Return on Average Assets Net income $ 222,879 $ 142,318 $ 67,407 $ 254,852 $ 201,897 Net non-core items, net of taxes, adjustment (4,099 ) (2,888 ) (3,412 ) 9,448 426 Core earnings $ 218,780 $ 139,430 $ 63,995 $ 264,300 $ 202,323 Average total assets $ 23,085,987 $ 22,999,805 $ 22,738,821 $ 21,590,745 $ 21,503,564 Return on average assets 1.29 % 1.25 % 1.20 % 1.18 % 1.25 % Core return on average assets 1.27 % 1.22 % 1.14 % 1.22 % 1.26 % Calculation of Return on Tangible Common Equity Net income $ 222,879 $ 142,318 $ 67,407 $ 254,852 $ 201,897 Amortization of intangibles, net of taxes 7,392 4,932 2,470 9,968 7,493 Total income available to common stockholders $ 230,271 $ 147,250 $ 69,877 $ 264,820 $ 209,390 Net non-core items, net of taxes (4,099 ) (2,888 ) (3,412 ) 9,448 426 Core earnings 218,780 139,430 63,995 264,300 202,323 Amortization of intangibles, net of taxes 7,392 4,932 2,470 9,968 7,493 Total core income available to common stockholders $ 226,172 $ 144,362 $ 66,465 $ 274,268 $ 209,816 Average common stockholders' equity $ 3,007,181 $ 2,976,671 $ 2,972,689 $ 2,921,039 $ 2,910,366 Average intangible assets: Goodwill (1,075,305 ) (1,075,305 ) (1,075,305 ) (1,065,190 ) (1,061,793 ) Other intangibles (106,043 ) (107,806 ) (109,850 ) (118,812 ) (120,731 ) Total average intangibles (1,181,348 ) (1,183,111 ) (1,185,155 ) (1,184,002 ) (1,182,524 ) Average tangible common stockholders' equity $ 1,825,833 $ 1,793,560 $ 1,787,534 $ 1,737,037 $ 1,727,842 Return on average common equity 9.91 % 9.64 % 9.20 % 8.72 % 9.27 % Return on tangible common equity 16.86 % 16.56 % 15.85 % 15.25 % 16.19 % Core return on average common equity 9.73 % 9.45 % 8.73 % 9.05 % 9.29 % Core return on tangible common equity 16.56 % 16.23 % 15.08 % 15.79 % 16.22 % Calculation of Efficiency Ratio (1) Non-interest expense $ 341,992 $ 227,659 $ 113,002 $ 484,736 $ 358,896 Non-core non-interest expense adjustment (133 ) (2,012 ) (858 ) (21,529 ) (9,040 ) Other real estate and foreclosure expense adjustment (1,545 ) (1,206 ) (343 ) (1,706 ) (1,161 ) Amortization of intangibles adjustment (10,008 ) (6,677 ) (3,344 ) (13,495 ) (10,144 ) Efficiency ratio numerator $ 330,306 $ 217,764 $ 108,457 $ 448,006 $ 338,551 Net-interest income $ 438,451 $ 293,214 $ 146,681 $ 639,734 $ 484,774 Non-interest income 145,214 96,664 49,549 239,769 198,008 Non-core non-interest income adjustment (5,683 ) (5,922 ) (5,477 ) (8,738 ) (8,463 ) Fully tax-equivalent adjustment (effective tax rate of 26.135%) 13,652 8,711 4,163 11,001 7,519 Gain on sale of securities (15,846 ) (10,598 ) (5,471 ) (54,806 ) (54,790 ) Efficiency ratio denominator $ 575,788 $ 382,069 $ 189,445 $ 826,960 $ 627,048 Efficiency ratio (1) 57.37 % 57.00 % 57.25 % 54.18 % 53.99 % (1) Efficiency ratio is core non-interest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and non-interest revenues, excluding gains and losses from securities transactions and non-core items. Simmons First National Corporation SFNC Reconciliation Of Non-GAAP Financial Measures - Year-to-Date (continued) For the Quarters Ended Sep 30 Jun 30 Mar 31 Dec 31 Sep 30 (Unaudited) 2021 2021 2021 2020 2020 ($ in thousands) Calculation of Core Net Interest Margin Net interest income $ 438,451 $ 293,214 $ 146,681 $ 639,734 $ 484,774 Fully tax-equivalent adjustment (effective tax rate of 26.135%) 13,652 8,711 4,163 11,001 7,519 Fully tax-equivalent net interest income 452,103 301,925 150,844 650,735 492,293 Total accretable yield (16,371 ) (12,249 ) (6,630 ) (41,507 ) (32,508 ) Core net interest income $ 435,732 $ 289,676 $ 144,214 $ 609,228 $ 459,785 Average earning assets $ 20,783,708 $ 20,723,587 $ 20,484,908 $ 19,272,886 $ 19,172,318 Net interest margin 2.91 % 2.94 % 2.99 % 3.38 % 3.43 % Core net interest margin 2.80 % 2.82 % 2.86 % 3.16 % 3.20 % Calculation of Core Loan Yield Loan interest income (FTE) $ 417,987 $ 285,588 $ 146,601 $ 688,600 $ 528,294 Total accretable yield (16,371 ) (12,249 ) (6,630 ) (41,507 ) (32,508 ) Core loan interest income $ 401,616 $ 273,339 $ 139,971 $ 647,093 $ 495,786 Average loan balance $ 11,772,077 $ 12,149,041 $ 12,518,300 $ 14,260,689 $ 14,530,938 Core loan yield 4.56 % 4.54 % 4.53 % 4.54 % 4.56 % Calculation of Adjusted Pre-Tax, Pre-Provision (PTPP) Earnings Net income available to common stockholders $ 222,879 $ 142,318 $ 67,407 $ 254,852 $ 201,897 Provision for income taxes 50,151 31,381 14,363 64,890 53,920 Provision for credit losses (including provision for unfunded commitments) (31,396 ) (11,506 ) 1,445 74,973 68,030 (Gain) loss on sale of securities (15,846 ) (10,598 ) (5,471 ) (54,806 ) (54,790 ) Net pre-tax non-core items (5,550 ) (3,910 ) (4,619 ) 12,791 577 Adjusted Pre-tax, pre-provision (PTPP) earnings $ 220,238 $ 147,685 $ 73,125 $ 352,700 $ 269,634 
- Net income of $80.6 million for the third quarter of 2021, up 22 percent from the year ago quarter and up 8 percent compared to the second quarter of 2021