News & Updates

Simmons First National Corporation Reports Second Quarter 2022 Earnings

George A. Makris, Jr., Simmons’ Chairman and CEO, commented on the quarter

Although second quarter results were significantly impacted by accounting adjustments and one-time merger expenses related to our acquisition of Spirit of Texas Bancshares during the quarter, Simmons’ operating results excluding these items were extremely strong. Highlights for the quarter include a significant increase in revenue, well contained operating expense growth, improved asset quality, annualized organic loan growth in excess of 25 percent, marked improvement in the efficiency ratio, substantial expansion of the net interest margin, and excellent capital ratios.

Our strategy of restructuring our loan portfolio over the past two years not only diversified the risk profile but also established capacity which should provide the foundation for additional loan and revenue growth, which is evident in our loan pipeline and unfunded commitments. Our liquidity is solid, and our capital is strong. We are growing in all markets as demonstrated by the addition of nearly 2,000 new business deposit accounts in the quarter.

Thanks to our continuing investment in technology associated with our NGB project, our digital products continue to be expanded and our Chief Digital Officer, Alex Carriles, was recently recognized as a “Digital Banker of the Year” by American Banker. Other initiatives, such as the engagement of Disney Institute to help us focus on our customer service standards, will continue to headline our “Better Bank” objective.

I am very proud of the members of our Simmons team who truly exemplify our Better Together cultural cornerstone.

Financial Highlights

2Q22

1Q22

2Q21

Second Quarter Highlights

Financial Results (in millions)

Diluted EPS was $0.21 and adjusted diluted EPS was $0.52
Revenue increased 20% on a linked quarter basis driven by the acquisition of Spirit, solid legacy SFNC net interest income growth and net interest margin expansion
Noninterest expenses increased 22% on a linked quarter basis. Excluding merger related costs and certain other items, adjusted noninterest expense increased 9%
Provision for credit losses totaled $33.9 million, reflecting Day 2 accounting provision for acquired loans and unfunded commitments
Total loans up 26% and total deposits up 14% on a linked quarter basis. Legacy SFNC loans up 7% and deposits relatively unchanged
Credit quality metrics reflect conservative risk profile and strategic decision in 2019 to de-risk acquired loan portfolios
Common equity to assets ratio at 11.98%; TCE ratio at 7.03%

Revenue

$225.4

$187.9

$188.5

Noninterest expense

156.8

128.4

114.7

Pre-provision net revenue⁽¹⁾

68.6

59.5

73.9

Merger related costs

19.1

1.9

0.7

Adjusted pre-provision net revenue⁽¹⁾

88.1

62.3

74.6

Provision for credit losses

33.9

(19.9)

(13.0)

Net income

27.5

65.1

74.9

Per Share Data

Diluted earnings

$0.21

$0.58

$0.69

Adjusted diluted earnings⁽¹⁾

0.52

0.59

0.69

Book value

25.31

26.32

28.03

Tangible book value⁽¹⁾

14.07

15.22

17.16

Avg diluted shares outstanding (000s)

128,720

113,027

108,822

Balance Sheet (in millions)

Total loans

$15,110

$12,029

$11,386

Total deposits

22,036

19,392

18,305

Total shareholders’ equity

3,260

2,962

3,039

Asset Quality

Net charge-off ratio

0.02%

0.22%

(0.07)%

Nonperforming loan ratio

0.42

0.53

0.71

Nonperforming assets to total assets

0.26

0.29

0.42

Allowance for credit losses to total loans

1.41

1.49

2.00

Nonperforming loan coverage ratio

334

278

281

Select Ratios

Net interest margin (FTE)

3.24

2.76

2.89

Efficiency ratio⁽¹⁾

57.49

62.95

56.75

Loan to deposit ratio

68.57

62.03

62.20

Common equity tier 1 (CET1) ratio

12.10

13.52

14.20

Total risk-based capital ratio

14.83

16.42

17.49

^{Revenue is defined as net interest income plus noninterest income excluding gain (loss) on sale of securities}
^{(1) Non-GAAP measurement. See “Reconciliation of Non-GAAP Financial Measures” below}
^{FTE – fully taxable equivalent using a tax rate of 26.135%}

PINE BLUFF, Ark., July 21, 2022 (GLOBE NEWSWIRE) -- Simmons First National Corporation (NASDAQ: SFNC) (Simmons or Company) today reported net income of $27.5 million for the second quarter of 2022, compared to $65.1 million in the first quarter of 2022 and $74.9 million in the second quarter of 2021. Diluted earnings per share were $0.21 for the second quarter of 2022, compared to $0.58 for the first quarter of 2022 and $0.69 for the second quarter of 2021. Included in second quarter 2022 results were $14.4 million (after-tax) of certain items, primarily merger-related expenses associated with our acquisition of Spirit of Texas Bancshares, Inc. (Spirit) that was completed on April 8, 2022. Certain items, consisting primarily of merger-related expenses and branch right-sizing costs, totaled $2.1 million (after-tax) in the first quarter of 2022 and $0.5 million (after-tax) in the second quarter of 2021.

Additionally, second quarter 2022 results included a $33.8 million Day 2 accounting provision required for loans and unfunded commitments acquired in connection with our second quarter acquisition. Excluding these items, adjusted diluted earnings per share were $0.52 for the second quarter of 2022, $0.59 for the first quarter of 2022 and $0.69 for the second quarter of 2021.

Impact of Certain Items on Earnings and Diluted EPS

$ in millions, except per share data

Q2 22

Q1 22

Q2 21

Net income

$27.5

$65.1

74.9

Day 2 accounting provision

33.8

Merger related expenses

19.1

1.9

0.7

Branch right sizing costs, net

0.4

0.9

Total pre-tax impact

53.3

2.8

0.7

Tax effect⁽¹⁾

(14.0)

(0.7)

(0.2)

Total impact on earnings

39.3

2.1

0.5

Adjusted earnings⁽²⁾

$66.8

$67.2

75.4

Diluted EPS

$0.21

$0.58

0.69

Day 2 accounting provision

0.26

Merger related expenses

0.15

0.01

Branch right sizing costs

0.01

Total pre-tax impact

0.41

0.02

0.01

Tax effect⁽¹⁾

(0.10)

(0.01)

Total impact on earnings

0.31

0.01

Adjusted Diluted EPS⁽²⁾

0.52

$0.59

0.69

Average diluted shares outstanding

128,720,078

113,026,911

108,822,175

^{(1) Effective tax rate of 26.135%}
^{(2) Non-GAAP measurement. See “Reconciliation of Non-GAAP Financial Measures” below}

Net Interest Income
Net interest income for the second quarter of 2022 totaled $185.1 million, compared to $145.6 million in the first quarter of 2022 and $146.5 million for the second quarter of 2021. Included in net interest income is accretion recognized on loans acquired, which totaled $9.9 million in the second quarter of 2022, $3.7 million in the first quarter of 2022 and $5.6 million in the second quarter of 2021. Also included in net interest income is interest income from Paycheck Protection Program (PPP) loans totaling $1.6 million in the second quarter of 2022, $2.1 million in the first quarter of 2022 and $9.0 million in the second quarter of 2021. The increase in net interest income on a linked quarter basis was driven by a $43.1 million increase in interest income, that was fueled by SFNC legacy net loan growth, the added contribution from loans acquired in the Spirit acquisition and higher yields on loans and investment securities. The increase in net interest income was also positively impacted by a significant decrease in the level of variable rate loans at or below their interest rate floors during the quarter. These items more than offset the $3.6 million increase in interest expense on a linked quarter basis, which was partially attributable to the addition of deposits acquired in the Spirit acquisition.

The yield on loans for the second quarter of 2022 was 4.54 percent, compared to 4.34 percent in the first quarter of 2022 and 4.73 percent in the second quarter of 2021. The yield on investments securities for the second quarter of 2022 was 2.08 percent, compared to 1.86 percent in the first quarter of 2022 and 1.97 percent in the second quarter of 2021. Cost of deposits for the second quarter of 2022 were relatively stable at 18 basis points, compared to 14 basis points in the first quarter of 2022 and below the 24 basis points incurred during the second quarter of 2021. Net interest margin on a fully taxable equivalent basis for the second quarter of 2022 was 3.24 percent, compared to 2.76 percent for the first quarter of 2022 and 2.89 percent for the second quarter of 2021. Excluding the impact of PPP loan interest income, the net interest margin was 3.22 percent for the second quarter of 2022, 2.74 percent for the first quarter of 2022 and 2.81 percent for the second quarter of 2021.

Q2 22

Q1 22

Q4 21

Q3 21

Q2 21

Loan yield (FTE) ⁽¹⁾

4.54

4.34

4.58

4.76

4.73

Security yield (FTE) ⁽¹⁾

2.08

1.86

1.74

1.77

1.97

Cost of interest bearing deposits

0.25

0.19

0.23

0.27

0.32

Cost of deposits

0.18

0.14

0.17

0.20

0.24

Cost of borrowed funds

2.13

1.94

1.95

1.96

1.97

Net interest spread (FTE) ⁽¹⁾

3.11

2.66

2.74

2.72

2.74

Net interest margin (FTE) ⁽¹⁾

3.24

2.76

2.86

2.85

2.89

(1) Fully tax equivalent using an effective tax rate of 26.135%.

Noninterest Income
Noninterest income for the second quarter of 2022 was $40.2 million, compared to $42.2 million in the first quarter of 2022 and $47.1 million in the second quarter of 2021. Included in noninterest income in the first quarter of 2022 was a settlement award totaling $1.4 million. Gains (losses) on sales of investment securities totaled $(150) thousand in the second quarter of 2022, $(54) thousand in the first quarter of 2022 and $5.1 million in the second quarter of 2021. The decrease in noninterest income on a linked quarter basis was primarily attributable to an expected decline in mortgage lending income given the higher interest rate environment and softening market conditions, and the previously mentioned settlement award. These declines were offset, in part, by an increase in debit and credit card fees, and an increase in service charges on deposit accounts that was aided by the addition of Spirit.

Select Noninterest Income Items
$ in millions

Q2 22

Q1 22

Q4 21

Q3 21

Q2 21

Service charges on deposit accounts

11.4

10.7

11.9

11.6

10.1

Wealth management fees

7.2

8.0

7.9

Debit and credit card fees ⁽¹⁾

8.2

7.4

7.5

7.1

Mortgage lending income

2.2

4.6

5.0

5.8

4.5

Bank owned life insurance

2.6

2.7

2.8

2.6

2.0

Gain (loss) on sale of securities

(0.2

)

(0.1

)

(0.3

)

5.2

5.1

Other income

6.8

7.3

10.0

6.4

8.4

Adjusted other income ⁽²⁾

6.9

7.3

10.0

6.7

8.0

^{(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) Adjusted figures exclude certain items and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below.}

Noninterest Expense
Noninterest expense for the second quarter of 2022 was $156.8 million, compared to $128.4 million in the first quarter of 2022 and $114.7 in the second quarter of 2021. Included in noninterest expense in the second quarter of 2022 is a $1.6 million contribution to the Simmons First Foundation Conservation Fund, reflecting a portion of paper statement fees collected as part of a promotion to encourage customers to enroll in eStatements. Also included in noninterest expense are certain non-core items, primarily associated with merger related and branch right-sizing costs, totaling $19.4 million in the second quarter of 2022, $2.8 million in the first quarter of 2022 and $1.2 million in the second quarter of 2021. Excluding these items, adjusted noninterest expense for the second quarter of 2022 was $137.4 million, compared to $125.6 million in the first quarter of 2022 and $113.5 million in the second quarter of 2021. The increase in adjusted noninterest expense on a linked quarter basis was primarily attributable to operating expenses associated with Spirit. The increase in adjusted noninterest expense on a year-over-year basis primarily reflects increased operating expenses associated with the acquisition of Spirit, and the acquisitions of Landmark Community Bank and Triumph Bancshares, Inc. in the fourth quarter of 2021.

Select Noninterest Expense Items
$ in millions

Q2 22

Q1 22

Q4 21

Q3 21

Q2 21

Salaries and employee benefits

74.1

67.9

63.9

61.9

60.3

Occupancy expense, net

11.0

10.0

11.0

9.4

9.1

Furniture and equipment

5.1

4.8

4.7

4.9

Merger related costs

19.1

1.9

13.6

1.4

0.7

Other operating expenses⁽¹⁾

44.5

41.6

45.7

34.6

37.2

Adjusted salaries and employee benefits ⁽²⁾

74.1

67.9

63.8

61.8

60.3

Adjusted other operating expenses ⁽²⁾

44.5

40.9

45.8

38.3

37.1

Loans and Unfunded Loan Commitments
Total loans at the end of the second quarter of 2022 were $15.1 billion, compared to $12.0 billion at the end of the first quarter of 2022 and $11.4 billion at the end of the second quarter of 2021. The increase in total loans on a linked quarter basis reflected the addition of $2.3 billion of loans (net of fair value adjustments) associated with the acquisition of Spirit. Excluding Spirit loans acquired at closing, net loan growth on a linked quarter basis was $822 million, or 7 percent. Net loan growth in the quarter was also driven by increased activity throughout our geographic footprint, which more than offset an anticipated decline in mortgage warehouse lending given current market conditions, as well as the continued forgiveness of PPP loans. Additionally, loan growth was weighted toward the latter half of the quarter as average total loans for the second quarter of 2022 were $14.5 billion. The higher level of period end loan balances compared to average balances should provide a platform for interest income growth going forward.

Unfunded commitments increased for the fifth consecutive quarter to $4.5 billion, up 30 percent on a linked quarter basis. Continued growth in this measure was aided by the addition of Spirit, and we believe reflects the Company’s ability to organically attract new customers throughout its franchise while also deepening relationships with existing customers. At the same time, momentum in our commercial loan pipeline continued to strengthen with all loan opportunities, including the addition of Spirit, totaling $3.0 billion at the end of the second quarter of 2022, up 28 percent on a linked quarter basis. This marked the seventh consecutive quarter of increased activity in our commercial loan pipeline. Commercial loans approved and ready to close at the end of the second quarter totaled $1.1 billion and the rate on ready to close commercial loans was 4.45 percent, up 102 basis points from the rate on ready to close commercial loans at the end of the first quarter of 2022.

$ in millions

Q2 22

Q1 22

Q4 21

Q3 21

Q2 21

Total loans

$15,110

$12,029

$12,013

$10,825

$11,386

Spirit loans, net of fair value adjustments

2,259

Total loans (excluding Spirit)^{(1) (2)}

$12,851

Linked quarter change in loans

Linked quarter change in loans (excluding Spirit)^{(1) (2)}

PPP loans

$19

$62

$117

$212

$441

Mortgage warehouse loans

168

166

230

275

307

Energy loans

105

128

174

Unfunded loan commitments

$4,473

$3,428

$2,943

$2,254

$2,130

^{(1) Adjusted figures exclude certain items and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” below}
^{(2) Loans excluding Spirit loans are also referred to as “Legacy SFNC loans” in this earnings release.}

Deposits
Total deposits at the end of the second quarter of 2022 were $22.0 billion, compared to $19.4 billion at the end of the first quarter of 2022 and $18.3 billion at the end of the second quarter of 2021. The increase in total deposits on a linked quarter basis reflected the addition of $2.7 billion of deposits (net of fair value adjustments) associated with the acquisition of Spirit. Excluding Spirit deposits acquired at closing, total deposits were relatively unchanged on a linked quarter basis, decreasing less than 1 percent. Noninterest bearing deposits totaled $6.1 billion at the end of the second quarter of 2022 and represented 27 percent of total deposits, unchanged from first quarter of 2022 levels. Interest bearing deposits (checking, savings and money market accounts) totaled $12.8 billion at the end of the second quarter of 2022 and represented 58 percent of total deposits, compared to 62 percent of total deposits at the end of the first quarter of 2022. Conversely, time deposits totaled $3.2 billion at the end of the second quarter of 2022 and represented 14 percent of total deposits, up from 11 percent at the end of the first quarter of 2022. The change in mix of deposits on a linked quarter basis is partially attributable to the attractiveness of higher rate deposits given the rapid increase in interest rates that has occurred during 2022, coupled with the mix of deposits acquired from Spirit. The loan to deposit ratio ended the second quarter of 2022 at 69 percent, up from 62 percent at the end of both the first quarter of 2022 and the second quarter of 2021.

$ in millions

Q2 22

Q1 22

Q4 21

Q3 21

Q2 21

Noninterest bearing deposits

$6,057

$5,224

$5,325

$4,919

$4,894

Interest bearing deposits

12,816

12,106

11,589

10,697

10,570

Time deposits

3,163

2,062

2,453

2,456

2,841

Total deposits

$22,036

$19,392

$19,367

$18,072

$18,305

Spirit deposits, net of fair value adjustments

2,719

Total deposits (excluding Spirit)^{(1) (2)}

$19,317

Linked quarter change in deposits

Linked quarter change in deposits (excluding Spirit) ^{(1) (2)}

—

^{(1) Adjusted figures exclude certain items and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” below.}
^{(2) Deposits excluding Spirit deposits are also referred to as “Legacy SFNC deposits” in this earnings release.}

Asset Quality
Total nonperforming loans at the end of the second quarter of 2022 were $63.6 million, down $0.7 million compared to $64.3 million at the end of the first quarter of 2022 and down $17.3 million compared to $80.9 million at the end of the second quarter of 2021. Total nonperforming assets as a percentage of total assets were 0.26 at the end of the second quarter of 2022, compared to 0.29 percent at the end of the first quarter of 2022 and 0.42 percent at the end of the second quarter of 2021. Net charge-offs as a percentage of average loans were 2 basis points in the second quarter of 2022, compared to 22 basis points in the first quarter of 2022 and net recoveries of 7 basis points in the second quarter of 2021.

Improving asset quality metrics reflect both economic conditions in the markets we serve, as well as the impact of the Company’s strategic decision in 2019 designed to de-risk loan portfolios that were acquired in connection with its geographic diversification and expansion. As a result of this strategic decision, over the past two years the Company has prudently and systematically exited certain non-relationship credits and non-core industries while also significantly reducing its exposure to commercial real estate to more acceptable levels.

During the second quarter of 2022, the Company recorded a provision for credit losses totaling $33.9 million, compared to provision recaptures of $19.9 million in the first quarter of 2022 and $13.0 million in the second quarter of 2021. The provision for credit losses in the second quarter of 2022 includes $33.8 million associated with Day 2 accounting provision required for loans and unfunded commitments acquired during the quarter in connection with the acquisition of Spirit.

The allowance for credit losses on loans at the end of the second quarter of 2022 was $212.6 million, compared to $178.9 million at the end of the first quarter of 2022 and $227.2 million at the end of the second quarter of 2021. Included in the allowance for credit losses in the second quarter of 2022 is the impact of the Day 2 accounting provision related to Spirit, as well as fair value purchase accounting credit marks of $4.1 million. The allowance for credit losses on loans to total loans ratio ended the quarter at 1.41 percent, compared to 1.49 percent at the end of the first quarter of 2022 and 2.00 percent at the end of the second quarter of 2021. The nonperforming loan coverage ratio ended the quarter at 334 percent, compared to 278 percent at the end of the first quarter of 2022 and 281 percent at the end of the second quarter of 2021.

$ in millions

Q2 22

Q1 22

Q4 21

Q3 21

Q2 21

Allowance for credit losses on loans to total loans

1.41

1.49

1.71

1.87

2.00

Allowance for credit losses on loans to nonperforming loans

334

278

300

341

281

Nonperforming loans to total loans

0.42

0.53

0.57

0.55

0.71

Net charge-off ratio (annualized)

0.02

0.22

0.31

0.17

(0.07

)

Net charge-off ratio YTD (annualized)

0.11

0.22

0.13

0.06

0.01

Total nonperforming loans

$63.6

$64.3

$68.6

$59.4

$80.9

Total other nonperforming assets

6.4

6.6

7.7

13.5

16.3

Total nonperforming assets

$70.0

$70.9

$76.3

$72.9

$97.2

Capital
Total common stockholders’ equity at the end of the second quarter of 2022 was $3.3 billion, compared to $3.0 billion at the end of both the first quarter of 2022 and second quarter of 2021. The increase in common stockholders’ equity on a linked quarter basis reflects the issuance of shares in connection with the acquisition of Spirit and earnings for the quarter, partially offset by the return of capital to shareholders through share repurchases and the payment of a cash dividend, and an increase in unrealized losses associated with investment securities classified as available-for-sale. Book value per share at the end of the second quarter of 2022 was $25.31, compared to $26.32 at the end of the first quarter of 2022 and $28.03 and the end of the second quarter of 2021. Tangible book value per share was $14.07 at the end of the second quarter of 2022, compared to $15.22 at the end of the first quarter of 2022 and $17.16 at the end of the second quarter of 2021. The ratio of stockholders’ equity to total assets at June 30, 2022, was 12.0 percent and the ratio of tangible common equity to tangible assets was 7.0 percent. All of Simmons’ regulatory capital ratios continue to significantly exceed “well-capitalized” guidelines.

Q2 22

Q1 22

Q4 21

Q3 21

Q2 21

Stockholders’ equity to total assets

12.0

12.1

13.1

13.0

Tangible common equity to tangible assets ⁽¹⁾

7.0

7.4

8.5

8.4

Regulatory common equity tier 1 ratio

12.1

13.5

13.8

14.3

14.2

Regulatory tier 1 leverage ratio

9.2

9.0

9.1

9.0

Regulatory tier 1 risk-based capital ratio

12.1

13.5

13.8

14.3

14.2

Regulatory total risk-based capital ratio

14.8

16.4

16.8

17.4

17.5

^{(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.}

Share Repurchase Program and Cash Dividend
As previously announced, as a result of the Simmons’ strong capital position and ability to organically generate capital, the board of directors declared a quarterly cash dividend on Simmons’ Class A common stock of $0.19 per share, which is payable on October 3, 2022, to shareholders of record as of September 15, 2022. The cash dividend rate represents an increase of $0.01 per share, or 6 percent, from the dividend paid for the same time period last year. The current quarterly cash dividend rate further represents an annualized cash dividend rate of $0.76 per share and a ten-year compound annual growth rate of 7 percent. With the payment of dividends in 2022, Simmons has paid cash dividends for 113 consecutive years. According to research performed by Dividend Power, Simmons is one of only 23 U.S. publicly traded companies that have paid dividends for 100+ uninterrupted years. Simmons was one of only two banks to be named to the list and tied for second among Nasdaq listed companies for the longest active streak.

During the second quarter of 2022, Simmons repurchased approximately 2.0 million shares of its Class A common stock at an average price of $24.57 under its 2022 stock repurchase program that was announced in January 2022 (2022 Program). Under the 2022 Program, Simmons is authorized to repurchase up to $175,000,000 of its issued and outstanding Class A common stock. Market conditions and our capital needs will drive the decisions 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.

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 113 consecutive years. Its principal subsidiary, Simmons Bank, operates more than 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. Simmons Bank was named to Forbes list of “America’s Best Banks” for the second consecutive year and was recently 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.

Conference Call
Management will conduct a live conference call to review this information beginning at 9:00 a.m. Central Time today, Thursday, July 21, 2022. Interested persons can listen to this call by dialing toll-free 1-877-270-2148 (North America only) and asking for the Simmons First National Corporation conference call, conference ID 10168365. 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 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), gains and/or losses on sale of branches, early retirement programs and net branch right-sizing initiatives. 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 the Spirit acquisition, mortgage warehouse loans, and/or energy 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 and the effects of the PPP. 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 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, 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, the ability of the Company to manage the impacts 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 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 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.

FOR MORE INFORMATION CONTACT:
Ed Bilek
EVP, Director of Investor and Media Relations
Simmons First National Corporation
ed.bilek@simmonsbank.com
205.612.3378 (cell)

Simmons First National Corporation

SFNC

Consolidated End of Period Balance Sheets

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2022

2021

($ in thousands)

ASSETS

Cash and non-interest bearing balances due from banks

193,473

195,510

209,190

225,500

215,381

Interest bearing balances due from banks and federal funds sold

771,374

1,491,507

1,441,463

1,555,913

2,123,743

Cash and cash equivalents

964,847

1,687,017

1,650,653

1,781,413

2,339,124

Interest bearing balances due from banks - time

1,535

1,857

1,882

1,780

1,335

Investment securities - held-to-maturity

3,819,682

1,556,825

1,529,221

1,516,797

931,352

Investment securities - available-for-sale

4,341,647

6,640,069

7,113,545

6,822,203

6,556,581

Mortgage loans held for sale

14,437

18,206

36,356

34,628

36,011

Other loans held for sale

16,375

100

Loans:

Loans

15,110,344

12,028,593

12,012,503

10,825,227

11,386,352

Allowance for credit losses on loans

(212,611

)

(178,924

)

(205,332

)

(202,508

)

(227,239

)

Net loans

14,897,733

11,849,669

11,807,171

10,622,719

11,159,113

Premises and equipment

553,062

486,531

483,469

463,924

429,587

Premises held for sale

6,090

Foreclosed assets and other real estate owned

4,084

5,118

6,032

11,759

15,239

Interest receivable

82,332

69,357

72,990

68,405

67,916

Bank owned life insurance

486,355

448,011

445,305

421,762

419,198

Goodwill

1,310,528

1,147,007

1,146,007

1,075,305

Other intangible assets

137,285

102,748

106,235

100,428

103,759

Other assets

588,707

469,853

325,793

304,707

282,449

Total assets

27,218,609

24,482,268

24,724,759

23,225,930

23,423,159

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:

Non-interest bearing transaction accounts

6,057,186

5,223,862

5,325,318

4,918,845

4,893,959

Interest bearing transaction accounts and savings deposits

12,816,198

12,105,948

11,588,770

10,697,451

10,569,602

Time deposits

3,162,479

2,062,612

2,452,460

2,455,774

2,841,052

Total deposits

22,035,863

19,392,422

19,366,548

18,072,070

18,304,613

Federal funds purchased and securities sold under agreements to repurchase

155,101

196,828

185,403

217,276

187,215

Other borrowings

1,060,244

1,337,243

1,337,973

1,338,585

1,339,193

Subordinated notes and debentures

421,693

384,242

384,131

383,278

383,143

Other liabilities held for sale

Accrued interest and other liabilities

285,813

209,926

201,863

184,190

169,629

Total liabilities

23,958,714

21,520,661

21,475,918

20,195,399

20,383,793

Stockholders' equity:

Preferred stock

767

Common stock

1,288

1,125

1,127

1,066

1,084

Surplus

2,569,060

2,150,453

2,164,989

1,974,561

2,021,128

Undivided profits

1,139,975

1,136,990

1,093,270

1,065,566

1,004,314

Accumulated other comprehensive (loss) income:

Unrealized (depreciation) appreciation on AFS securities

(450,428

)

(326,961

)

(10,545

)

(11,429

)

12,073

Total stockholders' equity

3,259,895

2,961,607

3,248,841

3,030,531

3,039,366

Total liabilities and stockholders' equity

27,218,609

24,482,268

24,724,759

23,225,930

23,423,159

Simmons First National Corporation

SFNC

Consolidated Statements of Income - Quarter-to-Date

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2022

2021

($ in thousands, except per share data)

INTEREST INCOME

Loans (including fees)

163,578

127,176

137,564

132,216

138,804

Interest bearing balances due from banks and federal funds sold

1,117

649

583

763

651

Investment securities

37,848

33,712

32,275

30,717

27,128

Mortgage loans held for sale

200

190

310

230

386

Other loans held for sale

2,063

TOTAL INTEREST INCOME

204,806

161,727

170,732

163,926

166,969

INTEREST EXPENSE

Time deposits

2,875

2,503

3,705

4,747

6,061

Other deposits

6,879

4,314

4,390

4,369

4,721

Federal funds purchased and securities sold under agreements to repurchase

119

192

Other borrowings

4,844

4,779

4,903

4,893

4,897

Subordinated notes and debentures

4,990

4,457

4,581

4,610

4,565

TOTAL INTEREST EXPENSE

19,707

16,121

17,651

18,689

20,436

NET INTEREST INCOME

185,099

145,606

153,081

145,237

146,533

Provision for credit losses

33,859

(19,914

)

(1,308

)

(19,890

)

(12,951

)

NET INTEREST INCOME AFTER PROVISION

FOR CREDIT LOSSES

151,240

165,520

154,389

165,127

159,484

NON-INTEREST INCOME

Wealth management fees

7,214

7,968

8,042

7,877

7,892

Service charges on deposit accounts

11,379

10,696

11,909

11,557

10,050

Other service charges and fees

1,871

1,637

1,762

1,964

2,048

Mortgage lending income

2,240

4,550

5,043

5,818

4,490

Debit and credit card fees

8,224

7,449

7,460

7,102

7,073

Bank owned life insurance income

2,563

2,706

2,768

2,573

2,038

(Loss) gain on sale of securities, net

(150

)

(54

)

(348

)

5,248

5,127

Other income

6,837

7,266

9,965

6,411

8,397

TOTAL NON-INTEREST INCOME

40,178

42,218

46,601

48,550

47,115

NON-INTEREST EXPENSE

Salaries and employee benefits

74,135

67,906

63,832

61,902

60,261

Occupancy expense, net

11,004

10,023

11,033

9,361

9,103

Furniture and equipment expense

5,104

4,775

4,721

4,895

4,859

Other real estate and foreclosure expense

142

343

576

339

863

Deposit insurance

2,812

1,838

2,108

1,870

1,687

Merger-related costs

19,133

1,886

13,591

1,401

686

Other operating expenses

44,483

41,646

45,736

34,565

37,198

TOTAL NON-INTEREST EXPENSE

156,813

128,417

141,597

114,333

114,657

NET INCOME BEFORE INCOME TAXES

34,605

79,321

59,393

99,344

91,942

Provision for income taxes

7,151

14,226

11,155

18,770

17,018

NET INCOME

27,454

65,095

48,238

80,574

74,924

Preferred stock dividends

NET INCOME AVAILABLE TO COMMON STOCKHOLDERS

27,454

65,095

48,230

80,561

74,911

BASIC EARNINGS PER SHARE

0.21

0.58

0.42

0.75

0.69

DILUTED EARNINGS PER SHARE

0.21

0.58

0.42

0.74

0.69

Simmons First National Corporation

SFNC

Consolidated Risk-Based Capital

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2022

2021

($ in thousands)

Tier 1 capital

Stockholders' equity

3,259,895

2,961,607

3,248,841

3,030,531

3,039,366

CECL transition provision ⁽¹⁾

92,619

114,458

122,787

128,933

Disallowed intangible assets, net of deferred tax

(1,423,323

)

(1,224,691

)

(1,226,686

)

(1,152,688

)

(1,156,203

)

Unrealized loss (gain) on AFS securities

450,428

326,961

10,545

11,429

(12,073

)

Total Tier 1 capital

2,379,619

2,156,496

2,147,158

2,012,059

2,000,023

Tier 2 capital

Subordinated notes and debentures

421,693

384,242

384,131

383,278

383,143

Qualifying allowance for loan losses and reserve for unfunded commitments

114,733

78,057

71,853

60,700

79,138

Total Tier 2 capital

536,426

462,299

455,984

443,978

462,281

Total risk-based capital

2,916,045

2,618,795

2,603,142

2,456,037

2,462,304

Risk weighted assets

19,669,149

15,953,622

15,538,967

14,098,320

14,076,975

Adjusted average assets for leverage ratio

25,807,113

23,966,206

23,647,901

22,189,921

22,244,118

Ratios at end of quarter

Equity to assets

11.98

12.10

13.14

13.05

12.98

Tangible common equity to tangible assets ⁽²⁾

7.03

7.37

8.51

8.41

8.36

Common equity Tier 1 ratio (CET1)

12.10

13.52

13.82

14.27

14.20

Tier 1 leverage ratio

9.22

9.00

9.08

9.07

8.99

Tier 1 risk-based capital ratio

12.10

13.52

13.82

14.27

14.21

Total risk-based capital ratio

14.83

16.42

16.75

17.42

17.49

(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

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2022

2021

($ in thousands)

Investment Securities - End of Period

Held-to-Maturity

U.S. Government agencies

446,789

232,670

232,609

232,549

77,396

Mortgage-backed securities

1,244,713

112,496

70,342

57,930

60,649

State and political subdivisions

1,868,924

1,194,459

1,209,051

1,209,091

793,307

Other securities

259,256

17,200

17,219

17,227

Total held-to-maturity (net of credit losses)

3,819,682

1,556,825

1,529,221

1,516,797

931,352

Available-for-Sale

U.S. Treasury

1,441

300

600

U.S. Government agencies

198,333

333,231

364,641

354,382

554,937

Mortgage-backed securities

2,963,934

4,166,108

4,448,616

4,421,620

3,987,209

State and political subdivisions

915,255

1,653,694

1,819,658

1,575,208

1,557,497

Other securities

262,684

487,036

480,330

470,693

456,338

Total available-for-sale (net of credit losses)

4,341,647

6,640,069

7,113,545

6,822,203

6,556,581

Total investment securities (net of credit losses)

8,161,329

8,196,894

8,642,766

8,339,000

7,487,933

Fair value - HTM investment securities

3,278,982

1,307,058

1,517,378

1,487,916

935,596

Investment Securities - QTD Average

Taxable securities

5,674,470

5,688,306

5,790,429

5,475,932

4,265,545

Tax exempt securities

2,725,610

2,844,777

2,787,301

2,496,958

2,157,076

Total investment securities - QTD average

8,400,080

8,533,083

8,577,730

7,972,890

6,422,621

Simmons First National Corporation

SFNC

Consolidated Loans

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2022

2021

($ in thousands)

Loan Portfolio - End of Period

Consumer

Credit cards

189,684

184,372

187,052

175,884

177,634

Other consumer

204,692

180,602

168,318

182,492

181,712

Total consumer

394,376

364,974

355,370

358,376

359,346

Real Estate

Construction

2,082,688

1,423,445

1,326,371

1,229,740

1,428,165

Single-family residential

2,357,942

2,042,978

2,101,975

1,540,701

1,608,028

Other commercial real estate

7,082,055

5,762,567

5,738,904

5,308,902

5,332,655

Total real estate

11,522,685

9,228,990

9,167,250

8,079,343

8,368,848

Commercial

2,612,256

2,016,405

1,992,043

1,821,905

2,074,729

Agricultural

218,743

150,465

168,717

216,735

193,462

Total commercial

2,830,999

2,166,870

2,160,760

2,038,640

2,268,191

Other

362,284

267,759

329,123

348,868

389,967

Total loans

15,110,344

12,028,593

12,012,503

10,825,227

11,386,352

Simmons First National Corporation

SFNC

Consolidated Allowance and Asset Quality

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2022

2021

($ in thousands)

Allowance for Credit Losses on Loans

Beginning balance

178,924

205,332

202,508

227,239

235,116

Day 1 PCD allowance from acquisitions

Landmark (10/08/2021)

2,359

Triumph (10/08/2021)

11,092

Spirit of Texas (01/08/2022)

4,043

Total Day 1 PCD allowance

4,043

13,451

Loans charged off

Credit cards

1,004

920

865

711

1,046

Other consumer

518

414

477

463

411

Real estate

115

485

2,624

5,941

439

Commercial

688

6,319

8,513

932

309

Total loans charged off

2,325

8,138

12,479

8,047

2,205

Recoveries of loans previously charged off

Credit cards

249

274

247

267

244

Other consumer

302

387

267

408

425

Real estate

391

426

916

2,068

1,523

Commercial

621

557

1,730

463

2,147

Total recoveries

1,563

1,644

3,160

3,206

4,339

Net loans charged off

762

6,494

9,319

4,841

(2,134

)

Provision for credit losses on loans

30,406

(19,914

)

(1,308

)

(19,890

)

(10,011

)

Balance, end of quarter

212,611

178,924

205,332

202,508

227,239

Non-performing assets

Non-performing loans

Nonaccrual loans

62,670

64,096

68,204

59,054

80,282

Loans past due 90 days or more

904

240

349

334

653

Total non-performing loans

63,574

64,336

68,553

59,388

80,935

Other non-performing assets

Foreclosed assets and other real estate owned

4,084

5,118

6,032

11,759

15,239

Other non-performing assets

2,314

1,479

1,667

1,724

1,062

Total other non-performing assets

6,398

6,597

7,699

13,483

16,301

Total non-performing assets

69,972

70,933

76,252

72,871

97,236

Performing TDRs (troubled debt restructurings)

2,655

3,424

4,289

4,251

4,436

Ratios

Allowance for credit losses on loans to total loans

1.41

1.49

1.71

1.87

2.00

Allowance for credit losses to non-performing loans

334

278

300

341

281

Non-performing loans to total loans

0.42

0.53

0.57

0.55

0.71

Non-performing assets (including performing TDRs) to total assets

0.27

0.30

0.33

0.43

Non-performing assets to total assets

0.26

0.29

0.31

0.42

Annualized net charge offs to total loans

0.02

0.22

0.31

0.17

-0.07

Annualized net credit card charge offs to total credit card loans

1.55

1.39

1.29

0.96

1.78

Simmons First National Corporation

SFNC

Consolidated - Average Balance Sheet and Net Interest Income Analysis

For the Quarters Ended

(Unaudited)

Three Months Ended
Jun 2022

Three Months Ended
Mar 2022

Three Months Ended
Jun 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

777,098

1,117

0.58

1,728,694

649

0.15

2,703,920

651

0.10

Investment securities - taxable

5,674,470

21,794

1.54

5,688,306

18,148

1.29

4,265,545

14,594

1.37

Investment securities - non-taxable (FTE)

2,725,610

21,733

3.20

2,844,777

20,937

2.98

2,157,076

16,899

3.14

Mortgage loans held for sale

17,173

200

4.67

27,633

190

2.79

49,262

386

3.14

Other loans held for sale

22,114

2,063

37.42

0.00

Loans - including fees (FTE)

14,478,183

163,995

4.54

11,895,805

127,405

4.34

11,783,839

138,987

4.73

Total interest earning assets (FTE)

23,694,648

210,902

3.57

22,185,215

167,329

3.06

20,959,642

171,517

3.28

Non-earning assets

3,074,384

2,640,984

2,298,279

Total assets

26,769,032

24,826,199

23,257,921

LIABILITIES AND STOCKHOLDERS' EQUITY

Interest bearing liabilities:

Interest bearing transaction and savings accounts

12,807,502

6,879

0.22

12,083,516

4,314

0.14

10,403,932

4,721

0.18

Time deposits

2,586,567

2,875

0.45

2,241,123

2,503

0.45

2,930,025

6,061

0.83

Total interest bearing deposits

15,394,069

9,754

0.25

14,324,639

6,817

0.19

13,333,957

10,782

0.32

Federal funds purchased and securities sold under agreement to repurchase

210,280

119

0.23

218,186

0.13

240,876

192

0.32

Other borrowings

1,241,501

4,844

1.56

1,337,654

4,779

1.45

1,340,008

4,897

1.47

Subordinated notes and debentures

418,327

4,990

4.78

384,187

4,457

4.70

383,078

4,565

4.78

Total interest bearing liabilities

17,264,177

19,707

0.46

16,264,666

16,121

0.40

15,297,919

20,436

0.54

Non-interest bearing liabilities:

Non-interest bearing deposits

5,926,304

5,184,828

4,826,927

Other liabilities

216,848

207,597

151,699

Total liabilities

23,407,329

21,657,091

20,276,545

Stockholders' equity

3,361,703

3,169,108

2,981,376

Total liabilities and stockholders' equity

26,769,032

24,826,199

23,257,921

Net interest income (FTE)

191,195

151,208

151,081

Net interest spread (FTE)

3.11

2.66

2.74

Net interest margin (FTE) - quarter-to-date

3.24

2.76

2.89

Net interest margin (FTE) - year-to-date

3.01

2.76

2.94

Simmons First National Corporation

SFNC

Consolidated - Selected Financial Data

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2022

2021

($ in thousands, except share data)

QUARTER-TO-DATE

Financial Highlights - GAAP

Net Income

27,454

65,095

48,230

80,561

74,911

Diluted earnings per share

0.21

0.58

0.42

0.74

0.69

Return on average assets

0.41

1.06

0.77

1.37

1.29

Return on average common equity

3.28

8.33

5.87

10.42

10.08

Return on tangible common equity

6.28

14.31

9.98

17.43

17.25

Net interest margin (FTE)

3.24

2.76

2.86

2.85

2.89

FTE adjustment

6,096

5,602

5,579

4,941

4,548

Average diluted shares outstanding

128,720,078

113,026,911

114,491,119

108,359,890

108,822,175

Shares repurchased under plan

2,035,324

513,725

2,625,348

1,806,205

Average price of shares repurchased

24.57

31.25

29.69

28.48

Cash dividends declared per common share

0.19

0.18

Accretable yield on acquired loans

9,898

3,703

5,758

4,122

5,619

Efficiency ratio (non-GAAP)⁽¹⁾

57.49

62.95

59.48

58.10

56.75

END OF PERIOD

Book value per share

25.31

26.32

28.82

28.42

28.03

Tangible book value per share

14.07

15.22

17.71

17.39

17.16

Shares outstanding

128,787,764

112,505,555

112,715,444

106,603,231

108,386,669

Full-time equivalent employees

3,233

2,893

2,877

2,740

2,783

Total number of financial centers

233

197

199

185

198

(1) Efficiency ratio is adjusted 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 certain adjusting items, and is a non-GAAP measurement.

Simmons First National Corporation

SFNC

Reconciliation Of Non-GAAP Financial Measures - Adjusted Earnings - Quarter-to-Date

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2022

2021

($ in thousands, except per share data)

QUARTER-TO-DATE

Net Income

27,454

65,095

48,230

80,561

74,911

Certain items

Gain on sale of branches

(16

)

Merger-related costs

19,133

1,886

13,591

1,401

686

Branch right-sizing (net)

380

909

1,648

(3,041

)

Day 2 CECL provision

33,779

22,688

Tax effect⁽¹⁾

(13,928

)

(731

)

(9,912

)

429

(185

)

Certain items, net of tax

39,364

2,064

28,015

(1,211

)

524

Adjusted earnings (non-GAAP)

66,818

67,159

76,245

79,350

75,435

Diluted earnings per share

0.21

0.58

0.42

0.74

0.69

Certain items

Gain on sale of branches

Merger-related costs

0.15

0.01

0.12

0.01

Branch right-sizing (net)

0.01

(0.03

)

Day 2 CECL provision

0.27

0.20

Tax effect⁽¹⁾

(0.11

)

(0.01

)

(0.09

)

0.01

(0.01

)

Certain items, net of tax

0.31

0.01

0.24

(0.01

)

Adjusted diluted earnings per share (non-GAAP)

0.52

0.59

0.66

0.73

0.69

(1) Effective tax rate of 26.135%.

Reconciliation of Certain Adjusting Non-Interest Income and Expense Items (non-GAAP)

QUARTER-TO-DATE

Other income

6,837

7,266

9,965

6,411

8,397

Adjusting items⁽¹⁾

)

239

(445

)

Adjusted other income (non-GAAP)

6,925

7,266

9,963

6,650

7,952

Non-interest expense

156,813

128,417

141,597

114,333

114,657

Adjusting items⁽¹⁾

(19,425

)

(2,795

)

(15,241

)

1,879

(1,154

)

Adjusted non-interest expense (non-GAAP)

137,388

125,622

126,356

116,212

113,503

Salaries and employee benefits

74,135

67,906

63,832

61,902

60,261

Adjusting items⁽¹⁾

(66

)

Adjusted salaries and employee benefits (non-GAAP)

74,135

67,906

63,832

61,836

60,261

Other operating expenses

44,483

41,646

45,736

34,565

37,198

Adjusting items⁽¹⁾

)

(717

)

3,759

(89

)

Adjusted other operating expenses (non-GAAP)

44,476

40,929

45,832

38,324

37,109

(1) Adjusting items include gain on sale of branches, merger related costs and branch right-sizing costs.

Simmons First National Corporation

SFNC

Reconciliation Of Non-GAAP Financial Measures - End of Period

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

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

3,259,895

2,961,607

3,248,841

3,029,764

3,038,599

Intangible assets:

Goodwill

(1,310,528

)

(1,147,007

)

(1,146,007

)

(1,075,305

)

(1,075,305

)

Other intangible assets

(137,285

)

(102,748

)

(106,235

)

(100,428

)

(103,759

)

Total intangibles

(1,447,813

)

(1,249,755

)

(1,252,242

)

(1,175,733

)

(1,179,064

)

Tangible common stockholders' equity

1,812,082

1,711,852

1,996,599

1,854,031

1,859,535

Total assets

27,218,609

24,482,268

24,724,759

23,225,930

23,423,159

Intangible assets:

Goodwill

(1,310,528

)

(1,147,007

)

(1,146,007

)

(1,075,305

)

(1,075,305

)

Other intangible assets

(137,285

)

(102,748

)

(106,235

)

(100,428

)

(103,759

)

Total intangibles

(1,447,813

)

(1,249,755

)

(1,252,242

)

(1,175,733

)

(1,179,064

)

Tangible assets

25,770,796

23,232,513

23,472,517

22,050,197

22,244,095

Paycheck protection program ("PPP") loans

(19,476

)

(61,887

)

(116,659

)

(212,087

)

(441,353

)

Total assets excluding PPP loans

27,199,133

24,420,381

24,608,100

23,013,843

22,981,806

Tangible assets excluding PPP loans

25,751,320

23,170,626

23,355,858

21,838,110

21,802,742

Ratio of common equity to assets

11.98

12.10

13.14

13.04

12.97

Ratio of common equity to assets excluding PPP loans

11.99

12.13

13.20

13.16

13.22

Ratio of tangible common equity to tangible assets

7.03

7.37

8.51

8.41

8.36

Ratio of tangible common equity to tangible assets excluding PPP loans

7.04

7.39

8.55

8.49

8.53

Calculation of Tangible Book Value per Share

Total common stockholders' equity

3,259,895

2,961,607

3,248,841

3,029,764

3,038,599

Intangible assets:

Goodwill

(1,310,528

)

(1,147,007

)

(1,146,007

)

(1,075,305

)

(1,075,305

)

Other intangible assets

(137,285

)

(102,748

)

(106,235

)

(100,428

)

(103,759

)

Total intangibles

(1,447,813

)

(1,249,755

)

(1,252,242

)

(1,175,733

)

(1,179,064

)

Tangible common stockholders' equity

1,812,082

1,711,852

1,996,599

1,854,031

1,859,535

Shares of common stock outstanding

128,787,764

112,505,555

112,715,444

106,603,231

108,386,669

Book value per common share

25.31

26.32

28.82

28.42

28.03

Tangible book value per common share

14.07

15.22

17.71

17.39

17.16

Simmons First National Corporation

SFNC

Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2022

2021

($ in thousands)

Calculation of Efficiency Ratio⁽¹⁾

Non-interest expense

156,813

128,417

141,597

114,333

114,657

Non-interest expense adjustment

(19,425

)

(2,795

)

(15,241

)

1,879

(1,154

)

Other real estate and foreclosure expense adjustment

(142

)

(343

)

(576

)

(339

)

(863

)

Amortization of intangibles adjustment

(4,096

)

(3,486

)

(3,486

)

(3,331

)

(3,333

)

Efficiency ratio numerator

133,150

121,793

122,294

112,542

109,307

Net-interest income

185,099

145,606

153,081

145,237

146,533

Non-interest income

40,178

42,218

46,601

48,550

47,115

Non-interest income adjustment

)

239

(445

)

Fully tax-equivalent adjustment (effective tax rate of 26.135%)

6,096

5,602

5,579

4,941

4,548

Loss (gain) on sale of securities

150

348

(5,248

)

(5,127

)

Efficiency ratio denominator

231,611

193,480

205,607

193,719

192,624

Efficiency ratio⁽¹⁾

57.49

62.95

59.48

58.10

56.75

Simmons First National Corporation

SFNC

Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date (continued)

For the Quarters Ended

Jun 30

Mar 31

Dec 31

Sep 30

Jun 30

(Unaudited)

2022

2021

($ in thousands)

Calculation of Adjusted Net Interest Margin

Net interest income

185,099

145,606

153,081

145,237

146,533

Fully tax-equivalent adjustment (effective tax rate of 26.135%)

6,096

5,602

5,579

4,941

4,548

Fully tax-equivalent net interest income

191,195

151,208

158,660

150,178

151,081

PPP loan interest income

(1,648

)

(2,113

)

(5,107

)

(9,614

)

(8,958

)

Net interest income adjusted for PPP loans

189,547

149,095

153,553

140,564

142,123

Average earning assets

23,694,648

22,185,215

22,029,792

20,901,992

20,959,642

Average PPP loan balance

(43,329

)

(89,757

)

(172,130

)

(359,828

)

(707,296

)

Average earning assets adjusted for PPP loans

23,651,319

22,095,458

21,857,662

20,542,164

20,252,346

Net interest margin

3.24

2.76

2.86

2.85

2.89

Net interest margin adjusted for PPP loans

3.21

2.74

2.79

2.71

2.81

Calculation of Pre-Provision Net Revenue (PPNR)

Net interest income

185,099

145,606

153,081

145,237

146,533

Non-interest income

40,178

42,218

46,601

48,550

47,115

Less: Gain (loss) on sale of securities

(150

)

(54

)

(348

)

5,248

5,127

Less: Non-interest expense

156,813

128,417

141,597

114,333

114,657

Pre-Provision Net Revenue (PPNR)

68,614

59,461

58,433

74,206

73,864

Calculation of Adjusted Pre-Provision Net Revenue

Pre-Provision Net Revenue (PPNR)

68,614

59,461

58,433

74,206

73,864

Less: Gain on sale of branches

(16

)

Plus: Merger related costs

19,133

1,886

13,591

1,401

686

Plus: Branch right sizing costs

380

909

1,648

(3,041

)

Adjusted Pre-Provision Net Revenue

88,127

62,256

73,672

72,566

74,573

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