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Simmons Reports Second Quarter 2021 Earnings
المصدر: Nasdaq GlobeNewswire / 27 يوليو 2021 07:00:05 America/Chicago
- Net income of $74.9 million, up 27 percent from the year ago quarter and up 11 percent compared to the first quarter of 2021
- Diluted EPS of $0.69, up 28 percent from the year ago quarter and up 11 percent compared to the first quarter of 2021
- Adjusted pre-tax, pre-provision income of $74.6 million, up 2 percent from first quarter 2021 levels
- Loan production totaled $1.8 billion during the first half of 2021, on pace to significantly exceed production volume for full-year of 2020
- Total deposits of $18.3 billion, up $1.3 billion since year-end 2020 while deposits costs dropped 10 bps over the same period
- Improved macroeconomic scenario models and sharp decline in nonperforming loans (down $34.6 million linked quarter) drive $13.0 million provision expense recapture in the quarter
- Merger and acquisition activity resumes during the quarter with announced pending acquisitions of Tennessee-based Landmark Community Bank and Triumph Bancshares, Inc.
PINE BLUFF, Ark., July 27, 2021 (GLOBE NEWSWIRE) -- Simmons First National Corporation (NASDAQ: SFNC) (the “Company” or “Simmons”) today reported net income of $74.9 million for the second quarter of 2021 compared to net income of $58.8 million for the second quarter of 2020, an increase of $16.1 million, or 27 percent. Diluted earnings per share for the second quarter of 2021 were $0.69, an increase of $0.15, or 28 percent, compared to the same period in the prior year. Included in second quarter 2021 results were $524,000 in net after-tax merger-related and net branch right-sizing costs. Excluding the impact of these items, core earnings were $75.4 million for the second quarter of 2021, compared to $60.1 million for the second quarter of 2020, an increase of $15.3 million, or 25 percent. Core diluted earnings per share were $0.69, an increase of $0.14, or 25 percent, from the comparable period in 2020.
On a year-to-date basis, net income for the first half of 2021 was $142.3 million, or $1.31 diluted earnings per share, compared to $136.0 million, or $1.22 diluted earnings per share, for the first half of 2020. Excluding $2.9 million in net after-tax merger-related and net branch right-sizing costs and the after-tax gain primarily associated with the sale of branches in Illinois, core earnings for the first half of 2021 were $139.4 million, an increase of $5.4 million compared to the first half of last year. Core diluted earnings per share for the first half of 2021 were $1.28, an increase of $0.07, or 6 percent, from the comparable period of 2020.
“Overall we were very pleased with our results for the quarter as we delivered solid performance in multiple areas while continuing to navigate the challenging environment,” said George A, Makris, Jr., Simmons’ chairman and CEO. “While loan growth throughout the financial services industry continues to be hampered by the significant amounts of government stimulus in the economy that has resulted in sluggish loan demand and historically high levels of paydowns, Simmons generated $1.8 billion in loan originations and advances during the first half of 2021, putting us on pace to significantly exceed loan production volume reported for the full-year of 2020. Our commercial loan pipeline has increased for three consecutive quarters and we are cautiously optimistic that this trend is a positive sign going forward.”
“At the same time, asset quality metrics continued to improve as certain initially anticipated impacts of the COVID-19 pandemic on asset quality have thus far failed to materialize. As such, we recorded the recapture of $13.0 million of provision expense during the quarter while maintaining our nonperforming loan coverage ratio and an appropriate allowance to loan ratio that is reflective of the uncertainty in the economy and associated risk in our loan portfolio. As a result of our solid results in the quarter and our strong asset quality and capital positions, Simmons’ board of directors extended and increased the authorization under our share repurchase program, thus increasing our remaining capacity under the program to approximately $150 million and extending the program’s scheduled expiration to October 2022.”
Selected Highlights: 2nd Qtr 2021 1st Qtr 2021 2nd Qtr 2020 Net income $74.9 million $67.4 million $58.8 million Diluted earnings per share $0.69 $0.62 $0.54 Return on avg assets 1.29% 1.20% 1.08% Return on avg common equity 10.08% 9.20% 8.21% Return on tangible common equity (1) 17.25% 15.85% 14.55% Core earnings (2) $75.4 million $64.0 million $60.1 million Core diluted earnings per share (2) $0.69 $0.59 $0.55 Core return on avg assets (2) 1.30% 1.14% 1.11% Core return on avg common equity (2) 10.15% 8.73% 8.40% Core return on tangible common equity (1)(2) 17.36% 15.08% 14.87% Efficiency ratio (3) 56.93% 57.43% 51.13% Adjusted pre-tax, pre-provision earnings (2) $74.6 million $73.1 million $97.7 million (1) Return on tangible common equity excludes goodwill and other intangible assets and is a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below. (2) Core figures exclude non-core items and are non-GAAP measurements. Adjusted pre-tax, pre-provision earnings exclude provision for income taxes, provisions for credit losses and unfunded commitments, gains on sales of securities, and other pre-tax, non-core items, and is also a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below. (3) Efficiency ratio is core non-interest expense before foreclosed property expense and amortization of intangibles, as a percent of net interest income (fully taxable equivalent) and non-interest revenues, excluding gains and losses from securities transactions and non-core items, and is a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below. Loans
($ in billions) 2nd Qtr 2021 1st Qtr 2021 2nd Qtr 2020 Total loans $11.4 $12.2 $14.6 Total loans at the end of the second quarter of 2021 were $11.4 billion compared to $12.2 billion at the end of the first quarter of 2021 and $14.6 billion at the end of the second quarter of 2020. Total loan production (loan originations and advances) for the first half of 2021 totaled $1.8 billion. While loan originations and advances are outpacing prior year production, the decline in loan balances reflects the substantial government stimulus to support the economy during the COVID-19 pandemic which contributed to an increase in the level of loan paydowns, payoffs and corresponding sluggish loan demand throughout the financial services industry. The Company’s balance of Paycheck Protection Program (“PPP”) loans totaled $441.4 million at the end of the second quarter of 2021, down $463.3 million during the first half of 2021 as originations under PPP Round 2 have been offset by loan forgiveness.
Despite these headwinds, loan demand appears to be returning to more normalized levels. For the third consecutive quarter, the Company experienced an increase in its commercial loan demand. The Company’s total commercial loan pipeline consisting of all loan opportunities was $1.3 billion compared to $674 million at December 31, 2020. Loans approved and ready to close at the end of the quarter totaled $467 million.
PPP Loans
($ in millions) PPP Round 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 (763.9) (18.3) (782.2) Ending balance, June 30, 2021 $140.8 $300.6 $441.4 Deposits
($ in billions) 2nd Qtr 2021 1st Qtr 2021 2nd Qtr 2020 Total deposits $18.3 $18.2 $16.6 Noninterest bearing deposits $4.9 $4.9 $4.6 Interest bearing deposits $10.6 $10.3 $9.0 Time deposits $2.8 $3.0 $3.0 Total deposits at the end of the second quarter of 2021 were $18.3 billion, an increase of $1.7 billion or 10 percent from $16.6 billion at the end of the second quarter of 2020. The increase in total deposits from a year ago was driven by a $1.6 billion increase in interest bearing deposits (checking, savings and money market accounts) which totaled $10.6 billion at the end of the second quarter of 2021. Noninterest bearing deposits also contributed to the year-over-year growth in total deposits, increasing $285.9 million or 6 percent while time deposits declined $188.9 million or 6 percent during the same period.
Net Interest Income
2nd Qtr
20211st Qtr
20214th Qtr
20203rd Qtr
20202nd Qtr
2020Loan yield (1) 4.73% 4.75% 4.74% 4.54% 4.84% Core loan yield (1) (2) 4.54% 4.53% 4.47% 4.29% 4.52% Security yield (1) 1.97% 2.36% 2.48% 2.60% 2.50% Cost of interest bearing deposits 0.32% 0.41% 0.47% 0.54% 0.59% Cost of deposits (3) 0.24% 0.30% 0.34% 0.39% 0.44% Cost of borrowed funds 1.97% 1.91% 1.88% 1.85% 1.84% Net interest margin (1) 2.89% 2.99% 3.22% 3.21% 3.42% Core net interest margin (1) (2) 2.78% 2.86% 3.04% 3.02% 3.18% (1) Fully tax equivalent using an effective tax rate of 26.135%. (2) Core loan yield and core net interest margin exclude accretion and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below. (3) Includes non-interest bearing deposits. Net interest income for the second quarter of 2021 totaled $146.5 million, compared to $146.7 million in the first quarter of 2021 and $163.7 million in the second quarter of 2020. Included in net interest income is accretion recognized on loans acquired totaling $5.6 million in the second quarter of 2021, $6.6 million in the first quarter of 2021 and $11.7 million in the second quarter of 2020. Excluding the impact of accretion, core net interest income for the second quarter of 2021 increased 1 percent on a linked quarter basis.
The decrease in net interest income from the year ago quarter reflects a lower average loan balance combined with an 11 basis point decrease in loan yields. To offset the expected pressure on net interest income given the current low interest rate environment, the Company has been diligent in its efforts to reduce deposits costs. As a result, cost of deposits for the second quarter of 2021 was 24 basis points, down 6 basis points on a linked quarter basis and 20 basis points compared to the second quarter of 2020.
While loan yields declined from the year ago quarter, on a linked quarter basis loan yields declined only 2 basis points. The core loan yield, which excludes accretion, for the second quarter of 2021 was 4.54 percent, up 1 basis point compared to the first quarter of 2021 and up 2 basis points compared to the second quarter a year ago. The yield on PPP loans was approximately 5.08 percent during the second quarter of 2021 (including accretion of net fees), which increased the overall loan yield by approximately 2 basis points.
The net interest margin on a fully taxable equivalent basis was 2.89 percent for the second quarter of 2021 compared to 2.99 percent for the first quarter of 2021 and 3.42 percent for the second quarter of 2020. Core net interest margin (excluding accretion on acquired loans) was 2.78 percent compared to 2.86 percent for the first quarter of 2021 and 3.18 percent for the second quarter of 2020. During the second quarter of 2021, the Company purchased $2.5 billion of investment securities. This included the strategic redeployment of excess liquidity through the purchase of variable rate investment securities totaling approximately $1.1 billion. Consequently, the duration of the investment securities portfolio shortened from 6.5 years at March 31, 2021 to 4.9 years at June 30, 2021.
Noninterest Income
Noninterest income for the second quarter of 2021 was $47.9 million compared to $50.3 million in the first quarter of 2021 and $48.8 million in the second quarter of 2020. Gains on the sale of investment securities totaled $5.1 million in the second quarter of 2021, $5.5 million in the first quarter of 2021 and $390,000 in the second quarter of 2020. Core noninterest income totaled $47.5 million in the second quarter of 2021 compared to $44.9 million in the first quarter of 2021 and $46.6 million in the second quarter of 2020. Core noninterest income excludes gains on the sale of branches which totaled $445,000 in the second quarter of 2021, $5.5 million in the first quarter of 2021 and $2.2 million in the second quarter of 2020.Select Noninterest Income Items
($ in millions)2nd Qtr
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20203rd Qtr
20202nd Qtr
2020Service charges on deposit accounts $10.1 $9.7 $10.8 $10.4 $8.6 Trust income $7.2 $6.7 $6.6 $6.7 $7.3 Mortgage lending income $4.5 $6.4 $3.0 $14.0 $12.5 SBA lending income $0.3 $0.2 $0.5 $0.3 $0.2 Debit and credit card fees (1) $7.9 $7.4 $7.2 $7.2 $6.6 Gain on sale of securities $5.1 $5.5 - $22.3 $0.4 Other income $8.1 $10.3 $10.6 $5.4 $9.8 Core other income (2) $7.7 $4.8 $10.3 $5.0 $7.6 (1) During the second quarter of 2021, certain debit and credit card transaction fees were reclassified from noninterest expense to noninterest income. Prior periods have been adjusted to reflect this reclassification. (2) Core figures exclude non-core items and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below. Noninterest Expense
Noninterest expense for the second quarter of 2021 totaled $115.5 million compared to $113.8 million for the first quarter of 2021 and $116.2 million for the second quarter of 2020. Included in noninterest expense are pre-tax, non- core items for merger-related expenses and branch right sizing costs. Excluding these items, core noninterest expense was $114.3 million for the second quarter of 2021, $112.9 million for the first quarter of 2021 and $112.1 million for the second quarter of 2020. Overall expenses were well contained, increasing 1 percent from first quarter 2021 levels both on a reported basis and on a core basis. The efficiency ratio for the second quarter of 2021 was 56.93 percent compared to 57.43 percent for the first quarter of 2021 and 51.13 percent for the second quarter of 2020. As part of its ongoing branch right sizing initiative, the Company announced plans to close 12 branches during the third quarter of 2021.Select Noninterest Expense Items
($ in millions)2nd Qtr
20211st Qtr
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20203rd Qtr
20202nd Qtr
2020Salaries and employee benefits $60.3 $60.3 $55.8 $61.1 $57.6 Merger related costs $0.7 $0.2 $0.7 $0.9 $1.8 Other operating expenses (1) $38.0 $36.9 $52.8 $36.5 $38.2 Core salaries and employee benefits (2) $60.3 $60.3 $55.6 $58.7 $57.2 Core merger related costs (2) - - - - - Core other operating expenses (2) $37.9 $36.6 $42.6 $36.5 $36.6 (1) During the second quarter of 2021, certain debit and credit card transaction fees were reclassified from noninterest expense to noninterest income. Prior periods have been adjusted to reflect this reclassification. (2) Core figures exclude non-core items and are non-GAAP measurements. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below. Asset Quality
($ in millions)2nd Qtr
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20202nd Qtr
2020Allowance for credit losses on loans to total loans 2.00% 1.93% 1.85% 1.77% 1.59% Allowance for credit losses on loans to nonperforming loans 281% 204% 193% 148% 176% Nonperforming loans to total loans 0.71% 0.95% 0.96% 1.20% 0.90% Net charge-off ratio (annualized) (0.07%) 0.10% 0.52% 0.16% 1.04% Net charge-off ratio YTD (annualized) 0.01% 0.10% 0.45% 0.43% 0.56% Total nonperforming loans $80.9 $115.5 $123.5 $167.9 $131.9 Total other nonperforming assets $16.3 $12.4 $20.4 $14.6 $16.1 Asset quality metrics continued to show marked improvement during the quarter. Total nonperforming loans at the end of the quarter totaled $80.9 million, down $34.6 million compared to $115.5 million at the end of the first quarter of 2021 and down $50.9 million from the second quarter of 2020. Net charge-offs as a percentage of average total loans for the quarter were negative 7 basis points, reflecting $2.2 million of loan charge-offs completely offset by $4.3 million of recoveries. Provision for credit losses in the quarter was a credit of $13 million, including $10 million associated with the loan portfolio. The recapture of provision for credit losses reflected continued positive trends in asset quality metrics, combined with improved economic modeling scenarios. As a result, the allowance for credit losses at the end of the second quarter of 2021 totaled $227.2 million compared to $235.1 million at the end of the first quarter of 2021 and $231.6 million at the end of the second quarter of 2020. At the same time, the allowance to loan ratio rose 7 basis points to 2.00 percent compared to 1.93 percent at the end of the first quarter of 2021 and 1.59 percent at the end of the second quarter of 2020. The nonperforming loan coverage ratio remains strong at 281 percent compared to 204 percent at the end of the first quarter of 2021 and 176 percent at the end of the second quarter of 2020.
Foreclosed Assets and Other Real Estate Owned
At June 30, 2021, foreclosed assets and other real estate owned (“OREO”) totaled $15.2 million compared to $11.2 million at the March 31, 2021 and $14.1 million at June 30, 2020. The increase on a linked quarter basis is primarily due to $4.4 million in closed bank branch facilities. A breakdown of the composition of foreclosed assets and OREO is provided in the table below:
($ in millions)2nd Qtr
20211st Qtr
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20203rd Qtr
20202nd Qtr
2020Closed bank branches and branch sites $4.4 $0.5 $0.6 $0.6 $2.7 Foreclosed assets – acquired $6.7 $7.7 $15.3 $9.3 $9.2 Foreclosed assets – legacy $4.1 $3.0 $2.5 $2.7 $2.2 Capital
2nd Qtr
20211st Qtr
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20203rd Qtr
20202nd Qtr
2020Stockholders’ equity to total assets 13.0% 12.6% 13.3% 13.7% 13.3% Tangible common equity to tangible assets (1) 8.4% 7.9% 8.5% 8.7% 8.3% Regulatory common equity tier 1 ratio 14.2% 14.1% 13.4% 12.6% 11.9% Regulatory tier 1 leverage ratio 9.0% 9.0% 9.1% 9.1% 8.8% Regulatory tier 1 risk-based capital ratio 14.2% 14.1% 13.4% 12.6% 11.9% Regulatory total risk-based capital ratio 17.5% 17.5% 16.8% 15.8% 14.9% (1) Tangible common equity to tangible assets is a non-GAAP measurement. Please see “Non-GAAP Financial Measures” and “Reconciliation of Non-GAAP Financial Measures” below. Total common stockholders’ equity at the end of the quarter totaled $3.0 billion compared to $2.9 billion at the end of the first quarter of 2021 and the second quarter of 2020. Book value per share at the end of the quarter was $28.03 compared to $27.04 at the end of the first quarter of 2021 and $26.64 at the end of the second quarter of 2020. Tangible book value per share was $17.16, up $1.03 from $16.13 reported at the end of the first quarter of 2021 and up $1.37 from $15.79 reported at the end of the second quarter of 2020. The ratio of stockholders’ equity to total assets at June 30, 2021 was 13.0 percent while tangible common equity to tangible total assets was 8.4 percent. All of the Company’s regulatory capital ratios continue to exceed the requirements under “well-capitalized” guidelines. The Company did not repurchase shares during the second quarter of 2021 primarily as a result of its merger and acquisition activity.
Share Repurchase Program
The Company’s board of directors approved an amendment to the Company’s stock repurchase program (“Program”) that increases the amount of the Company’s common stock that may be repurchased under the Program from a maximum of $180 million to a maximum of $276.5 million and extends the term of the Program from October 31, 2021, to October 31, 2022 (unless terminated sooner). The Program was originally approved on October 17, 2019 and amended in March 2020, and to date, the Company has repurchased approximately $126.5 million of its common stock under the Program.The Program permits the Company to repurchase shares of its common stock through open market and privately negotiated transactions or otherwise. The timing, pricing, and amount of any repurchases under the Program will be determined by the Company’s management at its discretion based on a variety of factors, including, but not limited to, trading volume and market price of the common stock, corporate considerations, the Company’s working capital and investment requirements, general market and economic conditions, and legal requirements. The Program does not obligate the Company to repurchase any common stock and may be modified, discontinued, or suspended at any time without prior notice.
Simmons First National Corporation
Simmons First National Corporation (NASDAQ: SFNC) is an approximately $23.4 billion asset Mid-South based financial holding company whose principal subsidiary, Simmons Bank, operates 198 financial centers, including 68 in Arkansas, 48 in Missouri, 33 in Tennessee, 23 in Texas, 20 in Oklahoma and 6 in Kansas. Founded in 1903, Simmons Bank offers comprehensive financial solutions delivered with a client-centric approach. Simmons Bank was recently named to Forbes’ list of “World’s Best Banks” for the second consecutive year and ranked among the top 30 banks in Forbes’ list of “America’s Best Banks” for 2021. Additional information about Simmons and Simmons Bank can be found on our website at simmonsbank.com, by following @Simmons_Bank on Twitter or by visiting our newsroom.Conference Call
Management will conduct a live conference call to review this information beginning at 9:00 a.m. CDT today, Tuesday, July 27, 2021. Interested persons can listen to this call by dialing toll-free 1-866-298-7926 (United States and Canada only) and asking for the Simmons First National Corporation conference call, conference ID 8482416. In addition, the call will be available live or in recorded version on the Company’s website at simmonsbank.com for at least 60 days.Non-GAAP Financial Measures
This press release contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”). The Company’s management uses these non-GAAP financial measures in their analysis of the Company’s performance. These measures adjust GAAP performance measures to, among other things, include the tax benefit associated with revenue items that are tax-exempt, as well as exclude from income available to common shareholders, non-interest income, and non-interest expense certain income and expenses related to significant non-core activities, including merger-related expenses, gain on sale of branches, early retirement program expenses and net branch right-sizing expenses. In addition, the Company also presents certain figures based on tangible common stockholders’ equity, tangible assets and tangible book value, which exclude goodwill and other intangible assets. The Company further presents certain figures that are exclusive of the impact of PPP loans. The Company’s management believes that these non-GAAP financial measures are useful to investors because they, among other things, present the results of the Company’s ongoing operations without the effect of mergers or other items not central to the Company’s ongoing business, as well as normalize for tax effects. Management, therefore, believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core businesses, and management uses these non-GAAP financial measures to assess the performance of the Company’s core businesses as related to prior financial periods. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the tables of this release.Forward-Looking Statements
Some of the statements in this news release may not be based on historical facts and should be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, including, without limitation, statements made in Mr. Makris’s quotes, may be identified by reference to future periods or by the use of forward-looking terminology, such as “believe,” “budget,” “expect,” “foresee,” “anticipate,” “intend,” “indicate,” “target,” “estimate,” “plan,” “project,” “continue,” “contemplate,” “positions,” “prospects,” “predict,” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could,” “might” or “may,” or by variations of such words or by similar expressions. These forward-looking statements include, without limitation, statements relating to Simmons’ future growth, lending capacity and lending activity, loan demand, revenue, assets, asset quality, profitability, net interest margin, non-interest revenue, share repurchase program, acquisition strategy, digital banking initiatives, the Company’s ability to recruit and retain key employees, the benefits associated with the Company’s early retirement program, branch closures and branch sales, the adequacy of the allowance for credit losses, the ability of the Company to manage the impact of the COVID-19 pandemic, and the impacts of the Company’s and its customers participation in the PPP. Any forward-looking statement speaks only as of the date of this news release, and Simmons undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date of this news release. By nature, forward-looking statements are based on various assumptions and involve inherent risk and uncertainties. Various factors, including, but not limited to, changes in economic conditions, credit quality, interest rates, loan demand, deposit flows, real estate values, the assumptions used in making the forward-looking statements, the securities markets generally or the price of Simmons common stock specifically, and information technology affecting the financial industry; the effect of steps the Company takes and has taken in response to the COVID-19 pandemic; the severity and duration of the pandemic, including the effectiveness of vaccination efforts and developments with respect to COVID-19 variants; the pace of recovery when the pandemic subsides and the heightened impact it has on many of the risks described herein; the effects of the COVID-19 pandemic on, among other things, the Company’s operations, liquidity, and credit quality; general economic and market conditions; unemployment; claims, damages, and fines related to litigation or government actions, including litigation or actions arising from the Company’s participation in and administration of programs related to the COVID-19 pandemic (including, among other things, the PPP loan program authorized by the Coronavirus Aid, Relief and Economic Security Act); changes in accounting principles relating to loan loss recognition (current expected credit losses, or CECL); the Company’s ability to manage and successfully integrate its mergers and acquisitions; cyber threats, attacks or events; reliance on third parties for key services; government legislation; and other factors, many of which are beyond the control of the Company, could cause actual results to differ materially from those contemplated by the forward-looking statements. Additional information on factors that might affect the Company’s financial results is included in the Company’s Form 10-K for the year ended December 31, 2020, which has been filed with, and is available from, the U.S. Securities and Exchange Commission.Important Additional Information and Where to Find It
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval with respect to the proposed transactions (“Proposed Transactions”) with Landmark Community Bank (“Landmark”) and Triumph Bancshares, Inc. (“Triumph”). No offer of securities shall be made except by means of a prospectus meeting the requirements of the Securities Act of 1933, as amended, and no offer to sell or solicitation of an offer to buy shall be made in any jurisdiction in which such offer, solicitation or sale would be unlawful.In connection with the Proposed Transactions, the Company has filed with the SEC a registration statement on Form S-4 (the “Registration Statement”) that includes proxy statements of each of Landmark and Triumph and a prospectus of the Company (the “Joint Proxy Statement/Prospectus”), and the Company may file with the SEC other relevant documents concerning the Proposed Transactions. The definitive Joint Proxy Statement/Prospectus will be mailed to shareholders of Landmark and Triumph. SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTIONS CAREFULLY AND IN ITS ENTIRETY AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC BY THE COMPANY, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTIONS.
Free copies of the Joint Proxy Statement/Prospectus, as well as other filings containing information about the Company, may be obtained at the SEC’s Internet site (http://www.sec.gov), when they are filed by the Company. You will also be able to obtain these documents, when they are filed, free of charge, from the Company at simmonsbank.com under the heading “Investor Relations.” Copies of the Joint Proxy Statement/Prospectus can also be obtained, free of charge, by directing a request to Simmons First National Corporation, 501 Main Street, Pine Bluff, Arkansas 71601, Attention: Ed Bilek, Director of Investor Relations, Email: ed.bilek@simmonsbank.com or ir@simmonsbank.com, Telephone: (870) 541-1000, to Triumph Bancshares, Inc., 5699 Poplar Avenue, Memphis, TN 38119, Attention: Will Chase, President, Telephone: (901) 333-8800, or to Landmark Community Bank, 1015 West Poplar Avenue, Collierville, TN 38017, Attention: Jake Farrell, Chairman, Telephone: (901) 850-0555.
Participants in the Solicitation
The Company, Landmark, Triumph and certain of their directors, executive officers and employees may be deemed to be participants in the solicitation of proxies from the shareholders of Landmark or Triumph in connection with the Proposed Transactions. Information about the Company’s directors and executive officers is available in its proxy statement for its 2021 annual meeting of shareholders, which was filed with the SEC on April 15, 2021. Information regarding all of the persons who may, under the rules of the SEC, be deemed participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, are contained in the Joint Proxy Statement/Prospectus regarding the Proposed Transactions and other relevant materials to be filed with the SEC when they become available. Free copies of these documents may be obtained as described in the preceding paragraph.FOR MORE INFORMATION CONTACT:
Ed Bilek
EVP, Director of Investor Relations
Simmons First National Corporation
ed.bilek@simmonsbank.comSimmons 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) 2021 2021 2020 2020 2020 ($ in thousands) ASSETS Cash and non-interest bearing balances due from banks $ 215,381 $ 227,713 $ 217,499 $ 382,691 $ 234,998 Interest bearing balances due from banks and federal funds sold 2,123,743 3,677,750 3,254,653 2,139,440 2,310,162 Cash and cash equivalents 2,339,124 3,905,463 3,472,152 2,522,131 2,545,160 Interest bearing balances due from banks - time 1,335 1,334 1,579 4,061 4,561 Investment securities - held-to-maturity 931,352 609,500 333,031 47,102 51,720 Investment securities - available-for-sale 6,556,581 4,528,348 3,473,598 2,607,288 2,496,896 Mortgage loans held for sale 36,011 63,655 137,378 192,729 120,034 Other assets held for sale 100 100 100 389 399 Loans: Loans 11,386,352 12,195,873 12,900,897 14,017,442 14,606,900 Allowance for credit losses on loans (227,239 ) (235,116 ) (238,050 ) (248,251 ) (231,643 ) Net loans 11,159,113 11,960,757 12,662,847 13,769,191 14,375,257 Premises and equipment 429,587 427,540 441,692 470,491 478,896 Premises held for sale 6,090 13,613 15,008 4,486 4,576 Foreclosed assets and other real estate owned 15,239 11,168 18,393 12,590 14,111 Interest receivable 67,916 71,359 72,597 77,352 79,772 Bank owned life insurance 419,198 257,152 255,630 257,718 256,643 Goodwill 1,075,305 1,075,305 1,075,305 1,075,305 1,064,765 Other intangible assets 103,759 107,091 111,110 114,460 117,823 Other assets 282,449 315,732 289,332 282,102 293,071 Total assets $ 23,423,159 $ 23,348,117 $ 22,359,752 $ 21,437,395 $ 21,903,684 LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Non-interest bearing transaction accounts $ 4,893,959 $ 4,884,667 $ 4,482,091 $ 4,451,385 $ 4,608,098 Interest bearing transaction accounts and savings deposits 10,569,602 10,279,997 9,672,608 8,993,255 8,978,045 Time deposits 2,841,052 3,024,724 2,832,327 2,802,007 3,029,975 Total deposits 18,304,613 18,189,388 16,987,026 16,246,647 16,616,118 Federal funds purchased and securities sold under agreements to repurchase 187,215 323,053 299,111 313,694 387,025 Other borrowings 1,339,193 1,340,467 1,342,067 1,342,769 1,393,689 Subordinated notes and debentures 383,143 383,008 382,874 382,739 382,604 Other liabilities held for sale - - 154,620 - - Accrued interest and other liabilities 169,629 181,426 217,398 209,305 219,545 Total liabilities 20,383,793 20,417,342 19,383,096 18,495,154 18,998,981 Stockholders' equity: Preferred stock 767 767 767 767 767 Common stock 1,084 1,083 1,081 1,090 1,090 Surplus 2,021,128 2,017,188 2,014,076 2,032,372 2,029,383 Undivided profits 1,004,314 948,913 901,006 866,503 819,153 Accumulated other comprehensive income (loss): Unrealized (depreciation) accretion on AFS securities 12,073 (37,176 ) 59,726 41,509 54,310 Total stockholders' equity 3,039,366 2,930,775 2,976,656 2,942,241 2,904,703 Total liabilities and stockholders' equity $ 23,423,159 $ 23,348,117 $ 22,359,752 $ 21,437,395 $ 21,903,684 Simmons First National Corporation SFNC Consolidated Statements of Income - Quarter-to-Date For the Quarters Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 (Unaudited) 2021 2021 2020 2020 2020 ($ in thousands, except per share data) INTEREST INCOME Loans (including fees) $ 138,804 $ 146,424 $ 160,115 $ 163,180 $ 176,910 Interest bearing balances due from banks and federal funds sold 651 798 716 623 603 Investment securities 27,128 21,573 17,207 14,910 13,473 Mortgage loans held for sale 386 639 1,070 1,012 668 TOTAL INTEREST INCOME 166,969 169,434 179,108 179,725 191,654 INTEREST EXPENSE Time deposits 6,061 7,091 7,835 9,437 10,803 Other deposits 4,721 6,088 6,536 6,769 7,203 Federal funds purchased and securities sold under agreements to repurchase 192 245 284 335 337 Other borrowings 4,897 4,802 4,869 4,943 4,963 Subordinated notes and debentures 4,565 4,527 4,624 4,631 4,667 TOTAL INTEREST EXPENSE 20,436 22,753 24,148 26,115 27,973 NET INTEREST INCOME 146,533 146,681 154,960 153,610 163,681 Provision for credit losses (12,951 ) 1,445 6,943 22,981 21,915 NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 159,484 145,236 148,017 130,629 141,766 NON-INTEREST INCOME Trust income 7,238 6,666 6,557 6,744 7,253 Service charges on deposit accounts 10,050 9,715 10,799 10,385 8,570 Other service charges and fees 2,048 1,922 1,783 1,764 1,489 Mortgage lending income 4,490 6,447 2,993 13,971 12,459 SBA lending income 287 240 484 304 245 Investment banking income 654 695 676 557 571 Debit and credit card fees 7,882 7,401 7,203 7,217 6,575 Bank owned life insurance income 2,038 1,523 1,481 1,591 1,445 Gain on sale of securities, net 5,127 5,471 16 22,305 390 Other income 8,110 10,260 10,557 5,380 9,809 TOTAL NON-INTEREST INCOME 47,924 50,340 42,549 70,218 48,806 NON-INTEREST EXPENSE Salaries and employee benefits 60,261 60,340 55,762 61,144 57,644 Occupancy expense, net 9,103 9,300 9,182 9,647 9,217 Furniture and equipment expense 4,859 5,415 5,940 6,231 6,144 Other real estate and foreclosure expense 863 343 551 602 274 Deposit insurance 1,687 1,308 1,627 2,244 2,838 Merger-related costs 686 233 731 902 1,830 Other operating expenses 38,007 36,854 52,835 36,546 38,230 TOTAL NON-INTEREST EXPENSE 115,466 113,793 126,628 117,316 116,177 NET INCOME BEFORE INCOME TAXES 91,942 81,783 63,938 83,531 74,395 Provision for income taxes 17,018 14,363 10,970 17,633 15,593 NET INCOME 74,924 67,420 52,968 65,898 58,802 Preferred stock dividends 13 13 13 13 13 NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 74,911 $ 67,407 $ 52,955 $ 65,885 $ 58,789 BASIC EARNINGS PER SHARE $ 0.69 $ 0.62 $ 0.49 $ 0.60 $ 0.54 DILUTED EARNINGS PER SHARE $ 0.69 $ 0.62 $ 0.49 $ 0.60 $ 0.54 Simmons First National Corporation SFNC Consolidated Risk-Based Capital For the Quarters Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 (Unaudited) 2021 2021 2020 2020 2020 ($ in thousands) Tier 1 capital Stockholders' equity $ 3,039,366 $ 2,930,775 $ 2,976,656 $ 2,942,241 $ 2,904,703 CECL transition provision (1) 128,933 131,637 131,430 134,798 130,480 Disallowed intangible assets, net of deferred tax (1,156,203 ) (1,159,720 ) (1,163,797 ) (1,167,357 ) (1,160,385 ) Unrealized loss (gain) on AFS securities (12,073 ) 37,176 (59,726 ) (41,509 ) (54,310 ) Total Tier 1 capital 2,000,023 1,939,868 1,884,563 1,868,173 1,820,488 Tier 2 capital Trust preferred securities and subordinated debt 383,143 383,008 382,874 382,739 382,604 Qualifying allowance for loan losses and reserve for unfunded commitments 79,138 87,251 89,546 96,734 83,780 Total Tier 2 capital 462,281 470,259 472,420 479,473 466,384 Total risk-based capital $ 2,462,304 $ 2,410,127 $ 2,356,983 $ 2,347,646 $ 2,286,872 Risk weighted assets $ 14,076,975 $ 13,771,244 $ 14,048,608 $ 14,878,932 $ 15,362,175 Adjusted average assets for leverage ratio $ 22,244,118 $ 21,668,406 $ 20,765,127 $ 20,652,454 $ 20,742,824 Ratios at end of quarter Equity to assets 12.98 % 12.55 % 13.31 % 13.72 % 13.26 % Tangible common equity to tangible assets (2) 8.36 % 7.88 % 8.45 % 8.65 % 8.31 % Common equity Tier 1 ratio (CET1) 14.20 % 14.08 % 13.41 % 12.55 % 11.85 % Tier 1 leverage ratio 8.99 % 8.95 % 9.08 % 9.05 % 8.78 % Tier 1 risk-based capital ratio 14.21 % 14.09 % 13.41 % 12.56 % 11.85 % Total risk-based capital ratio 17.49 % 17.50 % 16.78 % 15.78 % 14.89 % (1) The Company has elected to use the CECL transition provision allowed for in the year of adopting ASC 326. (2) Calculations of tangible common equity to tangible assets and the reconciliations to GAAP are included in the schedules accompanying this release. Simmons First National Corporation SFNC Consolidated Investment Securities For the Quarters Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 (Unaudited) 2021 2021 2020 2020 2020 ($ in thousands) Investment Securities - End of Period Held-to-Maturity U.S. Government agencies $ 77,396 $ 77,396 $ - $ - $ - Mortgage-backed securities 60,649 47,988 22,354 24,297 25,980 State and political subdivisions 793,307 484,116 310,109 21,930 24,777 Other securities - - 568 875 963 Total held-to-maturity (net of credit losses) 931,352 609,500 333,031 47,102 51,720 Available-for-Sale U.S. Treasury $ 600 $ 600 $ - $ - $ - U.S. Government agencies 554,937 487,679 477,237 471,973 210,921 Mortgage-backed securities 3,987,209 2,133,086 1,394,936 903,687 1,154,086 State and political subdivisions 1,557,497 1,571,910 1,470,723 1,133,006 1,054,068 Other securities 456,338 335,073 130,702 98,622 77,821 Total available-for-sale (net of credit losses) 6,556,581 4,528,348 3,473,598 2,607,288 2,496,896 Total investment securities (net of credit losses) $ 7,487,933 $ 5,137,848 $ 3,806,629 $ 2,654,390 $ 2,548,616 Fair value - HTM investment securities $ 935,596 $ 597,694 $ 341,925 $ 49,064 $ 53,751 Investment Securities - QTD Average Taxable securities $ 4,265,545 $ 2,471,291 $ 1,757,234 $ 1,534,742 $ 1,642,083 Tax exempt securities 2,157,076 1,919,919 1,528,127 1,155,099 866,944 Total investment securities - QTD average $ 6,422,621 $ 4,391,210 $ 3,285,361 $ 2,689,841 $ 2,509,027 Simmons First National Corporation SFNC Consolidated Loans For the Quarters Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 (Unaudited) 2021 2021 2020 2020 2020 ($ in thousands) Loan Portfolio - End of Period Consumer Credit cards $ 177,634 $ 175,458 $ 188,845 $ 180,848 $ 184,348 Other consumer 181,712 172,965 202,379 182,768 214,024 Total consumer 359,346 348,423 391,224 363,616 398,372 Real Estate Construction 1,428,165 1,451,841 1,596,255 1,853,360 2,010,256 Single-family residential 1,608,028 1,730,056 1,880,673 1,997,070 2,207,087 Other commercial real estate 5,332,655 5,638,010 5,746,863 6,132,823 6,316,444 Total real estate 8,368,848 8,819,907 9,223,791 9,983,253 10,533,787 Commercial Commercial 2,074,729 2,444,700 2,574,386 2,907,798 3,038,216 Agricultural 193,462 155,921 175,905 241,687 217,715 Total commercial 2,268,191 2,600,621 2,750,291 3,149,485 3,255,931 Other 389,967 426,922 535,591 521,088 418,810 Total Loans $ 11,386,352 $ 12,195,873 $ 12,900,897 $ 14,017,442 $ 14,606,900 Simmons First National Corporation SFNC Consolidated Allowance and Asset Quality For the Quarters Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 (Unaudited) 2021 2021 2020 2020 2020 ($ in thousands) Allowance for Credit Losses on Loans Beginning balance, after adoption of ASC 326 $ 235,116 $ 238,050 $ 248,251 $ 231,641 $ 243,195 Loans charged off Credit cards 1,046 1,003 787 832 1,053 Other consumer 411 702 960 1,091 592 Real estate 439 1,687 10,415 1,153 1,824 Commercial 309 859 8,199 4,327 35,687 Total loans charged off 2,205 4,251 20,361 7,403 39,156 Recoveries of loans previously charged off Credit cards 244 290 241 276 272 Other consumer 425 304 355 366 301 Real estate 1,523 403 431 120 253 Commercial 2,147 320 1,835 936 98 Total recoveries 4,339 1,317 2,862 1,698 924 Net loans charged off (2,134 ) 2,934 17,499 5,705 38,232 Provision for credit losses on loans (10,011 ) - 7,298 22,315 26,678 Balance, end of quarter $ 227,239 $ 235,116 $ 238,050 $ 248,251 $ 231,641 Non-performing assets Non-performing loans Nonaccrual loans $ 80,282 $ 114,856 $ 122,879 $ 167,713 $ 131,383 Loans past due 90 days or more 653 635 578 174 494 Total non-performing loans 80,935 115,491 123,457 167,887 131,877 Other non-performing assets Foreclosed assets and other real estate owned 15,239 11,168 18,393 12,590 14,111 Other non-performing assets 1,062 1,229 2,016 1,983 2,008 Total other non-performing assets 16,301 12,397 20,409 14,573 16,119 Total non-performing assets $ 97,236 $ 127,888 $ 143,866 $ 182,460 $ 147,996 Performing TDRs (troubled debt restructurings) $ 4,436 $ 3,805 $ 3,138 $ 3,379 $ 3,960 Ratios Allowance for credit losses on loans to total loans 2.00 % 1.93 % 1.85 % 1.77 % 1.59 % Allowance for credit losses to non-performing loans 281 % 204 % 193 % 148 % 176 % Non-performing loans to total loans 0.71 % 0.95 % 0.96 % 1.20 % 0.90 % Non-performing assets (including performing TDRs) to total assets 0.43 % 0.56 % 0.66 % 0.87 % 0.69 % Non-performing assets to total assets 0.42 % 0.55 % 0.64 % 0.85 % 0.68 % Annualized net charge offs to total loans -0.07 % 0.10 % 0.52 % 0.16 % 1.04 % Annualized net credit card charge offs to total credit card loans 1.78 % 1.39 % 1.15 % 1.20 % 1.67 % Simmons First National Corporation SFNC Consolidated - Average Balance Sheet and Net Interest Income Analysis For the Quarters Ended (Unaudited) Three Months Ended
Jun 2021Three Months Ended
Mar 2021Three Months Ended
Jun 2020($ in thousands) Average
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RateASSETS Earning assets: Interest bearing balances due from banks and federal funds sold $ 2,703,920 $ 651 0.10% $ 3,477,989 $ 798 0.09% $ 2,190,878 $ 603 0.11% Investment securities - taxable 4,265,545 14,594 1.37% 2,471,291 10,120 1.66% 1,642,083 7,131 1.75% Investment securities - non-taxable (FTE) 2,157,076 16,899 3.14% 1,919,919 15,439 3.26% 866,944 8,434 3.91% Mortgage loans held for sale 49,262 386 3.14% 97,409 639 2.66% 86,264 668 3.11% Loans - including fees (FTE) 11,783,839 138,987 4.73% 12,518,300 146,601 4.75% 14,731,306 177,168 4.84% Total interest earning assets (FTE) 20,959,642 171,517 3.28% 20,484,908 173,597 3.44% 19,517,475 194,004 4.00% Non-earning assets 2,298,279 2,253,913 2,304,798 Total assets $ 23,257,921 $ 22,738,821 $ 21,822,273 LIABILITIES AND STOCKHOLDERS' EQUITY Interest bearing liabilities: Interest bearing transaction and savings accounts $ 10,403,932 $ 4,721 0.18% $ 10,093,868 $ 6,088 0.24% $ 9,138,563 $ 7,203 0.32% Time deposits 2,930,025 6,061 0.83% 3,043,000 7,091 0.95% 3,057,153 10,803 1.42% Total interest bearing deposits 13,333,957 10,782 0.32% 13,136,868 13,179 0.41% 12,195,716 18,006 0.59% Federal funds purchased and securities sold under agreement to repurchase 240,876 192 0.32% 307,540 245 0.32% 392,633 337 0.35% Other borrowings 1,340,008 4,897 1.47% 1,341,059 4,802 1.45% 1,395,109 4,963 1.43% Subordinated notes and debentures 383,078 4,565 4.78% 382,943 4,527 4.79% 387,422 4,667 4.84% Total interest bearing liabilities 15,297,919 20,436 0.54% 15,168,410 22,753 0.61% 14,370,880 27,973 0.78% Non-interest bearing liabilities: Non-interest bearing deposits 4,826,927 4,419,136 4,354,781 Other liabilities 151,699 177,819 216,508 Total liabilities 20,276,545 19,765,365 18,942,169 Stockholders' equity 2,981,376 2,973,456 2,880,104 Total liabilities and stockholders' equity $ 23,257,921 $ 22,738,821 $ 21,822,273 Net interest income (FTE) $ 151,081 $ 150,844 $ 166,031 Net interest spread (FTE) 2.74% 2.83% 3.22% Net interest margin (FTE) - quarter-to-date 2.89% 2.99% 3.42% Net interest margin (FTE) - year-to-date 2.94% 2.99% 3.55% Core net interest margin (FTE) - quarter-to-date (1) 2.78% 2.86% 3.18% Core loan yield (FTE) - quarter-to-date (1) 4.54% 4.53% 4.52% Core net interest margin (FTE) - year-to-date (1) 2.82% 2.86% 3.30% Core loan yield (FTE) - year-to-date (1) 4.54% 4.53% 4.69% (1) Calculations of core net interest margin and core loan yield and the reconciliations to GAAP are included in the schedules accompanying this release. Simmons First National Corporation SFNC Consolidated - Selected Financial Data For the Quarters Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 (Unaudited) 2021 2021 2020 2020 2020 ($ in thousands, except share data) QUARTER-TO-DATE Financial Highlights - GAAP Net Income $ 74,911 $ 67,407 $ 52,955 $ 65,885 $ 58,789 Diluted earnings per share 0.69 0.62 0.49 0.60 0.54 Return on average assets 1.29 % 1.20 % 0.96 % 1.20 % 1.08 % Return on average common equity 10.08 % 9.20 % 7.13 % 8.91 % 8.21 % Return on tangible common equity 17.25 % 15.85 % 12.48 % 15.45 % 14.55 % Net interest margin (FTE) 2.89 % 2.99 % 3.22 % 3.21 % 3.42 % FTE adjustment 4,548 4,163 3,482 2,864 2,350 Amortization of intangibles 3,333 3,344 3,351 3,362 3,369 Amortization of intangibles, net of taxes 2,462 2,470 2,475 2,483 2,489 Average diluted shares outstanding 108,822,175 108,655,293 108,888,264 109,207,294 109,130,866 Shares repurchased under plan - 130,916 1,034,364 - - Average price of shares repurchased - 23.53 19.36 - - Cash dividends declared per common share 0.18 0.18 0.17 0.17 0.17 Financial Highlights - Core (non-GAAP) Core earnings (excludes non-core items) (1) $ 75,435 $ 63,995 $ 61,977 $ 68,338 $ 60,147 Core diluted earnings per share (1) 0.69 0.59 0.57 0.63 0.55 Core net interest margin (FTE) (2) 2.78 % 2.86 % 3.04 % 3.02 % 3.18 % Accretable yield on acquired loans 5,619 6,630 8,999 8,948 11,723 Efficiency ratio (1) 56.93 % 57.43 % 54.93 % 53.75 % 51.13 % Core return on average assets (1) 1.30 % 1.14 % 1.13 % 1.25 % 1.11 % Core return on average common equity (1) 10.15 % 8.73 % 8.34 % 9.24 % 8.40 % Core return on tangible common equity (1) 17.36 % 15.08 % 14.51 % 16.00 % 14.87 % YEAR-TO-DATE Financial Highlights - GAAP Net Income $ 142,318 $ 67,407 $ 254,852 $ 201,897 $ 136,012 Diluted earnings per share 1.31 0.62 2.31 1.83 1.22 Return on average assets 1.25 % 1.20 % 1.18 % 1.25 % 1.28 % Return on average common equity 9.64 % 9.20 % 8.72 % 9.27 % 9.45 % Return on tangible common equity 16.56 % 15.85 % 15.25 % 16.19 % 16.57 % Net interest margin (FTE) 2.94 % 2.99 % 3.38 % 3.43 % 3.55 % FTE adjustment 4,548 4,163 11,001 7,519 4,655 Amortization of intangibles 6,677 3,344 13,495 10,144 6,782 Amortization of intangibles, net of taxes 4,932 2,470 9,968 7,493 5,010 Average diluted shares outstanding 108,746,439 108,655,293 110,173,661 110,480,508 111,083,999 Cash dividends declared per common share 0.18 0.18 0.68 0.51 0.34 Financial Highlights - Core (non-GAAP) Core earnings (excludes non-core items) (1) $ 139,430 $ 63,995 $ 264,300 $ 202,323 $ 133,985 Core diluted earnings per share (1) 1.28 0.59 2.40 1.83 1.21 Core net interest margin (FTE) (2) 2.82 % 2.86 % 3.16 % 3.20 % 3.30 % Accretable yield on acquired loans 12,249 6,630 41,507 32,508 23,560 Efficiency ratio (1) 57.18 % 57.43 % 54.33 % 54.14 % 54.33 % Core return on average assets (1) 1.22 % 1.14 % 1.22 % 1.26 % 1.26 % Core return on average common equity (1) 9.45 % 8.73 % 9.05 % 9.29 % 9.31 % Core return on tangible common equity (1) 16.23 % 15.08 % 15.79 % 16.22 % 16.33 % END OF PERIOD Book value per share $ 28.03 $ 27.04 $ 27.53 $ 26.98 $ 26.64 Tangible book value per share 17.16 16.13 16.56 16.07 15.79 Shares outstanding 108,386,669 108,345,732 108,077,662 109,023,781 108,994,389 Full-time equivalent employees 2,783 2,817 2,827 2,840 2,906 Total number of financial centers 198 198 204 226 226 (1) Core earnings exclude non-core items, which is a non-GAAP measurement. Reconciliations to GAAP are included in the schedules accompanying this release. (2) Excludes accretable yield adjustment on loans, which is a non-GAAP measurement. Reconciliations to GAAP are included in the schedules accompanying this release. Simmons First National Corporation SFNC Reconciliation Of Non-GAAP Financial Measures - Core Earnings - Quarter-to-Date For the Quarters Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 (Unaudited) 2021 2021 2020 2020 2020 ($ in thousands, except per share data) QUARTER-TO-DATE Net Income $ 74,911 $ 67,407 $ 52,955 $ 65,885 $ 58,789 Non-core items Gain on sale of branches (445 ) (5,477 ) (275 ) - (2,204 ) Merger-related costs 686 233 731 902 1,830 Early retirement program - - 62 2,346 493 Branch right-sizing (net) 468 625 11,696 72 1,721 Tax effect (1) (185 ) 1,207 (3,192 ) (867 ) (482 ) Net non-core items 524 (3,412 ) 9,022 2,453 1,358 Core earnings (non-GAAP) $ 75,435 $ 63,995 $ 61,977 $ 68,338 $ 60,147 Diluted earnings per share $ 0.69 $ 0.62 $ 0.49 $ 0.60 $ 0.54 Non-core items Gain on sale of branches (0.01 ) (0.05 ) - - (0.02 ) Merger-related costs 0.01 - - 0.01 0.02 Early retirement program - - - 0.02 - Branch right-sizing (net) - 0.01 0.11 - 0.02 Tax effect (1) - 0.01 (0.03 ) - (0.01 ) Net non-core items - (0.03 ) 0.08 0.03 0.01 Core diluted earnings per share (non-GAAP) $ 0.69 $ 0.59 $ 0.57 $ 0.63 $ 0.55 (1) Effective tax rate of 26.135%. Reconciliation of Selected Non-Core Non-Interest Income and Expense Items (non-GAAP) QUARTER-TO-DATE Other income $ 8,110 $ 10,260 $ 10,557 $ 5,380 $ 9,809 Non-core items (1) (445 ) (5,477 ) (275 ) (370 ) (2,204 ) Core other income (non-GAAP) $ 7,665 $ 4,783 $ 10,282 $ 5,010 $ 7,605 Non-interest expense $ 115,466 $ 113,793 $ 126,628 $ 117,316 $ 116,177 Non-core items (1) (1,154 ) (858 ) (12,489 ) (3,690 ) (4,044 ) Core non-interest expense (non-GAAP) $ 114,312 $ 112,935 $ 114,139 $ 113,626 $ 112,133 Salaries and employee benefits $ 60,261 $ 60,340 $ 55,762 $ 61,144 $ 57,644 Non-core items (1) - - (144 ) (2,448 ) (493 ) Core salaries and employee benefits (non-GAAP) $ 60,261 $ 60,340 $ 55,618 $ 58,696 $ 57,151 Merger related costs $ 686 $ 233 $ 731 $ 902 $ 1,830 Non-core items (1) (686 ) (233 ) (731 ) (902 ) (1,830 ) Core merger related costs (non-GAAP) $ - $ - $ - $ - $ - Other operating expenses $ 38,007 $ 36,854 $ 52,835 $ 36,546 $ 38,230 Non-core items (1) (89 ) (208 ) (10,270 ) (11 ) (1,662 ) Core other operating expenses (non-GAAP) $ 37,918 $ 36,646 $ 42,565 $ 36,535 $ 36,568 (1) Non-core items include gain on sale of branches, merger related costs, early retirement program expenses and branch right-sizing costs. Simmons First National Corporation SFNC Reconciliation Of Non-GAAP Financial Measures - Core Earnings - Year-to-Date For the Quarters Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 (Unaudited) 2021 2021 2020 2020 2020 ($ in thousands, except per share data) YEAR-TO-DATE Net Income $ 142,318 $ 67,407 $ 254,852 $ 201,897 $ 136,012 Non-core items Gain on sale of branches (5,922 ) (5,477 ) (8,368 ) (8,093 ) (8,093 ) Merger-related costs 919 233 4,531 3,800 2,898 Early retirement program - - 2,901 2,839 493 Branch right-sizing (net) 1,093 625 13,727 2,031 1,959 Tax effect (1) 1,022 1,207 (3,343 ) (151 ) 716 Net non-core items (2,888 ) (3,412 ) 9,448 426 (2,027 ) Core earnings (non-GAAP) $ 139,430 $ 63,995 $ 264,300 $ 202,323 $ 133,985 Diluted earnings per share $ 1.31 $ 0.62 $ 2.31 $ 1.83 $ 1.22 Non-core items Gain on sale of branches (0.06 ) (0.05 ) (0.07 ) (0.07 ) (0.07 ) Merger-related costs 0.01 - 0.04 0.03 0.03 Early retirement program - - 0.03 0.02 - Branch right-sizing (net) 0.01 0.01 0.12 0.02 0.02 Tax effect (1) 0.01 0.01 (0.03 ) - 0.01 Net non-core items (0.03 ) (0.03 ) 0.09 - (0.01 ) Core diluted earnings per share (non-GAAP) $ 1.28 $ 0.59 $ 2.40 $ 1.83 $ 1.21 (1) Effective tax rate of 26.135%. Reconciliation of Selected Non-Core Non-Interest Income and Expense Items (non-GAAP) YEAR-TO-DATE Other income $ 18,370 $ 10,260 $ 38,547 $ 27,990 $ 22,610 Non-core items (1) (5,922 ) (5,477 ) (8,738 ) (8,463 ) (8,093 ) Core other income (non-GAAP) $ 12,448 $ 4,783 $ 29,809 $ 19,527 $ 14,517 Non-interest expense $ 229,259 $ 113,793 $ 487,585 $ 360,957 $ 243,641 Non-core items (1) (2,012 ) (858 ) (21,529 ) (9,040 ) (5,350 ) Core non-interest expense (non-GAAP) $ 227,247 $ 112,935 $ 466,056 $ 351,917 $ 238,291 Salaries and employee benefits $ 120,601 $ 60,340 $ 242,474 $ 186,712 $ 125,568 Non-core items (1) - - (3,085 ) (2,941 ) (493 ) Core salaries and employee benefits (non-GAAP) $ 120,601 $ 60,340 $ 239,389 $ 183,771 $ 125,075 Merger related costs $ 919 $ 233 $ 4,531 $ 3,800 $ 2,898 Non-core items (1) (919 ) (233 ) (4,531 ) (3,800 ) (2,898 ) Core merger related costs (non-GAAP) $ - $ - $ - $ - $ - Other operating expenses $ 74,861 $ 36,854 $ 168,050 $ 115,215 $ 78,669 Non-core items (1) (297 ) (208 ) (12,155 ) (1,885 ) (1,874 ) Core other operating expenses (non-GAAP) $ 74,564 $ 36,646 $ 155,895 $ 113,330 $ 76,795 (1) Non-core items include gain on sale of branches, merger related costs, early retirement program expenses and branch right-sizing costs. Simmons First National Corporation SFNC Reconciliation Of Non-GAAP Financial Measures - End of Period For the Quarters Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 (Unaudited) 2021 2021 2020 2020 2020 ($ in thousands, except per share data) Calculation of Tangible Common Equity and the Ratio of Tangible Common Equity to Tangible Assets Total common stockholders' equity $ 3,038,599 $ 2,930,008 $ 2,975,889 $ 2,941,474 $ 2,903,936 Intangible assets: Goodwill (1,075,305 ) (1,075,305 ) (1,075,305 ) (1,075,305 ) (1,064,765 ) Other intangible assets (103,759 ) (107,091 ) (111,110 ) (114,460 ) (117,823 ) Total intangibles (1,179,064 ) (1,182,396 ) (1,186,415 ) (1,189,765 ) (1,182,588 ) Tangible common stockholders' equity $ 1,859,535 $ 1,747,612 $ 1,789,474 $ 1,751,709 $ 1,721,348 Total assets $ 23,423,159 $ 23,348,117 $ 22,359,752 $ 21,437,395 $ 21,903,684 Intangible assets: Goodwill (1,075,305 ) (1,075,305 ) (1,075,305 ) (1,075,305 ) (1,064,765 ) Other intangible assets (103,759 ) (107,091 ) (111,110 ) (114,460 ) (117,823 ) Total intangibles (1,179,064 ) (1,182,396 ) (1,186,415 ) (1,189,765 ) (1,182,588 ) Tangible assets $ 22,244,095 $ 22,165,721 $ 21,173,337 $ 20,247,630 $ 20,721,096 Paycheck protection program ("PPP") loans (441,353 ) (797,629 ) (904,673 ) (970,488 ) (963,712 ) Total assets excluding PPP loans $ 22,981,806 $ 22,550,488 $ 21,455,079 $ 20,466,907 $ 20,939,972 Tangible assets excluding PPP loans $ 21,802,742 $ 21,368,092 $ 20,268,664 $ 19,277,142 $ 19,757,384 Ratio of equity to assets 12.98 % 12.55 % 13.31 % 13.72 % 13.26 % Ratio of equity to assets excluding PPP loans 13.23 % 13.00 % 13.87 % 14.38 % 13.87 % Ratio of tangible common equity to tangible assets 8.36 % 7.88 % 8.45 % 8.65 % 8.31 % Ratio of tangible common equity to tangible assets excluding PPP loans 8.53 % 8.18 % 8.83 % 9.09 % 8.71 % Calculation of Tangible Book Value per Share Total common stockholders' equity $ 3,038,599 $ 2,930,008 $ 2,975,889 $ 2,941,474 $ 2,903,936 Intangible assets: Goodwill (1,075,305 ) (1,075,305 ) (1,075,305 ) (1,075,305 ) (1,064,765 ) Other intangible assets (103,759 ) (107,091 ) (111,110 ) (114,460 ) (117,823 ) Total intangibles (1,179,064 ) (1,182,396 ) (1,186,415 ) (1,189,765 ) (1,182,588 ) Tangible common stockholders' equity $ 1,859,535 $ 1,747,612 $ 1,789,474 $ 1,751,709 $ 1,721,348 Shares of common stock outstanding 108,386,669 108,345,732 108,077,662 109,023,781 108,994,389 Book value per common share $ 28.03 $ 27.04 $ 27.53 $ 26.98 $ 26.64 Tangible book value per common share $ 17.16 $ 16.13 $ 16.56 $ 16.07 $ 15.79 Calculation of Regulatory Tier 1 Leverage Ratio Excluding Average PPP Loans Total Tier 1 capital $ 2,000,023 $ 1,939,868 $ 1,884,563 $ 1,868,173 $ 1,820,488 Adjusted average assets for leverage ratio $ 22,244,118 $ 21,668,406 $ 20,765,127 $ 20,652,454 $ 20,742,824 Average PPP loans (707,296 ) (891,070 ) (937,544 ) (967,152 ) (645,172 ) Adjusted average assets excluding average PPP loans $ 21,536,822 $ 20,777,336 $ 19,827,583 $ 19,685,302 $ 20,097,652 Tier 1 leverage ratio 8.99 % 8.95 % 9.08 % 9.05 % 8.78 % Tier 1 leverage ratio excluding average PPP loans 9.29 % 9.34 % 9.50 % 9.49 % 9.06 % Simmons First National Corporation SFNC Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date For the Quarters Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 (Unaudited) 2021 2021 2020 2020 2020 ($ in thousands) Calculation of Core Return on Average Assets Net income $ 74,911 $ 67,407 $ 52,955 $ 65,885 $ 58,789 Net non-core items, net of taxes, adjustment 524 (3,412 ) 9,022 2,453 1,358 Core earnings $ 75,435 $ 63,995 $ 61,977 $ 68,338 $ 60,147 Average total assets $ 23,257,921 $ 22,738,821 $ 21,852,094 $ 21,765,321 $ 21,822,273 Return on average assets 1.29 % 1.20 % 0.96 % 1.20 % 1.08 % Core return on average assets 1.30 % 1.14 % 1.13 % 1.25 % 1.11 % Calculation of Return on Tangible Common Equity Net income $ 74,911 $ 67,407 $ 52,955 $ 65,885 $ 58,789 Amortization of intangibles, net of taxes 2,462 2,470 2,475 2,483 2,489 Total income available to common stockholders $ 77,373 $ 69,877 $ 55,430 $ 68,368 $ 61,278 Net non-core items, net of taxes 524 (3,412 ) 9,022 2,453 1,358 Core earnings 75,435 63,995 61,977 68,338 60,147 Amortization of intangibles, net of taxes 2,462 2,470 2,475 2,483 2,489 Total core income available to common stockholders $ 77,897 $ 66,465 $ 64,452 $ 70,821 $ 62,636 Average common stockholders' equity $ 2,980,609 $ 2,972,689 $ 2,955,865 $ 2,942,045 $ 2,879,337 Average intangible assets: Goodwill (1,075,305 ) (1,075,305 ) (1,075,305 ) (1,064,893 ) (1,064,955 ) Other intangibles (105,785 ) (109,850 ) (113,098 ) (116,385 ) (120,111 ) Total average intangibles (1,181,090 ) (1,185,155 ) (1,188,403 ) (1,181,278 ) (1,185,066 ) Average tangible common stockholders' equity $ 1,799,519 $ 1,787,534 $ 1,767,462 $ 1,760,767 $ 1,694,271 Return on average common equity 10.08 % 9.20 % 7.13 % 8.91 % 8.21 % Return on tangible common equity 17.25 % 15.85 % 12.48 % 15.45 % 14.55 % Core return on average common equity 10.15 % 8.73 % 8.34 % 9.24 % 8.40 % Core return on tangible common equity 17.36 % 15.08 % 14.51 % 16.00 % 14.87 % Calculation of Efficiency Ratio (1) Non-interest expense $ 115,466 $ 113,793 $ 126,628 $ 117,316 $ 116,177 Non-core non-interest expense adjustment (1,154 ) (858 ) (12,489 ) (3,690 ) (4,044 ) Other real estate and foreclosure expense adjustment (863 ) (343 ) (545 ) (600 ) (242 ) Amortization of intangibles adjustment (3,333 ) (3,344 ) (3,351 ) (3,362 ) (3,369 ) Efficiency ratio numerator $ 110,116 $ 109,248 $ 110,243 $ 109,664 $ 108,522 Net-interest income $ 146,533 $ 146,681 $ 154,960 $ 153,610 $ 163,681 Non-interest income 47,924 50,340 42,549 70,218 48,806 Non-core non-interest income adjustment (445 ) (5,477 ) (275 ) (370 ) (2,204 ) Fully tax-equivalent adjustment (effective tax rate of 26.135%) 4,548 4,163 3,482 2,864 2,350 Gain on sale of securities (5,127 ) (5,471 ) (16 ) (22,305 ) (390 ) Efficiency ratio denominator $ 193,433 $ 190,236 $ 200,700 $ 204,017 $ 212,243 Efficiency ratio (1) 56.93 % 57.43 % 54.93 % 53.75 % 51.13 % (1) Efficiency ratio is core non-interest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and non-interest revenues, excluding gains and losses from securities transactions and non-core items. Simmons First National Corporation SFNC Reconciliation Of Non-GAAP Financial Measures - Quarter-to-Date (continued) For the Quarters Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 (Unaudited) 2021 2021 2020 2020 2020 ($ in thousands) Calculation of Core Net Interest Margin Net interest income $ 146,533 $ 146,681 $ 154,960 $ 153,610 $ 163,681 Fully tax-equivalent adjustment (effective tax rate of 26.135%) 4,548 4,163 3,482 2,864 2,350 Fully tax-equivalent net interest income 151,081 150,844 158,442 156,474 166,031 Total accretable yield (5,619 ) (6,630 ) (8,999 ) (8,948 ) (11,723 ) Core net interest income $ 145,462 $ 144,214 $ 149,443 $ 147,526 $ 154,308 PPP loan and additional liquidity interest income (9,445 ) (12,257 ) (6,983 ) $ (6,131 ) $ (5,623 ) Net interest income adjusted for PPP loans and liquidity $ 141,636 $ 138,587 $ 151,459 $ 150,343 $ 160,408 Average earning assets $ 20,959,642 $ 20,484,908 $ 19,573,651 $ 19,415,314 $ 19,517,475 Average PPP loan balance and additional liquidity (2,659,831 ) (3,617,567 ) (2,837,125 ) $ (2,359,928 ) $ (2,071,411 ) Average earning assets adjusted for PPP loans and liquidity $ 18,299,811 $ 16,867,341 $ 16,736,526 $ 17,055,386 $ 17,446,064 Net interest margin 2.89 % 2.99 % 3.22 % 3.21 % 3.42 % Core net interest margin 2.78 % 2.86 % 3.04 % 3.02 % 3.18 % Net interest margin adjusted for PPP loans and liquidity 3.10 % 3.33 % 3.60 % 3.51 % 3.70 % Calculation of Core Loan Yield Loan interest income (FTE) $ 138,987 $ 146,601 $ 160,306 $ 163,379 $ 177,168 Total accretable yield (5,619 ) (6,630 ) (8,999 ) (8,948 ) (11,723 ) Core loan interest income $ 133,368 $ 139,971 $ 151,307 $ 154,431 $ 165,445 PPP loan interest income (8,958 ) (11,652 ) (6,457 ) $ (5,782 ) $ (3,733 ) Core loan interest income without PPP loans $ 124,410 $ 128,319 $ 144,850 $ 148,649 $ 161,712 Average loan balance $ 11,783,839 $ 12,518,300 $ 13,457,077 $ 14,315,014 $ 14,731,306 Average PPP loan balance (707,296 ) (891,070 ) (937,544 ) $ (967,152 ) $ (645,172 ) Average loan balance without PPP loans $ 11,076,543 $ 11,627,230 $ 12,519,533 $ 13,347,862 $ 14,086,134 Core loan yield 4.54 % 4.53 % 4.47 % 4.29 % 4.52 % Core loan yield without PPP loans 4.51 % 4.48 % 4.60 % 4.43 % 4.62 % Calculation of Adjusted Pre-Tax, Pre-Provision (PTPP) Earnings Net income available to common stockholders $ 74,911 $ 67,407 $ 52,955 $ 65,885 $ 58,789 Provision for income taxes 17,018 14,363 10,970 17,633 15,593 Provision for credit losses (including provision for unfunded commitments) (12,951 ) 1,445 6,943 22,981 21,915 (Gain) loss on sale of securities (5,127 ) (5,471 ) (16 ) (22,305 ) (390 ) Net pre-tax non-core items 709 (4,619 ) 12,214 3,320 1,840 Adjusted Pre-tax, pre-provision (PTPP) earnings $ 74,560 $ 73,125 $ 83,066 $ 87,514 $ 97,747 Simmons First National Corporation SFNC Reconciliation Of Non-GAAP Financial Measures - Year-to-Date For the Quarters Ended Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 (Unaudited) 2021 2021 2020 2020 2020 ($ in thousands) Calculation of Core Return on Average Assets Net income $ 142,318 $ 67,407 $ 254,852 $ 201,897 $ 136,012 Net non-core items, net of taxes, adjustment (2,888 ) (3,412 ) 9,448 426 (2,027 ) Core earnings $ 139,430 $ 63,995 $ 264,300 $ 202,323 $ 133,985 Average total assets $ 22,999,805 $ 22,738,821 $ 21,590,745 $ 21,503,564 $ 21,371,248 Return on average assets 1.25 % 1.20 % 1.18 % 1.25 % 1.28 % Core return on average assets 1.22 % 1.14 % 1.22 % 1.26 % 1.26 % Calculation of Return on Tangible Common Equity Net income $ 142,318 $ 67,407 $ 254,852 $ 201,897 $ 136,012 Amortization of intangibles, net of taxes 4,932 2,470 9,968 7,493 5,010 Total income available to common stockholders $ 147,250 $ 69,877 $ 264,820 $ 209,390 $ 141,022 Net non-core items, net of taxes (2,888 ) (3,412 ) 9,448 426 (2,027 ) Core earnings 139,430 63,995 264,300 202,323 133,985 Amortization of intangibles, net of taxes 4,932 2,470 9,968 7,493 5,010 Total core income available to common stockholders $ 144,362 $ 66,465 $ 274,268 $ 209,816 $ 138,995 Average common stockholders' equity $ 2,976,671 $ 2,972,689 $ 2,921,039 $ 2,910,366 $ 2,894,351 Average intangible assets: Goodwill (1,075,305 ) (1,075,305 ) (1,065,190 ) (1,061,793 ) (1,060,226 ) Other intangibles (107,806 ) (109,850 ) (118,812 ) (120,731 ) (122,928 ) Total average intangibles (1,183,111 ) (1,185,155 ) (1,184,002 ) (1,182,524 ) (1,183,154 ) Average tangible common stockholders' equity $ 1,793,560 $ 1,787,534 $ 1,737,037 $ 1,727,842 $ 1,711,197 Return on average common equity 9.64 % 9.20 % 8.72 % 9.27 % 9.45 % Return on tangible common equity 16.56 % 15.85 % 15.25 % 16.19 % 16.57 % Core return on average common equity 9.45 % 8.73 % 9.05 % 9.29 % 9.31 % Core return on tangible common equity 16.23 % 15.08 % 15.79 % 16.22 % 16.33 % Calculation of Efficiency Ratio (1) Non-interest expense $ 229,259 $ 113,793 $ 487,585 $ 360,957 $ 243,641 Non-core non-interest expense adjustment (2,012 ) (858 ) (21,529 ) (9,040 ) (5,350 ) Other real estate and foreclosure expense adjustment (1,206 ) (343 ) (1,706 ) (1,161 ) (561 ) Amortization of intangibles adjustment (6,677 ) (3,344 ) (13,495 ) (10,144 ) (6,782 ) Efficiency ratio numerator $ 219,364 $ 109,248 $ 450,855 $ 340,612 $ 230,948 Net-interest income $ 293,214 $ 146,681 $ 639,734 $ 484,774 $ 331,164 Non-interest income 98,264 50,340 242,618 200,069 129,851 Non-core non-interest income adjustment (5,922 ) (5,477 ) (8,738 ) (8,463 ) (8,093 ) Fully tax-equivalent adjustment (effective tax rate of 26.135%) 8,711 4,163 11,001 7,519 4,655 Gain on sale of securities (10,598 ) (5,471 ) (54,806 ) (54,790 ) (32,485 ) Efficiency ratio denominator $ 383,669 $ 190,236 $ 829,809 $ 629,109 $ 425,092 Efficiency ratio (1) 57.18 % 57.43 % 54.33 % 54.14 % 54.33 % (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 Jun 30 Mar 31 Dec 31 Sep 30 Jun 30 (Unaudited) 2021 2021 2020 2020 2020 ($ in thousands) Calculation of Core Net Interest Margin Net interest income $ 293,214 $ 146,681 $ 639,734 $ 484,774 $ 331,164 Fully tax-equivalent adjustment (effective tax rate of 26.135%) 8,711 4,163 11,001 7,519 4,655 Fully tax-equivalent net interest income 301,925 150,844 650,735 492,293 335,819 Total accretable yield (12,249 ) (6,630 ) (41,507 ) (32,508 ) (23,560 ) Core net interest income $ 289,676 $ 144,214 $ 609,228 $ 459,785 $ 312,259 Average earning assets $ 20,723,587 $ 20,484,908 $ 19,272,886 $ 19,172,318 $ 19,049,487 Net interest margin 2.94 % 2.99 % 3.38 % 3.43 % 3.55 % Core net interest margin 2.82 % 2.86 % 3.16 % 3.20 % 3.30 % Calculation of Core Loan Yield Loan interest income (FTE) $ 285,588 $ 146,601 $ 688,600 $ 528,294 $ 364,915 Total accretable yield (12,249 ) (6,630 ) (41,507 ) (32,508 ) (23,560 ) Core loan interest income $ 273,339 $ 139,971 $ 647,093 $ 495,786 $ 341,355 Average loan balance $ 12,149,041 $ 12,518,300 $ 14,260,689 $ 14,530,938 $ 14,640,082 Core loan yield 4.54 % 4.53 % 4.54 % 4.56 % 4.69 % Calculation of Adjusted Pre-Tax, Pre-Provision (PTPP) Earnings Net income available to common stockholders $ 142,318 $ 67,407 $ 254,852 $ 201,897 $ 136,012 Provision for income taxes 31,381 14,363 64,890 53,920 36,287 Provision for credit losses (including provision for unfunded commitments) (11,506 ) 1,445 74,973 68,030 45,049 (Gain) loss on sale of securities (10,598 ) (5,471 ) (54,806 ) (54,790 ) (32,485 ) Net pre-tax non-core items (3,910 ) (4,619 ) 12,791 577 (2,743 ) Adjusted Pre-tax, pre-provision (PTPP) earnings $ 147,685 $ 73,125 $ 352,700 $ 269,634 $ 182,120 
- Net income of $74.9 million, up 27 percent from the year ago quarter and up 11 percent compared to the first quarter of 2021