Simmons First National : Reports Fourth Quarter 2017 Earnings - January 22, 2018

Pine Bluff, AR - Simmons First National Corporation (NASDAQ-GS: SFNC) today announced net income available to common shareholders of $18.9 million, or $0.43 per diluted share, for the quarter ended December 31, 2017, compared to $27.0 million, or $0.85 per diluted share, for the same period in 2016. Included in fourth quarter 2017 results was $14.2 million in merger-related and branch right-sizing costs, a $5.0 million donation to Simmons Foundation and a one-time tax adjustment of $11.5 million.

As a result of the 'Tax Cuts and Jobs Act' that was signed into law on December 22, 2017, the Company was required to revalue its deferred tax assets and deferred tax liabilities to account for the future impact of lower corporate tax rates on these deferred amounts. The analysis resulted in a one-time non-cash charge to the income statement of $11.5 million.

Excluding the net after-tax impact of these items, core earnings were $42.0 million, or $0.97 per diluted share, for the quarter ended December 31, 2017, compared to $28.8 million, or $0.91 per diluted share, for the quarter ended December 31, 2016.

Year-to-date net income was $92.9 million, or $2.66 diluted earnings per share. Excluding the net after-tax merger-related and branch right-sizing costs, tax adjustment and the gain on sale of insurance lines recorded in the prior quarter, year-to-date core earnings were $119.0 million, or $3.41 diluted core earnings per share.

On October 19, 2017, Simmons First National Corporation completed the acquisitions of Southwest Bancorp, Inc. (NASDAQ-GS: OKSB), headquartered in Stillwater, OK., including its wholly-owned bank subsidiary, Bank SNB, and First Texas BHC, Inc., headquartered in Ft. Worth, TX, including its wholly-owned subsidiary, Southwest Bank. The systems conversions are planned during the first half of 2018, at which time the subsidiary banks will be merged into Simmons Bank.

'We welcome our newest associates from Bank SNB and Southwest Bank and are pleased with our integration efforts thus far. We look forward to continued growth and profitability in their legacy markets,' said George A. Makris, Jr., chairman and CEO.

Makris continued, 'The effect of the tax law changes has allowed us the opportunity to consider an increased investment in our associates which will include, among a variety of initiatives, an increase in the profit-sharing component of our 401(k) plan and increased consideration for our high-performing associates; an investment in technology of up to $100 million over 5 years to improve our delivery of products and services to our customers; an investment in our communities as evidenced by our $5 million contribution to our Foundation to support CRA qualified community development grants throughout our footprint; and finally a strategy to provide a return on the investment of our shareholders through retention and deployment of additional capital to grow our business while at the same time increasing the dividend we distribute to our shareholders.

'These investments reflect our optimism for Simmons and we believe will help us achieve the growth potential we envision for our company,' said Makris.

'Late last week we announced a 2 for 1 stock split which we believe will create investment opportunities for a wide variety of investors. Our retail ownership is approximately 50% and we believe it is a valuable dynamic to have owners as customers and vice-versa. We also announced a 20% increase in our dividend over the previous quarter.'

Financial statements, including earnings per share as well as other share-related disclosures, reported after the stock split record date of January 30, 2018, will include the impact of the stock split on all periods presented.

Selected Highlights	4th Qtr 2017	3rd Qtr 2017	4th Qtr 2016
Net income	$18.9 million	$28.9 million	$27.0 million
Diluted earnings per share	$0.43	$0.89	$0.85
Return on avg assets	0.54%	1.25%	1.29%
Return on avg common equity	3.88%	9.12%	9.27%
Return on tangible common equity	7.53%	14.47%	14.71%
Net interest margin(1)	4.21%	3.91%	4.12%
Core earnings(2)	$42.0 million	$27.7 million	$28.8 million
Diluted core earnings per share(2)	$0.97	$0.86	$0.91
Core return on avg assets(2)	1.20%	1.20%	1.38%
Core return on avg common equity(2)	8.63%	8.77%	9.89%
Core return on tangible common equity(2)	15.97%	13.93%	15.65%
Core net interest margin(1)(2)	3.70%	3.77%	3.76%
Efficiency ratio	51.36%	55.06%	55.47%

(1) Fully tax equivalent

(2) Core earnings excludes non-core items, which is a non-GAAP measurement.

Loans	4th Qtr 2017	3rd Qtr 2017	4th Qtr 2016
Total loans	$10.8 billion	$6.3 billion	$5.6 billion
Legacy loans (all loans excluding loans acquired)	$5.7 billion	$5.2 billion	$4.3 billion
Loans acquired	$5.1 billion	$1.1 billion	$1.3 billion

Total loans, including those acquired, were $10.8 billion at December 31, 2017, an increase of $5.2 billion, or 91.4% from December 31, 2016.

On a linked-quarter basis (December 31, 2017 compared to September 30, 2017), total loans increased $4.5 billion, or 71.0%. The increase was due to:

• $4.2 billion increase in loans acquired on October 19th
• $193 million net increase in loans at Southwest Bank since merger
• $54 million net increase in loans at Bank SNB since merger
• $118 million net increase in loans at Simmons Bank
• $26 million decrease in liquidating portfolio (indirect lending and consumer finance)
• $65 million decrease from seasonal agricultural loan payoffs

Deposits	4th Qtr 2017	3rd Qtr 2017	4th Qtr 2016
Total deposits	$11.1 billion	$7.3 billion	$6.7 billion
Non-time deposits	$9.2 billion	$6.0 billion	$5.4 billion
Time deposits	$1.9 billion	$1.3 billion	$1.3 billion

At December 31, 2017, total deposits were $11.1 billion, an increase of 64.7%, compared to the same period in 2016. The increase is from the recent acquisitions and growth in core deposits. Total non-time deposits increased 68.1% compared to the same period in 2016, and comprised 82.6% of total deposits.

Net Interest Income

The Company's net interest income for the fourth quarter of 2017 was $126.9 million, an increase of $52.6 million, or 70.8%, from the same period of 2016. Included in interest income was the yield accretion recognized on loans acquired of $15.7 million and $6.6 million for the fourth quarters of 2017 and 2016, respectively. Net interest margin was 4.21% for the quarter ended December 31, 2017, a 9 basis point increase from the same quarter of 2016. The Company's core net interest margin, excluding the accretion, was 3.70% for the fourth quarter of 2017, a 6 basis point decline from December 31, 2016 and a 7 basis point decrease from September 30, 2017. Cost of interest bearing deposits was 0.63% for the fourth quarter of 2017, a 32 basis point increase from December 31, 2016 and a 20 basis point increase from September 30, 2017.

Non-Interest Income

Non-interest income for the fourth quarter 2017 was $36.6 million, an increase of $514,000 compared to the fourth quarter of 2016. The increase was primarily due to additional trust income, service charge and fee income resulting from the acquisitions. These increases were partially offset by the following items included in non-interest income:

• $315,000 decrease in insurance income, due to the sale of the property and casualty lines of business in the third quarter of 2017
• $566,000 decrease in the gain on sale of SBA loans
• $2.7 million decrease in gain on sale of securities

Non-Interest Expense

Non-interest expense for the fourth quarter of 2017 was $108.5 million, an increase of $41.8 million compared to the fourth quarter of 2016. Included in this quarter were $14.2 million of merger-related expenses and branch rightsizing costs. Also included was a $5 million donation to Simmons Foundation. Excluding these expenses, core non-interest expense was $89.3 million.

The increases during the quarter were driven by incremental increases in operating expenses related to the additions of Bank SNB and Southwest Bank during the quarter and First South Bank which closed earlier in 2017. The efficiency ratio for the fourth quarter 2017 was 51.36%.

Asset Quality	4th Qtr 2017	3rd Qtr 2017	4th Qtr 2016
Allowance for loan losses on loans to total loans	0.73%	0.82%	0.84%
Allowance for loan losses on loans to non-performing loans	90%	78%	92%
Non-performing loans to total loans	0.81%	1.05%	0.91%
Net charge-off ratio (annualized)	0.53%	0.32%	0.20%
Net charge-off ratio excluding credit cards	0.51%	0.27%	0.14%

All loans acquired are recorded at their discounted net present value; therefore, they are excluded from the computations of the asset quality ratios for the legacy loan portfolio, except for their inclusion in total assets.

At December 31, 2017, the allowance for loan losses for legacy loans was $41.7 million. The allowance for loan losses for loans acquired was $418,000 and the acquired loan discount credit mark was $89.3 million. The allowances for loan losses and credit marks provide a total of $131.4 million of coverage, which equates to a total coverage ratio of 1.2% of gross loans. The ratio of credit mark and related allowance to loans acquired was 1.7%.

Provision for loan losses for the fourth quarter of 2017 was $9.6 million, an increase of $5.3 million compared to December 31, 2016.

Foreclosed Assets and Other Real Estate Owned

At December 31, 2017, foreclosed assets and other real estate owned were $32.1 million, an increase of $5.2 million, or 19.4%, compared to the same period in 2016. The composition of these assets is divided into three types:

Foreclosed Assets and other Real Estate Owned	4th Qtr 2017	3rd Qtr 2017	4th Qtr 2016
Closed bank branches, branch sites and associate relocation	$9.8 million	$12.8 million	$6.1 million
Foreclosed assets - acquired	$16.0 million	$11.1 million	$12.0 million
Foreclosed assets - legacy	$6.3 million	$7.6 million	$8.8 million

Capital	4th Qtr 2017	3rd Qtr 2017	4th Qtr 2016
Stockholders' equity to total assets	13.9%	13.2%	13.7%
Tangible common equity to tangible assets	8.1%	9.1%	9.4%
Regulatory tier 1 leverage ratio	9.2%	10.6%	11.0%
Regulatory total risk-based capital ratio	11.6%	13.5%	15.1%

At December 31, 2017, common stockholders' equity was $2.1 billion, book value per share was $45.30 and tangible book value per share was $24.68.

Download full press release

Simmons First National Corporation

Simmons First National Corporation is a financial holding company, headquartered in Pine Bluff, Arkansas, with total assets of $15.1 billion as of December 31, 2017 conducting financial operations throughout Arkansas, Colorado, Kansas, Missouri, Oklahoma, Tennessee and Texas. The Company, through its subsidiaries, offers comprehensive financial solutions delivered with a client-centric approach. The Company's common stock trades on the NASDAQ Global Select Market under the symbol 'SFNC.'

Conference Call

Management will conduct a live conference call to review this information beginning at 9:00 a.m. CDT on Tuesday, January 23, 2018. 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 9490927. In addition, the call will be available live or in recorded version on the Company's website at www.simmonsbank.com.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with 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 typically adjust GAAP performance measures to include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant non-core activities or nonrecurring transactions. Since the presentation of these GAAP performance measures and their impact differ between companies, management 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. 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

Statements in this news release that are not historical facts should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any forward-looking statement speaks only as of the date of this news release, and we undertake 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 involve inherent risk and uncertainties. Various factors, including, but not limited to, economic conditions, credit quality, interest rates, loan demand, changes in the assumptions used in making the forward-looking statements, and the Company's ability to manage and successfully integrate its mergers and acquisitions could cause actual results to differ materially from those contemplated by the forward-looking statements. Additional information on factors that might affect Simmons First National Corporation's financial results is included in its Form 10-K filing with the Securities and Exchange Commission.

####

FOR MORE INFORMATION CONTACT:

DAVID W. GARNER

EVP and Investor Relations Officer

Simmons First National Corporation

[phone]