SIMMONS FIRST NATIONAL CORP [SFNC] Filings

10-Q 1 sfnc-20220630.htm 10-Q sfnc-20220630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number 000-06253

SIMMONS FIRST NATIONAL CORPORATION

(Exact name of registrant as specified in its charter)


Arkansas			71-0407808
(State or other jurisdiction of			(I.R.S. Employer
incorporation or organization)			Identification No.)

501 Main Street			71601
Pine Bluff			(Zip Code)
Arkansas
(Address of principal executive offices)

(870) 541-1000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.01 per share

SFNC

The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging Growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.). ☐ Yes ☒ No

The number of shares outstanding of the Registrant’s Common Stock as of August 3, 2022, was 128,317,550.

Simmons First National Corporation

Quarterly Report on Form 10-Q

June 30, 2022

Table of Contents


		Page
Part I:	Financial Information
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets	3
	Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income (Loss)	5
	Consolidated Statements of Cash Flows	6
	Consolidated Statements of Stockholders' Equity	7
	Condensed Notes to Consolidated Financial Statements	9
	Report of Independent Registered Public Accounting Firm	53
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	54
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	80
Item 4.	Controls and Procedures	82

Part II:	Other Information
Item 1.	Legal Proceedings	82
Item 1A.	Risk Factors	82
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	83
Item 3.	Defaults Upon Senior Securities	*
Item 4.	Mine Safety Disclosures	*
Item 5.	Other Information	*
Item 6.	Exhibits	84

Signatures		85

___________________

* No reportable information under this item.

Part I: Financial Information

Item 1. Financial Statements (Unaudited)

Simmons First National Corporation

Consolidated Balance Sheets

June 30, 2022 and December 31, 2021


	June 30,		December 31,
(In thousands, except share data)	2022		2021
	(Unaudited)
ASSETS
Cash and non-interest bearing balances due from banks	$	193,473	$	209,190
Interest bearing balances due from banks and federal funds sold	771,374		1,441,463
Cash and cash equivalents	964,847		1,650,653
Interest bearing balances due from banks - time	1,535		1,882
Investment securities:
Held-to-maturity, net of allowance for credit losses of $1,381 and $1,279 at June 30, 2022 and December 31, 2021, respectively	3,819,682		1,529,221
Available-for-sale, at estimated fair value (amortized cost of $4,730,178 and $7,130,861 at June 30, 2022 and December 31, 2021, respectively)	4,341,647		7,113,545
Total investments	8,161,329		8,642,766
Mortgage loans held for sale	14,437		36,356
Other loans held for sale	16,375		100
Loans	15,110,344		12,012,503
Allowance for credit losses on loans	(212,611)		(205,332)
Net loans	14,897,733		11,807,171
Premises and equipment	553,062		483,469
Foreclosed assets and other real estate owned	4,084		6,032
Interest receivable	82,332		72,990
Bank owned life insurance	486,355		445,305
Goodwill	1,310,528		1,146,007
Other intangible assets	137,285		106,235
Other assets	588,707		325,793
Total assets	$	27,218,609	$	24,724,759

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Non-interest bearing transaction accounts	$	6,057,186	$	5,325,318
Interest bearing transaction accounts and savings deposits	12,816,198		11,588,770
Time deposits	3,162,479		2,452,460
Total deposits	22,035,863		19,366,548
Federal funds purchased and securities sold under agreements to repurchase	155,101		185,403
Other borrowings	1,060,244		1,337,973
Subordinated notes and debentures	421,693		384,131
Accrued interest and other liabilities	285,813		201,863
Total liabilities	23,958,714		21,475,918

Stockholders’ equity:
Common stock, Class A, $0.01 par value; 350,000,000 and 175,000,000 shares authorized at June 30, 2022 and December 31, 2021, respectively; 128,787,764 and 112,715,444 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively	1,288		1,127
Surplus	2,569,060		2,164,989
Undivided profits	1,139,975		1,093,270
Accumulated other comprehensive loss	(450,428)		(10,545)
Total stockholders’ equity	3,259,895		3,248,841
Total liabilities and stockholders’ equity	$	27,218,609	$	24,724,759

See Condensed Notes to Consolidated Financial Statements.

Simmons First National Corporation

Consolidated Statements of Income

Three and Six Months Ended June 30, 2022 and 2021


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands, except per share data)	2022		2021		2022		2021
	(Unaudited)				(Unaudited)
INTEREST INCOME
Loans, including fees	$	165,641	$	138,804	$	292,817	$	285,228
Interest bearing balances due from banks and federal funds sold	1,117		651		1,766		1,449
Investment securities	37,848		27,128		71,560		48,701
Mortgage loans held for sale	200		386		390		1,025
TOTAL INTEREST INCOME	204,806		166,969		366,533		336,403

INTEREST EXPENSE
Deposits	9,754		10,782		16,571		23,961
Federal funds purchased and securities sold under agreements to repurchase	119		192		187		437
Other borrowings	4,844		4,897		9,623		9,699
Subordinated notes and debentures	4,990		4,565		9,447		9,092
TOTAL INTEREST EXPENSE	19,707		20,436		35,828		43,189

NET INTEREST INCOME	185,099		146,533		330,705		293,214
Provision for credit losses	33,859		(12,951)		13,945		(11,506)

NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES	151,240		159,484		316,760		304,720

NON-INTEREST INCOME
Wealth management fees	7,214		7,892		15,182		15,253
Service charges on deposit accounts	11,379		10,050		22,075		19,765
Other service charges and fees	1,871		2,048		3,508		3,970
Mortgage lending income	2,240		4,490		6,790		10,937
Debit and credit card fees	8,224		7,073		15,673		13,683
Bank owned life insurance income	2,563		2,038		5,269		3,561
Gain (loss) on sale of securities, net	(150)		5,127		(204)		10,598
Other income	6,837		8,397		14,103		18,897
TOTAL NON-INTEREST INCOME	40,178		47,115		82,396		96,664

NON-INTEREST EXPENSE
Salaries and employee benefits	74,135		60,261		142,041		120,601
Occupancy expense, net	11,004		9,103		21,027		18,403
Furniture and equipment expense	5,104		4,859		9,879		10,274
Other real estate and foreclosure expense	142		863		485		1,206
Deposit insurance	2,812		1,687		4,650		2,995
Merger related costs	19,133		686		21,019		919
Other operating expenses	44,483		37,198		86,129		73,261
TOTAL NON-INTEREST EXPENSE	156,813		114,657		285,230		227,659

INCOME BEFORE INCOME TAXES	34,605		91,942		113,926		173,725
Provision for income taxes	7,151		17,018		21,377		31,381

NET INCOME	27,454		74,924		92,549		142,344
Preferred stock dividends	—		13		—		26
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	27,454	$	74,911	$	92,549	$	142,318
BASIC EARNINGS PER SHARE	$	0.21	$	0.69	$	0.77	$	1.31
DILUTED EARNINGS PER SHARE	$	0.21	$	0.69	$	0.77	$	1.31

See Condensed Notes to Consolidated Financial Statements.

Simmons First National Corporation

Consolidated Statements of Comprehensive Income (Loss)

Three and Six Months Ended June 30, 2022 and 2021


	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2022		2021		2022		2021
	(Unaudited)				(Unaudited)
NET INCOME	$	27,454	$	74,924	$	92,549	$	142,344

OTHER COMPREHENSIVE INCOME (LOSS)
Unrealized holding gains (losses) arising during the period on available-for-sale securities	21,333		71,801		(444,375)		(53,916)
Less: Reclassification adjustment for realized (loss) gains included in net income	(150)		5,127		(204)		10,598
Less: Realized loss on available-for-sale securities interest rate hedges	(22,832)		—		(60,031)		—
Net unrealized losses on securities transferred from available for sale to held to maturity during the period	(206,682)		—		(206,682)		—
Less: Accretion of net unrealized losses on securities transferred from available-for-sale to held-to-maturity	4,785		—		4,701		—
Other comprehensive income (loss), before tax effect	(167,152)		66,674		(595,523)		(64,514)
Less: Tax effect of other comprehensive income (loss)	(43,685)		17,425		(155,640)		(16,861)

TOTAL OTHER COMPREHENSIVE INCOME (LOSS)	(123,467)		49,249		(439,883)		(47,653)

COMPREHENSIVE INCOME (LOSS)	$	(96,013)	$	124,173	$	(347,334)	$	94,691

See Condensed Notes to Consolidated Financial Statements.

Simmons First National Corporation

Consolidated Statements of Cash Flows

Six Months Ended June 30, 2022 and 2021


(In thousands)	June 30, 2022		June 30, 2021
	(Unaudited)
OPERATING ACTIVITIES
Net income	$	92,549	$	142,344
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	24,230		23,837
Provision for credit losses	13,945		(11,506)
(Gain) loss on sale of investments	204		(10,598)
Net accretion of investment securities and assets	(24,494)		(24,377)
Net amortization on borrowings	192		269
Stock-based compensation expense	8,164		7,592
Gain on sale of premises and equipment, net of impairment	—		(606)
Gain on sale of foreclosed assets and other real estate owned	(290)		(177)
Gain on sale of mortgage loans held for sale	(4,333)		(20,006)
Gain on sale of loans	(228)		—
Gain on sale of branches	—		(5,300)
Deferred income taxes	917		6,315
Income from bank owned life insurance	(5,269)		(3,630)
Originations of mortgage loans held for sale	(329,833)		(534,124)
Proceeds from sale of mortgage loans held for sale	356,085		655,497
Changes in assets and liabilities:
Interest receivable	(1,547)		4,680
Other assets	(10,064)		(2,402)
Accrued interest and other liabilities	57,874		(58,284)
Income taxes payable	(245)		6,786
Net cash provided by operating activities	177,857		176,310

INVESTING ACTIVITIES
Net change in loans	(835,002)		1,520,504
Proceeds from sale of loans	15,556		1,847
Net change in due from banks - time	347		244
Purchases of premises and equipment, net	(17,000)		(5,829)
Proceeds from sale of premises and equipment	—		5,156
Proceeds from sale of foreclosed assets and other real estate owned	2,819		10,988
Proceeds from sale of available-for-sale securities	—		249,454
Proceeds from maturities of available-for-sale securities	762,094		314,547
Purchases of available-for-sale securities	(259,586)		(3,672,029)
Proceeds from maturities of held-to-maturity securities	30,848		9,479
Purchases of held-to-maturity securities	(329,660)		(606,187)
Purchases of bank owned life insurance death benefits	—		(160,000)
Proceeds from bank owned life insurance death benefits	—		3,032
Disposition of assets and liabilities held for sale	—		(134,166)
Purchase of Spirit of Texas Bancshares, Inc.	276,396		—
Net cash used in investing activities	(353,188)		(2,462,960)

FINANCING ACTIVITIES
Net change in deposits	(49,701)		1,307,965
Dividends paid on preferred stock	—		(26)
Dividends paid on common stock	(45,844)		(39,010)
Net change in other borrowed funds	(315,778)		(2,874)
Net change in federal funds purchased and securities sold under agreements to repurchase	(30,302)		(111,896)
Net shares issued (cancelled) under stock compensation plans	(3,905)		1,373
Shares issued under employee stock purchase plan	1,151		1,170
Repurchases of common stock	(66,096)		(3,080)
Net cash (used in) provided by financing activities	(510,475)		1,153,622

DECREASE IN CASH AND CASH EQUIVALENTS	(685,806)		(1,133,028)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	1,650,653		3,472,152

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	964,847	$	2,339,124

See Condensed Notes to Consolidated Financial Statements.

Simmons First National Corporation

Consolidated Statements of Stockholders’ Equity

Three Months Ended June 30, 2022 and 2021


(In thousands, except share data)	Preferred Stock		Common Stock		Surplus		Accumulated Other Comprehensive (Loss) Income		Undivided Profits		Total
Three Months Ended June 30, 2022
Balance, March 31, 2022 (Unaudited)	$	—	$	1,125	$	2,150,453	$	(326,961)	$	1,136,990	$	2,961,607

Comprehensive (loss) income	—		—		—		(123,467)		27,454		(96,013)
Stock-based compensation plans, net – 42,459 shares	—		—		3,893		—		—		3,893
Stock issued for Spirit acquisition - 18,275,074 shares	—		183		464,735		—		—		464,918
Stock repurchases – 2,035,324 shares	—		(20)		(50,021)		—		—		(50,041)
Dividends on common stock – $0.19 per share	—		—		—		—		(24,469)		(24,469)

Balance, June 30, 2022 (Unaudited)	$	—	$	1,288	$	2,569,060	$	(450,428)	$	1,139,975	$	3,259,895

Three Months Ended June 30, 2021
Balance, March 31, 2021 (Unaudited)	$	767	$	1,083	$	2,017,188	$	(37,176)	$	948,913	$	2,930,775

Comprehensive income	—		—		—		49,249		74,924		124,173
Stock-based compensation plans, net – 40,937 shares	—		1		3,940		—		—		3,941
Dividends on preferred stock	—		—		—		—		(13)		(13)
Dividends on common stock – $0.18 per share	—		—		—		—		(19,510)		(19,510)

SIMMONS FIRST NATIONAL CORP [SFNC] Filings
10-Q	[2022-08-05]
10-Q	[2022-05-06]
10-K	[2022-02-25]
10-Q	[2021-11-05]
10-Q	[2021-08-06]
10-Q	[2021-05-06]
10-K	[2021-02-25]
10-Q	[2020-11-06]
10-Q	[2020-08-06]
10-Q	[2020-05-07]
10-K	[2020-02-27]
10-Q	[2019-11-07]
10-Q	[2019-08-07]
10-Q	[2019-05-08]
10-K	[2019-02-27]
10-Q	[2018-11-07]
10-Q	[2018-08-07]
10-Q	[2018-05-08]
10-K	[2018-02-28]
10-Q	[2017-11-06]
10-Q	[2017-08-07]
10-Q	[2017-05-09]
10-K	[2017-02-28]
10-Q	[2016-11-08]
10-Q	[2016-08-08]
10-Q	[2016-05-09]
10-K	[2016-02-29]
10-Q	[2015-11-09]
10-Q	[2015-08-10]
10-Q	[2015-05-11]
10-K	[2015-03-16]
10-Q	[2014-11-10]
10-Q	[2014-08-11]
10-Q	[2014-05-09]
10-K	[2014-03-11]
10-Q	[2013-11-12]
10-Q	[2013-08-09]
10-Q	[2013-05-10]
10-K	[2013-03-12]
10-Q	[2012-11-09]
10-Q	[2012-08-09]
10-Q	[2012-05-10]
10-K	[2012-03-07]