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Item 5. Market for Registrant’s Common Equity

2022-02-25 compared with 2021-02-25 · 16 added, 121 removed, 22 unchanged (86% of the section changed)

4 unchanged sentences

Issuer Purchases of Equity Securities

On October 22, 2019, we announced that our Board of Directors authorized a new stock repurchase program (“Program”) under which we may repurchase up to $60,000,000 of our Class A common stock currently issued and outstanding.

On March 5, 2020, we announced an amendment to the Program that increased the maximum amount that may be repurchased under the Program from $60,000,000 to $180,000,000.

The Program will terminate on October 31, 2021 (unless terminated sooner) and replaced our previous stock repurchase program, which was announced on July 23, 2012, that authorized us to repurchase up to 1,700,000 shares of common stock.

We did not repurchase shares under the Program beginning in April of 2020 through September of 2020.

On October 22, 2020, we announced the resumption of stock repurchases under the Program.

Effective July 23, 2021, our Board of Directors approved an amendment to the Company’s stock repurchase program originally approved in October 2019 and first amended in March 2020 (“2019 Program”) that increased the amount of our Class A Common Stock that may be repurchased under the 2019 Program from a maximum of $180 million to a maximum of $276.5 million and extended the term of the 2019 Program from October 31, 2021, to October 31, 2022 (unless terminated sooner).

The repurchase authorization under the 2019 Program was substantially exhausted during January 2022.

On January 27, 2022, we announced a new stock repurchase program (the “2022 Program”) under which we may repurchase up to $175 million of our Class A Common Stock currently issued and outstanding.

The 2022 Program replaced the 2019 Program.

The timing, pricing, and amount of any repurchases under the 2022 Program will be determined by management at its discretion based on a variety of factors, including but not limited to, trading volume and market price of our common stock, corporate considerations, the Company working capital and investment requirements, general market and economic conditions, and legal requirements.

Under the 2022 Program, we may repurchase shares of our Class A Common Stock through open market and privately negotiated transactions or otherwise.

The 2022 Program does not obligate us to repurchase any of our Class A Common Stock and may be modified, discontinued, or suspended at any time without prior notice.

We anticipate funding for the 2022 Program to come from available sources of liquidity, including cash on hand and future cash flow.

Information concerning our purchases of common stock during the quarter ended December 31, 2021 is as follows:

6 unchanged sentences

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(1) Total number of shares purchased includes 1,744 shares with an average price of $19.11 of restricted stock purchased in connection with employee tax withholding obligations under employee compensation plans, which are not purchases under any publicly announced plan.

(1) No shares of restricted stock were purchased in connection with employee tax withholding obligations under employee compensation plans, which are not purchases under any publicly announced plan.

Performance Graph

The performance graph below compares the cumulative total shareholder return on the Company’s Common Stock with the cumulative total return on the equity securities of companies included in the Nasdaq Composite Index and the SNL U.S.

Bank & Thrift Index.

The performance graph below compares the cumulative total shareholder return on the Company’s Common Stock with the cumulative total return of the Nasdaq Composite Index, the SNL U.S.

Bank & Thrift Index, the Russell 2000 Index and KBW Regional Banking Index.

The graph assumes an investment of $100 on December 31, 2016 and reinvestment of dividends on the date of payment without commissions.

The performance graph represents past performance and should not be considered as an indication of future performance.

In the preceding year, the Company selected the NASDAQ Composite and SNL U.S.

Bank & Thrift Index as the indexes with which to compare its performance.

The Company is replacing these indexes with the Russell 2000 Index and the KBW Regional Banking Index, respectively, as we believe these indexes are more representative of companies similar in size and market capitalization to the Company.

In addition, the Company is a member of the Russell 2000 Index and, during 2021, was added as a member of the KBW Regional Bank Index.

Period Ending

1 unchanged sentence

Simmons First National Corporation 100.00 93.56 80.70 91.91 76.98 108.04

Russell 2000 Index 100.00 114.63 101.99 127.98 153.49 176.18

KBW Nasdaq Regional Banking Index 100.00 95.60 84.00 104.05 95.02 129.84

Nasdaq Composite 100.00 129.73 126.08 172.41 250.08 305.63

Bank & Thrift 100.00 118.21 98.75 135.64 118.33 160.89

SELECTED FINANCIAL DATA

The following table sets forth consolidated selected financial data concerning the Company and should be read in conjunction with, and is qualified in its entirety by, the detailed information and consolidated financial statements, including notes thereto, included elsewhere in this report.

The income statement, balance sheet and per common share data as of and for the years ended December 31, 2020, 2019, 2018, 2017, and 2016, were derived from consolidated financial statements of the Company, which were audited by BKD, LLP.

Results from past periods are not necessarily indicative of results that may be expected for any future period.

Management believes that certain non-GAAP measures, including core diluted earnings per share, tangible book value, the ratio of tangible common equity to tangible assets, tangible stockholders’ equity, core return on average assets, core return on average common equity, return on average tangible equity, core return on average tangible equity, efficiency ratio, and certain measures exclusive of PPP loans and/or additional liquidity may be useful to analysts and investors in evaluating the performance of our Company.

We have included certain of these non-GAAP measures, including cautionary remarks regarding the usefulness of these analytical tools, in this table.

The consolidated selected financial data set forth below should be read in conjunction with the financial statements of the Company and related notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this report.

See the “GAAP Reconciliation of Non-GAAP Financial Measures” for additional discussion of non-GAAP measures.

Years Ended December 31,

(In thousands, except per common share data, ratios & other data) 2020 2019 2018 2017 2016

Income statement data:

Interest income $ 759,718 $ 783,123 $ 676,829 $ 392,539 $ 299,295

Interest expense 119,984 181,370 128,135 40,074 21,799

Net interest income 639,734 601,753 548,694 352,465 277,496

Provision for credit losses 74,973 43,240 38,148 26,393 20,065

Net interest income after provision for credit losses 564,761 558,513 510,546 326,072 257,431

Non-interest income 248,528 205,031 147,754 141,230 141,092

Non-interest expense 493,495 461,112 392,229 312,379 255,085

Income before taxes 319,794 302,432 266,071 154,923 143,438

Provision for income taxes 64,890 64,265 50,358 61,983 46,624

Net income 254,904 238,167 215,713 92,940 96,814

Preferred stock dividends 52 339 — — 24

Net income available to common stockholders $ 254,852 $ 237,828 $ 215,713 $ 92,940 $ 96,790

Per common share data (7) :

Basic earnings 2.32 2.42 2.34 1.34 1.58

Diluted earnings 2.31 2.41 2.32 1.33 1.56

Core diluted earnings (non-GAAP) (1)

2.40 2.73 2.37 1.70 1.64

Book value 27.53 26.30 24.33 22.65 18.40

Tangible book value (non-GAAP) (2)

16.56 15.89 14.18 12.34 11.98

Dividends 0.68 0.64 0.60 0.50 0.48

Basic average common shares outstanding 109,860,321 98,350,992 92,268,131 69,384,500 61,291,296

Diluted average common shares outstanding 110,173,661 98,796,628 92,830,485 69,852,920 61,927,092

Years Ended December 31,

(In thousands, except per common share data, ratios & other data) 2020 2019 2018 2017 2016

Balance sheet data at period end:

Total assets $ 22,359,752 $ 21,259,143 $ 16,543,337 $ 15,055,806 $ 8,400,056

Investment securities 3,806,629 3,329,270 2,286,220 1,838,642 1,571,430

Loans 12,900,897 14,425,704 11,723,266 10,780,103 5,633,843

Allowance for credit losses on loans 238,050 68,244 56,694 42,086 37,240

Goodwill and other intangible assets 1,186,415 1,182,860 937,021 948,722 401,464

Non-interest bearing deposits 4,482,091 3,741,093 2,672,405 2,665,249 1,491,676

Deposits 16,987,026 16,108,940 12,398,752 11,092,875 6,735,219

Other borrowings 1,342,067 1,297,599 1,345,450 1,380,024 273,159

Subordinated debt and trust preferred 382,874 388,260 353,950 140,565 60,397

Stockholders’ equity 2,976,656 2,988,924 2,246,434 2,084,564 1,151,111

Tangible stockholders’ equity (non-GAAP) (2)

1,789,474 1,805,297 1,309,413 1,135,842 749,647

Capital ratios at period end:

Common stockholders’ equity to total assets 13.31 % 14.06 % 13.58 % 13.85 % 13.70 %

Common stockholders’ equity to total assets excluding PPP loans (non-GAAP) (8)

13.87 % N/A N/A N/A N/A

Tangible common equity to tangible assets (non-GAAP) (3)

8.45 % 8.99 % 8.39 % 8.05 % 9.37 %

Tangible common equity to tangible assets excluding PPP loans (non-GAAP) (3) (8)

8.83 % N/A N/A N/A N/A

Tier 1 leverage ratio 9.08 % 9.59 % 8.78 % 9.21 % 10.95 %

Tier 1 leverage ratio excluding average PPP loans (non-GAAP) (8)

9.50 % N/A N/A N/A N/A

Common equity Tier 1 risk-based ratio 13.41 % 10.92 % 10.22 % 9.80 % 13.45 %

Tier 1 risk-based ratio 13.41 % 10.92 % 10.22 % 9.80 % 14.45 %

Total risk-based capital ratio 16.78 % 13.73 % 13.35 % 11.35 % 15.12 %

Dividend payout to common stockholders 29.44 % 26.56 % 25.86 % 37.59 % 30.67 %

Annualized performance ratios:

Return on average assets 1.18 % 1.33 % 1.37 % 0.92 % 1.25 %

Core return on average assets (non-GAAP) (1)

1.22 % 1.51 % 1.40 % 1.18 % 1.31 %

Return on average common equity 8.72 % 9.93 % 10.00 % 6.68 % 8.75 %

Core return on average common equity (non-GAAP) (1)

9.05 % 11.25 % 10.21 % 8.56 % 9.17 %

Return on average tangible equity (non-

GAAP) (2) (4)

15.25 % 17.99 % 18.44 % 11.26 % 13.92 %

Core return on average tangible equity (non-GAAP) (1) (2) (4)

15.79 % 20.31 % 18.81 % 14.28 % 14.56 %

Net interest margin (5)

3.38 % 3.85 % 3.99 % 4.08 % 4.19 %

Net interest margin adjusted for PPP loans and additional liquidity (non-GAAP) (5) (8)

3.63 % N/A N/A N/A N/A

Efficiency ratio (non-GAAP) (6)

54.66 % 50.33 % 52.85 % 55.26 % 56.24 %

Years Ended December 31,

(In thousands, except per common share data, ratios & other data) 2020 2019 2018 2017 2016

Balance sheet ratios:

Nonperforming assets as a percentage of period-end assets 0.64 % 0.54 % 0.50 % 0.70 % 1.35 %

Nonperforming loans as a percentage of period-end loans 0.96 % 0.65 % 0.48 % 0.67 % 1.53 %

Nonperforming assets as a percentage of period-end loans and OREO 1.11 % 0.80 % 0.70 % 0.97 % 2.01 %

Allowance to nonperforming loans 192.82 % 72.46 % 101.12 % 57.96 % 43.18 %

Allowance for credit losses as a percentage of period-end loans 1.85 % 0.47 % 0.48 % 0.39 % 0.66 %

Net charge-offs (recoveries) as a percentage of average loans 0.45 % 0.24 % 0.21 % 0.31 % 0.30 %

Number of financial centers 204 251 191 200 150

Number of full time equivalent associates 2,923 3,270 2,654 2,640 1,875

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(1) Core diluted earnings per share is a non-GAAP financial measure.

Core diluted earnings per share excludes from net income certain non-core items and then is divided by average diluted common shares outstanding.

See “GAAP Reconciliation of Non-GAAP Financial Measures” below for a GAAP reconciliation of this non-GAAP financial measure.

(2) Because of Simmons’ significant level of intangible assets, total goodwill and core deposit premiums, management of Simmons believes a useful calculation for investors in their analysis of Simmons is tangible book value per share, which is a non-GAAP financial measure.

Tangible book value per share is calculated by subtracting goodwill and other intangible assets from total common stockholders’ equity, and dividing the resulting number by the shares of common stock outstanding at period end.

See “GAAP Reconciliation of Non-GAAP Financial Measures” below for a GAAP reconciliation of this non-GAAP financial measure.

(3) Tangible common equity to tangible assets ratio is a non-GAAP financial measure.

The tangible common equity to tangible assets ratio is calculated by dividing total common stockholders’ equity less goodwill and other intangible assets (resulting in tangible common equity) by total assets less goodwill and other intangible assets as of and for the periods ended presented above.

See “GAAP Reconciliation of Non-GAAP Financial Measures” below for a GAAP reconciliation of this non-GAAP financial measure.

(4) Return on average tangible equity is a non-GAAP financial measure that removes the effect of goodwill and other intangible assets, as well as the amortization of intangibles, from the return on average equity.

This non-GAAP financial measure is calculated as net income, adjusted for the tax-effected effect of intangibles, divided by average tangible equity which is calculated as average stockholders’ equity for the period presented less goodwill and other intangible assets.

See “GAAP Reconciliation of Non-GAAP Financial Measures” below for a GAAP reconciliation of this non-GAAP financial measure.

(5) Net interest margin is presented on a fully taxable equivalent basis that consists of dividing tax-exempt income by one minus the combined federal and state income tax rate of 26.135% for periods beginning January 1, 2018 or 39.225% for periods prior to 2018.

(6) The efficiency ratio is a non-GAAP financial measure that is noninterest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and non-core items.

See “GAAP Reconciliation of Non-GAAP Financial Measures” below for a reconciliation of this non-GAAP financial measure.

(7) Share and per share amounts have been restated for the two-for-one stock split in February 2018.

(8) Certain figures are presented that are exclusive of the impact of PPP loans and/or additional liquidity:

the ratios of common equity to total assets and tangible common equity to tangible assets, each adjusted for PPP loans (each non-GAAP), Tier 1 leverage ratio excluding average PPP loans (non-GAAP), and net interest margin, adjusted for PPP loans and additional liquidity (Non-GAAP).

See “GAAP Reconciliation of Non-GAAP Financial Measures” below for a GAAP reconciliation of these non-GAAP financial measures.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 5. Market for Registrant’s Common Equity