0000090498-95-000036.txt : 19950816 0000090498-95-000036.hdr.sgml : 19950816 ACCESSION NUMBER: 0000090498-95-000036 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950815 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIMMONS FIRST NATIONAL CORP CENTRAL INDEX KEY: 0000090498 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 710407808 STATE OF INCORPORATION: AR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-06253 FILM NUMBER: 95564127 BUSINESS ADDRESS: STREET 1: PO BOX 7009 STREET 2: ATTN TRUST SERVICES DIVISION CITY: PINE BLUFF STATE: AR ZIP: 71611-7009 BUSINESS PHONE: 5015411350 10-Q/A 1 SIMMONS FIRST NATIONAL CORPORATION --------------------------------- Financial Statements -------------------- (Form 10-Q) ---------- June 30, 1995 ------------- SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Form 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended June 30, 1995 Commission File Number 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 Pine Bluff, Arkansas 71601 ----------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 501-541-1350 --------------------- Not Applicable ----------------------------------------------------------------------------- Former name, former address and former fiscal year, if changed since last report 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) and (2) has been subject to such filing requirements for the past 90 days. YES X NO ----- ----- * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Indicate the number of shares outstanding of each of issuer's classes of securities. Class A, Common 3,815,877 Class B, Common None SIMMONS FIRST NATIONAL CORPORATION INDEX Page No. Part I: Summarized Financial Information Consolidated Balance Sheets -- June 30, 1995 and December 31, 1994 3-4 Consolidated Statements of Income -- Three months and six months ended June 30, 1995 and 1994 5 Consolidated Statements of Cash Flows -- Six months ended June 30, 1995 and 1994 6 Consolidated Statement of Changes in Stockholders' Equity -- Six months ended June 30, 1995 and 1994 7 Notes to Consolidated Financial Statements 8-17 Management's Discussion and Analysis of Financial Condition and Results of Operations 18-19 Review by Independent Certified Public Accountants 20 Part I ------ A. Summarized Financial Information SIMMONS FIRST NATIONAL CORPORATION CONSOLIDATED BALANCE SHEETS JUNE 30, 1995 AND DECEMBER 31, 1994 ASSETS ------
June 30, December 31, (Dollars in Thousands) 1995 1994 ---------------------------------------------------------------------------------- (Unaudited) Cash and due from banks $ 31,302 $ 33,476 Interest-bearing balances due from banks 231 101 Federal funds sold and securities purchased under agreements to resell 34,990 40,425 --------- --------- Cash and cash equivalents 66,523 74,002 Investment securities (Note 2) Securities held to maturity 163,085 142,374 Securities available for sale 42,835 29,610 Mortgage loans held for sale 18,835 8,720 Assets held in trading accounts 482 2,734 Loans 444,027 418,392 Allowance for loan losses (Note 3) (8,254) (7,790) --------- --------- Net loans (Note 3) 435,773 410,602 Premises and equipment 14,501 12,115 Foreclosed assets held for sale, net 1,568 1,730 Interest receivable 7,453 6,289 Other assets 31,521 25,086 --------- --------- Total Assets $ 782,576 $ 713,262 ========= =========
The December 31, 1994 Consolidated Balance Sheet is as reported in the Corporation's 1994 Annual Report. See Notes to Consolidated Financial Statements. LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------
June 30, December 31, (Dollars in Thousands) 1995 1994 ---------------------------------------------------------------------------------- (Unaudited) Non-interest bearing transaction accounts $ 106,137 $ 109,564 Interest bearing transaction and savings deposits 231,688 228,649 Time deposits (Note 9) 304,497 245,325 --------- --------- Total Deposits 642,322 583,538 Federal funds purchased and securities sold under agreements to repurchase 23,587 23,931 Borrowed funds 15,195 13,765 Other liabilities 10,168 8,328 --------- --------- Total Liabilities 691,272 629,562 --------- --------- STOCKHOLDERS' EQUITY Capital stock Class A, common, par value $5 a share, authorized 10,000,000 shares; issued and outstanding 3,815,877 and 3,677,378 at 1995 and 1994, respectively 19,083 18,387 Surplus 22,651 19,827 Net unrealized gain (loss) on securities available for sale 722 233 Undivided profits (Note 12) 48,848 45,253 --------- --------- Total Stockholders' Equity $ 91,304 $ 83,700 --------- --------- Total Liabilities and Stockholders' Equity $ 782,576 $ 713,262 ========= =========
The December 31, 1994 Consolidated Balance Sheet is as reported in the Corporation's 1994 Annual Report. See Notes to Consolidated Financial Statements. SIMMONS FIRST NATIONAL CORPORATION CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1995 AND 1994
Three Months Ended Six Months Ended June 30, June 30, (Dollars in thousands, except per share figures) 1995 1994 1995 1994 --------------------------------------------------------------------------------------------------- (Unaudited) INTEREST INCOME Loans $ 9,729 $ 7,353 $ 18,545 $ 14,503 Federal funds sold and securities purchased under agreements to resell 548 174 918 405 Investment securities - taxable Held to maturity 1,766 1,472 3,402 2,924 Available for sale 740 830 1,414 1,583 Investment securities - non-taxable Held to maturity 742 698 1,429 1,393 Available for sale 1 -- 1 -- Mortgage loans held for sale 190 636 333 1,246 Trading account 14 24 23 56 Other interest 28 9 55 20 ------- -------- ------- ------- TOTAL INTEREST INCOME 13,758 11,196 26,120 22,130 ------- -------- ------- ------- INTEREST EXPENSE Deposits 5,366 3,446 9,702 6,830 Borrowed funds 622 414 1,252 832 ------- -------- ------- ------- TOTAL INTEREST EXPENSE 5,988 3,860 10,954 7,662 ------- -------- ------- ------- NET INTEREST INCOME 7,770 7,336 15,166 14,468 Provision for loan losses 452 525 901 1,050 ------- -------- ------- ------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 7,318 6,811 14,265 13,418 ------- -------- ------- ------- NON-INTEREST INCOME Trust income 376 396 794 850 Service charges on deposit accounts 697 559 1,297 1,107 Other service charges and fees 201 208 402 445 Income on sale of mortgage loans, net of commissions 54 (13) 146 197 Income on investment banking, net of commissions 196 332 319 897 Gains on sale of securities -- 27 -- 56 Other operating income 4,308 4,561 8,837 9,483 ------- -------- ------- ------- TOTAL NON-INTEREST INCOME 5,832 6,070 11,795 13,035 ------- -------- ------- ------- NON-INTEREST EXPENSE Salaries and employee benefits 5,310 5,070 10,533 10,369 Net occupancy expense 591 538 1,123 1,019 Equipment expense 522 473 1,031 984 Other operating expense 3,426 3,537 6,854 7,184 ------- -------- ------- ------- TOTAL NON-INTEREST EXPENSE 9,849 9,618 19,541 19,556 ------- -------- ------- ------- NET INCOME BEFORE INCOME TAXES 3,301 3,263 6,519 6,897 Provision for income taxes (Note 8) 908 911 1,873 1,919 ------- -------- ------- ------- NET INCOME $ 2,393 $ 2,352 $ 4,646 $ 4,978 ======= ======== ======= ======= EARNINGS PER COMMON SHARE AVG $ 0.63 $ 0.64 $ 1.24 $ 1.35 ======= ======== ======= ======= DIVIDENDS PER COMMON SHARE $ 0.15 $ 0.12 $ 0.28 $ 0.22 ======= ======== ======= =======
See Notes to Consolidated Financial Statements. SIMMONS FIRST NATIONAL CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 1995 AND 1994
Six Months Ended June 30, June 30, (Dollars in Thousands) 1995 1994 ------------------------------------------------------------------------------------------------ (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES (Note 7) Net Income $ 4,646 $ 4,978 Items not requiring (providing) cash Depreciation and amortization 443 846 Provision for loan losses 901 1,050 Amortization of premiums and accretion of discounts on investment securities and mortgage- backed certificates (50) (152) Provision for real estate owned losses 156 81 (Gain)/loss on sale of investments -- (56) (Gain) on sale of premises and equipment -- (4) Deferred income taxes (123) (173) Changes in: Accrued interest receivable (1,164) (591) Mortgage loans held for sale (10,115) (6,734) Other assets (6,122) 2,037 Accounts payable and accrued expenses 2,148 (1,792) Income taxes payable (597) 1,315 Trading accounts 2,253 1,050 -------- -------- Net cash provided (used) by operating activities (7,624) 1,855 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Net collection of loans (26,323) 31,767 Purchase of premises and equipment (5,173) (1,782) Proceeds from sale of fixed assets 2,154 416 Proceeds from the sale of foreclosed assets held for sale 256 808 Proceeds from maturing a-f-s securities 4,850 10,207 Purchases of a-f-s securities (16,985) (11,403) Proceeds from maturing h-t-m securities 7,747 5,028 Purchases of h-t-m securities (28,720) (2,851) -------- -------- Net cash provided (used) by investing securities (62,194) 32,190 -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Net increase (decrease) in demand deposits, money market, all-in-one and savings accounts (388) (19,701) Net repayment of certificates of deposit 59,172 (13,229) Repayments of other borrowings (89,049) (55,420) Proceeds from other borrowings 90,479 55,711 Dividends paid (1,051) (809) Net (increase) federal funds purchased and securities sold under agreements to repurchase (344) (9,974) Issuance of common stock 3,520 -- -------- -------- Net cash used in financing activities $ 62,339 $ (43,422) -------- -------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ (7,479) $ (9,377) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 74,002 49,090 -------- -------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 66,523 $ 39,713 ======== ========
See Notes to Consolidated Financial Statements. SIMMONS FIRST NATIONAL CORPORATION CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY SIX MONTHS ENDED JUNE 30, 1995 AND 1994
NET UNREALIZED GAIN (LOSS) COMMON SECURITIES UNDIVIDED (Dollars in Thousands) STOCK SURPLUS AFS PROFITS TOTAL ----------------------------------------------------------------------------------------------------------------------------- Balance, December 31, 1993 $ 18,387 $ 19,827 $ $ 37,121 $ 75,335 Adoption of SFAS 115 "Accounting for Certain Investments in Debt and Equity Securities", January 1, 1994, net of income taxes of $487 946 946 Net income 4,978 4,978 Cash dividend declared ($0.22 per share) (809) (809) Change in unrealized appreciation (depreciation) on available-for-sale securities, net of income tax credit of $87 (169) (169) --------- --------- --------- --------- --------- Balance, June 30, 1994 18,387 19,827 777 41,290 80,281 Net income 4,882 4,882 Cash dividends declared ($0.25 per share) (919) (919) Change in unrealized appreciation (depreciation) on available-for-sale securities, net of income tax credit of $280 (544) (544) --------- --------- --------- --------- --------- Balance, December 31, 1994 18,387 19,827 233 45,253 83,700 Exercise of stock options--2,000 shares 10 10 20 Common Stock issued in connection with purchase of Dumas Bancshares, Inc. (136,499 shares @$25.50 per share) 686 2,814 3,500 Net income 4,646 4,646 Cash dividends declared ($0.28 per share) (1,051) (1,051) Change in unrealized appreciation (depreciation) on available-for-sale securities, net of income taxes of $290 489 489 --------- --------- --------- --------- --------- Balance, June 30, 1995 $ 19,083 $ 22,651 $ 722 $ 48,848 $ 91,304 ========= ========= ========= ========= =========
See Notes to Consolidated Financial Statements. SIMMONS FIRST NATIONAL CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1: ACCOUNTING POLICIES The consolidated financial statements include the accounts of Simmons First National Corporation and its subsidiaries. Significant intercompany accounts and transactions have been eliminated in consolidation. All adjustments made to the unaudited financial statements were of a normal recurring nature. In the opinion of management, all adjustments necessary for a fair presentation of the results of interim periods have been made. Certain prior year amounts are reclassified to conform to current year classification. The accounting policies followed in the presentation of interim financial results are presented on pages 30-32 of the 1994 Annual Report to shareholders. NOTE 2: INVESTMENT SECURITIES The amortized cost and fair value of investments in debt securities that are Held to Maturity and Available For Sale are as follows:
June 30, 1995 December 31, 1994 ------------------------------------------------------------------------------------------------------- Gross Gross Gross Gross (Dollars in Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair Thousands) Cost Gains (Losses) Value Cost Gains (Losses) Value ---------------------------------------------------------------------------------------------------------------------- Held to Maturity U.S. Treasury $ 81,163 $ 2,025 $ (281) $ 82,907 $ 74,544 $ 349 $ (1,479) $ 73,414 U.S. Government agencies 23,100 637 (63) 23,674 13,375 32 (289) 13,118 Mortgage-backed securities 3,370 12 (79) 3,303 3,551 6 (244) 3,313 State and political subdivisions 55,248 1,217 (513) 55,952 50,904 577 (1,962) 49,519 Other securities 204 3 -- 207 -------- -------- --------- -------- -------- -------- -------- -------- $ 163,085 $ 3,894 $ (936) $ 166,043 $ 142,374 $ 964 $ (3,974) $ 139,364 ======== ======== ========= ======== ======== ======== ======== ======== Available For Sale U.S. Treasury $ 37,578 $ 496 $ (9) $ 38,065 $ 25,701 $ 96 $ (202) $ 25,595 U.S. Government agencies 1,308 20 -- 1,328 1,002 3 -- 1,005 State and political subdivisions 50 -- -- 50 -- -- -- -- Other securities 2,767 625 -- 3,392 2,554 457 (1) 3,010 -------- -------- --------- -------- -------- -------- -------- -------- $ 41,703 $ 1,141 $ (9) $ 42,835 $ 29,257 $ 556 $ (203) $ 29,610 ======== ======== ========= ======== ======== ======== ======== ========
Maturities of investment securities at June 30, 1995
Held to Maturity Available for Sale Amortized Fair Amortized Fair (Dollars in Thousands) Cost Value Cost Value -------------------------------------------------------------------------------------------------------------------- One year of less $ 41,272 $ 41,372 $ 21,804 $ 21,923 After one through five years 73,223 75,065 17,132 17,520 After five through ten years 38,354 38,900 -- -- After ten years 6,662 7,196 -- -- Mortgage-backed securities not due on a single maturity date 3,370 3,303 -- -- Other securities 204 207 2,767 3,392 ----------- ----------- ----------- ----------- $ 163,085 $ 166,043 $ 41,703 $ 42,835 =========== =========== =========== ===========
The book value of securities pledged as collateral, to secure public deposits and for other purposes, amounted to $99,745,000 at June 30, 1995, and $70,981,000 at December 31, 1994. The approximate fair value of pledged securities amounted to $102,218,000 at June 30, 1995 and $70,217,000 at December 31, 1994. The book value of securities sold under agreements to repurchase amounted to $2,457,000 and $196,000 for June 30, 1995 and December 31, 1994, respectively. As of January 1, 1994, the Corporation adopted Statement of Financial Accounting Standards (SFAS) No. 115. "Accounting for Certain Investments in Debt and Equity Securities." SFAS No. 115 requires the classification of securities into one of three categories: Trading, Available-for-Sale, or Held-to-Maturity. Management will determine the appropriate classification of debt securities at the time of purchase and re-evaluate the classifications periodically. Trading account securities are used to provide inventory for resale. Debt securities are classified as held to maturity when the Corporation has the positive intent and ability to hold the securities to maturity. Securities not classified as held to maturity or trading are classified as available for sale. During the second quarter of 1995, there were $1,000 in unrealized gains on trading securities. During the first six months of 1995 and 1994, there were no securities sold. The gross realized gains and losses shown in the table below were the result of called bonds.
June 30, June 30, (Dollars in Thousands) 1995 1994 ---------------------------------------------------------------------------------------- Proceeds from sales $ -- $ -- ----------- ----------- Gross gains -- 60 Gross losses -- (4) ----------- ----------- Securities gains (losses) $ -- $ 56 =========== ===========
Approximately 11 percent of the state and political subdivisions are rated A or above. Of the remaining securities, most are non-rated bonds and represent small, Arkansas issues, which are evaluated on an ongoing basis. NOTE 3: LOANS AND ALLOWANCE FOR LOAN LOSSES The various categories are summarized as follows:
June 30, December 31, (Dollars in Thousands) 1995 1994 ------------------------------------------------------------------------------------------ Loans: Consumer: Credit card $ 147,099 $ 164,501 Student loan 59,893 62,836 Other consumer 51,710 40,739 Real estate: Construction 8,470 6,232 Single family residential 51,571 43,629 Other commercial 56,485 44,141 Commercial: Commercial 33,230 29,047 Agricultural 23,036 16,048 Financial institutions 10,734 6,681 Other 2,709 5,122 ---------- ---------- Total loans before unearned discount and allowances for loan losses 444,937 418,976 Unearned discount (910) (584) Allowance for loan losses (8,254) (7,790) ---------- ---------- Net Loans $ 435,773 $ 410,602 ========== ==========
During the second quarter of 1995, foreclosed assets held for sale decreased to $1,567,000 and are carried at the lower of cost or fair market value. Non-accrual loans and other non-performing loans for the Corporation at June 30, 1995, were $1,379,000 and $978,000, respectively, bringing the total of non-performing assets to $3,924,000.
June 30, December 31, (Dollars in Thousands) 1995 1994 ------------------------------------------------------------------------------------------ Allowance for Loan Losses: Balance, beginning of year $ 7,790 $ 7,430 Additions Provision charged to expense 901 1,050 Allowance for loan losses of acquired institutions 314 -------- -------- 9,005 8,480 Deductions Losses charged to allowance, net of recoveries of $213,000 and $81,000 for the first six months of 1995 and 1994, respectively 751 966 --------- -------- Balance, June 30 $ 8,254 $ 7,514 ========= -------- Additions Provision charged to expense 1,000 -------- 8,514 Deductions Losses charged to allowance, net of recoveries of $339,000 for the last six months of 1994 724 -------- Balance, end of year $ 7,790 ========
As of January 1, 1995, the Corporation adopted Statement of Financial Accounting Standards (SFAS) No. 114, Accounting by Creditors for Impairment of a Loan. FAS 114 requires discounting expected future cash flows to measure impairment of certain loans, or, as a practical expedient, impairment measurements based on the loans's observable market price or the fair value of collateral if the loan is collateral dependent. The adoption of FAS 114 did not increase the 1995 loan loss provision. Total impaired loans at December 31, 1994, was $3,766,000. At that time, $587,000 of the allowance for loan losses related to those loans. All impaired loans had designated reserves for possible loan losses. At June 30, 1995, impaired loans totaled $3,407,000, all of which had reserves allocated. An allowance of $646,000 for possible losses related to those loans. Interest of $88,000 was recognized on average impaired loans of $3,548,000 as of June 30, 1995. No interest was recognized on impaired loans on a cash basis during the first six months of 1995. NOTE 4: ACQUISITIONS On April 1, 1995, the acquisition of Dumas Bancshares, Inc. (DBI) was completed and DBI was merged into Simmons First National Corporation (SFNC) in a transaction valued at $5 million. DBI owned Dumas State Bank, Dumas, Arkansas, and First State Bank, Gould, Arkansas, with consolidated assets at March 31, 1995, of approximately $42 million. First State Bank, which has branches in Grady and Star City, Arkansas, in addition to its primary location in Gould, Arkansas, was merged into Simmons First National Bank, SFNC's lead bank, and Dumas State Bank became Simmons First Bank of Dumas and will continue to operate as a subsidiary bank of the Corporation. On April 25, 1995, SFNC entered into a definitive agreement to stock purchase Dermott State Bank Bancshares, Inc. (DSBB), located in Dermott, Arkansas, into the Corporation. That acquisition was completed August 1, 1995, in a transaction valued at approximately $2.4 million. DSBB, the holding company for Dermott State Bank, has consolidated assets as of June 30, 1995 of approximately $20 million. NOTE 5: CERTAIN TRANSACTIONS From time to time the Corporation and its subsidiaries have made loans and other extensions of credit to directors, officers, their associates and members of their immediate families, and from time to time directors, officers and their associates and members of their immediate families have placed deposits with Simmons First National Bank, Simmons First Bank of Lake Village, Simmons First Bank of Jonesboro, and Simmons First Bank of Dumas. Such loans, other extensions of credit and deposits were made in the ordinary course of business, on substantially the same terms (including interest rates and collateral) as those prevailing at the time for comparable transactions with other persons and did not involve more than normal risk of collectibility or present other unfavorable features. NOTE 6: STOCK OPTIONS As of June 30, 1995, 80,000 shares of common stock of the Corporation had been granted through an employee stock option incentive plan. There were 49,600 exercisable options at the end of the second quarter after 2,000 shares had been issued. NOTE 7: ADDITIONAL CASH FLOW INFORMATION
Six Months Ended June 30, (Dollars in Thousands) 1995 1994 ------------------------------------------------------------------------ Interest paid $ 10,256 $ 7,643 Income taxes paid $ 1,582 $ 2,121
NOTE 8: INCOME TAXES The provision for income taxes is comprised of the following components:
June 30, June 30, (Dollars in Thousands) 1995 1994 ---------------------------------------------------------------------------------- Income taxes currently payable $ 1,996 $ 2,092 Increase in future income tax benefits (123) (173) --------- --------- Provision for income taxes $ 1,873 $ 1,919 ========= =========
The tax effects of temporary differences related to deferred taxes shown on the balance sheet are:
June 30, December 31, (Dollars in Thousands) 1995 1994 ------------------------------------------------------------------------------------------------------- Deferred tax assets: Allowance for loan losses $ 2,926 $ 2,744 Valuation adjustment of foreclosed assets held for sale 294 281 Deferred compensation payable 364 373 Deferred loan fee income 779 773 Other 716 645 --------- --------- Total deferred tax assets 5,079 4,816 --------- --------- Deferred tax liabilities: Accumulated depreciation (384) (405) Available-for-sale securities (93) (120) --------- --------- Total deferred tax liabilities (477) (525) --------- --------- Net Deferred tax assets before valuation allowance $ 4,602 $ 4,291 --------- --------- Valuation allowance: Beginning balance -- (564) Change during period -- 564 --------- --------- Ending balance -- -- --------- --------- Net deferred tax asset $ 4,602 $ 4,291 ========= =========
A reconciliation of income tax expense at the statutory rate to the Corporation's actual income tax expense is shown below:
June 30, June 30, (Dollars in Thousands) 1995 1994 ------------------------------------------------------------------------------------ Computed at the statutory rate (34%) $ 2,345 $ 2,345 Increase (decrease) resulting from: Tax exempt income (488) (502) Other difference, net 16 76 -------- -------- Actual tax provision $ 1,873 $ 1,919 ======== ========
NOTE 9: TIME DEPOSITS Time deposits include approximately $80,670,000 and $55,222,000 of certificates of deposit of $100,000 or more at June 30, 1995, and December 31, 1994, respectively. NOTE 10: COMMITMENTS AND CREDIT RISK The four affiliate banks of the Corporation grant agribusiness, commercial, consumer, and residential loans to their customers. Included in the Corporation's diversified loan portfolio is unsecured debt in the form of credit card receivables that comprised approximately 33.1% and 39.3% of the portfolio, as of June 30, 1995 and December 31, 1994, respectively. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since a portion of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Each customer's creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management's credit evaluation of the counter party. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, commercial real estate, and residential real estate. At June 30, 1995 and December 31, 1994, the Corporation had outstanding commitments to originate loans aggregating approximately $88,912,000 and $47,733,000, respectively. The commitments extended over varying periods of time, with the majority being disbursed within a one year period. Loan commitments at fixed rates of interest amounted to $40,755,000 and $16,519,000 at June 30, 1995 and December 31, 1994, respectively, with the remainder at floating market rates. Letters of credit are conditional commitments issued by the bank subsidiaries of the Corporation, to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing, and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. The Corporation had total outstanding letters of credit amounting to $1,184,000 and $918,000 at June 30, 1995 and December 31, 1994, respectively, with terms ranging from 90 days to one year. Lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Lines of credit generally have fixed expiration dates. Since a portion of the line may expire without being drawn upon, the total unused lines do not necessarily represent future cash requirements. Each customer's creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary, upon extension of credit, is based on management's credit evaluation of the counter party. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, commercial real estate, and residential real estate. Management uses the same credit policies in granting lines of credit as it does for on balance sheet instruments. At June 30, 1995, the Corporation had granted unused lines of credit to borrowers aggregating approximately $13,861,000 and $166,127,000 for commercial lines and open-end consumer lines, respectively. At December 31, 1994, unused lines of credit to borrowers aggregated approximately $4,568,000 for commercial lines and $143,563,000 for open-end consumer lines, respectively. Mortgage loans serviced for others totaled $1,207,261,000 and $1,228,311,000 at June 30, 1995 and December 31, 1994, respectively, of which mortgage-backed securities serviced totaled $1,118,571,000 and $1,027,855,000 at June 30, 1995 and December 31, 1994, respectively. Simmons First National Bank serviced VA loans subject to certain recourse provisions totaling approximately $148,041,000 and $156,650,000, at June 30, 1995 and December 31, 1994, respectively. A reserve was established for potential loss obligations, based on management's evaluation of historical losses, as well as prevailing and anticipated economic conditions, giving consideration for specific reserves. As of June 30, 1995 and December 31, 1994, this reserve balance was $43,000 and $210,000, respectively, and is included in other liabilities. NOTE 11: CONTINGENT LIABILITIES A number of legal proceedings exist in which the Corporation and/or its subsidiaries are either plaintiffs or defendants or both. Most of the lawsuits involve loan foreclosure activities. The various unrelated legal proceedings pending against the subsidiary banks in the aggregate are not expected to have a material adverse effect on the financial position of the Corporation and its subsidiaries. NOTE 12: UNDIVIDED PROFITS The subsidiary banks are subject to a legal limitation on dividends that can be paid to the parent corporation without prior approval of the applicable regulatory agencies. The approval of the Comptroller of the Currency is required, if the total of all dividends declared by a national bank in any calendar year exceeds the total of its net profits, as defined, for that year combined with its retained net profits of the preceding two years. Arkansas bank regulators have specified that the maximum dividend limit state banks may pay to the parent company without prior approval is 50% of current year earnings. At June 30, 1995, the bank subsidiaries had approximately $12.5 million available for payment of dividends to the Corporation without prior approval of the regulatory agencies. The Federal Reserve Board's risk-based capital guidelines require a minimum risk-adjusted ratio for total capital of 8% at the end of 1992. The Federal Reserve Board has further refined its guidelines to include the definitions for (1) a well-capitalized institution, (2) an adequately- capitalized institution, and (3) an undercapitalized institution. The criteria for a well-capitalized institution is a 5% "Tier l leverage capital" ratio, a 6% "Tier 1 risk-based capital" ratio, and a 10% "total risk-based capital" ratio. As of June 30, 1995, each of the four subsidiary banks met the capital standards for a well-capitalized institution. The Corporation's total capital to total risk-weighted assets ratio was 20.5% at June 30, 1995, well above the minimum required. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS --------------------- Net income for the quarter ended June 30, 1995, was $2,393,000, an increase of $41,000, or 1.7%, over the same period of 1994. Earnings per share for the three-month periods ended June 30, 1995 and June 30, 1994, were $.63 and $.64, respectively. Year-to-date earnings for 1995 were $4,646,000, a decrease of $332,000 or 6.7%, over earnings of the first six months of 1994. Per share earnings for the six-month periods ended June 30, 1995 and 1994, were $1.24 and $1.35, respectively. The Corporation's annualized return on average assets (ROA) for the three-month periods ended June 30, 1995 and 1994, were 1.26% and 1.34%, respectively. For the six-month periods ended June 30, 1995 and 1994, annualized ROA were 1.28 and 1.40%, respectively. Annualized return on equity (ROE) for the same six-month periods were 10.52% and 12.83%, respectively. Net interest income, the difference between interest income and interest expense, for the three-month period ended June 30, 1995, increased $434,000, or 5.9%, when compared to the same period in 1994. During the second quarter, interest income increased $2,562,000, or 22.9%, and interest expense increased $2,128,000, or 55.1%, when compared to the same period in 1994. Total interest income figures for the six months ended June 30, 1995 and 1994, were $26,120,000 and $22,130,000, respectively. Total interest expense for this same period in 1995 increased $3,292,000 to $10,954,000, resulting in a net interest income of $15,166,000, a 4.8% increase during the six-month period in 1995, when compared to the same period figures of 1994. These increases in net interest income can be attributed to an increase in the Corporation's interest margin. Continued improvement in asset quality resulted in a reduction in the provision for loan losses for the second quarter of 1995, to $452,000, compared to $525,000 for the same period of 1994 resulting in a $73,000, or 13.9% decrease. The year-to-date provision for loan losses decreased $149,000, to $901,000 from $1,050,000 at June 30, 1994, a 14.2% reduction. Non-interest income for the second quarter ending at June 30, 1995 was $5,832,000, a reduction of $238,000, or 3.9%, from the same period in 1994. For the six-month periods ended June 30, 1995 and 1994, non-interest income was down 9.5% to 11,795,000 from $13,035,000. This is primarily attributable to reduced profits in the mortgage, dealer bank, and bank card operations as a result of the unstable interest rate environment that has existed. During the three months ended June 30, 1995, non-interest expense decreased $231,000, or 2.4%, over the same period in 1994. For the first six months of 1995 and 1994, non-interest expense was $19,541,000 and $19,556,000, respectively. This $15,000 decrease, primarily in the dealer bank operations is also tied to the general slowdown nationally in fixed income securities sales. At June 30, 1995, total assets for the Corporation were $782,576,000, an increase of $69,314,000, or 9.7%, from the same figure at December 31, 1994. Deposits at June 30, 1995, totaled $642,322,000, an increase of $58,784,000 or 10.1%, from the same figure at December 31, 1994. Stockholders' equity at the end of the quarter was $91,304,000, an increase of $7,604,000, or 9.1%, from the December 31, 1994 figure. FINANCIAL CONDITION ------------------- Generally speaking, the Corporation's banking subsidiaries rely upon net inflows of cash from financing activities, supplemented by net inflows of cash from operating activities, to provide cash used in their investing activities. As is typical of most banking companies, significant financing activities include: deposit gathering; use of short-term borrowing facilities, such as federal funds purchased and repurchase agreements; and the issuance of long-term debt. The banks' primary investing activities include loan originations and purchases of investment securities, offset by loan payoffs and investment maturities. Liquidity represents an institution's ability to provide funds to satisfy demands from depositors and borrowers, by either converting assets into cash or accessing new or existing sources of incremental funds. It is a major responsibility of management to maximize net interest income within prudent liquidity constraints. Internal corporate guidelines have been established to constantly measure liquid assets as well as relevant ratios concerning earning asset levels and purchased funds. Each bank subsidiary is also required to monitor these same indicators and report regularly to its own senior management and board of directors. At June 30, 1995, each bank was within established guidelines and total corporate liquidity was strong. At June 30, 1995, cash and due from banks, securities available for sale, and federal funds sold and securities purchased under agreements for resale were 16.4% of total assets. REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS BAIRD, KURTZ & DOBSON Certified Public Accountants 200 East Eleventh Pine Bluff, Arkansas Board of Directors Simmons First National Bank Pine Bluff, Arkansas We have made a review of the accompanying consolidated condensed financial statements, appearing on pages 3 to 8 of the accompanying Form 10-Q, of SIMMONS FIRST NATIONAL CORPORATION and consolidated subsidiaries as of June 30, 1995 and for the three-month and six-month periods ended June 30, 1995 and 1994, in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of obtaining an understanding of the system for the preparation of interim financial information, applying analytical review procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an examination in accordance with generally accepted auditing standards, the objective which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the condensed financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet as of December 31, 1994, and the related consolidated statements of income, cash flows and changes in stockholders' equity for the year then ended (not presented herein) and in our report dated January 27, 1995, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1994, is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. BAIRD, KURTZ & DOBSON Pine Bluff, Arkansas August 4, 1995 Part II Item 4. Submission of Matters to a Vote of Security Holders. (a) The annual shareholders meeting of the Company was held on April 25, 1995. The matters submitted to the security holders for approval included setting the number of directors at nine (9) and the election of directors and two amendments to the Articles of Incorporation of the Company. (b) At the annual meeting, all nine (9) nominees for director were elected by the voting of proxies solicited pursuant to Section 14 of the Security Exchange Act of 1934, without any solicitation in opposition thereto. (c) The following table shows the required analysis of the voting by security holders at the annual meeting: Voting of Shares
Action For Against Adstain ------ --- ------- ------- Set Number of Directors at Nine (9) 3,010,465 2,797 14,255 Director Election: Ayres 3,013,039 5,552 1,530 Floriani 3,012,771 5,820 1,530 Greenwood 3,018,579 5,542 1,000 Hutt 3,017,660 6,317 1,000 May 3,014,039 5,552 1,530 Perdue 3,017,123 5,564 1,000 Ryburn 3,017,831 5,964 1,000 Stone 3,013,039 5,552 1,530 Trotter 3,014,528 8,009 1,000
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SIMMONS FIRST NATIONAL CORPORATION ---------------------------------- (Registrant) Date: 8/14/95 /s/J. Thomas May -------------------- -------------------------------------- J. Thomas May President & CEO Date: 8/14/95 /s/Barry L. Crow -------------------- --------------------------------------- Barry L. Crow, Executive Vice President and Chief Financial Officer EX-27 2
9 1000 6-MOS DEC-31-1995 JUN-30-1995 31,302 231 34,990 482 42,835 163,085 166,043 441,814 8,254 782,576 642,322 3,269 10,168 11,926 19,083 0 0 72,221 782,576 18,545 6,246 1,329 26,120 9,702 10,954 15,166 901 0 19,541 6,519 4,646 0 0 4,646 1.24 1.24 4.88 1,379 978 0 0 7,790 964 213 8,254 8,254 0 2,330