8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 2)

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) October 19, 2012

SIMMONS FIRST NATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

Arkansas	000-06253	71-0407808
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
501 Main Street, Pine Bluff, Arkansas		71601
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code:  (870) 541-1000

 (Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[ ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Explanatory Note

On October 22, 2012, Simmons First National Corporation (the “Company”) filed a Current Report on Form 8-K (the “Report”) to report that its wholly-owned subsidiary, Simmons First National Bank (the “Bank”), had entered into a purchase and assumption agreement with the Federal Deposit Insurance Corporation (“FDIC”) dated October 19, 2012 (the “Agreement”) to purchase certain loans and other assets and to assume certain deposits and other liabilities of Excel Bank in Sedalia, Missouri (“Excel”).

On October 25, 2012, the Company filed an amended Current Report on Form 8-K/A (Amendment No. 1) to report under Item 1.01 and Item 2.01 additional details of the terms and conditions of the Agreement, a copy of which was  included as Exhibit 2.1 to Amendment No. 1.

This Current Report on Form 8-K/A (Amendment No. 2) is being filed to amend and supplement the disclosure provided in the Original Report, as previously amended and supplemented by Amendment No. 1. This Amendment No. 2 provides an audited Statement of Assets Acquired and Liabilities Assumed, and updates the disclosures provided in Item 2.01 and 9.01 of the Original Report. All financial and other numeric measures of Excel as described below were based upon information as of October 19, 2012, and may be subject to change.

Statements made in this Amendment, other than those concerning historical financial information, may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties. These forward-looking statements include, without limitation, statements regarding the Company’s expectations concerning its financial condition, operating results, cash flows, liquidity and capital resources. A discussion of risks, uncertainties and other factors that could cause actual results to differ materially from management’s expectations is set forth under the captions “Cautionary Note Regarding Forward-Looking Statements,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K and 10-K/A for the year ended December 31, 2011, and in its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012, June 30, 2012 and September 30, 2012.

Item 2.01                      Completion of Acquisition or Disposition of Assets

The following discussion of assets acquired and liabilities assumed are presented at estimated fair value on the date of the Agreement. The fair values of the assets acquired and liabilities assumed were determined as described in Note 3 to the Company’s audited Statement of Assets Acquired and Liabilities Assumed, dated as of October 19, 2012, and the accompanying notes thereto, which is attached hereto as Exhibit 99.2 and incorporated herein by reference (the Audited Statement). These fair value estimates are based on the information available, and are subject to change for up to one year after the closing date of the acquisition as additional information relative to closing date fair values may become available. The Bank and the FDIC are engaged in on-going discussions that may impact which assets and liabilities are ultimately acquired or assumed by the Bank and/or the purchase price. In addition, the tax treatment of FDIC assisted acquisitions is complex and subject to interpretations that may result in future adjustments of deferred taxes as of the acquisition date. The disclosure set forth in this Item 2.01 reflects the status of these items to the best of management’s knowledge as of October 19, 2012.

Effective October 19, 2012, the Bank assumed substantially all deposits and acquired certain assets and liabilities of Excel from the FDIC, as receiver for Excel (the “Acquisition”), pursuant to the terms of the Agreement entered into by and among the Bank, the FDIC, as receiver for Excel, and the FDIC.

2

Under the terms of the Agreement, the Bank acquired approximately $180.5 million in assets, including approximately $108.3 million in loans held and other real estate owned by Excel, $8.6 million of investment securities, $18.6 million of cash and cash equivalents (excluding cash paid by the FDIC to complete the Acquisition), a $26.2 million FDIC indemnification asset and $4.9 million of other assets. The Bank also assumed approximately $178.2 million in liabilities, including approximately $168.6 million in customer deposits, $8.2 million in Federal Home Loan Bank borrowings, and $1.4 million in other liabilities. Additionally, Simmons First National Corporation recorded a deferred tax liability of $0.9 million associated with the $2.3 million pre-tax gain on the transaction. The deposits were acquired at no premium, and net assets were acquired at an aggregate discount to historic book value as of October 19, 2012, of approximately $21.0 million, subject to customary adjustments. In connection with the Acquisition, the FDIC has made a payment to the Bank in the amount of approximately $13.8 million. The cash payment is settlement for the net equity received, assets discount bid, charge-offs since August 13, 2012, and other customary closing adjustments. The terms of the Agreement provide for the FDIC to indemnify the Bank against certain claims, including claims with respect to liabilities of Excel not assumed or otherwise purchased by the Bank, claims made by shareholders of Excel and claims based on any prior action or inaction by Excel’s directors, officers and other employees.

In connection with the Acquisition, the Bank entered into a loss sharing agreement on certain assets with the FDIC. Pursuant to the terms of the loss sharing agreement, the FDIC is obligated to reimburse the Bank for 80% of all losses with respect to covered assets. The Bank will reimburse the FDIC for 80% of recoveries with respect to losses for which the FDIC paid the Bank 80% reimbursement under the loss sharing Agreement. The loss sharing agreement does not provide loss sharing for various consumer loans, real estate loans or commercial and industrial loans estimated to have a fair value of approximately $21.2 million, which we acquired from Excel.

In addition, on February 14, 2021 (the “True-Up Date”), the Bank has agreed to pay to the FDIC 50% of the excess, if any, of (A) 25% of the product of (i) a fraction, the numerator which is the total shared loss recoveries, and the denominator is the net loss amount (the sum of all losses less the sum of all recoveries on the covered assets) plus (ii) a fraction, the numerator which is the total shared loss assets as of closing date, and the denominator is the total loans and other real estate acquired as of closing date, times (B) (i) the intrinsic loss estimate of $51.3 million minus the net loss amount less (ii) the asset discount bid of $21.0 million times a fraction, the numerator which is the intrinsic shared loss estimate of $39.2 million, and the denominator is the intrinsic loss estimate of $51.3 million, less (C) 2.5% of the total shared loss assets as of the bank closing date, as specified in the Agreement.

All capitalized terms used herein but not otherwise defined are ascribed the meanings as given in the Agreement. The foregoing summary of the Agreement is not complete and is qualified in its entirety by reference to the full text of the Agreement and certain exhibits attached thereto, a copy of which is attached hereto as Exhibit 2.1 and incorporated by reference herein.

3

The following table summarizes the assets covered by the loss sharing agreement, the amount covered by the FDIC and the fair value:

		October 19, 2012
		Amount Covered
		By FDIC		Fair Value
Assets covered by FDIC loss share:	(In Thousands)
Loans acquired, covered by FDIC loss share		$	111,807	$	78,147
Foreclosed assets acquired covered by FDIC loss share			6,671		3,113
Total assets covered by FDIC loss share		$	118,478	$	81,260

The amounts covered by the loss sharing agreement are the pre-acquisition book values of the underlying covered assets, the contractual balance of unfunded commitments that were acquired and certain future net direct costs. The loss sharing agreement applicable to all of the covered assets provides for FDIC loss sharing for five years and the Bank reimbursement of recoveries to the FDIC for eight years.

The loss sharing agreement is subject to certain servicing procedures as specified in the agreement with the FDIC. The expected reimbursements under the loss sharing agreement were recorded as an indemnification asset at their estimated fair values of $26.2 million for the agreement, on the acquisition date. The indemnification asset reflects the present value of the expected net cash reimbursement related to the loss sharing agreement described above.  Based upon the acquisition date fair values of the net assets acquired, no goodwill was recorded. The transaction resulted in a pre-tax gain of $2.3 million, which will be included in non-interest income in the Company’s December 31, 2012, Consolidated Statements of Income. Due to the difference in tax bases of the assets acquired and liabilities assumed, the Company recorded a deferred tax liability of $0.9 million, resulting in an after-tax gain of $1.4 million.

An analysis of the likely short-term and long-term effects of the loss sharing agreement on the Company’s cash flows and reported results is included in Item 9.01(a) below.

Item 9.01                      Financial Statements and Exhibits

(a)         Financial Statements of Business Acquired

As set forth in Item 2.01 above, on October 19, 2012, the Bank acquired certain assets and assumed substantially all deposits and certain liabilities of Excel pursuant to the Agreement. A narrative description of the anticipated effects of the Acquisition on the Company’s financial condition, liquidity, capital resources and operating results is presented below. This discussion should be read in conjunction with the historical financial statements and the related notes of the Company, which have been filed with the SEC and the Audited Statement, which is attached hereto as Exhibit 99.2.

The Acquisition increased the Company’s total assets and total deposits by approximately 5.3% and 6.0%, respectively, as compared with balances at September 30, 2012, and is expected to positively affect the Company’s operating results, to the extent the Company earns more from interest earned on its assets than it pays in interest on deposits and other borrowings. The ability of the Company to successfully collect interest and principal on loans acquired and collect reimbursement from the FDIC on the related indemnification asset will also impact cash flows and operating results.

The Company considers that the determination of the initial fair value of loans and other real estate owned acquired in the October 19, 2012, FDIC assisted transaction and the initial fair value of the related FDIC indemnification asset involves a high degree of judgment and complexity. The carrying value of the acquired loans, the other real estate owned and the FDIC indemnification asset reflect management’s best estimate of the amount to be realized on each of these assets. The Company estimated the acquisition date fair value of the acquired assets and assumed liabilities in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 805, Business Combinations. However, the amount that the Company realizes on these assets could differ materially from the carrying value reflected in the attached Audited Statement primarily as a result of changes in the timing and amount of collections on the acquired loans and sales of other real estate owned in future periods. Because of the loss sharing agreement with the FDIC on these assets, as described in Item 2.01 above, the Company does not expect to incur significant losses. To the extent the actual values realized for the acquired loans and other real estate owned differ from the estimated amounts; the indemnification asset will generally be impacted in an offsetting manner due to the loss sharing support from the FDIC.

4

Financial Condition

In the Acquisition, the Bank purchased $99.3 million in loans receivable, at fair value, net of a $39.0 million estimated discount to the outstanding principal balance, representing approximately 5.4% of the Company’s total loans (net of the allowance for loan losses) at September 30, 2012. Foreclosed assets acquired were $9.0 million at fair value, approximately 16.0% of the Company’s total foreclosed assets at September 30, 2012.

The Bank acquired $18.6 million in cash and cash equivalents in the transaction. In addition to the cash and cash equivalents acquired, the Bank received $13.8 million from the FDIC. The Bank also acquired $8.6 million in securities, at fair value. These assets provided additional liquidity to the Company.

The following table presents information with respect to the fair value of certain acquired earning assets and loans, as well as their book balance at acquisition date, contractual term and average effective yield.

Schedule of Earning Assets Acquired

	October 19, 2012
					Average		Effective
	Initial		Fair		Months to		Interest
	Value		Value		Maturity		Rate
	(Dollars in thousands)
Earnings assets
Federal funds sold	$	104	$	104		--		0.16	%
U.S. Government agencies		3,133		3,133		37		0.50
Mortgage-backed securities		1,793		1,793		34		2.32
State and political subdivisions		3,002		3,002		50		0.86
FHLB stock		644		644		--		2.64
Other securities		11		11		--		0.40
Loans acquired, covered by FDIC loss share:
Performing loans		52,575		50,223		58		5.56
Substandard loans		37,597		19,506		25		8.99
Nonaccrual loans		21,635		8,418		22		9.28
Loans acquired, not covered by FDIC loss share:
Performing loans		22,092		19,329		206		5.40
Substandard loans		3,186		1,405		150		9.49
Nonaccrual loans		1,250		418		192		9.79
Total loans		138,335		99,299
Total earning assets	$	147,022	$	107,986

5

In the acquisition, the Bank assumed $168.6 million in deposits, at fair value. This amount represents approximately 6.0% of the Company’s total deposits of $2.80 billion at September 30, 2012. Demand and non-interest bearing, savings and interest bearing transaction accounts, and time deposits assumed were $19.4 million, $55.1 million and $94.1 million, respectively.

In its assumption of the deposit liabilities, the Company believed that the customer relationships associated with these deposits have intangible value. The Company applied FASB ASC 805, which prescribes the accounting for goodwill and other intangible assets such as core deposit intangibles, in a business combination. The Bank determined the estimated fair value of the core deposit intangible asset totaled $1.3 million, which will be amortized utilizing a straight line method over an estimated economic life of 10 years. In determining the estimated life and valuation, deposits were analyzed based on factors such as type of deposit, deposit retention, interest rates, age of deposit relationships, and the maturities of time deposits.

Future amortization of this core deposit intangible asset over the estimated life will decrease results of operations, net of any potential tax effect. Future capital will be reduced by the amount of expected amortization, net of any tax effect. Since amortization is a noncash item, it will have no effect upon future liquidity and cash flows. For the calculation of regulatory capital, this core deposit intangible asset, net of related deferred taxes, is disallowed and is a reduction to equity capital. It is expected that the results of disallowing this intangible asset should not materially affect the Company’s or the Bank’s regulatory capital ratios.

The core deposit intangible asset is subject to significant estimates by management of the Company related to the value and the life of the asset. These estimates could change over time. The Company will review the valuation of this asset periodically to ensure that no impairment has occurred. If any impairment is subsequently determined, the Company will record the impairment as an expense in its Consolidated Statement of Income.

Nonperforming Loans

ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality, applies to a loan with evidence of deterioration of credit quality since origination, for which it is probable, at acquisition, that the investor will be unable to collect all contractually required payments receivable. ASC Topic 310-30 prohibits carrying over or creating an allowance for loan losses upon initial recognition for loans that fall under its scope. The Company evaluated loans purchased in conjunction with the Excel acquisition for impairment in accordance with the provisions of ASC Topic 310-30. Purchased covered loans are considered impaired if there is evidence of credit deterioration since origination and if it is probable that not all contractually required payments will be collected. All covered loans acquired in this transaction were deemed to be impaired loans. These loans were not classified as nonperforming assets at October 19, 2012, as the loans are accounted for on a pooled basis and the pools are considered to be performing. Therefore, interest income, through accretion of the difference between the carrying amount of the loans and the expected cash flows, is being recognized on all purchased impaired loans.

A summary of nonaccrual loans at October 19, 2012, follows:

Nonaccrual Loans

	October 19, 2012
	Assets Not		Assets Covered
	Covered by		by FDIC
	Loss Share		Loss Share		Total
	(Dollars in thousands)
Nonaccrual loans, at fair value	$	8,418	$	418	$	8,836

6

Operating Results and Cash Flows

The Company’s management has from time to time become aware of acquisition opportunities and has performed various levels of review related to potential acquisitions in the past. This Acquisition was attractive to the Company for a variety of reasons, including the:

·   ability to further expand within the state of Missouri and strategically fit within its expansion markets;

·   anticipated profitability in the pricing of the acquired loan portfolio including the indemnification asset;

·   opportunity to utilize the infrastructure it has built over the past 2 years related to management and resolution of assets acquired from the FDIC;

·   ability to leverage and deploy a portion of the excess capital, while maintaining a well capitalized position.

Based on these and other factors, including the level of FDIC support related to the acquired loans and foreclosed assets, the Company believes that this acquisition will have an immediate positive impact on its earnings.

The Excel transaction had a small immediate accretive impact to the Company’s financial results as it recognized a pre-tax gain on acquisition of $2.3 million. The transaction resulted in a $1.4 million after-tax gain, before considering merger related costs.

Based on September 30, 2012, information, total assets acquired make up 5.3%, or $180.5 million, of the Company’s total assets of $3.42 billion, and total deposits assumed make up 6.0%, or $168.6 million, of the Company’s total deposits of $2.80 billion. The Company believes that the transaction will improve the Company’s net interest income, as the Bank earns more interest on its loans and investments than it pays in interest on deposits and borrowings.

The extent to which the Bank’s operating results may be adversely affected by the acquired loans and other real estate owned is largely offset by the loss sharing agreement and the related discounts reflected in the estimated fair value of these assets at the acquisition date. In accordance with the provisions of ASC Topic 310-30, the fair values of the acquired loans and other real estate owned reflect an estimate of expected credit losses related to these assets. As a result, the Company’s operating results would only be adversely affected by loan losses to the extent that such losses exceed the expected credit losses reflected in the fair value of these assets at the acquisition date. In addition, to the extent that the stated interest rate on acquired loans was not considered a market rate of interest at the acquisition date, appropriate adjustments to the acquisition-date fair values were recorded. These adjustments mitigate the risk associated with the acquisition of loans earning a below-market rate of return.

The long-term effects that the Company may experience will depend primarily on the ability of the borrowers under the various loans covered by the loss sharing agreement to make payments over time. As the loss sharing agreement covers losses and expenses over a 5-year period, changing economic conditions will likely impact the timing of future charge-offs and the resulting reimbursements from the FDIC. The Company believes that any recapture of interest income and recognition of cash flows from the borrowers or received from the FDIC (as part of the FDIC indemnification asset) may be recognized unevenly over this period, as the Company exhausts its collection efforts under its normal practices. In addition, the Company recorded substantial discounts related to the purchase of these covered assets.

7

Liquidity and Capital Resources

The transaction significantly enhanced the liquidity position of the Bank. The Company acquired $18.6 million in cash and cash equivalents as well as $8.6 million of investment securities. In addition, the FDIC transferred $13.8 million in cash to the Bank to compensate for the net liability that resulted from the transfer of Excel’s assets and liabilities adjusted for the Bank’s discount bid.

Deposits in the amount of $168.6 million were also assumed. Of this amount, 44.2%, or $74.5 million, were in the form of highly liquid transaction accounts. Certificates of deposit and other time deposits comprised 55.8%, or $94.1 million, of total deposits.

At September 30, 2012, the Company was considered “well-capitalized” under relevant regulatory ratios. The Company remains “well-capitalized” after taking into consideration the results of the transaction. The Company had the following pro-forma capital ratios at October 19, 2012 (includes the effects of this FDIC assisted transaction) and September 30, 2012:

	Pro-Forma
	October 19, 2012			September 30, 2012
Tier 1 leverage ratio		11.1	%		11.7	%
Tier 1 risk-based capital ratio		18.8			19.3
Total risk-based capital ratio		20.0			20.6

At September 30, 2012, the Bank was considered “well-capitalized” under relevant regulatory ratios. The Bank remains “well-capitalized” after taking into consideration the results of the transaction, which required no additional capital to be injected by the Company. The Bank had the following pro-forma capital ratios at October 19, 2012 (includes the effects of this FDIC assisted transaction) and September 30, 2012:

	Pro-Forma
	October 19, 2012			September 30, 2012
Tier 1 leverage ratio		8.7	%		9.5	%
Tier 1 risk-based capital ratio		15.9			16.8
Total risk-based capital ratio		16.8			17.8

Financial Statements

Attached hereto as Exhibit 99.2 and incorporated by reference into this Item 9.01(a) is an audited Statement of Assets Acquired and Liabilities Assumed by Simmons First National Bank (a wholly owned subsidiary of Simmons First National Corporation) related to its acquisition of Excel at October 19, 2012, and the accompanying notes thereto.

Report of Independent Registered Public Accounting Firm

Statement of Assets Acquired and Liabilities Assumed at October 19, 2012

Notes to Statement of Assets Acquired and Liabilities Assumed

The Company has omitted certain financial information of Excel required by Rule 3-05 of Regulation S-X and the related pro forma financial information under Article 11 of Regulation S-X in accordance with a request for relief submitted to the Commission in accordance with the guidance provided in Staff Accounting Bulletin 1:K, Financial Statements of Acquired Troubled Financial Institutions (SAB 1:K). SAB 1:K provides relief from the requirements of Rule 3-05 in certain instances, such as the transaction, where a registrant engages in an acquisition of a significant amount of assets of a troubled financial institution that involves pervasive federal assistance and audited financial statements of the troubled financial institution that are not reasonably available.

8

(d)         Exhibits

2.1 Purchase and Assumption Agreement Whole Bank All Deposits, among Federal Deposit Insurance Corporation, receiver of Excel Bank, Sedalia, Missouri, Federal Deposit Insurance Corporation, and Simmons First National Bank, Pine Bluff, Arkansas, dated as of October 19, 2012 (filed as Exhibit 2.1 to the Form 8-K/A on October 19, 2012, and incorporated herein by reference).

23.1 Consent of Independent Registered Public Accounting Firm

99.1 Press Release: Simmons First Announces Sedalia Acquisition (filed as Exhibit 99.1 to the Form 8-K on October 19, 2012, and incorporated herein by reference).

99.2 Report of Independent Registered Public Accounting Firm Statement of Assets Acquired and Liabilities Assumed at October 19, 2012 Notes to Statement of Assets Acquired and Liabilities Assumed

9

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Simmons First National Corporation
	(Registrant)
January 3, 2013	/s/ Robert A. Fehlman
(Date)	Robert A. Fehlman
	Senior Executive Vice President and Chief Financial Officer

 10

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

Audit Committee, Board of Directors and Stockholders

Simmons First National Corporation

Pine Bluff, Arkansas

We consent to the incorporation by reference in Registration Statement Nos. 333-134240, 333-134241, 333-134276, 333-134301, 333-134356 and 333-138629 on Form S-8 and Registration Statement No. 333-161558 on Form S-3 of Simmons First National Corporation (Company) of our report dated January 3, 2013, on our audit of the statement of assets acquired and liabilities assumed by Simmons First National Bank (a wholly owned subsidiary of Simmons First National Corporation) pursuant to the purchase and assumption agreement dated October 19, 2012, and included in this Form 8-K/A.

/s/BKD, LLP

Pine Bluff, Arkansas

January 3, 2013

EX-99.2

Exhibit 99.2

EXCEL BANK

INDEX OF FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	2
Statement of Assets Acquired and Liabilities Assumed at October 19, 2012	3
Notes to Statement of Assets Acquired and Liabilities Assumed	4 - 9

1

Report of Independent Registered Public Accounting Firm

Audit Committee, Board of Directors and Stockholders

Simmons First National Corporation

Pine Bluff, Arkansas

We have audited the accompanying statement of assets acquired and liabilities assumed by Simmons First National Bank (a wholly owned subsidiary of Simmons First National Corporation) pursuant to the purchase and assumption agreement dated October 19, 2012. The Company’s management is responsible for this financial statement. Our responsibility is to express an opinion on the financial statement based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the statement of assets acquired and liabilities assumed referred to above is presented fairly, in all material respects, as of October 19, 2012, in conformity with accounting principles generally accepted in the United States of America.

/s/BKD, LLP

Pine Bluff, Arkansas

January 3, 2013

2

Statement of Assets Acquired and Liabilities Assumed

By Simmons First National Bank

(a wholly owned subsidiary of Simmons First National Corporation)

(In thousands)	October 19, 2012
ASSETS
Cash and due from banks	$	18,622
Cash received from FDIC		13,845
Federal funds sold		104
Investment securities		8,583
Loans acquired, covered by FDIC loss share (net of discount)		78,147
Loans acquired, not covered by FDIC loss share (net of discount)		21,152
Foreclosed assets covered by FDIC loss share		3,113
Foreclosed assets not covered by FDIC loss share		5,861
FDIC indemnification asset		26,218
Premises and equipment		2,582
Core deposit premium		1,337
Other assets		972
Total assets acquired	$	180,536
LIABILITIES
Deposits:
Non-interest bearing transaction accounts	$	19,372
Interest bearing transaction accounts and savings deposits		55,082
Time deposits		94,138
Total deposits		168,592
FHLB borrowings		8,193
FDIC true-up provision		328
Accrued interest and other liabilities		1,132
Total liabilities assumed		178,245
Net assets acquired, excluding deferred tax impact		2,291
Deferred tax impact		899
Net assets acquired	$	1,392

See Notes to Statement of Assets Acquired and Liabilities Assumed.

3

NOTES TO STATEMENT OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

By Simmons First National Bank

(a wholly owned subsidiary of Simmons First National Corporation)

1. FDIC Assisted Acquisition of Certain Assets and Liabilities of Excel Bank

On October 19, 2012, Simmons First National Bank (the “Bank” or “Simmons”) entered into a purchase and assumption agreement with loss share arrangements on certain assets (the “Agreement”) with the FDIC, as receiver, pursuant to which the Bank acquired loans and certain other assets and assumed all of the deposits and certain other liabilities of Excel Bank, of Sedalia, Missouri (“Excel”).

Prior to the acquisition, Excel operated four banking centers in Missouri, one each in Sedalia, Green Ridge, Lee’s Summit (Kansas City MSA) and Kirkwood (St. Louis MSA). Excluding the effects of purchase accounting adjustments, Simmons acquired $198.0 million in assets and assumed approximately $168.6 million of the deposits of Excel. Specifically, Simmons purchased loans with an estimated fair value of $99.3 million, $9.0 million of foreclosed assets and $8.6 million of investment securities.

The assets acquired and liabilities assumed are presented at fair value on the date of acquisition, after adjustment for expected loss recoveries under the loss sharing agreement described below. Fair values for the categories of assets and liabilities were determined as described in Note 3 to the Statement of Assets Acquired and Liabilities Assumed. These fair value estimates are considered preliminary, and are subject to change for up to one year after the closing date of the acquisition as additional information relative to closing date fair values becomes available. Simmons and the FDIC are engaged in on-going discussions that may impact which assets and liabilities are ultimately acquired or assumed by Simmons and/or the purchase prices. In addition, the tax treatment of the FDIC assisted acquisition is complex and subject to interpretations that may result in future adjustments of deferred taxes as of the acquisition date.

2. Loss Sharing Agreement and FDIC Indemnification Asset

In connection with the Excel acquisition, Simmons entered into a loss sharing agreement with the FDIC that covered $81.3 million of assets, based upon the seller’s records, including commercial real estate loans, commercial and industrial loans and foreclosed assets (collectively, “covered assets”). The Bank acquired other Excel assets that are not covered by the loss sharing agreement with the FDIC including single-family and commercial real estate loans, commercial and industrial loans, consumer loans, foreclosed assets, investment securities purchased at fair value and other tangible assets. Pursuant to the terms of the loss sharing agreement, the FDIC will reimburse the Bank for 80% of losses on the covered assets. The Bank will reimburse the FDIC for its share of recoveries with respect to losses for which the FDIC paid Simmons a reimbursement under the loss sharing agreement. The FDIC’s obligation to reimburse the Bank for losses with respect to covered assets begins with the first dollar of loss incurred.

4

The following table summarizes the assets covered by the loss sharing agreement, the amount covered by the FDIC and the fair value:

		October 19, 2012
		Amount Covered
		By FDIC		Fair Value
Assets covered by FDIC loss share:	(In Thousands)
Loans acquired, covered by FDIC loss share		$	111,807	$	78,147
Foreclosed assets acquired covered by FDIC loss share			6,671		3,113
Total assets covered by FDIC loss share		$	118,478	$	81,260

The amounts covered by the loss sharing agreement are the pre-acquisition book values of the underlying covered assets, the contractual balance of unfunded commitments that were acquired, and certain future net direct costs. The loss sharing agreement applicable to all of the covered assets provides for FDIC loss sharing for five years and Simmons reimbursement of recoveries to the FDIC for eight years.

The loss sharing agreement is subject to certain servicing procedures as specified in the agreement with the FDIC. The expected reimbursements under the loss sharing agreement were recorded as an indemnification asset at their estimated fair values of $26.2 million for the agreement, on the acquisition date. The indemnification asset reflects the present value of the expected net cash reimbursement related to the loss sharing agreement described above.

3. Summary of Significant Accounting Policies

The Bank has determined that the acquisition of the net assets of Excel constitutes a business combination as defined by the FASB ASC Topic 805, Business Combinations. Accordingly, the assets acquired and liabilities assumed are presented at their fair values as required. Fair values were determined based on the requirements of FASB ASC Topic 820, Fair Value Measurements. In many cases, the determination of these fair values required management to make estimates about discount rates, future expected cash flows, market conditions and other future events that are highly subjective in nature and subject to change. The following is a description of the methods used to determine the fair values of significant assets and liabilities.

Cash and due from banks, cash received from FDIC and Federal funds sold – The carrying amount of these assets is a reasonable estimate of fair value based on the short-term nature of these assets. The $13.8 million cash received from the FDIC is the first pro-forma cash settlement received from the FDIC on Monday following the closing weekend.

Investment securities – Investment securities were acquired from the FDIC at fair value. The fair values provided by the FDIC were reviewed and considered reasonable based on the Bank’s understanding of the market conditions, based on actual balances transferred compared to pro-forma balances.

Loans acquired – Fair values for loans were based on a discounted cash flow methodology that considered factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and current discount rates.  The discount rates used for loans are based on current market rates for new originations of comparable loans and include adjustments for liquidity concerns.  The discount rate does not include a factor for credit losses as that has been included in the estimated cash flows.  Loans were grouped together according to similar characteristics and were treated in the aggregate when applying various valuation techniques.

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Foreclosed assets held for sale – These assets are presented at the estimated present values that management expects to receive when the properties are sold, net of related costs of disposal.

FDIC indemnification asset – This loss sharing asset is measured separately from the related covered assets as it is not contractually embedded in the covered assets and is not transferable with the covered assets should the Bank choose to dispose of them. Fair value was estimated using projected cash flows related to the loss sharing agreement based on the expected reimbursements for losses and the applicable loss sharing percentages. These cash flows were discounted to reflect the uncertainty of the timing and receipt of the loss-sharing reimbursement from the FDIC.

Core deposit premium – This intangible asset represents the value of the relationships that Excel had with its deposit customers. The fair value of this intangible asset was estimated based on a discounted cash flow methodology that gave appropriate consideration to expected customer attrition rates, cost of the deposit base and the net maintenance cost attributable to customer deposits.

Deposits – The fair values used for the demand and savings deposits that comprise the transaction accounts acquired, by definition equal the amount payable on demand at the acquisition date. Even though deposit rates were above market, because the Bank reset deposit rates to current market rates, there was no fair value adjustment recorded for time deposits.

FDIC true-up provision – The Agreement allows the FDIC to recover a portion of the loss share funds previously paid out under the indemnification agreement in the event losses fail to reach the expected loss level under a claw back provision (“true-up provision”). A true-up is scheduled to occur in the calendar month in which the eighth anniversary of the Excel closing occurred. If the threshold is not met, the assuming institution is required to pay the FDIC 50 percent of the excess, if any, within 45 days following the true-up.

As of October 19, 2012, the true-up provision is estimated to be $0.3 million. The value of the true-up provision liability is calculated as the present value of the estimated payment to the FDIC in the tenth year using the formula provided in the agreement. The result of the calculation is based on the net present value of expected future cash payments to be made by the Bank to the FDIC at the conclusion of the loss share agreement.  The discount rate used was based on current market rates.  The expected cash flows were calculated in accordance with the loss share agreement and are based primarily on the expected losses on the covered assets.

FHLB borrowings – The fair value of FHLB borrowings was estimated using rates that would be charged for borrowings with similar maturities at acquisition date.

Unfunded commitments – Unfunded loan commitments represent the unused portion of lines of credit available to customers based on previously agreed rates and terms.

The fair value of the unfunded loan commitments (the “Commitments”) was estimated using the income approach. Assumptions regarding expected utilization were applied to the unfunded balances. A premium or discount was estimated for the Commitments. The premium/discount for the Commitments was then adjusted for the time value of money over the average remaining life of the Commitments. In addition, the present value of the opportunity cost associated with regulatory requirements to hold reserve capital in connection with the Commitments was included to arrive at its fair value.

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Based on the facts, assumptions, and valuation methodologies used in the analysis, the estimated fair value of the Commitments, as of October 19, 2012, was not material.

4. Bank Premises and Equipment

The Bank acquired approximately $2.6 million of the real estate, furniture and equipment of Excel as part of the purchase and assumption agreement, and has the option to assume existing leases on the banking facilities. The option to assume leases expires 90 days after the acquisition date. The Bank is leasing these facilities and equipment from the FDIC until leases are assumed, or a final decision not to lease is made.

5. Investment Securities

The fair value of securities acquired is as follows at October 19, 2012:

			Effective
	Fair Value		Yield
	(In Thousands)
U.S. Government agencies	$	3,133		0.50	%
Mortgage-backed securities		1,793		2.32
State and political subdivisions		3,002		0.86
FHLB stock		644		2.64
Other securities		11		0.40
Total investment securities	$	8,583

6. Loans Acquired, Net of Discount

The composition of loans acquired, net of discount, at October 19, 2012, is as follows:

			Effective
	Fair Value		Interest Rate
	(In Thousands)
Loans acquired, covered by FDIC loss share:
Performing loans	$	50,223		5.56	%
Substandard loans		19,506		8.99
Nonaccrual loans		8,418		9.28
Total loans acquired, covered by FDIC loss share	$	78,147
Loans acquired, not covered by FDIC loss share:
Performing loans		19,329		5.40
Substandard loans		1,405		9.49
Nonaccrual loans		418		9.79
Total loans acquired, not covered by FDIC loss share	$	21,152

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The following is a summary of the impaired loans acquired in the Excel acquisition on October 19, 2012, as of the date of acquisition.

		Covered by			Not Covered
		Loss Share			by Loss Share
	(In Thousands)
Contractually required principal and interest at acquisition		$	121,850		$	30,048
Non-accretable difference (expected losses and foregone interest)			(29,258	)		(5,170	)
Cash flows expected to be collected at acquisition			92,592			24,878
Accretable yield			(14,445	)		(3,726	)
Basis in acquired covered loans at acquisition		$	78,147		$	21,152

7. Core Deposit Premium

The audited Statement of Assets Acquired and Liabilities Assumed reflects a core deposit intangible asset of $1.3 million at October 19, 2012, related to the Excel acquisition. The core deposit intangible asset will be amortized utilizing a straight-line amortization method over an estimated economic life of 10 years. Estimated amortization expense of core deposit intangibles is $22,300 for 2012, $133,700 for each year from 2013 through 2017, with $646,300 to be amortized thereafter. The Bank will review the valuation of this intangible asset at least annually to ensure that no impairment has occurred. If any impairment is subsequently determined, the Company will record the impairment as an expense in its consolidated statement of income.

8. Deposits

Deposit liabilities assumed are composed of the following at October 19, 2012:

	October 19, 2012
	(In Thousands)
Non-interest bearing transaction accounts	$	19,372
Interest bearing transaction accounts and savings deposits		55,082
Time deposits		94,138
Total deposits	$	168,592

The following is a summary of the scheduled maturities of the assumed time deposits at October 19, 2012:

	Fair Value
	(In Thousands)
Three months or less	$	19,998
Over three months to six months		23,620
Over six months to 12 months		33,574
Over 12 months		16,946
Total time deposits	$	94,138

At the time of the acquisition, deposit rates of the acquired deposits were above market. Because the Bank reset deposit rates to current market rates there was no fair value adjustment recorded for time deposits. The aggregate amount of time deposits with a minimum denomination of $100,000 was $35.3 million at October 19, 2012.

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9. FHLB Borrowed Funds

Included in the acquisition were Federal Home Loan Bank (“FHLB”) borrowed funds with a fair value totaling $8.2 million. The Bank did not need these advances to meet its present liquidity needs, and redeemed the advances during the fourth quarter of 2012.

10. Deferred Income Taxes

The deferred tax liability of $0.9 million as of October 19, 2012, is solely related to the differences between the financial statement and tax bases of assets acquired and liabilities assumed in this transaction.

11. Commitments

In the ordinary course of business, Excel made various commitments and incurred certain contingent liabilities to fulfill the financing needs of their customers. At October 19, 2012, commitments to extend credit of $5.7 million were outstanding and assumed by the Bank.

12. Net Assets Acquired

Under the terms of the purchase and assumption agreement, the FDIC agreed to transfer to the Bank certain assets subject to a loss-sharing agreement at book value, certain assets that are not subject to the loss-sharing agreement at a contractually-specified purchase price, certain assets at fair value and certain liabilities at book value. The FDIC also transferred cash to the Bank to compensate for the net liability that resulted from the transfer of Excel assets and liabilities adjusted for the Bank’s discount bid.

Details related to the transfer at October 19, 2012, are as follows:

	October 19, 2012
	(In Thousands)
Net assets acquired per purchase and assumption agreement	$	7,106
Cash received		13,845
Purchase accounting adjustments:
Loans acquired, covered by FDIC loss share		(33,660	)
Loans acquired, not covered by FDIC loss share		(5,376	)
Foreclosed assets covered by FDIC loss share		(3,558	)
Foreclosed assets not covered by FDIC loss share		(2,404	)
FDIC indemnification asset		26,218
Core deposit premium		1,337
FHLB borrowings		(183	)
FDIC true-up provision		(328	)
Deferred tax impact		(899	)
Other liabilities		(706	)
Net assets acquired	$	1,392

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