7^5&550 Everything for Arkansas Filings Services MAR 1 0 ?008 SNL Financial, LC 1-800-969-4121 Simmons First National Corporation 2 0 01 A n n u al Report L C t t Gf to b r i B r C h O l d G rS TO say 2007 was a challenging year for our national economy would be an understatement. Likewise, the uncertainty that created much of the volatility of the stock market continues to be a challenge as v/e enter 2008. Fears of a recession, uncertainty of the depth and breadth of the mortgage crisis, and speculation of global economic challenges will likely continue for a period of time; thus, there will likely be continued volatility in the stock market, in general, and the financial sector, in particular. However, it is important to remember our economy has enjoyed a fifteen year plus growth cycle; one of the longest in our history. The banking industry and overall stock market has prospered well during this growth cycle, and we believe the same trend will continue when the economy completes the corrections currently under\vay. We are fully cognizant that during periods of uncertainty and economic corrections, the financial strength of an institution will determine how well it navigates through periods of troubled waters. As a conservative, multi-bank holding company that has been around for 105 years, we are pleased to report your company is well positioned with strong capital, very good asset quality, and sound liquidity. We have no sub prime loans or investments in our portfolios, nor do we broker sub prime loans. We have recorded excellent growth over the last twelve years, primarily driven through the acquisition of traditional banks. We now have eight community banks ranging from $142 million to $1.3 billion strategically located throughout Arkansas. These banks and associates focus their entire attention on their local markets and customers. Collectively, our eight banks have grown to a level of $2.7 billion in assets and generated operating earnings of $28.1 miliion. Our team continues to look for opportunities to differentiate ourselves from our competition. Our community banking philosophy, "local banks making local decisions for their local customers," is used to "out service" the large regional banks, while our size, niche products, and services are used to "out product" the other good community banks. This is our culture and it works. During 2007, we continued to add to our Arkansas footprint with our first entry in the new markets of North Little Rock, Paragould, and Beebe. At year-end, our eight banks have eighty-six locations serving forty-eight communities. While we have seven traditional community banks, our lead bank continues to be a leader in technology and the development of niche products. Last year. Money Magazine ranked Simmons First's fixed rate credit card as the "Best in America," and our Platinum card as the third best in America. Likev/ise, we continue to be the largest full-service provider of student loans in Arkansas. Collectively, our banks rank among the highest in a forty-five state region relative to the delivery of quality customer service. Going forward, we are working extremely hard to enhance our already good performance by creating efficiencies through our Corporate buying power, enhancing organic growth through sales and cash management initiatives, and we will continue to evaluate opportunities to expand into growth markets beyond the borders of Arkansas. As always, we realize our success lies in the talent and commitment of our associates, maintaining a conservative lending and spending culture, and in meeting the quality customer service needs of our customers. I am very proud of the strength and commitment of our Corporate Management team and the leadership of our eight banks that generate the results. We have a very good team and a very strong company We remain confident in our vision, strategic initiatives, and the capacity of our team to execute our plan for the future. A big part of executing our community banking philosophy is a direct result of the dedicated leadership provided by our Boards of Directors. This past year we were saddened with the death of Bill Clark, CEO of GDI Contractors, a Corporate Director, and friend. Mr. Clark was an individual of major influence as a business and community leader in Arkansas and the region, yet one of his greatest attributes was what he did to help others in need.... most of which are not known to the general public. He was generous beyond description, unselfish beyond belief, and caring beyond most people's understanding. He will certainly be missed by all that had the opportunity to know and work with him. We are proud of your company and we will strive to make sure that you remain proud of your investment. J.Thomas IVIay Chairman and Cliief Executive Officer Everything for the Future For more than 1 00 years, leadership h as set us a p a r t. In Pine Bluff, we created the Simmons First Plaza and Leadership Sculf^ture. The sculfture, dedicated to former Chairman and ChlefExecutive Officer W.E. Ayres, commemorates the first century of Simmons First, and a listing ofthe nine Chairmen who led the company through its 100th anniversary on March 23, 2003. Simmons First National Corforation: A $Z. 7 billion financial holding company with 8 hanks, 86 offices and 83 Financial Centers in 48 Arkansas communities. Headquartered in Arkansas, Simmons First has paid quarterly dividends for 99 consecutive years. O ur C u s t o m e rs a re E v e r y t h i ng in Arkansas, relationships are everything. We're your neighbors. Friends. Advisors. And if our bank seems to put a major emphasis on our customers, it's because we have been doing so for more than 100 years. We may have begun small, but over the last century of service we have become an integral part of communities all over our state. And as we have done so, we remain true to the idea of growth that benefits our associates, our customers, and our community. From the young person who dreams of owning a home one day, to the young company that wants to make its mark, to the retired couple who depends on the decisions we help them make, at Simmons First our customers are everything. The Simmons First Trust Company, N.A. manages over $42.5 million in retirement funds for individuals and companies, providing them with cornprehensive investment management, asset allocation and retirement planning services. S e r v i ce is E v e r y t h i ng Wellve what we belleve: that service is everything. Our goal is to achieve a 95% approval rating on all Customer Service Standards—nothing less will do. And we are succeeding. In 2007, our Quality Customer Service Program (QCS) score was 974%! Since 1985, The Performance Group has provided services to banks located in 45 states. None have achieved the overall outstanding levels of service that • • ' « > ^ ^ ^ ^ ^ ^ ^^ ^ Simmons First has achieved in the essential measures of quality customer service. "These are outstanding performance achievements. This places Simmons First National Corporation as a leader among financial institutions in the delivery of quality customer service." Walter E. Babcock, Jr. President S CEO The Performance Group 'f^0^^^^^- We devote the same attention to making certain that our customers have the best products, services - and value - in the market. In fact, one example of this is, Kiplinger's naming Simmons First as ' ^ V ^ ^ ^ ^ ^ KT • ; ; ; : • ; ;^ •- "Best Low-Rate Credit Card" in their 2007 "Best of" list. As we work to be the premier banking organization in Arkansas, we celebrate these 2007 landmarks: • Opened two financial centers in North Little Rock as part of Simmons First National Bank, our first time in this market • Opened our first financial center in Paragould, part of Simmons First Bank of Jonesboro • Opened our first Beebe financial center in January, part of Simmons First Bank of Searcy • Will open a new Headquarters in Rogers, part of Simmons First Bank of Northwest Arkansas, as well as a third new financial center in Little Rock midtown, both in the first quarter of 200E UJ In 2007, Simmons First issued almost $55 million in loans to help 18,200 students. L e g a cy is E v e r y t h i ng At Slmmons First, a legacy is more than something we leave behind us: It is the sound, ongoing basis for a lifetime of security. We make certain that every individual at every Ufe stage enjoys the advantages of our considerable resources. We're here to see that every person has the full benefit of the products, services, and smart advice that help them manage their resources, grow them, and protect them. For Students Simmons First continues its commitment to higher education as the leading full-service student loan lender in Arkansas, with almost $55 million loaned to 18,200 students. In 2007, we introduced an entire program of products and services to help students "Make life simpler. Bank your w ay "...things like UFirst Student Checking, loans—and even a microsite, simmonsstepl.com. Mortgages Simmons First has always believed that home ownership is central to our way of Hfe here in Arkansas. That's why we have continued our longstanding commitment to providing home loans. In fact, during 2007 alone, we provided $331,632,107 in mortgage loans to help our customers purchase homes. immons First received the Outstanding Philanthropic Corporation Award (large business category), Ksented by the Arkansas Community Foundation during the annual Arkansas Business ofthe Year Awards. C o m n n U n i ty M e a ns E v e r y t h i ng We work to be more than a good steward of our customers' finances; the members of our Simmons First family actively support many charitable and community organizations. Our associates participate in organizations that contribute to the educational, social, economic and cultural health of their communities. In 2007 alone, more than 1,000 associates contributed 32,500 volunteer hours to over 600 organizations. Making a Difference • When a devastating tornado hit Dumas, Simmons First associates, directors and officers Arkansas on February 24th, 2007, we discovered from all across our state traveled to El Dorado to an important new way to serve our neighbors. build our latest Habitat for Humanity home, joining In the midst of power outages and a disrupted the two previous homes, in Hot Springs and Pine water supply, associates from Pine Bluff and Bluff, funded and built by Simmons First. South Arkansas cooked and served nearly 4,100 hot dogs to the people of the hard-struck area, In March, Simmons First associates in Pine Bluff along with chips, cookies, soft drinks and water. used department and group challenges to collect • For the ninth consecutive year, Simmons First Neighbor food pantry. 14,540 canned food items for the Neighbor to was presented the "Largest Team" award in the Financial/Investment category by Race for the Cure®. With 430 team members, Simmons First associates raised $11,400. ' • ~ T %L -K*, m^ Simmons First Nation rporation B: William E. Clark, II Chairman di CEO CDI Contradors, LLC Steven A. Cosse Executive Vice President d2 General Counsel Murphy Oil Corf oration Edward Drilling President AT(&T Arkansas George A. Makris, Jr. President M. K. Distributors, Inc. J. Thomas May Chairman £! Chief Executive Officer Simmons First National Corporation W. Scott McGeorge President Pine Bluff Sand dJ Gravel Stanley E. Reed President Farm Bureau Mutual Insurance of Arkansas HarryL Ryburn.D.D.S. Robert L. Shoptaw ChlefExecutive Officer Arkansas Blue Cross and Blue Shield Henry F. Trotter, Jr. President Trotter Auto Group Advisory Directors Consultant to the Boarci Lara F Hutt President Hutt Buildmg Material Company, Inc David R. Perdue Vice President JDR, Inc. Jerry Watkins Retired Executive Murphy Oil Corporation w - « ; m f * y g - & » ^ » ' i s s a « ? e c i i » a i a g S B f e » w s a » M » ^^ 'We are saddened by the loss durittg the past year ofour Corporate Director, 'William E. Clark, and Retired Directors Earl H. Clemmons, Jr., George H. Dunklin, and Adam B. Robinson. Their deep interest and wise counsel will be greatly missed. 12 Simmons First National Bank Board of Directors Advisory Director Robert E. Dreher, Jr. Partner Dreher