Simmons First National Annual Report 2016

FY2016 Annual Report · Simmons First National

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C O M P A N Y R E P O R T

FORWARD-LOOKING
STATEMENTS

Certain statements contained in this communication may not be based on historical facts and are “forward-looking

statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities

Exchange Act of 1934, as amended. These forward-looking statements may be identiﬁed by reference to a future

period(s) or by the use of forward-looking terminology, such as “anticipate,” “estimate,” “expect,” “foresee,” “may,” “might,”

“will,” “would,” “could” or “intend,” future or conditional verb tenses, and variations or negatives of such terms. These

forward-looking statements include, without limitation, those relating to the Simmons First National Corporation’s

(“Company”) future growth, revenue, assets, asset quality, proﬁtability and customer service, critical accounting policies,

net interest margin, non-interest revenue, market conditions related to the Company’s common stock repurchase program,

allowance for loan losses, the effect of certain new accounting standards on the Company’s ﬁnancial statements, income

tax deductions, credit quality, the level of credit losses from lending commitments, net interest revenue, interest rate

sensitivity, loan loss experience, liquidity, capital resources, market risk, earnings, effect of pending litigation, acquisition

strategy, legal and regulatory limitations and compliance and competition.

Readers are cautioned not to place undue reliance on the forward-looking statements contained in this document in that

actual results could differ materially from those indicated in such forward-looking statements, due to a variety of factors.

These factors include, but are not limited to, changes in the Company’s operating or expansion strategy, availability of and

costs associated with obtaining adequate and timely sources of liquidity, the ability to maintain credit quality, possible

adverse rulings, judgments, settlements and other outcomes of pending litigation, the ability of the Company to collect

amounts due under loan agreements, changes in consumer preferences, effectiveness of the Company’s interest rate risk

management strategies, laws and regulations affecting ﬁnancial institutions in general or relating to taxes, the effect of

pending or future legislation, the ability of the Company to repurchase its common stock on favorable terms, ability to

successfully complete mergers and acquisitions and integrate target companies’ businesses, ability to fully realize cost

savings and other beneﬁts of mergers and acquisitions, business disruption following mergers and acquisitions, changes in

interest rates and capital markets, inﬂation, customer acceptance of the Company’s products and services, and other risk

factors. Other relevant risk factors may be detailed from time to time in the Company’s press releases and ﬁlings with the

Securities and Exchange Commission. Any forward-looking statement speaks only as of the date of this communication,

and the Company undertakes no obligation to update these forward-looking statements to reﬂect events or circumstances

that occur after the date of this communication.

Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts, and may

not reﬂect actual results.

TO OUR
SHAREHOLDERS

For years now, Simmons First National Corporation has experienced signiﬁcant growth through both strong organic

performance and strategic mergers and acquisitions, and 2016 proved to be no exception. For perspective, when I joined

the company in January 2013, Simmons had operations in three states and total consolidated assets of approximately $3.5

billion. As of the date of this letter, however, our company has announced pending mergers that, when completed, will

create a corporation with a seven-state footprint and over $13 billion in total consolidated assets.

There is no doubt that, due to this growth, Simmons has changed. We’ve restructured many of our operations to become

more efficient and effective, entered a variety of new markets, developed and rolled out new products and services, and

invested in more sophisticated information technology. The result is that customers coming into today’s Simmons can not

only open savings accounts and apply for home loans (as they always have) but also enjoy the beneﬁts of highly rated

credit cards; receive experienced assistance with their estate planning; obtain quality insurance for their cars, homes, and

health; work with knowledgeable investment professionals to help manage and grow their assets; and much more. The

idea that Simmons can be a “one-stop ﬁnancial shop” for our customers is no longer just an idea. As a truly regional

ﬁnancial institution, it’s reality, and that’s exciting.

Yet, I continue to believe that what ultimately makes – and will continue to make – Simmons successful is its community

banking philosophy. For decades, Simmons’ customers have greatly valued their relationships with their local Simmons

contacts, and as we move forward, it is critical that we continue to use talented associates who are rooted in and

understand the markets in which they operate to establish rewarding connections and make business decisions in those

markets. Simply put, to the customer, there is no substitute for the “personal touch,” and we intend to be the regional bank

that has it.

Nonetheless, we recognize the fact that we are a regional ﬁnancial institution and, in particular, one that will soon have

total consolidated assets in excess of $10 billion. Crossing that threshold is a milestone for our company that comes with

substantial consequences. To name a few, our company will become subject to annual stress testing requirements imposed

by the Dodd-Frank Act, and Simmons Bank will become subject to oversight of the Bureau of Consumer Financial

Protection, as well as regulatory caps on debit card transaction interchange rates. In preparation for these events, in 2016,

we spent considerable time and resources enhancing our audit, compliance, and risk management functions. Asset quality

and regulatory compliance are known table stakes for us, and we intend to work diligently with both our federal and our

state regulators to satisfy all requirements of the evolving regulatory environment. That said, we do operate within a highly

regulated industry, and where our experiences give rise to opportunities to suggest improvements to those regulations, we

will do so.

I remain highly optimistic about the future of our company and extremely proud to be a part of it. Our growth strategy is

one in which I have great faith, and our associates are motivated to execute it every day. The value created by their efforts

is evident. Our stock price was able to reach $62.15 at the end of 2016, an increase of approximately 21 percent from the

end of 2015. Our focus for 2017 will be to continue to build on this progress.

Sincerely,

George A. Makris, Jr.

Chairman and Chief Executive Officer

Simmons First National Corporation

Q&A with

CHAIRMAN + CHIEF EXECUTIVE OFFICER

G E O R G E A . M A K R I S , J R .

The past four years have included major milestones
in the illustrious history of Simmons Bank, founded
in Pine Bluff, Ark., in 1903.

George Makris, Jr., chairman and chief executive
officer of Simmons First National Corp., recently
discussed some of the things that occurred in 2016
and what he sees happening in the years ahead.

A V I S I T W I T H T H E C H A I R M A N

Q / 2016 was a big year for Simmons’ mergers

and acquisitions (M&A) program. Talk about
Simmons’ M&A strategy and philosophy.

A / We want to continue to expand our community-banking

network. We can do that in two ways. One is to look for M&A

opportunities in markets where we already have a presence in

order to gain additional market share. We prefer to ﬁnd a

good partner in those markets. You could see that in our

acquisition of Citizens National Bank (Athens, Tenn.) and our

pending acquisition of First South Bank (Jackson, Tenn.).

The second way to expand is through acquisitions in new

markets that are strategically attractive. We had success with

this approach with our acquisitions of First State Bank in

Tennessee and Liberty Bank in Missouri, and it’s also the

approach we took with two pending acquisitions, Bank SNB

(Stillwater, Okla.) and Southwest Bank (Fort Worth, Texas).

We have an inside-out growth strategy. If we’re contiguous to

good markets, we’ll consider expansion into those markets

A V I S I T W I T H T H E C H A I R M A N

Q&A with

CHAIRMAN + CHIEF EXECUTIVE OFFICER

G E O R G E A . M A K R I S , J R .

Q / Give us a sense of where you see the company

Q / There are so many new associates with the

going in the next three to ﬁve years.

A / While we plan to continue pursuing attractive M&A

opportunities as and when they arise, there are several

outside factors that will affect our M&A strategy.

acquisitions. How are they responding to
these cornerstones?

A / The cultures of the various banks that now are a part of
Simmons were different. The newly deﬁned culture is a

Increased proﬁtability of some privately held banks

mixture of input from all of our associates including those

could alter their decisions. Changes in the regulatory

from acquired institutions. It’s one of the ﬁrst things

environment also could inﬂuence what they do. I have

we discuss with potential partners. We want to ensure

to assume that the current conditions will continue for

that they fully understand what the culture is here. We

the next few years. If so, I expect we’ll have many more

actually do a survey of their associates so we can better

occasions to consider potential mergers.

understand how they feel about these things. A cultural

ﬁt is one of the most important factors in any acquisition.

Critical to our long-term success are our people. We’ve

built an excellent team, and we’re picking up excellent

teams with our acquisitions. With this combined group in

place, we project double-digit organic growth per year,

which, when combined with some additional acquisitions,

could result in a $20 billion to $25 billion bank in three to

ﬁve years.

Q / At the same time we’re entering additional
markets, we’re rolling out new products
in existing markets. How does this ﬁt into
Simmons’ strategy?

A / Simmons has dedicated signiﬁcant time and resources to
developing a full suite of ﬁnancial products and services

designed to meet the needs of what has become a

Q / Describe how you become a strong regional
bank without losing the best aspects of
community banking.

A / There’s a ﬁne line there. We don’t want to focus on the
wrong things. We want to be an efficient organization,

but we don’t want the cost side of the efficiency formula

to be the sole focus of our decision-making. We want the

revenue side to have a signiﬁcant impact on that process.

We’re in some really nice metropolitan markets, and

we’re about to be in even more. Those all offer great

growth opportunities. But the roots of our business are in

rural America. We have to provide all of our products and

services in those smaller communities because they can’t

diverse customer base. If we are just successful in rolling

get them anywhere else. You need to have everything

out our wealth management, credit card, mortgage and

from mortgage to small business to consumer to farm

additional lending products in markets that currently

aren’t served by those products, I believe our revenue

could grow 10 percent a year with no acquisitions. It’s

simply a great formula for expanding our presence in

existing markets, better serving our customers, and

increasing the value of our organization.

Q / An effort is taking place inside Simmons

that’s designed to strengthen our corporate
culture. How do you view our work to make
associates aware of our culture cornerstones
– integrity, passion, better together, pursue
growth and high performance.

A / That has been a big effort, and I compliment Jena Compton
(Simmons’ chief people officer) for having the foresight to

get us through the process. New associates joined people

who have been at Simmons for years to help deﬁne our

culture. We came up with something to which we can all

relate that’s meaningful to the future of the company and

easily understood by our new partners. It’s really sticking.

lending. If a customer wants to buy a washer and dryer,

we need to be able to take care of that need. We must

have the ability to take care of customers of all sizes.

Our growth is allowing us to also be a ﬁnancial institution

for much larger customers. Let’s say you’re a multistate

company whose borrowing needs are $50 million. Before

we were this size, we couldn’t take care of those lending

needs. Now we can. We can also manage their 401k plans

and take care of all of their treasury services. We can

provide them with business credit cards.

The bottom line is that we’ll always value our relationships

with consumers and small businesses and strive to

improve our ability to meet all of their ﬁnancial needs.

FINANCIAL HIGHLIGHTS

STRONG REGULATORY CAPITAL

Regulatory Minimum

Regulatory “Well-Capitalized”

Simmons First National Corp.

10.95%

13.45%

4.00%

5.00%

4.50%

6.50%

LEVERAGE RATIO

COMMON EQUITY TIER 1 CAPITAL RATIO

14.45%

15.12%

6.00%

8.00%

10.00%

TIER 1 CAPITAL RATIO

TOTAL RISK-BASED CAPITAL RATIO

STRONG ASSET QUALITY

Consistently Outperforming Our Peers

Nonperforming Loans
as a % of Loans1

Net Charge-Offs as a %
of Average Loans

Net Credit Card
Charge-Offs as a % of
Credit Card Portfolio

SFNC

ALL U.S. BANKS

1.16%2
.35%3
1.28%

1.64%
.45%
3.51%4

1 Includes troubled-debt restructures
2 Legacy loans; excluding all acquired loans
3 Legacy loans; excluding all acquired loans and credit cards
4 Most recently published industry average

S
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2,000

1,750

1,500

1,250

1,000

750

500

250

TOTAL ASSET GROWTH

$8,400,056,000

$7,559,658,000

$4,383,100,000

$4,643,354,000

$3,527,489,000

2012

2013

2014

2015

2016

MARKET CAPITALIZATION

$1,943,910,484

$1,555,100,268

$602,805,410

$733,833,637

$419,524,850

2012

2013

2014

2015

2016

EARNINGS GROWTH

$101,409,000

Core Earnings
Per Share: $3.28

$96,790,000

GAAP Earnings
Per Share: $3.13

$89,622,000

Core Earnings
Per Share: $3.18

$74,107,000

GAAP Earnings
Per Share: $2.63

$27,684,000

GAAP Earnings
Per Share: $1.64

$26,870,000

Core Earnings
Per Share: $1.59

$23,231,000

GAAP Earnings
Per Share: $1.42

$27,612,000

Core Earnings
Per Share: $1.69

$35,688,000

GAAP Earnings
Per Share: $2.11

$38,707,000

Core Earnings
Per Share: $2.29

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100

2 0 1 2

2 0 1 3

2 0 1 4

2 0 1 5

2 0 1 6

“Core earnings” and “diluted core earnings per share” are ﬁnancial measures that exclude non-core items such as items related to branch right sizing
and merger related costs. We believe these non-GAAP ﬁnancial measures provide a meaningful base for period-to-period and company-to-company
comparisons, which will assist investors and analysts in evaluating the core operating results of the Company and predicting future performance. See
“Reconciliation of Non-GAAP Financial Measures” in the 2016 Form 10-K for a GAAP reconciliation of these non-GAAP ﬁnancial measures.

FINANCIAL HIGHLIGHTS

CONDENSED CONSOLIDATED BALANCE SHEETS

December 31, 2016 and 2015

(In thousands)

ASSETS
Cash and cash equivalents

Investment securities

2016
$285,659

2015
$252,262

1,624,013

1,540,887

Mortgage loans held for sale and assets held in trading accounts

27,829

34,687

Legacy loans

Allowance for loan losses

Loans acquired

NET LOANS

Premises and equipment

Premises held for sale

Foreclosed assets

Goodwill and other intangible assets

Other assets

TOTAL ASSETS

LIABILITIES AND STOCKHOLDERS’ EQUITY
Non-interest bearing transaction accounts

Interest bearing transaction accounts and saving deposits

Time deposits

TOTAL DEPOSITS

Other borrowings

Subordinated debentures

Accrued interest and other liabilities

TOTAL LIABILITIES

Total stockholders’ equity

4,327,207

3,246,454

(36,286)

(31,351)

1,305,683

1,672,901

$5,596,604

$4,888,004

199,359

193,618

6,052

26,895

401,464

232,181

923

44,820

380,923

223,534

$8,400,056

$7,559,658

1,491,676

3,956,483

1,280,234

3,485,845

1,287,060

1,320,017

$6,735,219

$6,086,096

273,159

60,397

180,170

162,289

60,570

173,848

$7,248,945

$6,482,803

1,151,111

1,076,855

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$8,400,056

$7,559,658

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

December 31, 2016 and 2015

(In thousands, except per share data)

Interest income

Interest expense

NET INTEREST INCOME
Provision for loan losses

NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES

NON-INTEREST INCOME
Trust income

Service charges on deposit accounts

Other service charges and fees

Mortgage banking income

Investment banking income

Credit and debit card fees

Bank owned life insurance income

Gain on sale of securities, net

Net gain (loss) on assets covered by FDIC loss share agreements

Other income

TOTAL NON-INTEREST INCOME

NON-INTEREST EXPENSE
Salaries and employee beneﬁts

Occupancy expense, net

Furniture and equipment expense

Other real estate and foreclosure expense

Deposit insurance

Merger related costs

Other operating expenses

TOTAL NON-INTEREST EXPENSE

INCOME BEFORE INCOME TAXES
Provision for income taxes

NET INCOME
Preferred stock dividends

NET INCOME AVAILABLE TO COMMON STOCKHOLDERS

DILUTED EARNINGS PER SHARE

Net non-core items

CORE EARNINGS AVAILABLE TO COMMON STOCKHOLDERS1
DILUTED CORE EARNINGS PER SHARE1

2016
$301,005

21,799

$279,206
20,065

2015
$300,948

22,353

$278,595
9,022

$259,141

$269,573

15,442

32,414

6,913

22,442

3,471

30,740

3,324

5,848

—

18,788

$139,382

133,457

18,667

16,683

4,461

3,469

4,835

73,513

$255,085

$143,438
46,624

$96,814
24

$96,790

$3.13
4,619

$101,409

$3.28

9,261

30,985

8,756

11,452

2,590

26,660

2,680

307

(14,812)

16,782

$94,661

138,243

16,858

14,352

4,861

4,201

13,760

64,695

$256,970

$107,264
32,900

$74,364
257

$74,107

$2.63
15,515

$89,622

$3.18

1 “Core earnings” and “diluted core earnings per share” are ﬁnancial measures that exclude non-core items such as items related to branch right sizing
and merger related costs. We believe these non-GAAP ﬁnancial measures provide a meaningful base for period-to-period and company-to-company
comparisons, which will assist investors and analysts in evaluating the core operating results of the Company and predicting future performance. See
“Reconciliation of Non-GAAP Financial Measures” in the 2016 Form 10-K for a GAAP reconciliation of these non-GAAP ﬁnancial measures.

FINANCIAL HIGHLIGHTS

SELECTED CONSOLIDATED FINANCIAL DATA

Years Ended December 31

FINANCIAL
STATEMENT DATA
Total assets

Total loans

Total deposits

Total equity

Net income available to
common shareholders

Core earnings available
to common shareholders1

PER SHARE DATA

Diluted earnings

Diluted core earnings
(non-GAAP)1

Book value

Tangible book value
(non-GAAP)2

Dividends

CAPITAL RATIOS
AT PERIOD END
Common shareholders’
equity to total assets

Tangible common equity
to tangible assets
(non-GAAP)2

Tier 1 leverage ratio

Common equity Tier 1
risk-based ratio

Tier 1 risk-based ratio

Total risk-based
capital ratio

Dividend payout to
common shareholders

2016

2015

2014

2013

2012

$8,400,056

$7,559,658

$4,643,354

$4,383,100

$3,527,489

5,632,890

4,919,355

2,736,634

2,404,935

1,922,119

6,735,219

6,086,096

3,860,718

3,697,567

2,874,163

1,151,111

1,076,855

494,319

403,832

406,062

96,790

74,107

35,688

23,231

27,684

101,409

89,622

38,707

27,612

26,870

$3.13

3.28

36.80

23.97

0.96

$2.63

3.18

34.55

21.97

0.92

$2.11

2.29

27.38

20.15

0.88

$1.42

1.69

24.89

19.13

0.84

$1.64

1.59

24.55

20.66

0.80

13.70%

13.84%

10.65%

9.37%

9.26%

8.06%

10.95%

13.45%

14.45%

15.12%

11.20%

14.21%

16.02%

16.72%

8.77%

—

13.43%

14.50%

9.21%

7.24%

11.51%

9.87%

9.22%

10.81%

—

13.02%

14.10%

—

19.08%

20.34%

30.67%

34.98%

41.71%

59.15%

48.78%

1 “Core earnings” and “diluted core earnings per share” are financial measures that exclude non-core items such as items related to branch right sizing
and merger related costs. We believe these non-GAAP financial measures provide a meaningful base for period-to-period and company-to-company
comparisons, which will assist investors and analysts in evaluating the core operating results of the Company and predicting future performance. See
“Reconciliation of Non-GAAP Financial Measures” in the 2016 Form 10-K for a GAAP reconciliation of these non-GAAP financial measures.

ANNUALIZED
PERFORMANCE RATIOS

Return on average assets

Return on average
common equity

Return on average
tangible common equity
(non-GAAP)2

Net interest margin

Efficiency ratio3

ASSET QUALITY RATIOS4
Nonperforming assets/
total assets

Nonperforming loans/
total loans

Allowance/
nonperforming loans

Allowance/total loans

Net charge-offs/
average loans5

Net credit card charge-
offs/credit card loans

OTHER DATA
Number of
ﬁnancial centers

Number of full time
equivalent employees

2016

1.25%

8.75%

2015

1.03%

7.90%

2014

0.80%

8.11%

2013

0.64%

5.33%

2012

0.83%

6.77%

13.92%

12.53%

10.99%

6.36%

8.05%

4.19%

56.32%

4.55%

59.01%

4.47%

67.22%

4.21%

71.20%

3.93%

70.06%

0.79%

0.91%

0.85%

0.58%

1.25%

0.63%

1.69%

0.53%

1.29%

0.74%

92.09%

165.83%

223.31%

297.89%

231.62%

0.84%

0.35%

0.97%

0.16%

1.41%

0.20%

1.57%

0.15%

1.71%

0.26%

1.28%

1.27%

1.33%

1.50%

150

149

109

131

1,875

1,946

1,338

1,343

1,068

2 Because of our signiﬁcant level of intangible assets, total goodwill and core deposit premiums, we believe a useful calculation for investors in their
analysis of Simmons is tangible book value per share and tangible common equity to tangible assets, which are non-GAAP ﬁnancial measures. See
“Reconciliation of Non-GAAP Financial Measures” in the 2016 Form 10-K for a GAAP reconciliation of these non-GAAP ﬁnancial measures.

3 The efficiency ratio is noninterest expense before foreclosed property expense and amortization of intangibles as a percent of net interest income (fully
taxable equivalent) and noninterest revenues, excluding gains and losses from securities transactions and non-core items. See “GAAP Reconciliation of
Non-GAAP Financial Measures” below for a GAAP reconciliation of this non-GAAP ﬁnancial measure.

4 Excludes all acquired loans and excludes acquired foreclosed assets covered by FDIC loss share agreements, except for their inclusion in total assets.

5 Excludes credit cards.

DIVIDEND HISTORY &
TOTAL SHAREHOLDER RETURN

2016 Annual Dividend Yield: 1.5%

(Based on 12/31/16 stock price)

$0.96

$0.92

$0.88

$0.84

$0.80

$0.76

$0.76 $0.76 $0.76

$0.73

$0.68

$0.61

$0.57

$0.53

$0.48

$0.44

$0.40

$0.36

$0.32

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$1.00

$.80

$.60

$.40

$.20

‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16

108 CONSECUTIVE YEARS OF PAYING DIVIDENDS TO OUR SHAREHOLDERS

1–YEAR1 TOTAL
SHAREHOLDER RETURN3

3-YEAR2 TOTAL
SHAREHOLDER RETURN3

1-Year Total Shareholder Return(1)

(Dividends + Stock Appreciation)

3-Year Total Shareholder Return(1)

(Dividends + Stock Appreciation)

SFNC
+23%
SNL U.S. Bank Index (4) +39%

-10

%
n
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100

%
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l
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SFNC
+78%
SNL U.S. Bank Index (4) +52%

-25

Dec-15

Mar-16

Jun-16

Sep-16

Dec-16

-20

Dec-13

Dec-14

Dec-15

Dec-16

SFNC SNL U.S. BANK

1 Period from January 1, 2016 through December 31, 2016
2 Period from January 1, 2014 through December 31, 2016

3 Total shareholder return includes dividends plus stock price appreciation
4 The SNL U.S. Bank Index includes all U.S. banks traded on the major U.S.
Source: SNL Financial

stock exchanges (NYSE, NYSE MKT an NASDAQ)

Simmons First
National Corporation

BOARD OF

JOE D. PORTER
President, Akin Porter Produce, Inc.

EUGENE HUNT
Attorney, Hunt Law Firm

EDWARD DRILLING
President, AT&T Arkansas

MARK C. DORAMUS
Chief Financial Officer, Stephens, Inc.

JAY D. BURCHFIELD
Retired Financial Services Executive

GEORGE A. MAKRIS, JR.
Chairman & Chief Executive Officer,
Simmons First National Corporation

STEVEN A. COSSÉ
Retired President & Chief Executive Officer,
Murphy Oil Corporation

W. SCOTT McGEORGE
Chairman, Pine Bluff Sand & Gravel Company

CHRISTOPHER R. KIRKLAND
Principal, The Kirkland Group

WILLIAM E. CLARK, II
Chairman & Chief Executive Officer,
Clark Contractors, LLC

ROBERT L. SHOPTAW
Retired Executive,
Arkansas Blue Cross & Blue Shield

Simmons Bank
BOARD OF DIRECTORS

JOE D. PORTER
President,
Akin Porter Produce, Inc.

EDWARD DRILLING
President,
AT&T Arkansas

ROBERT L. SHOPTAW
Retired Executive,
Arkansas Blue Cross & Blue Shield

MET L. JONES, II

General Manager,

Dickey Machine Works

MARK C. DORAMUS
Chief Financial Officer,
Stephens, Inc.

STEVEN A. COSSÉ
Retired President & Chief Executive Officer,
Murphy Oil Corporation

CHRISTOPHER R. KIRKLAND
Principal,
The Kirkland Group

BEVERLY MORROW

Vice President,

TLM Management

EUGENE HUNT
Attorney,
Hunt Law Firm

WILLIAM E. CLARK, II
Chairman & Chief Executive Officer,
Clark Contractors, LLC

JOHN LYTLE, M.D.
Orthopedic Surgeon,
South Arkansas Orthopedic Center

DEAN CHAMBLISS

Owner,

H&D Farms

JAY D. BURCHFIELD
Retired Financial Services Executive

W. SCOTT McGEORGE
Chairman,
Pine Bluff Sand & Gravel Company

H. FORD TROTTER, III
General Manager,
Trotter Auto Group

JANE W. ROGERS

Community Volunteer

ROBERT L. SHOPTAW

Retired Executive,

Arkansas Blue Cross & Blue Shield

MET L. JONES, II
General Manager,
Dickey Machine Works

MARTY D. CASTEEL
Senior Executive Vice President,
Simmons First National Corporation
Chairman & Chief Executive Officer, Simmons Bank

MARY PRINGOS
President,
Phillips Planting Company, Inc.

CHRISTOPHER R. KIRKLAND

Principal,

The Kirkland Group

BEVERLY MORROW
Vice President,
TLM Management

CLIFTON ROAF, D.D.S. Advisory Director
Retired Dentist

H. GLENN RAMBIN
President,
R&R Farms

JOHN LYTLE, M.D.

Orthopedic Surgeon,

South Arkansas Orthopedic Center

DEAN CHAMBLISS
Owner,
H&D Farms

MARK SHELTON, III Advisory Director
President,
M.A. Shelton Farming Company, Inc.

JOHNNY McGRAW
Owner,
McGraw Farms

H. FORD TROTTER, III

General Manager,

Trotter Auto Group

JANE W. ROGERS
Community Volunteer

ADAM B. ROBINSON, JR.
President,
Ralph Robinson & Son, Inc.

GEORGE O’CONNOR
Owner & President,
O’Connor Distributing

Shareholders may obtain a copy of the company’s annual report/Form 10-K, as ﬁled with the Securities
and Exchange Commission by writing to Patrick A. Burrow, Executive Vice President and General Counsel,
Simmons First National Corporation; P.O. Box 7009; Pine Bluff, Arkansas 71611-7009, or on the company’s
website at simmonsbank.com. Simmons First National Corporation is an Equal Opportunity Employer.

A CLOSER LOOK AT
ARK ANSAS

The second half of 2015 saw major changes in
Simmons Bank’s Arkansas region.

Freddie Black of Lake Village, the Arkansas regional

chairman, and the bank’s community presidents spent 2016

instituting new procedures and building additional customer

relationships across the state.

“They’ve both done a great job,” Black says. “They spent 2016

putting their teams together. Both markets are showing really

good loan growth. Those guys have roots in the communities

where they work. We’re really pleased.”

In Fayetteville, Martin dealt with the closure of one branch

and the opening of another in a more strategic location.

Black became the Arkansas regional chairman in the summer

of 2015 and hired community presidents in two key markets.

“There’s momentum in northwest Arkansas,” Black says.

“We’re getting an opportunity to look at a lot of new

Rodney West in Fort Smith and Greg Martin in northwest

business there.”

Arkansas were hired on the same day in November 2015.

Simmons now has 10 branches in the northwest corner of

the state. Black says Martin will spend 2017 increasing the

efficiency of those branches.

In southwest Arkansas, Franklin Bass celebrated his ﬁrst year

as the community president in Hot Springs. Black says the

Hot Springs market is a growth area for Simmons. Veteran

lender Dwayne Johnson will move his base of operations from

Little Rock to Hot Springs to bolster the efforts there.

Chris White, the central Arkansas community president,

continues to produce good results with just more than a year

in that position.

“Little Rock is doing real well,” Black says.

Jay Meador, who had been the president of private banking in

Arkansas since 2015, became the Little Rock market lending

officer. He now oversees private banking and commercial

lending in the region.

In north central Arkansas, the Marshall and Clinton branches

are now under the supervision of Conway community

president Jason Culpepper. The Mammoth Spring location in

northeast Arkansas, meanwhile, will be supervised by Daniel

Robinson, the Jonesboro community president.

“We had a lot of changes with our loan processes in 2016,”

Black says. “There was a huge learning curve for everybody

involved in lending with new lending committees and loan

authority.”

FREDDIE BLACK
Arkansas Regional Chairman

GRAND OPENING IN FAYETTEVILLE

A CLOSER LOOK AT
MISSOURI & K ANSAS

Key acquisitions, organic growth and
improved efficiency made for a good year
in 2016 in Simmons Bank’s Missouri/Kansas
region, according to Gary Metzger, the
region’s chairman.

“The chance to build from the ground up was the big appeal

for me,” Nay says. “The opportunity to build a team and

mentor lenders made this a great opportunity. I could have

sat there and focused on loan origination for another 20

years, but I’m glad to have the chance to mentor a team.”

“Asset quality remains strong, and our loan pipeline

continues to grow,” Metzger says. “We were able to lower

Metzger says community president Andrea Scarpelli and

her team continue to excel in the Wichita, Kan., market. He’s

our cost of funds, and we continue to work hard to enhance

excited that a pending acquisition will double the market

our net interest margin. In 2016, we lowered our cost of

size for Simmons in Wichita.

He also says the southwest Missouri market ﬁnished the year

strong. Simmons has a strong presence in the Springﬁeld

metropolitan area.

“The fourth quarter of 2016 was a good quarter,” Metzger

says. “When I look at the pipeline and the continuing

opportunities we have in that market, I feel very bullish

about 2017. Banking remains an extremely competitive

environment, but 2017 should be another great year for the

Missouri/Kansas region.”

funds by focusing our growth in transactional accounts. The

growth in transactional accounts gave us a more favorable

mix of deposits. Our deposits increased, and the cost of the

deposits decreased.”

Metzger says the region beneﬁted from the recent addition

of Karen Karwoski. She joined Simmons in October 2016

as a senior vice president of treasury management in the

St. Louis market, but the entire footprint beneﬁted from

her knowledge.

“We were successful in recruiting a strong, well-respected

treasury management specialist in our St. Louis market,”

Metzger says. “We’re leveraging Karen’s expertise

throughout the Missouri/Kansas region. We’re having great

success in doing that.” Karwoski has been in banking in the

St. Louis market since 1997.

Metzger was pleased with the growth in the St. Louis market

during 2016.

“We’re going to leverage our team and focus on organic

growth,” he says. “We can control organic growth, and that’s

what we’re focused on.”

GARY METZGER
Kansas/Missouri
Regional Chairman

Optimism also is running high in the Kansas City market,

thanks in part to the hiring of Marty Nay as the market

president.

“He has exceptional leadership skills, excellent credit

underwriting skills and a thorough understanding of

our Kansas City market,” Metzger says of Nay. “We look

to Kansas City to have an outstanding year in 2017 and

continue that well into the future.”

Nay, a veteran Kansas City commercial lender, came

to Simmons during the middle of the year and had an

immediate impact as he added business and hired a

seasoned area lender. Nay has worked in commercial

lending in the Kansas City area since 1998.

A CLOSER LOOK AT
TENNESSEE

John Clark and Paul Willson remember the days
when deals were done with a handshake.

in Weakley County, not far from the family farm in west

Tennessee.

“Back in the day, people would call on a Friday or even a

Saturday morning and say, ‘Hey Paul, I need to buy a dump

After graduating from the University of Tennessee at Martin

in 1975 with a master’s degree in education, Clark began

truck,’” Willson says. “’I’ve got a couple of other things I want

working at the Bank of Sharon. He rose quickly through the

to bid on. Can I bid up to $85,000 on it?’ We would just say,

‘Yes, go for it.’”

The country has changed since Clark and Willson began their

Tennessee banking careers more than four decades ago. It’s

ﬁtting that one of their ﬁnal deals was a bit of a throwback, a

deal based on trust and friendship.

Clark was the president and chief executive officer of First

State Bank of Union City, and Willson was the chairman and

chief executive officer of Citizens National Bank at Athens.

The two men, who had known each other for more than

20 years, had talked about a merger before Clark and his

board decided First State should instead become a part of

Simmons Bank.

ranks, becoming president and CEO of the bank by 1981.

Clark established a one-bank holding company – Sharon

Bancshares – in 1986. The holding company grew to include

the Bank of Sharon, City State Bank, Weakley County Bank

and First State Bank. Clark consolidated the four bank

locations under the First State Bank brand in 2003 and

helped the company grow to almost $2 billion in assets.

In 2008, the Tennessee Bankers Association (TBA) presented

Clark its Leader in Banking Excellence award and put up a

plaque in the association’s new headquarters in Nashville in

his honor.

As they climbed the ladder, the two men became more active

in the TBA. They became acquainted through TBA meetings

and grew even closer 10 years ago when they were on the
closer 10 years ago when they were on the

“John called me and said, ‘Paul, we’ve got something going

association’s CEO advisory group.
advisory group.

on, but I’ll come back around to you,’” Willson says.

First State and Simmons joined forces in 2015. Simmons then

strengthen our relationship,” Clark says.
relationship,” Clark says.

acquired Citizens in 2016.

“Conversations before and after the meetings helped
before and after the meetings helped

JOHN CLARK
Former President and
Chief Executive Officer
of First State Bank

“I just made some introductions,” says Clark, who retired from

Simmons in 2016. “I knew it would be as good for Simmons to

ﬁll in the footprint in east Tennessee as it would have been for

First State. It has proved to be a win/win for shareholders.”

Even though they come from opposite parts of the state, the

two men have a lot in common. Both grew up on farms. They

are University of Tennessee graduates and started working

for small, community banks.

Willson’s father raised dairy cattle but sold them so he

would have the funds to buy into his father’s bank. Willson

began working in the bank when he was in the sixth grade.

After college graduation, he worked at several banks before

coming home to work at Citizens in 1983.

Clark’s farming roots go back six generations, but the family

also owned bank stock. He began his banking career in 1976

Willson, his mother and other board members ﬂew to Union

“If George, Marty and the entire team hadn’t ﬁrst meshed

City to meet with Clark and learn more about First State.

with our board, our employees and our shareholders, it would

Willson’s mother, Mintie, remains active in the bank and

have been a much more difficult task,” Willson says. “It’s all

community affairs at age 79. A room in the Colloms Campus

about establishing trust.”

Center at Tennessee Wesleyan College in Athens is named in

honor of Mintie Willson and her late husband, Hugh. Mintie

Willson was also a founder of the McMinn County Living

Heritage Museum in 1982.

Willson says he enjoys taking calls from longtime Citizens

customers and directing them to the right people at

Simmons. He remains active in the community and is

helping to spread the Simmons name while addressing any

First State had grown from a few branches in the northwest

transition matters.

corner of Tennessee to having a presence in the Jackson and

Nashville markets. Board members decided they needed to

partner with a larger bank.

Willson plans to relax and spend time on his new boat named

“Victory” this summer. Clark is serving as an interim chairman

for the banking program at the University of Tennessee at

Clark, though, remembered what he and Willson had

Martin and is helping his son expand their farming business.

discussed.

Willson began doing research on Simmons.

before retiring from banking.

Both men are happy they worked on a ﬁnal deal together

“Knowing John and how smart he is — how steadfast and

“We feel extremely lucky to be a part of the Simmons family,”

careful — it made it an easy decision for me to take our bank

Willson says. “We’re excited about everything that’s going

toward Simmons,” Willson says. “Trust goes a long way, and

on. When somebody reaches out their hand, you better grab

you can’t ﬁnd it everywhere these days.”

it the ﬁrst time. If you have that trust, you grab that hand and

go. We have absolutely no regrets.”

Willson didn’t know Simmons First National Corp. chairman

and CEO George Makris, Jr. or Simmons Bank chairman and

CEO Marty Casteel, but he had a comfort level going into

negotiations because Clark had vouched for them.

It didn’t take Willson long to see for himself what Clark was

talking about.

PAUL WILLSON
WILLSON
Former Chairman and
Chairman and
Chief Executive Officer
Officer
of Citizens National Bank
Bank

“We’re excited about everything that’s
going on. When somebody reaches out
their hand, you better grab it the ﬁrst time.
If you have that trust, you grab that hand
and go. We have absolutely no regrets.”

– Paul Willson

GO FORWARD
PINE BLUFF

One of the plan’s recommendations is the development of
a municipal master plan that includes land use regulations,
city codes, planning requirements, zoning laws and
enforcement options. The most recent such master plan
was adopted in 1976.

Other recommendations include establishing a land
bank to acquire and manage foreclosed and abandoned
properties; ﬁnding new uses for downtown blocks
that house empty, decaying buildings; establishing a
multipurpose center for meetings and recreational uses;
establishing an institute to recruit and train Pine Bluff
residents to run for public office; creating an educational
alliance to improve the quality of education in the city’s
three school districts; and establishing an innovation hub
to assist entrepreneurs.

Organizers are also thinking big when it comes to ﬁnding
ways to draw visitors to the city. Pine Bluff once hosted
the King Cotton Classic, a nationally televised high school
basketball tournament, which drew prestigious programs
from across the country. The Go Forward Pine Bluff plan

A year of intense effort produced an ambitious
plan for expanding the tax base of Pine Bluff,
Ark., – the location of Simmons First National
Corp.’s (Simmons) headquarters – and halting
population loss.

The Go Forward Pine Bluff initiative kicked off in late 2015.
The planning effort was funded by Simmons through a
$300,000 donation to the Simmons First Foundation.

George Makris, Jr., Simmons’ chairman and chief executive
officer, said at the time: “We’re hopeful that the Go
Forward Pine Bluff process will help pinpoint how to
direct our efforts more effectively.”

The planning initiative was led by Tommy May, the former
Simmons CEO who now heads the foundation.

During 2016, volunteers from across the city came
together to draw up an action plan, which will be
implemented during the next two years. The four pillars
of the plan are quality of life, education, economic
development, and government and infrastructure. May
says more than 12,000 hours of volunteer time went into
the planning effort.

“It was encouraging to have that many citizens involved,
and we had great diversity,” he says. “Almost 40 percent
of those involved were younger than 40. It’s their future
that we’re talking about. We had a lot of debates, and
we weren’t always in agreement about everything. There
were no personal agendas that got brought to the table.”

At the end of the process, a 47-page report was released
to the public. May and Go Forward co-chairman Mary
Pringos, who is heavily involved in agriculture, joined pillar
chairman Carla Martin, an administrator at the University
of Arkansas at Pine Bluff, in planning a public presentation
at the Arts and Science Center of Southeast Arkansas in
downtown Pine Bluff. More than 400 people jammed the
auditorium there before the ﬁre marshal closed the doors.
Another 100 people waited outside.

“That was good because it shows interest in the project,”
May says.

J. THOMAS MAY
Chairman & Chief Executive Officer, Simmons First Foundation

calls for an annual Delta Classic Christmas Invitational
Basketball Tournament. There also would be an annual
Torii Hunter Baseball Tournament of Champions.
Other quality-of-life proposals include a system of
hiking and biking trails, public gardens, an area for
food trucks downtown and an incentive program
to attract restaurants and retailers to a renovated
downtown district. There are also plans for an annual
Celebrate the Delta Festival.

Implementation of the overall project would cost
about $50 million. Organizers hope to gain $32 million
from a temporary citywide sales tax, which will be
voted on in 2017.

“There are no guarantees, but I’m optimistic,” May
says of the plan’s implementation.

He says one of the ﬁrst things that must be done is to
clean up downtown.

“That will be an aggressive process,” May says.
“I expect that by 2018 people won’t recognize
downtown Pine Bluff.”

May has faith that Pine Bluff residents will rally around
the cause.

“It’s going to make Pine Bluff a place our children will
be glad to call home,” he says. “It’s going to happen.”

The project hasn’t made the foundation, founded in
2013, lose sight of its charity work for youth. Grants
totaling over $500,000 have been awarded since 2014.

In 2016, the foundation provided 11 $1,000 grants to
charities and another $123,000 in ﬁve major grants.
May says more than $122,000 will be given in 2017.

“Even with Go Forward Pine Bluff, we’ve made time
to stay committed to the youth,” he says. “We’ve had
a big impact since the foundation started, and we’ll
continue to do that.”

Chairman & Chief Executive Officer, Simmons First Foundation

J. THOMAS MAY

CULTURE
CORNERSTONES

Jena Compton had corporate culture on
her mind well before she took the job
as Simmons Bank’s chief people officer.

“It was one of the ﬁrst things I asked about in my
interview,” Compton says.

Compton came to Simmons in September 2015 and began
the process of developing ﬁve culture cornerstones that
deﬁne the company.

In June 2016, the cornerstones were unveiled: Integrity,
passion, better together, pursue growth and high
performance.

Once the cornerstones were unveiled, the second half of
2016 was spent marketing the concept to associates. “He
has been the biggest advocate of them all,” Compton says
of George A. Makris, Jr., the Simmons First National Corp.
chairman and CEO. “He knows we need to have something
that identiﬁes us as a company, something that we can all
believe in. So from the top to the bottom, we have people
talking the talk and walking the walk. … If the executives
aren’t on board, it won’t work.”

The cornerstones are used in everyday conversations at
Simmons. Managers mention them when they give
feedback to associates. The cornerstones are also a part
of the hiring process.

An engagement survey later in the year revealed that 78
percent of associates polled agreed that the company is
adhering to the cornerstones.

“We know if they have these traits and the basic skills,
they’re going to do a good job,” Compton says. “They’re
going to ﬁt in, and they’re going to ﬁnd success.”

Compton credits Allison Cox, a human resources senior
vice president, and Becka McGee, a human resources
manager, for signiﬁcant contributions to the project.

JENA COMPTON
Chief People Officer

“Every company has a culture,” Compton says. “The only
question is whether or not it is what you want it to be. …
We decided we wanted to be more thoughtful in
determining the best culture for our people – who they
are, what they believe in and what they can get behind.”

Compton researched the cultural values of institutions
Simmons had recently acquired: Metropolitan National
Bank and Delta Trust and Bank in Arkansas, Liberty Bank
and Trust Company of the Ozarks in Missouri and First
State Bank in Tennessee. She identiﬁed 28 core values
across those companies. Only four were duplicated.

“There was a ton of difference in what people thought,”
Compton says. “We decided early on that we needed
something and that we needed to decide what it was
going to be.”

Not long after she was hired, Compton and members of
her team began the arduous task of determining the
company’s values. The ﬁve cornerstones were ultimately
chosen after what turned out to be a ﬁve-month process.

I NTEGRITY

Do what’s right and be true to yourself.
Value honor, act with responsibility
and respect those around you.

Your
Your word
Your word

is your bond.
your
your bond.

PASSION

Care intensely about
intensely
intensely about

your work,
your
your work,
customers and community.
Always look to innovate, improve
and dream big.

BBBBBBBBBBB EEEEEEEEEEETTTTTTTTTTTTTTTTTTTTEEEEEEEEEEERRRRRRRRRR TTTTTTTTTOOOOOOOOOOGGGGGGGGGGEEEEEEEEETTTTTTTTTTHHHHHHHHHEEEEEEEEERRRRRRRRRRRR
B ETTER TOGETHER

Embrace collaboration.
Make time to help your colleagues
your
your colleagues
and lift up those around you.
Win together —
together
together —

celebrate together.

CULTURE
CORNERSTONES

Your career with Simmons Bank is a journey. Never lose sight
of the destination, but always enjoy the adventure.

HHHHHHHHHHHIIIIIIIII GGGGGGGGG
HI G

PPPPPPPPP EEEEEEEERRRRRRRRRRFFFFFFFFOOOOOOOOORRRRRRRRRMMMMMMMMMMAAAAAAAAAAAANNNNNNNNNNNCCCCCCCCCCCEEEEEEEEEE
H P ERFORMANCE
HHHHHHHHHH

Strive to exceed expectations.
Go beyond what you think is possible.
Reach for excellence.
for
for excellence.

P U R S UE

GGGGGGGGRRRRRRRRROOOOOOWWWWWWTTTTTTHHHHHH
GROWTH

Explore your path
your
your path
and seek opportunities.
seek
seek opportunities.
Aim to learn and expand your skills
your
your skills
every
single day. Explore growth — personally
and professionally.

We’re glad you’re
glad
glad you’re

here

McGee continues to design innovative projects that keep
the cornerstones at the forefront of everything that occurs
at Simmons.

Compton and the members of her team spend signiﬁcant
time examining proposed mergers and acquisitions to
gauge if they are a good culture ﬁt. They also make it a
priority to work with new associates to introduce the
cornerstones.

“The more diversity and the larger the size of the
corporate footprint, the more you need something to
bring everyone together,” she says. “When we have these
acquisitions and we bring people in to talk about our
company, it’s one of the ﬁrst things we talk about. Here’s
who we are and who we strive to be every day.”

Compton is proud of the progress that has been made but
knows it will be a never-ending pursuit.

“The tricky part is keeping this thing alive,” she says.
“You want it to have a life of its own, but you have to
keep it fresh and keep it in front of people. You have to
let them know you still care. If you let a year go by and
you don’t talk about it anymore, people will think it was
a ﬂavor-of-the-day kind of thing.”

HIGHLIGHTS OF
2016 ACCOMPLISHMENTS

WE’RE HONORED TO HAVE BEEN RECOGNIZED
IN COMMUNITIES ACROSS OUR FOOTPRINT.
THESE ARE ONLY A FEW OF THE TOP AWARDS
SIMMONS RECEIVED IN 2016.

TOP 100 FASTEST GROWING COMPANIES
Fortune

KANSAS CITY’S TOP SBA LENDERS, 3rd Place
Kansas City Business Journal

100 MOST ACTIVE SBA 7(A) LENDERS, Top 100
U.S. Small Business Administration

BEST IN RELIABILITY
St. Louis Small Business Monthly

BEST FINANCIAL SERVICES, 1st Place
AY Magazine

#1 BANK AND MORTGAGE LENDER
Pine Bluff Commercial

MAIN STREET BESTIES AWARD,
BEST BANKS IN SUMNER COUNTY
Sumner County, TN

Corporate Headquarters
501 Main Street | Pine Bluff, AR 71601 | 870.541.1000

Little Rock Corporate Office
425 W. Capitol Avenue, Suite 1400 | Little Rock, AR 72201 | 501.558.3100

simmonsbank.com