Simmons First National Corporation (NASDAQ:SFNC) Q4 2014 Earnings Conference Call - Final Transcript
Jan 22, 2015 • 04:00 pm ET
(Operator Instructions) Matt Olney, Stephens.
Hey, I want to start off on expenses. It looked to be a little bit higher than I was looking for, lots of noise in there, some
one-time stuff, and I guess you didn't get the benefit post - full impact of the conversion of Delta. Any outlook you can give us as far as what to expect from a core expense run rate going forward here, excluding the two pending deals?
I'll take first, pass that Matt. There were really three significant items in the fourth quarter, they will not be a part of our run rate going forward. We have one-time accrual of about $1.5 million related to our equity incentive program. We went through a study with a consulting firm this year and the - why we are going to invest those incentives going forward is going to change, so we had a one-time expense. We used to invest those over an extended period of time and those going to be vested at the award date, that had not been accrued previously, so all of that came into the fourth quarter.The second big number is $1 million contribution to the Simmons First Foundation.
I think, we've mentioned before that our intention is to fund that through the sale of some Visa stock that we currently do not have access to sell. But the Foundation is up and running and we needed to go ahead and give them some capital in order to do some things in the community. So we funded that with $1 million contribution.And the last thing is that, because of the timing of the Delta conversion, we've retained all Delta associates through the end of the year, and all of that's going to be in our core expense. The Delta associates that are not going to be retained long-term and will have severance agreements will be part of our merger-related costs after December 31.
So those are three big items that make up the bulk of our increased expenses. If you just take a look at the third quarter expenses a little bit higher than that would be probably the run rate that we will consider to be normalized until we get the other two deals approved and we start realizing some of those expense savings through those mergers.
And Matt, if you go back to June, you can see our - we were at about 38 to 30 - I'm sorry, about $38 million run rate that was probably normalized before Delta come again with Delta and what George just mentioned, we are probably at that $41 million to $42 million just like he said from looking at third quarter numbers.
And then the two pending deals, I know, we are trying to get those to the bench line, any update that you can share with us in terms of the timing and expectations on those two pending deals?
Matt, I would be glad to share with