Simmons First National Corporation (NASDAQ:SFNC) Q4 2014 Earnings Conference Call - Final Transcript

Jan 22, 2015 • 04:00 pm ET

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Simmons First National Corporation (NASDAQ:SFNC) Q4 2014 Earnings Conference Call - Final Transcript

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Presentation
Executive
George Makris

a reminder, acquired assets were recorded at their discounted net present value. Additionally, acquired assets covered by FDIC loss sharing agreements are provided 80% protection against possible losses by the FDIC loss share indemnification. Therefore, all acquired assets are excluded from the computations of asset quality ratio for our legacy loan portfolio.

Executive
George Makris

continue to have good asset quality. As a reminder, acquired assets were recorded at their discounted net present value. Additionally, acquired assets covered by FDIC loss sharing agreements are provided 80% protection against possible losses by the FDIC loss share indemnification. Therefore, all acquired assets are excluded from the computations of asset quality ratio for our legacy loan portfolio. At December 31, 2014, the allowance for loan losses on legacy loans was $29 million and the loan credit mark and the allowance on acquired loans was $78.2 million for a total of $107.2 million of coverage. This equates to total coverage ratio of 40.8% of gross loans.

The allowance for loan losses on legacy loans equaled 1.41% of total loans and approximately 223% of non-performing loans. Non-performing loans as a percent of total loans were 63 basis points. At December 31, non-performing assets were $58 million, a decrease of $4.8 million from the prior quarter. The year-to-date net charge-off ratio was 22 basis points. Excluding credit cards, the year-to-date net charge-off ratio was 20 basis points. Our credit card portfolio continues to compare very favorably to the industry. Our year-to-date net credit card charge-offs to loans was only 1.27% for 2014. During the quarter, we completed the systems conversion and the integration for Delta Trust.

We continue to make good progress with our efficiency initiatives, both in revenue enhancement and in expense control. The efficiency ratio for Q4 2014, was 64.3% compared to 70.5% in Q4 of 2013. This concludes our prepared comments and we'd like to now open the phone lines for questions from our analysts and institutional investors. Let me ask the operator to come back on the line and once again explain how to queue in for questions.