STOCKHOLDERS’ EQUITY

The Company’s subsidiary bank is subject to legal limitations on dividends that can be paid to the parent company without prior approval of the applicable regulatory agencies. The approval of the Commissioner of the Arkansas State Bank Department is required if the total of all dividends declared by an Arkansas state bank in any calendar year exceeds seventy-five percent (75%) of the total of its net profits, as defined, for that year combined with seventy-five percent (75%) of its retained net profits of the preceding year. At December 31, 2018, the Company’s subsidiary bank had approximately $32.3 million available for payment of dividends to the Company, without prior regulatory approval.

The Company’s subsidiary bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. Our capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Effective January 1, 2015, the Company and the subsidiary bank became subject to new capital regulations (the “Basel III Capital Rules”) adopted by the Federal Reserve in July 2013 establishing a new comprehensive capital framework for U.S. Banks. The Basel III Capital Rules substantially revise the risk-based capital requirements applicable to bank holding companies and depository institutions compared to the previous U.S. risk-based capital rules. Full compliance with all of the final rule’s requirements will be phased in over a multi-year schedule. The final rules include a new common equity Tier 1 capital to risk-weighted assets (CET1) ratio of 4.5% and a common equity Tier 1 capital conservation buffer of 2.5% of risk-weighted assets. CET1 generally consists of common stock; retained earnings; accumulated other comprehensive income and certain minority interests; all subject to applicable regulatory adjustments and deductions. The new capital conservation buffer requirement began being phased in beginning on January 1, 2016 when a buffer greater than 0.625% of risk-weighted assets was required, which amount will increase each year until the buffer requirement is fully implemented on January 1, 2019.

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table below) of total, Tier 1 and common equity Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average assets (as defined). As of December 31, 2018, the Company and its subsidiary bank met all capital adequacy requirements under the Basel III Capital Rules, and management believes the Company and its subsidiary bank would meet all capital rules on a fully-phased in basis if such requirements were currently effective.

As of the most recent notification from regulatory agencies, the subsidiary bank was well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Company and its subsidiary bank must maintain minimum total risk-based, Tier 1 risk-based, common equity Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the institutions’ categories.

The Company’s and the subsidiary bank’s actual capital amounts and ratios are presented in the following table. Bank SNB and Southwest Bank were merged into Simmons Bank during 2018.



	Actual			Minimum For Capital Adequacy Purposes			To Be Well Capitalized Under Prompt Corrective Action Provision
(In thousands)	Amount		Ratio (%)	Amount		Ratio (%)	Amount	Ratio (%)
December 31, 2018
Total Risk-Based Capital Ratio
Simmons First National Corporation	$	1,778,938	13.3	$	1,070,038	8.0	N/A
Simmons Bank	1,532,864		11.5	1,066,340		8.0	1,332,925	10.0
Tier 1 Risk-Based Capital Ratio
Simmons First National Corporation	1,361,380		10.2	800,812		6.0	N/A
Simmons Bank	1,469,260		11.0	801,415		6.0	1,068,553	8.0
Common Equity Tier 1 Capital Ratio
Simmons First National Corporation	1,361,380		10.2	600,609		4.5	N/A
Simmons Bank	1,469,260		11.0	601,061		4.5	868,199	6.5
Tier 1 Leverage Ratio
Simmons First National Corporation	1,361,380		8.8	618,809		4.0	N/A
Simmons Bank	1,469,260		9.5	618,636		4.0	773,295	5.0

December 31, 2017
Total Risk-Based Capital Ratio
Simmons First National Corporation	$	1,388,970	11.4	$	974,716	8.0	N/A
Simmons Bank	877,728		12.1	580,316		8.0	725,395	10.0
Bank SNB	259,077		10.9	190,148		8.0	237,685	10.0
Southwest Bank	297,164		11.0	216,119		8.0	270,149	10.0
Tier 1 Risk-Based Capital Ratio
Simmons First National Corporation	1,199,457		9.8	734,361		6.0	N/A
Simmons Bank	835,787		11.5	436,063		6.0	581,417	8.0
Bank SNB	255,360		10.7	143,193		6.0	190,923	8.0
Southwest Bank	294,874		10.9	162,316		6.0	216,421	8.0
Common Equity Tier 1 Capital Ratio
Simmons First National Corporation	1,199,457		9.8	550,771		4.5	N/A
Simmons Bank	835,787		11.5	327,047		4.5	472,401	6.5
Bank SNB	255,360		10.7	107,394		4.5	155,125	6.5
Southwest Bank	294,874		10.9	121,737		4.5	175,842	6.5
Tier 1 Leverage Ratio
Simmons First National Corporation	1,199,457		9.2	521,503		4.0	N/A
Simmons Bank	835,787		9.2	363,386		4.0	454,232	5.0
Bank SNB	255,360		10.1	101,133		4.0	126,416	5.0
Southwest Bank	294,874		12.2	96,680		4.0	120,850	5.0