Stockholders' Equity

12 Months Ended

Dec. 31, 2019

STOCKHOLDERS’ EQUITY

Simmons 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, 2019, Simmons Bank had approximately $160.2 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 the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and its subsidiary bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s 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 revised 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 was phased in over a multi-year schedule. The final rules included 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 capital conservation buffer was fully phased in 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, 2019, the Company and its subsidiary bank met all capital adequacy requirements under the Basel III Capital Rules and exceeded the fully phased in capital conservation buffer.

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 banks’ actual capital amounts and ratios are presented in the following table.



	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, 2019
Total Risk-Based Capital Ratio
Simmons First National Corporation	$	2,272,858	13.7	$	1,327,216	8.0	N/A
Simmons Bank	1,852,880		12.9	1,149,073		8.0	1,436,341	10.0
Landmark Bank	291,378		13.9	167,700		8.0	209,624	10.0
Tier 1 Risk-Based Capital Ratio
Simmons First National Corporation	1,807,954		10.9	995,204		6.0	N/A
Simmons Bank	1,777,602		12.3	867,123		6.0	1,156,164	8.0
Landmark Bank	290,016		13.8	126,094		6.0	168,125	8.0
Common Equity Tier 1 Capital Ratio
Simmons First National Corporation	1,807,187		10.9	746,086		4.5	N/A
Simmons Bank	1,777,602		12.3	650,342		4.5	939,383	6.5
Landmark Bank	270,016		12.9	94,192		4.5	136,055	6.5
Tier 1 Leverage Ratio
Simmons First National Corporation	1,807,954		9.6	753,314		4.0	N/A
Simmons Bank	1,777,602		10.7	664,524		4.0	830,655	5.0
Landmark Bank	290,016		8.8	131,825		4.0	164,782	5.0

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