Profile: Simmons First National Corporation (SFNC.O)

Simmons First National Corporation is a financial holding company that owns eight community banks in Arkansas. The Bank subsidiaries include Simmons First National Bank, Simmons First Bank of Jonesboro, Simmons First Bank of South Arkansas, Simmons First Bank of Northwest Arkansas, Simmons First Bank of Russellville, Simmons First Bank of Searcy, Simmons First Bank of El Dorado, N.A., and Simmons First Bank of Hot Springs. Its subsidiaries provide banking services, which includes consumer (credit card, student, and other consumer), real estate (construction, single family residential and other commercial) and commercial (commercial, agriculture and financial institutions) loans, checking, savings and time deposits, trust and investment management services, and securities and investment services.

Subsidiary Activities

The Company's subsidiaries provide complete banking services to individuals and businesses throughout the market areas they serve. Simmons First National Bank (the Bank) is the Company’s lead bank. The Bank is a national bank whose market area, with the exception of its nationally provided credit card product, is Central and Western Arkansas. Simmons First Trust Company N.A., a wholly owned subsidiary of the Bank, performs the trust and fiduciary business operations for the Bank, as well as the Company. Simmons First Investment Group, Inc. (SFIG), a wholly owned subsidiary of the Bank, performs the broker-dealer operations of the Bank.

Lending Activities

As of December 31, 2008, the Company's loan portfolio averaged $1.891 billion. The significant components of the loan portfolio were loans to businesses (commercial loans, commercial real estate loans and agricultural loans) and individuals (consumer loans, credit card loans and single-family residential real estate loans). Consumer loans were $419.3 million or 21.7% of total loans. Real estate loans were $1.219 billion or 63.1% of total loans. Commercial real estate loans increased $42.7 million and single-family residential loans increased by $26.9 million. Commercial loans were $284.2 million, or 14.7% of total loans.

Investment Activities

The Company's securities portfolio is the second largest component of earning assets and provides a significant source of revenue. Securities within the portfolio are classified as either held-to-maturity, available-for-sale or trading. Investments in the portfolio primarily include United States Treasury securities, United States Government agencies, mortgage-backed securities and municipal securities.

Held-to-maturity and available-for-sale investment securities were $187.3 million and $458.8 million, respectively, at December 31, 2008. Simmons First National has approximately $109,000, or 0.06%, in mortgaged-backed securities in the held-to-maturity portfolio. In the available-for-sale securities, $2.9 million, or 0.6% were invested in mortgaged-backed securities. The held-to-maturity investment portfolio had gross unrealized gains of $1.895 million and gross unrealized losses of $1.876 million.

Sources of Funds

Deposits are Simmons First National’s primary source of funding for earning assets and are primarily developed through the Company’s network of 84 financial centers. As of December 31, 2008, Simmons First National has consolidated deposits of $2.3 billion.

The Company offers products designed to customers with a continuing focus on developing core deposits. Its deposits consist of all deposits excluding time deposits of $100,000 or more and brokered deposits. Core deposits comprised 80.7% of Simmons First National’s total deposits during 2008.