Edgar Filing: SIMMONS FIRST NATIONAL CORP

f10q_051115.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended March 31, 2015

Commission File Number 000-06253

SIMMONS FIRST NATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

Arkansas	71-0407808
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

501 Main Street, Pine Bluff, Arkansas	71601
(Address of principal executive offices)	(Zip Code)

870-541-1000

(Registrant's telephone number, including area code)

Not Applicable

Former name, former address and former fiscal year, if changed since last report

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer x Non-accelerated filer o Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.). o Yes x No

The number of shares outstanding of the Registrant’s Common Stock as of April 28, 2015, was 29,851,254.

Simmons First National Corporation

Quarterly Report on Form 10-Q

March 31, 2015

Table of Contents

		Page
Part I:	Financial Information
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets	3
	Consolidated Statements of Income	4
	Consolidated Statements of Comprehensive Income	5
	Consolidated Statements of Cash Flows	6
	Consolidated Statements of Stockholders' Equity	7
	Condensed Notes to Consolidated Financial Statements	8-48
	Report of Independent Registered Public Accounting Firm	49
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	50-72
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	72-74
Item 4.	Controls and Procedures	74

Part II:	Other Information
Item 1A.	Risk Factors	74
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	75
Item 6.	Exhibits	75-80

Signatures		81

Part I: Financial Information

Item 1. Financial Statements (Unaudited)

Simmons First National Corporation

Consolidated Balance Sheets

March 31, 2015 and December 31, 2014

(In thousands, except share data)	March 31, 2015			December 31, 2014
	(Unaudited)
ASSETS
Cash and non-interest bearing balances due from banks	$	83,424		$	54,347
Interest bearing balances due from banks		423,986			281,562
Federal funds sold		178,418			-
Cash and cash equivalents		685,828			335,909
Interest bearing balances due from banks - time		25,000			-
Investment securities		1,609,806			1,082,870
Mortgage loans held for sale		25,513			21,265
Assets held in trading accounts		6,528			6,987
Loans:
Legacy loans		2,115,380			2,053,721
Allowance for loan losses		(29,183	)		(29,028	)
Loans acquired, not covered by FDIC loss share (net of discount)		2,418,440			575,980
Loans acquired, covered by FDIC loss share (net of discount and allowance)		102,468			106,933
Net loans		4,607,105			2,707,606
FDIC indemnification asset		15,965			22,663
Premises and equipment		200,091			122,246
Premises held for sale		-			6,846
Foreclosed assets not covered by FDIC loss share		50,723			44,856
Foreclosed assets covered by FDIC loss share		12,010			11,793
Interest receivable		24,719			16,774
Bank owned life insurance		117,296			77,592
Goodwill		314,643			108,095
Other intangible assets		47,887			22,526
Other assets		74,710			55,326
Total assets	$	7,817,824		$	4,643,354

LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Non-interest bearing transaction accounts	$	1,123,966		$	889,260
Interest bearing transaction accounts and savings deposits		3,627,870			2,006,271
Time deposits		1,522,872			965,187
Total deposits		6,274,708			3,860,718
Federal funds purchased and securities sold under agreements to repurchase		111,484			110,586
Other borrowings		285,060			114,682
Subordinated debentures		62,994			20,620
Accrued interest and other liabilities		69,841			42,429
Total liabilities		6,804,087			4,149,035
Stockholders’ equity:
Preferred stock, 40,040,000 shares authorized; Series A, $0.01 par value, $1,000 liquidation value per share; 30,852 shares issued and outstanding at March 31, 2015		30,852			-
Common stock, Class A, $0.01 par value; 60,000,000 shares authorized; 29,850,034 and 18,052,488 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively		299			181
Surplus		639,493			156,568
Undivided profits		341,238			338,906
Accumulated other comprehensive income (loss)		1,855			(1,336	)
Total stockholders’ equity		1,013,737			494,319
Total liabilities and stockholders’ equity	$	7,817,824		$	4,643,354

See Condensed Notes to Consolidated Financial Statements.

Simmons First National Corporation

Consolidated Statements of Income

Three Months Ended March 31, 2015 and 2014

	Three Months Ended March 31,
(In thousands, except per share data)	2015			2014
	(Unaudited)
INTEREST INCOME
Loans	$	50,986		$	40,131
Federal funds sold		29			1
Investment securities		5,879			4,549
Mortgage loans held for sale		148			69
Assets held in trading accounts		3			5
Interest bearing balances due from banks		210			279
TOTAL INTEREST INCOME		57,255			45,034

INTEREST EXPENSE
Deposits		2,944			2,269
Federal funds purchased and securities sold under agreements to repurchase		64			53
Other borrowings		1,051			1,010
Subordinated debentures		234			157
TOTAL INTEREST EXPENSE		4,293			3,489

NET INTEREST INCOME		52,962			41,545
Provision for loan losses		1,171			908

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		51,791			40,637

NON-INTEREST INCOME
Trust income		2,251			1,537
Service charges on deposit accounts		6,363			6,068
Other service charges and fees		1,827			1,866
Mortgage lending income		2,262			810
Investment banking income		894			181
Credit card fees		5,648			4,600
Bank owned life insurance income		572			330
Loss on sale of securities		(38	)		-
Net loss on assets covered by FDIC loss share agreements		(2,671	)		(7,370	)
Other income		1,390			1,176
TOTAL NON-INTEREST INCOME		18,498			9,198

NON-INTEREST EXPENSE
Salaries and employee benefits		26,771			22,464
Occupancy expense, net		3,557			3,890
Furniture and equipment expense		3,268			2,014
Other real estate and foreclosure expense		381			873
Deposit insurance		870			668
Merger related costs		10,419			1,272
Other operating expenses		12,106			13,370
TOTAL NON-INTEREST EXPENSE		57,372			44,551

INCOME BEFORE INCOME TAXES		12,917			5,284
Provision for income taxes		4,182			932

NET INCOME		8,735			4,352
Preferred stock dividends		26			-
NET INCOME AVAILABLE TO COMMON STOCKHOLDERS	$	8,709		$	4,352
BASIC EARNINGS PER SHARE	$	0.39		$	0.27
DILUTED EARNINGS PER SHARE	$	0.39		$	0.27

See Condensed Notes to Consolidated Financial Statements.

Simmons First National Corporation

Consolidated Statements of Comprehensive Income

Three Months Ended March 31, 2015 and 2014

	Three Months Ended March 31,
(In thousands)	2015			2014
	(Unaudited)

NET INCOME	$	8,735		$	4,352

OTHER COMPREHENSIVE INCOME
Unrealized holding gains arising during the period on available-for-sale securities		5,213			1,453
Less: Reclassification adjustment for realized losses included in net income		(38	)		-
Other comprehensive gain, before tax effect		5,251			1,453
Less: Tax effect of other comprehensive gain		2,060			570

TOTAL OTHER COMPREHENSIVE INCOME		3,191			883

COMPREHENSIVE INCOME	$	11,926		$	5,235

See Condensed Notes to Consolidated Financial Statements.

Simmons First National Corporation

Consolidated Statements of Cash Flows

Three Months Ended March 31, 2015 and 2014

(In thousands)	March 31, 2015			March 31, 2014
	(Unaudited)
OPERATING ACTIVITIES
Net income	$	8,735		$	4,352
Items not requiring (providing) cash:
Depreciation and amortization		3,001			1,897
Provision for loan losses		1,171			908
Net (accretion) amortization of investment securities and assets not covered by FDIC loss share		(5,960	)		(1,073	)
Stock-based compensation expense		485			361
Net accretion on assets covered by FDIC loss share		(184	)		(715	)
Deferred income taxes		(1,578	)		(2,667	)
Loss on sale of available-for-sale securities		(38	)		--
Bank owned life insurance income		(572	)		(330	)
Changes in:
Interest receivable		1,787			552
Mortgage loans held for sale		(4,248	)		(7,223	)
Assets held in trading accounts		459			2,113
Other assets		3,444			(2,835	)
Accrued interest and other liabilities		2,599			4,206
Income taxes payable		7,912			2,333
Net cash provided by operating activities		17,013			1,879

INVESTING ACTIVITIES
Net collections of loans not covered by FDIC loss share		13,522			26,757
Net collections of loans covered by FDIC loss share		6,440			16,061
Purchases of premises and equipment, net		(3,454	)		1,969
Proceeds from sale of foreclosed assets held for sale		3,916			8,730
Proceeds from sale of foreclosed assets held for sale, covered by FDIC loss share		829			2,934
Proceeds from sale of available-for-sale securities		238			10
Proceeds from maturities of available-for-sale securities		32,489			11,687
Purchases of available-for-sale securities		(52,591	)		(63,533	)
Proceeds from maturities of held-to-maturity securities		168,621			36,307
Purchases of held-to-maturity securities		(5,265	)		(67,265	)
Cash received on FDIC loss share		3,980			3,859
Cash received in business combinations, net of cash paid		201,029			--
Net cash provided by (used in) investing activities		369,754			(22,484	)

FINANCING ACTIVITIES
Net change in deposits		3,214			9,481
Dividends paid on preferred stock		(26	)		--
Dividends paid on common stock		(6,377	)		(3,575	)
Net change in other borrowed funds		(20,367	)		(120	)
Net change in federal funds purchased and securities sold under agreements to repurchase		(15,332	)		(3,244	)
Net shares issued under stock compensation plans		2,040			819
Net cash (used in) provided by financing activities		(36,848	)		3,361

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		349,919			(17,244	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		335,909			539,380

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	685,828		$	522,136

See Condensed Notes to Consolidated Financial Statements.

Simmons First National Corporation

Consolidated Statements of Stockholders’ Equity

Three Months Ended March 31, 2015 and 2014

(In thousands, except share data)	Preferred Stock		Common Stock		Surplus			Accumulated Other Comprehensive Income (Loss)			Undivided Profits			Total

Balance, December 31, 2013	$	--	$	162	$	88,095		$	(3,002	)	$	318,577		$	403,832
Comprehensive income:
Net income		--		--		--			--			4,352			4,352
Change in unrealized depreciation on available-for-sale securities, net of income taxes of $570		--		--		--			883			--			883
Comprehensive income															5,235
Stock issued as bonus shares – 63,530 shares		--		1		269			--			--			270
Vesting bonus shares, net of forfeitures		--		--		361			--			--			361
Stock issued for employee stock purchase plan – 4,897 shares		--		--		118			--			--			118
Exercise of stock options – 16,580 shares		--		--		431			--			--			431
Cash dividends – $0.22 per share		--		--		--			--			(3,575	)		(3,575	)

Balance, March 31, 2014 (Unaudited)		--		163		89,274			(2,119	)		319,354			406,672
Comprehensive income:
Net income		--		--		--			--			31,336			31,336
Change in unrealized depreciation on available-for-sale securities, net of income taxes of $505		--		--		--			783			--			783
Comprehensive income		--		--		--			--			--			32,119
Stock issued as bonus shares – 70,350 shares		--		--		172			--			--			172
Vesting bonus shares, net of forfeitures – (1,560 shares)		--		--		1,062			--			--			1,062
Exercise of stock options – 48,140 shares		--		2		1,243			--			--			1,245
Securities exchanged under stock option plan – (5,220 shares)		--		--		(213	)		--			--			(213	)
Stock issued for Delta Trust & Bank acquisition – 1,629,515 shares		--		16		65,030			--			--			65,046
Cash dividends – $0.64 per share		--		--		--			--			(11,784	)		(11,784	)

Balance, December 31, 2014		--		181		156,568			(1,336	)		338,906			494,319
Comprehensive income:
Net income		--		--		--			--			8,735			8,735
Change in unrealized depreciation on available-for-sale securities, net of income taxes of $2,060		--		--		--			3,191			--			3,191
Comprehensive income															11,926
Stock issued as bonus shares – 56,600 shares		--		1		1,564			--			--			1,565
Vesting bonus shares, net of forfeitures – (9,500 shares)		--		--		384			--			--			384
Stock issued for employee stock purchase plan – 6,528 shares		--		--		226			--			--			226
Exercise of stock options – 10,410 shares		--		--		280			--			--			280
Stock granted under stock-based compensation plans		--		--		101			--			--			101
Securities exchanged under stock option plan – (745 shares)		--		--		(31	)		--			--			(31	)
Stock issued for Community First acquisition – 30,852 preferred shares: 6,552,916 common shares		30,852		65		268,277			--			--			299,194
Stock issued for Liberty Bank acquisition – 5,181,337 shares		--		52		212,124			--			--			212,176
Dividends on preferred stock		--		--		--			--			(26	)		(26	)
Dividends on common stock – $0.23 per share		--		--		--			--			(6,377	)		(6,377	)

Balance, March 31, 2015 (Unaudited)	$	30,852	$	299	$	639,493		$	1,855		$	341,238		$	1,013,737

See Condensed Notes to Consolidated Financial Statements.

SIMMONS FIRST NATIONAL CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1:

BASIS OF PRESENTATION

The consolidated financial statements include the accounts of Simmons First National Corporation (the “Company”) and its subsidiaries. Significant intercompany accounts and transactions have been eliminated in consolidation.

All adjustments made to the unaudited financial statements were of a normal recurring nature. In the opinion of management, all adjustments necessary for a fair presentation of the results of interim periods have been made. Certain prior year amounts are reclassified to conform to current year classification. The consolidated balance sheet of the Company as of December 31, 2014, has been derived from the audited consolidated balance sheet of the Company as of that date. The results of operations for the period are not necessarily indicative of the results to be expected for the full year.

Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K Annual Report for 2014 filed with the U.S. Securities and Exchange Commission (the “SEC”).

Recently Issued Accounting Pronouncements

ASU 2014-17 – Business Combinations: Pushdown Accounting (“ASU 2014-17”). ASU 2014-17 amends existing guidance related to the accounting by an acquired entity upon a change-in-control event. The standard provides an acquired entity with an option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. An acquired entity may elect the option to apply pushdown accounting in the reporting period in which the change-in-control event occurs. If pushdown accounting is not applied in the reporting period in which the change-in-control event occurs, an acquired entity will have the option to elect to apply pushdown accounting in a subsequent reporting period to the acquired entity’s most recent change-in-control event. ASU 2014-17 was effective on November 18, 2014. The adoption of this standard has not had a material effect on the Company’s operating results or financial condition.

ASU 2014-14 – Receivables – Troubled Debt Restructurings by Creditors: Classification of Certain Government-Guaranteed Mortgage Loans Upon Foreclosure (“ASU 2014-14”). ASU 2014-14 amends existing guidance related to the classification of certain government-guaranteed mortgage loans, including those guaranteed by the FHA and the VA, upon foreclosure. It requires that a mortgage loan be derecognized and a separate other receivable be recognized upon foreclosure if three conditions are met. Upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. ASU 2014-14 is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2014, and early adoption is permitted. It can be applied using a prospective transition method or a modified retrospective transition using a cumulative-effect adjustment. The adoption of this standard has not had a material effect on the Company’s results of operations, financial position or disclosures.

ASU 2014-12 – Compensation – Stock Compensation – Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period (“ASU 2014-12”). ASU 2014-12 amends existing guidance related to the accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period. The standard requires that a performance target that affects vesting and that could be achieved after the requisite service period should be treated as a performance condition. ASU 2014-12 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015, and early adoption is permitted. It can be applied either prospectively to all awards granted or modified after the effective date or retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. The adoption of this standard is not expected to have a material effect on the Company’s operating results or financial condition.

ASU 2014-11 – Transfers and Servicing – Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures (“ASU 2014-11”). ASU 2014-11 aligns the accounting for repurchase-to-maturity transactions and repurchase agreements executed as a repurchase financing with the accounting for other typical repurchase agreements. ASU 2014-11 requires that these transactions all be accounted for as secured borrowings. The standard requires a new disclosure for transactions economically similar to repurchase agreements in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets throughout the term of the transaction and requires expanded disclosures about the nature of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings. ASU 2014-11 is effective for the first interim or annual period beginning after December 15, 2014. An entity is required to present changes in accounting for transactions outstanding on the effective date as a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption. Earlier application for a public business entity is prohibited. The adoption of this standard did not have a material effect on the Company’s results of operations, financial position or disclosures.

ASU 2014-09 – Revenue from Contracts with Customers (“ASU 2014-09”). ASU 2014-09 provides guidance that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 is effective prospectively, for annual and interim periods, beginning after December 15, 2016. The Company is currently evaluating the impact this standard will have on the Company’s results of operations, financial position or disclosures.

ASU 2014-04 – Receivables – Troubled Debt Restructurings by Creditors (“ASU 2014-04”). ASU 2014-04 clarifies when a creditor should reclassify mortgage loans collateralized by residential real estate from loans to other real estate owned. It defines when an in-substance repossession or foreclosure has occurred and when a creditor is considered to have received physical possession of residential real estate collateralizing a mortgage loan. ASU 2014-04 is effective for fiscal years beginning after December 31, 2014, and early adoption is permitted. It can be applied either prospectively or using a modified retrospective transition method. The adoption of this standard has not had a material effect on the Company’s results of operations, financial position or disclosures.

There have been no other significant changes to the Company’s accounting policies from the 2014 Form 10-K. Presently, the Company is not aware of any other changes to the Accounting Standards Codification that will have a material impact on the Company’s present or future financial position or results of operations.

Acquisition Accounting, Acquired Loans

The Company accounts for its acquisitions under ASC Topic 805, Business Combinations, which requires the use of the purchase method of accounting. All identifiable assets acquired, including loans, are recorded at fair value. No allowance for loan losses related to the acquired loans is recorded on the acquisition date as the fair value of the loans acquired incorporates assumptions regarding credit risk. Loans acquired are recorded at fair value in accordance with the fair value methodology prescribed in ASC Topic 820, exclusive of the shared-loss agreements with the FDIC. The fair value estimates associated with the loans include estimates related to expected prepayments and the amount and timing of undiscounted expected principal, interest and other cash flows.

The Company evaluates loans acquired in accordance with the provisions of ASC Topic 310-20, Nonrefundable Fees and Other Costs. The fair value discount on these loans is accreted into interest income over the weighted average life of the loans using a constant yield method. These loans are not considered to be impaired loans. The Company evaluates purchased impaired loans in accordance with the provisions of ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. Purchased loans are considered impaired if there is evidence of credit deterioration since origination and if it is probable that not all contractually required payments will be collected.

The Company evaluates all of the loans purchased in conjunction with its FDIC-assisted transactions in accordance with the provisions of ASC Topic 310-30. All loans acquired in the FDIC transactions, both covered and not covered, were deemed to be impaired loans. All loans acquired, whether or not covered by FDIC loss share agreements, are considered impaired if there is evidence of credit deterioration since origination and if it is probable that not all contractually required payments will be collected.

For impaired loans accounted for under ASC Topic 310-30, we continue to estimate cash flows expected to be collected on pools of loans sharing common risk characteristics, which are treated in the aggregate when applying various valuation techniques. We evaluate at each balance sheet date whether the present value of our pools of loans determined using the effective interest rates has decreased significantly and if so, recognize a provision for loan loss in our consolidated statement of income. For any significant increases in cash flows expected to be collected, we adjust the amount of accretable yield recognized on a prospective basis over the pool’s remaining life.

Covered Loans and Related Indemnification Asset

Because the FDIC will reimburse us for certain losses incurred on certain acquired loans, an indemnification asset is recorded at fair value at the acquisition date. The indemnification asset is recognized at the same time as the indemnified loans, and measured on the same basis, subject to collectability or contractual limitations. The shared-loss agreements on the acquisition date reflect the reimbursements expected to be received from the FDIC, using an appropriate discount rate, which reflects counterparty credit risk and other uncertainties.

The shared-loss agreements continue to be measured on the same basis as the related indemnified loans, as prescribed by ASC Topic 805. Deterioration in the credit quality of the loans (immediately recorded as an adjustment to the allowance for loan losses) would immediately increase the basis of the shared-loss agreements, with the offset recorded through the consolidated statement of income. Increases in the credit quality or cash flows of loans (reflected as an adjustment to yield and accreted into income over the remaining life of the loans) decrease the basis of the shared-loss agreements, with such decrease being accreted into income over 1) the same period or 2) the life of the shared-loss agreements, whichever is shorter. Loss assumptions used in the basis of the indemnified loans are consistent with the loss assumptions used to measure the indemnification asset. Fair value accounting incorporates into the fair value of the indemnification asset an element of the time value of money, which is accreted back into income over the life of the shared-loss agreements.

Upon the determination of an incurred loss the indemnification asset will be reduced by the amount owed by the FDIC. A corresponding, claim receivable is recorded until cash is received from the FDIC. For further discussion of the Company’s acquisition and loan accounting, see Note 5, Loans Acquired.

Earnings Per Common Share (“EPS”)

Basic EPS is computed by dividing reported net income available to common shareholders by weighted average number of common shares outstanding during each period. Diluted EPS is computed by dividing reported net income available to common shareholders by the weighted average common shares and all potential dilutive common shares outstanding during the period.

Following is the computation of earnings per common share for the three months ended March 31, 2015 and 2014:

(In thousands, except per share data)	2015		2014

Net income available to common shareholders	$	8,709	$	4,352

Average common shares outstanding		22,258		16,270
Average potential dilutive common shares		92		40
Average diluted common shares		22,350		16,310

Basic earnings per common share	$	0.39	$	0.27
Diluted earnings per common share	$	0.39	$	0.27

Subsequent Events

On April 28, 2015, the Company entered into a definitive agreement and plan of merger (the “Agreement”) with Ozark Trust & Investment Corporation (“OTIC”), including its wholly-owned non-deposit trust company, Trust Company of the Ozarks (“TCO”). TCO is headquartered in Springfield, Missouri and has over $1 billion in assets under management. Under the terms of the Agreement, each outstanding share of common stock of OTIC held by banks or bank holding companies will be converted into the right to receive $701.9268 in cash and each share of common stock or common stock equivalents held by any other type of shareholder will be converted into the right to receive 16.7205 shares of the Company’s common stock, all subject to certain conditions and potential adjustments. The Company owns 1,000 shares of OTIC’s common stock, which it acquired through its acquisition of Liberty Bancshares, Inc. in February 2015. The transaction is valued at $20.7 million (based on the Company’s April 27, 2015 closing price). The purchase price will be allocated among the net assets of OTIC acquired as appropriate, with the remaining balance being reported as goodwill. The transaction is subject to the routine regulatory review by the Missouri Department of Finance and other customary closing conditions. The transaction is expected to close during the third quarter of 2015. Upon closing, OTIC will merge into the Company.

NOTE 2:

ACQUISITIONS

Liberty Bancshares, Inc.

On February 27, 2015, the Simmons First National Corporation completed the acquisition of Liberty Bancshares, Inc. (“Liberty”), headquartered in Springfield, Missouri, including its wholly-owned bank subsidiary Liberty Bank (“LB”). Simmons issued 5,181,337 shares of its common stock valued at approximately $212.2 million as of February 27, 2015 in exchange for all outstanding shares of Liberty common stock.

Prior to the acquisition, Liberty conducted banking business from 23 branches located in southwest Missouri. Including the effects of the purchase accounting adjustments, the Company acquired approximately $1.1 billion in assets, approximately $780.7 million in loans including loan discounts and approximately $874.7 million in deposits. The Company completed the systems conversion and merged LB into Simmons Bank on April 24, 2015.

Goodwill of $94.9 million was recorded as a result of the transaction. The merger strengthened Simmons’ position in the southwest Missouri market and Simmons believes that it will be able to achieve cost savings by integrating the two companies and combining accounting, data processing, and other administrative functions all of which gave rise to the goodwill recorded. The goodwill will not be deductible for tax purposes.

A summary, at fair value, of the assets acquired and liabilities assumed in the Liberty transaction, as of the acquisition date, is as follows:

(In thousands)	Acquired from Liberty			Fair Value Adjustments			Fair Value

Assets Acquired
Cash and due from banks	$	102,637		$	(14	)	$	102,623
Federal funds sold		7,060			--			7,060
Investment securities		99,123			(335	)		98,788
Loans acquired, not covered by FDIC loss share		790,493			(9,835	)		780,658
Allowance for loan losses		(10,422	)		10,422			--
Premises and equipment		34,239			(1,229	)		33,010
Bank owned life insurance		16,972			--			16,972
Core deposit intangible		699			13,857			14,556
Other intangibles		3,063			(3,063	)		--
Other assets		17,703			(4,293	)		13,410
Total assets acquired	$	1,061,567		$	5,510		$	1,067,077

Liabilities Assumed
Deposits:
Non-interest bearing transaction accounts	$	146,618		$	--		$	146,618
Interest bearing transaction accounts and savings deposits		543,183			--			543,183
Time deposits		184,913			--			184,913
Total deposits		874,714			--			874,714
FHLB borrowings		46,128			223			46,351
Subordinated debentures		20,620			--			20,620
Accrued interest and other liabilities		7,828			300			8,128
Total liabilities assumed		949,290			523			949,813
Equity		112,277			(112,277	)		--
Total equity assumed		112,277			(112,277	)		--
Total liabilities and equity assumed	$	1,061,567		$	(111,754	)	$	949,813
Net assets acquired								117,264
Purchase price								212,176
Goodwill							$	94,912

The following is a description of the methods used to determine the fair values of significant assets and liabilities presented in the Liberty acquisition above.

Cash and due from banks and federal funds sold – The carrying amount of these assets is a reasonable estimate of fair value based on the short-term nature of these assets. Due from banks – time were acquired with an adjustment to fair value based on rates currently available to the Company for deposits in banks with similar maturities.

Investment securities – Investment securities were acquired with an adjustment to fair value based upon quoted market prices.

Loans acquired – Fair values for loans were based on a discounted cash flow methodology that considered factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term of loan and whether or not the loan was amortizing, and current discount rates. The discount rates used for loans are based on current market rates for new originations of comparable loans and include adjustments for liquidity concerns. The discount rate does not include a factor for credit losses as that has been included in the estimated cash flows. Loans were grouped together according to similar characteristics and were treated in the aggregate when applying various valuation techniques.

Premises and equipment – Bank premises and equipment were acquired with an adjustment to fair value, which represents the difference between the Company’s current analysis of property and equipment values completed in connection with the acquisition and book value acquired.

Bank owned life insurance – Bank owned life insurance is carried at its current cash surrender value, which is the most reasonable estimate of fair value.

Goodwill – The consideration paid as a result of the acquisition exceeded the fair value of the assets acquired, resulting in an intangible asset, goodwill, of $94.9 million.

Core deposit intangible – This intangible asset represents the value of the relationships that Liberty had with its deposit customers. The fair value of this intangible asset was estimated based on a discounted cash flow methodology that gave appropriate consideration to expected customer attrition rates, cost of the deposit base and the net maintenance cost attributable to customer deposits.

Other assets – The fair value adjustment results from certain assets whose value was estimated to be less than book value, such as certain prepaid assets, receivables and other miscellaneous assets. The deferred tax asset, included in other assets, is based on 39.225% of fair value adjustments related to the acquired assets and assumed liabilities and on a calculation of future tax benefits. The Company also recorded Liberty’s remaining deferred tax assets and liabilities as of the acquisition date.

Deposits – The fair values used for the demand and savings deposits that comprise the transaction accounts acquired, by definition equal the amount payable on demand at the acquisition date. The Company performed a fair value analysis of the estimated weighted average interest rate of Liberty’s certificates of deposits compared to the current market rates. Based on the results of the analysis, the estimated fair value adjustment was immaterial.FHLB borrowings – The fair value of Federal Home Loan Bank borrowings is estimated based on borrowing rates currently available to the Company for borrowings with similar terms and maturities.

Subordinated debentures – The fair value of subordinated debentures is estimated based on borrowing rates currently available to the Company for borrowings with similar terms and maturities.

Accrued interest and other liabilities – The adjustment establishes a liability for unfunded commitments equal to the fair value of that liability at the date of acquisition.

The purchase price allocation and certain fair value measurements remain preliminary due to the timing of the acquisition and due to the number of assets acquired and liabilities assumed. Management will continue to review the estimated fair values of loans, property and equipment, intangible assets, subordinated debentures, and other assets and liabilities, and to evaluate the assumed tax positions. The Company expects to finalize its analysis of the acquired loans and subordinated debentures along with the other acquired assets and assumed liabilities in this transaction over the next few months, within one year of the acquisition. Therefore, adjustments to the estimated amounts and carrying values may occur.

The Company’s operating results for 2015 include the operating results of the acquired assets and assumed liabilities of Liberty subsequent to the acquisition date.

Community First Bancshares, Inc.

On February 27, 2015, the Simmons First National Corporation completed the acquisition of Community First Bancshares, Inc. (“Community First”), headquartered in Union City, Tennessee, including its wholly-owned bank subsidiary First State Bank (“FSB”). Simmons issued 6,552,915 shares of its common stock valued at approximately $268.3 million as of February 27, 2015, plus $9,974 in cash in exchange for all outstanding shares of Community First common stock. Simmons also issued $30.9 million of preferred stock in exchange for all outstanding shares of Community First preferred stock.

Prior to the acquisition, Community First conducted banking business from 33 branches located across Tennessee. Including the effects of the purchase accounting adjustments, the Company acquired approximately $1.9 billion in assets, approximately $1.1 billion in loans including loan discounts and approximately $1.5 billion in deposits. The Company expects to complete the systems conversion and merge FSB into Simmons Bank by September 4, 2015.

Goodwill of $111.6 million was recorded as a result of the transaction. The merger allowed Simmons’ entrance into the Tennessee market and will serve as a launching platform for possible expansion into adjacent areas. Simmons believes that it will be able to achieve cost savings by integrating the two companies and combining accounting, data processing, and other administrative functions. Further Simmons believes it can benefit from the addition of Community First's small-business lending platform while cross-selling its trust products in Community First’s market. This combination of factors gave rise to the goodwill recorded. The goodwill will not be deductible for tax purposes.

A summary, at fair value, of the assets acquired and liabilities assumed in the Community First transaction, as of the acquisition date, is as follows:

(In thousands)	Acquired from Community First			Fair Value Adjustments			Fair Value

Assets Acquired
Cash and due from banks	$	39,848		$	--		$	39,848
Federal funds sold		76,508			--			76,508
Investment securities		570,199			(3,381	)		566,818
Loans acquired, not covered by FDIC loss share		1,163,398			(26,855	)		1,136,543
Allowance for loan losses		(14,635	)		14,635			--
Foreclosed assets not covered by FDIC loss share		747			--			747
Premises and equipment		44,837			(2,794	)		42,043
Bank owned life insurance		22,149			--			22,149
Goodwill		100			(100	)		--
Core deposit intangible		--			11,273			11,273
Other intangibles		--			420			420
Deferred tax asset		3,700			3,866			7,566
Other assets		11,474			--			11,474
Total assets acquired	$	1,918,325		$	(2,936	)	$	1,915,389

Liabilities Assumed
Deposits:
Non-interest bearing transaction accounts	$	103,825		$	--		$	103,825
Interest bearing transaction accounts and savings deposits		995,207			--			995,207
Time deposits		436,181			849			437,030
Total deposits		1,535,213			849			1,536,062
Federal funds purchased and securities sold under agreement to repurchase		16,230			--			16,230
FHLB borrowings		143,047			1,347			144,394
Subordinated debentures		21,754			--			21,754
Accrued interest and other liabilities		8,769			601			9,370
Total liabilities assumed		1,725,013			2,797			1,727,810
Equity		193,312			(193,312	)		--
Total equity assumed		193,312			(193,312	)		--
Total liabilities and equity assumed	$	1,918,325		$	(190,515	)	$	1,727,810
Net assets acquired								187,580
Purchase price								299,204
Goodwill							$	111,624

The following is a description of the methods used to determine the fair values of significant assets and liabilities presented in the Community First acquisition above.

Cash and due from banks and federal funds sold – The carrying amount of these assets is a reasonable estimate of fair value based on the short-term nature of these assets.

Investment securities – Investment securities were acquired with an adjustment to fair value based upon quoted market prices.

Foreclosed assets held for sale – These assets are presented at the estimated present values that management expects to receive when the properties are sold, net of related costs of disposal.

Bank owned life insurance – Bank owned life insurance is carried at its current cash surrender value, which is the most reasonable estimate of fair value.

Goodwill – The consideration paid as a result of the acquisition exceeded the fair value of the assets acquired, resulting in an intangible asset, goodwill, of $111.6 million. Goodwill established prior to the acquisition was written off.

Core deposit intangible – This intangible asset represents the value of the relationships that Community First had with its deposit customers. The fair value of this intangible asset was estimated based on a discounted cash flow methodology that gave appropriate consideration to expected customer attrition rates, cost of the deposit base and the net maintenance cost attributable to customer deposits.

Other intangibles – This intangible asset represents the value of the relationships that Community First’s insurance subsidiary had with their customers. The fair value of this intangible asset was estimated based on a combination of discounted cash flow methodology and a market valuation approach.

Deferred tax asset – The deferred tax asset is based on 39.225% of fair value adjustments related to the acquired assets and assumed liabilities and on a calculation of future tax benefits. The Company also recorded Community First’s remaining deferred tax assets and liabilities as of the acquisition date.

Other assets – The carrying amount of these assets was deemed to be a reasonable estimate of fair value.

Federal funds purchased and securities sold under agreement to repurchase – The carrying amount of federal funds purchased and securities sold under agreement to repurchase is a reasonable estimate of fair value based on the short-term nature of these liabilities.

FHLB borrowings – The fair value of Federal Home Loan Bank borrowings is estimated based on borrowing rates currently available to the Company for borrowings with similar terms and maturities.

Subordinated debentures – The fair value subordinated debentures is estimated based on borrowing rates currently available to the Company for borrowings with similar terms and maturities.

Accrued interest and other liabilities – The adjustment establishes a liability for unfunded commitments equal to the fair value of that liability at the date of acquisition.

The purchase price allocation and certain fair value measurements remain preliminary due to the timing of the acquisition and due to the number of assets acquired and liabilities assumed. Management will continue to review the estimated fair values of loans, foreclosed assets, property and equipment, intangible assets, subordinated debentures, and other assets and liabilities, and to evaluate the assumed tax positions. The Company expects to finalize its analysis of the acquired loans and subordinated debentures along with the other acquired assets and assumed liabilities in this transaction over the next few months, within one year of the acquisition. Therefore, adjustments to the estimated amounts and carrying values may occur.

The Company’s operating results for 2015 include the operating results of the acquired assets and assumed liabilities of Community First subsequent to the acquisition date.

Summary of Unaudited Pro forma Information

The unaudited pro forma information below for the three-months ended March 31, 2015 and 2014 gives effect to the Liberty and Community First acquisitions as if the acquisitions had occurred on January 1, 2014. Pro forma earnings for the three months ended March 31, 2015 were adjusted to exclude $7.4 million of acquisition-related costs, net of tax, incurred by Simmons during 2015. Supplemental pro-forma earnings for the three months ended March 31, 2014 were adjusted to include these charges. The pro forma financial information is not necessarily indicative of the results of operations if the acquisitions had been effective as of this date.

(dollars in thousands)	Three-months ended March 31, 2015		Three-months ended March 31, 2014
Revenue (1)	$	97,265	$	90,843
Net income	$	23,273	$	5,444
Earnings per share	$	0.78	$	0.19

(1)	Net interest income plus noninterest income.

Consolidated 2015 results included approximately $4.7 million of revenue and $1.5 million of net income attributable to the Liberty acquisition and $8.2 million of revenue and $2.2 million of net income attributable to the Community First acquisition.

NOTE 3:

INVESTMENT SECURITIES

The amortized cost and fair value of investment securities that are classified as held-to-maturity and available-for-sale are as follows:

	March 31, 2015									December 31, 2014
(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Estimated Fair Value

Held-to-Maturity
U.S. Government agencies	$	390,625	$	1,935	$	(1,043	)	$	391,517	$	418,914	$	929	$	(4,055	)	$	415,788
Mortgage-backed securities		28,535		276		(145	)		28,666		29,743		56		(411	)		29,388
State and political subdivisions		482,316		9,807		(210	)		491,907		328,310		7,000		(573	)		334,737
Other securities		947		-		-			947		620		-		-			620
Total HTM	$	902,423	$	12,012	$	(1,398	)	$	913,037	$	777,587	$	7,985	$	(5,039	)	$	780,533

Available-for-Sale
U.S. Treasury	$	4,000	$	8	$	-		$	4,008	$	4,000	$	1	$	(9	)	$	3,992
U.S. Government agencies		346,786		355		(826	)		346,315		275,381		15		(2,580	)		272,816
Mortgage-backed securities		308,333		3,748		(70	)		312,011		1,579		-		(7	)		1,572
State and political subdivisions		13,342		110		-			13,452		6,536		7		(3	)		6,540
Other securities		31,870		458		(731	)		31,597		19,985		386		(8	)		20,363
Total AFS	$	704,331	$	4,679	$	(1,627	)	$	707,383	$	307,481	$	409	$	(2,607	)	$	305,283

Securities with limited marketability, such as stock in the Federal Reserve Bank and the Federal Home Loan Bank, are carried at cost and are reported as other available-for-sale securities in the table above.

Certain investment securities are valued at less than their historical cost. Total fair value of these investments at March 31, 2015, was $537.2 million, which is approximately 33.4% of the Company’s combined available-for-sale and held-to-maturity investment portfolios.

The following table shows the gross unrealized losses and fair value of the Company’s investments with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at March 31, 2015:

	Less Than 12 Months					12 Months or More					Total
(In thousands)	Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses			Estimated Fair Value		Gross Unrealized Losses

Held-to-Maturity
U.S. Government agencies	$	131,872	$	(589	)	$	70,543	$	(454	)	$	202,415	$	(1,043	)
Mortgage-backed securities		1,902		(13	)		8,895		(132	)		10,797		(145	)
State and political subdivisions		31,294		(186	)		2,920		(24	)		34,214		(210	)
Total HTM	$	165,068	$	(788	)	$	82,358	$	(610	)	$	247,426	$	(1,398	)

Available-for-Sale
U.S. Government agencies	$	196,571	$	(500	)	$	79,311	$	(326	)	$	275,882	$	(826	)
Mortgage-backed securities		12,300		(70	)		--		--			12,300		(70	)
State and political subdivisions		--		--			--		--			--		--
Equity Securities		515		(2	)		--		--			515		(2	)
Other		1,060		(729	)		--		--			1,060		(729	)
Total AFS	$	210,446	$	(1,301	)	$	79,311	$	(326	)	$	289,757	$	(1,627	)

These declines primarily resulted from the rate for these investments yielding less than current market rates. Based on evaluation of available evidence, management believes the declines in fair value for these securities are temporary. Management does not have the intent to sell these securities and management believes it is more likely than not the Company will not have to sell these securities before recovery of their amortized cost basis less any current period credit losses.

Declines in the fair value of held-to-maturity and available-for-sale securities below their cost that are deemed to be other than temporary are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers, among other things, (i) the length of time and the extent to which the fair value has been less than cost, (ii) the financial condition and near-term prospects of the issuer, and (iii) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

Management has the ability and intent to hold the securities classified as held to maturity until they mature, at which time the Company expects to receive full value for the securities. Furthermore, as of March 31, 2015, management also had the ability and intent to hold the securities classified as available-for-sale for a period of time sufficient for a recovery of cost. The unrealized losses are largely due to increases in market interest rates over the yields available at the time the underlying securities were purchased. The fair value is expected to recover as the bonds approach their maturity date or repricing date or if market yields for such investments decline. Management does not believe any of the securities are impaired due to reasons of credit quality. Accordingly, as of March 31, 2015, management believes the impairments detailed in the table above are temporary. Should the impairment of any of these securities become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period the other-than-temporary impairment is identified.

The book value of securities sold under agreements to repurchase equaled $104.4 million and $93.5 million for March 31, 2015 and December 31, 2014, respectively.

Income earned on securities for the three months ended March 31, 2015 and 2014, is as follows:

(In thousands)	2015		2014

Taxable:
Held-to-maturity	$	1,389	$	1,349
Available-for-sale		1,583		550
Non-taxable:
Held-to-maturity		2,602		2,619
Available-for-sale		305		31
Total	$	5,879	$	4,549

Maturities of investment securities at March 31, 2015, are as follows:

	Held-to-Maturity				Available-for-Sale
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value

One year or less	$	41,310	$	41,392	$	58,762	$	58,752
After one through five years		414,115		414,863		247,200		246,659
After five through ten years		182,259		185,229		123,795		124,808
After ten years		264,739		271,553		243,476		246,322
Other securities (no maturity)		-		-		31,098		30,842
Total	$	902,423	$	913,037	$	704,331	$	707,383

The carrying value, which approximates the fair value, of securities pledged as collateral, to secure public deposits and for other purposes, amounted to $888.6 million at March 31, 2015 and $520.4 million at December 31, 2014.

There were $2,000 of gross realized gains and $40,000 of realized losses from the sale of available for sale securities during the three months ended March 31, 2015. There were no realized gains or losses on investment securities for the three months ended March 31, 2014.

The state and political subdivision debt obligations are primarily non-rated bonds representing small, Arkansas, Texas, Missouri and Tennessee issues, which are evaluated on an ongoing basis.

NOTE 4:

LOANS AND ALLOWANCE FOR LOAN LOSSES

At March 31, 2015, the Company’s loan portfolio was $4.64 billion, compared to $2.74 billion at December 31, 2014. The various categories of loans are summarized as follows:

(In thousands)	March 31, 2015		December 31, 2014

Consumer:
Credit cards	$	171,413	$	185,380
Other consumer		107,486		103,402
Total consumer		278,899		288,782
Real Estate:
Construction		178,929		181,968
Single family residential		467,671		455,563
Other commercial		755,701		714,797
Total real estate		1,402,301		1,352,328
Commercial:
Commercial		324,815		291,820
Agricultural		105,228		115,658
Total commercial		430,043		407,478
Other		4,137		5,133
Legacy loans		2,115,380		2,053,721
Loans acquired, not covered by FDIC loss share (net of discount) (1)		2,418,440		575,980
Loans acquired, covered by FDIC loss share (net of discount and allowance) (1)		102,468		106,933
Total loans	$	4,638,288	$	2,736,634

______________________________

(1)	See Note 5, Loans Acquired, for segregation of loans acquired by loan class.

Loan Origination/Risk Management – The Company seeks to manage its credit risk by diversifying its loan portfolio, determining that borrowers have adequate sources of cash flow for loan repayment without liquidation of collateral; obtaining and monitoring collateral; providing an adequate allowance for loans losses by regularly reviewing loans through the internal loan review process. The loan portfolio is diversified by borrower, purpose and industry. The Company seeks to use diversification within the loan portfolio to reduce its credit risk, thereby minimizing the adverse impact on the portfolio, if weaknesses develop in either the economy or a particular segment of borrowers. Collateral requirements are based on credit assessments of borrowers and may be used to recover the debt in case of default. Furthermore, factors that influenced the Company’s judgment regarding the allowance for loan losses consists of a five-year historical loss average segregated by each primary loan sector. On an annual basis, historical loss rates are calculated for each sector.

Consumer – The consumer loan portfolio consists of credit card loans and other consumer loans. The Company no longer originates or services student loans. Credit card loans are diversified by geographic region to reduce credit risk and minimize any adverse impact on the portfolio. Although they are regularly reviewed to facilitate the identification and monitoring of creditworthiness, credit card loans are unsecured loans, making them more susceptible to be impacted by economic downturns resulting in increasing unemployment. Other consumer loans include direct and indirect installment loans and overdrafts. Loans in this portfolio segment are sensitive to unemployment and other key consumer economic measures.

Real estate – The real estate loan portfolio consists of construction loans, single family residential loans and commercial loans. Construction and development loans (“C&D”) and commercial real estate loans (“CRE”) can be particularly sensitive to valuation of real estate. Commercial real estate cycles are inevitable. The long planning and production process for new properties and rapid shifts in business conditions and employment create an inherent tension between supply and demand for commercial properties. While general economic trends often move individual markets in the same direction over time, the timing and magnitude of changes are determined by other forces unique to each market. CRE cycles tend to be local in nature and longer than other credit cycles. Factors influencing the CRE market are traditionally different from those affecting residential real estate markets; thereby making predictions for one market based on the other difficult. Additionally, submarkets within commercial real estate – such as office, industrial, apartment, retail and hotel – also experience different cycles, providing an opportunity to lower the overall risk through diversification across types of CRE loans. Management realizes that local demand and supply conditions will also mean that different geographic areas will experience cycles of different amplitude and length. The Company monitors these loans closely and has no significant concentrations in its real estate loan portfolio.

Commercial – The commercial loan portfolio includes commercial and agricultural loans, representing loans to commercial customers and farmers for use in normal business or farming operations to finance working capital needs, equipment purchase or other expansion projects. Collection risk in this portfolio is driven by the creditworthiness of the underlying borrowers, particularly cash flow from customers’ business or farming operations. The Company continues its efforts to keep loan terms short, reducing the negative impact of upward movement in interest rates. Term loans are generally set up with a one or three year balloon, and the Company has recently instituted a pricing mechanism for commercial loans. It is standard practice to require personal guaranties on all commercial loans, particularly as they relate to closely-held or limited liability entities.

Nonaccrual and Past Due Loans – Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are placed on nonaccrual status when, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, as well as when required by regulatory provisions. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Nonaccrual loans, excluding loans acquired, segregated by class of loans, are as follows:

(In thousands)	March 31, 2015		December 31, 2014

Consumer:
Credit cards	$	290	$	197
Other consumer		401		405
Total consumer		691		602
Real estate:
Construction		5,341		4,863
Single family residential		4,600		4,010
Other commercial		2,755		1,522
Total real estate		12,696		10,395
Commercial:
Commercial		950		585
Agricultural		174		456
Total commercial		1,124		1,041
Total	$	14,511	$	12,038

An age analysis of past due loans, excluding loans acquired, segregated by class of loans, is as follows:

(In thousands)	Gross 30-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans		90 Days Past Due & Accruing

March 31, 2015
Consumer:
Credit cards	$	538	$	439	$	977	$	170,436	$	171,413	$	--
Other consumer		1,205		388		1,593		105,893		107,486		116
Total consumer		1,743		827		2,570		276,329		278,899		116
Real estate:
Construction		1,798		828		2,626		176,303		178,929		--
Single family residential		3,023		2,568		5,591		462,080		467,671		3
Other commercial		3,453		1,406		4,859		750,842		755,701		--
Total real estate		8,274		4,802		13,076		1,389,225		1,402,301		3
Commercial:
Commercial		645		128		773		324,042		324,815		13
Agricultural		435		72		507		104,721		105,228		3
Total commercial		1,080		200		1,280		428,763		430,043		16
Other		--		--		--		4,137		4,137		--
Total	$	11,097	$	5,829	$	16,926	$	2,098,454	$	2,115,380	$	135

December 31, 2014
Consumer:
Credit cards	$	687	$	457	$	1,144	$	184,236	$	185,380	$	--
Other consumer		1,349		447		1,796		101,606		103,402		223
Total consumer		2,036		904		2,940		285,842		288,782		223
Real estate:
Construction		760		570		1,330		180,638		181,968		177
Single family residential		4,913		2,213		7,126		448,437		455,563		248
Other commercial		1,987		847		2,834		711,963		714,797		--
Total real estate		7,660		3,630		11,290		1,341,038		1,352,328		425
Commercial:
Commercial		381		354		735		291,085		291,820		--
Agricultural		119		109		228		115,430		115,658		40
Total commercial		500		463		963		406,515		407,478		40
Other		--		--		--		5,133		5,133		--
Total	$	10,196	$	4,997	$	15,193	$	2,038,528	$	2,053,721	$	688

Impaired Loans – A loan is considered impaired when it is probable that the Company will not receive all amounts due according to the contractual terms of the loans, including scheduled principal and interest payments. This includes loans that are delinquent 90 days or more, nonaccrual loans and certain other loans identified by management. Certain other loans identified by management consist of performing loans with specific allocations of the allowance for loan losses. Impaired loans are carried at the present value of estimated future cash flows using the loan’s existing rate, or the fair value of the collateral if the loan is collateral dependent.

Impairment is evaluated in total for smaller-balance loans of a similar nature and on an individual loan basis for other loans. Impaired loans, or portions thereof, are charged-off when deemed uncollectible.

Impaired loans, net of government guarantees and excluding loans acquired, segregated by class of loans, are as follows:

(In thousands)	Unpaid Contractual Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance		Average Investment in Impaired Loans		Interest Income Recognized

March 31, 2015											Three Months Ended March 31, 2015
Consumer:
Credit cards	$	439	$	439	$	--	$	439	$	13	$	318	$	5
Other consumer		572		544		8		552		91		586		9
Total consumer		1,011		983		8		991		104		904		14
Real estate:
Construction		8,098