Good day ladies and gentlemen and welcome to the Simmons First National Corporation, second quarter earnings call and webcast. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time (Operator Instructions). I would now like to turn the call over to David Garner.

Good afternoon. I’m David Garner, Investor Relations Officer for Simmons First National Corporation. We want to welcome you to our second quarter earnings teleconference and webcast. Joining me today are George Makris, Chief Executive Officer; David Bartlett, Chief Banking Officer; and Bob Fehlman, Chief Financial Officer. The purpose of this call is to discuss the information and data provided by the company in our quarterly earnings release issued this morning. We will begin our discussion with prepared comments and then we will entertain questions. We have invited institutional investors and analysts from the investment firms that provide research on our company to participate in the question-and-answer session. All other guests in this conference are in a listen-only mode. I would remind you of the special cautionary notice regarding forward-looking statements and that certain matters discussed in this presentation may constitute forward-looking statements, may involve certain known and unknown risks, uncertainties and other factors which may cause actual results to be materially different from our current expectations, performance or achievements. Additional information concerning these factors can be found in the closing paragraph of our press release and in our Form 10-K. With that said, I’ll turn the call over to George Makris.

Thank you David and welcome everyone to our second quarter conference call. Second quarter was a landmark quarter for Simmons. We announced two acquisitions totaling approximately $3 billion in assets and today reported record core earnings and record core earnings per share for the quarter. In our press release issued earlier today, we reported second quarter core earnings of $9.2 million and the increase of 42.8% compared to the same quarter last year. Diluted core EPS was $0.56 a share, a 43.6% increase quarter-over-quarter. Core earnings exclude $755,000 in net after tax earnings. Let me give you an overview of the non-core items from the second quarter. First, we announced the acquisitions of Community First Bancshares in Union City, Tennessee and Liberty Bancshares in Springfield, Missouri. As a result of these acquisitions, along with previously announced Delta Trust & Bank acquisition, we recognized $823,000 in after tax merger related expenses. Also we had net after tax gains of $1.2 million related to the sale of previously closed branches, which will offset somewhat by costs related to maintaining the properties. These were sales of branches closed during the first quarter, related to the integration of the Metropolitan National Bank into Simmons Bank. We also incurred $252,000 in after tax charter consolidation costs during the quarter. Finally, we recorded a $608,000 after tax gain from the sale of our merchant services business. Including these non-core items, net income for the second quarter was $9.9 million or $0.60 diluted EPS, compared to $6.6 million or $0.40 diluted EPS or a 50% increase over the same period last year. Year-to-date core earnings were $16.6 million and core EPS was $1.02 per share, compared to $12.5 million and $0.76 last year. On June 30 total assets were $4.3 billion. The combined loan portfolio was $2.4…

(Operator Instructions). The first question comes from Matt Olney from Stephens.

Hey, good afternoon guys. This is actually Tyler Stafford in for Matt, how are you doing?

Hey Tyler, how are you?

I’m doing well, thank you. I wanted to start on the loan growth. It looks like you had some nice loan growth within your legacy portfolio even outside of the seasonal strength of the Ag portfolio. Can you talk about the trend that you’re seeing within that Legacy book and what markets are driving that growth?

Tyler, I’ll start and then I’ll turn it over to David Bartlett for a little more detail. I would tell you that our growth is coming from virtually every market we serve and we are seeing some of the new lenders that we hired about a year ago, our Kansas and Missouri markets starting to really have some production success up in those markets. But I’ll turn it over to David and ask him to talk about the trend that we see and maybe a little more detail about some of the markets.

Hi Tyler, David Bartlett here. Thanks for the question and quite frankly we’re seeing some nice loan growth in the core areas, primarily in St. Louis, Kansas City and Wichita. Little Rock, Central Arkansas is still driving some nice long growth for us as well in the Legacy portfolio. Now we anticipate around a 7% to a 10% growth in that portfolio going forward. So that’s pretty well where see our legacy growth portfolio to advance.

And what about your pipelines as they stand today?

Tyler, as David mentioned, if everything comes through that we see in the pipeline, that 7% to 10% growth rate ought to be pretty easy to attain. So, I would say they are pretty sturdy with what you’ve seen over the last two quarters at least.

Okay, and then switching over to M&A and just kind of a bigger picture question if you will. So you’ve got three pending bills now, how do you balance the pipeline of additional M&A opportunities with everything that’s on your plant with the integration of the existing deals. Can you give any color on that?

Sure. I will tell you, our focus right now is clearly on the integration of these deals. We’re spending a lot of time talking to our newest friends at Liberty Bank and First State Bank and Delta Trust, to make sure we understand how to integrate their successful lines of business with ours and we’re well down the road of understanding some of their product lines that we didn’t previously have with Simons and are getting even more excited about that opportunity once we get to roll those out across the entire franchise. So that’s a high priority for us right now. I will tell you that because of our pending size and that is about $8 billion, we are going to have to spend a little time vesting with regulators about how things will change for us once we pass $10 billion. As we take a look at out of state opportunities, we would like those acquisitions to be big enough to be a standalone region on their own, so for us that means about $1 billion or more. I will tell you that we continued to have a keen interest in the states that we are in and filling in the footprints and also win some other contiguous stats we’ve mentored before, like Oklahoma and Texas. We are going to defer any serious discussions until at least the end of this year and probably into the first quarter of 2015. Go through our books between now and April of 2015 with regard to closings and conversions, so anything we would do would have to occur after that timeline. Now I’m not speaking of any relatively small deal that we may run across in the meantime and that would make a strategic sense for us. For instance, some very specific line of lending or very compressed geographic coverage area that would fill in very well. We might be able to handle something like that, but any large acquisition we think is a 2015 project.

Okay, that’s helpful George. I appreciate it.

Sure

The next question comes from Brian Zabora from Keefe Bruyette & Woods Inc.

Hi Brian Brian Zabora - Keefe Bruyette & Woods Inc.: Hi, good afternoon.

Hi Brian Brian Zabora - Keefe Bruyette & Woods Inc.: One question I had on the gains that you recorded. You said something about the merging gain. Was that in other income, other fees or does that flow through another line item. I just want to double check where it came from.

Other income Brian from the income statement, the non-interest income category. Brian Zabora - Keefe Bruyette & Woods Inc.: So credit card fees, that’s all organic, that was pretty strong. Can you give a sense – are you expanding your operations to maybe Metropolitan or maybe talk about a little bit of the spreads of the credit card fee line item.

I’ll tell you first, the credit card income was really up about 4% or so. That was really a re-class related to the Metropolitan after the conversion, and if you look up in other service, charges and fees, that was down about that like amount. So yes, it looks like it’s up about 30%, but that’s really a re-class after the conversion. Brian Zabora - Keefe Bruyette & Woods Inc.: Great, okay, that makes sense. And then could give us a sense on how much accretion interest income did you receive from Metropolitan this quarter compared to last.

Well, let me just give you the total numbers. For this quarter our accretable yield was $8.2 million versus about $10.1 million in the first quarter, and if you look at in the press release we give you the e numbers for the quarter. The excess that we have to accrete and write-off there, we have a non-interest income. Our excess, we accreted the income $5.8 million, while our indemnification asset went down $6.4 million. So we actually had a negative impact to the P&L this quarter related to that. Metropolitan, their accretable yield was relatively flat from this quarter to the first quarter. Brian Zabora - Keefe Bruyette & Woods Inc.: Okay. So with the margin, I mean I know there’s some seasonality, but how do you think about the margin going forward. In the second half of the year I know you got acquisitions, potential closing in the fourth quarter, but just any thoughts around the margin would be helpful.

Well, I think first off I think when you look at us first, you need to look at what the core margin is and that takes out of this accretable component of it. But we were at 374 compared to about 375 in the first quarter, so relatively flat. Third quarter will pick-up. That will be our highest yielding for seasonality. As we put more assets, as these loans we talked about going from 7% to 9%, 10% loan growth, as we move that from the lower costing funds and Fed funds, that yield will go up. So I would say on a core basis of the 375 will be improved from those numbers. The top number, that reportable number will be kind of volatile as we go up and down with the accretable yield over the next couple of quarters, but I would say that 435 is going to be in that anywhere from the 420 to 435 range. Brian Zabora - Keefe Bruyette & Woods Inc.: Okay, that’s helpful. And then just lastly, the business that you saw, can you just give us a sense on may be the annual revenues and expenses, just for modeling purposes.

Well, I’ll tell you. First off, we think the revenue down. I don’t have that number, but it’s going to be down $1 million or so, but on net side the expenses that go with it, it’s basically a wash. What we’ve done here is we were able to get out of this line of business and take off a lot of liability off the books and yet keep our revenue and we’re having revenue sharing going forward. So revenue and the increase going forward, we think will be about a wash if we were in the business line. Now on the gross side we will see little at a time. But in our size income statement, it will be relatively negligible in there. Brian Zabora - Keefe Bruyette & Woods Inc.: Sounds great. Thanks for taking all my questions. I’m sorry, go ahead.

Hey Brian, this is George. Just a little bit more on merchant services sales. It’s always hard to make a decision to get out of them, a service area. This one was not as difficult for two major reasons. One is, in 2015 the conversion to the chip credit cards is coming into play, which means that many, many merchants are going to have to convert their card readers. That is a huge capital expense and we were looking forward to it. We don’t have that expense now going forward. And the second thing is, Bob mentioned it, is the risk associated with merchant services businesses. All that has left us at this point. We still have a great marketing agreement, so we still have a great revenue stream coming in and we can focus on what we do well and that is sales to our customers and providing that service through a third party, who quite honestly over time is going to be much more proficient at proving that service than we were going to be able to do. Brian Zabora - Keefe Bruyette & Woods Inc.: I really appreciate all the color.

Sure.

Thanks.

(Operator Instructions). The next question comes from Michael Rose from Raymond James.

Hey, good afternoon guys. How are you?

Hello Michael.

Hey, just wanted to get your thoughts on the provision from here. One of your instate competitors today just reiterated the fact they are going to build reserves, as the banks that they’ve acquired move from a loss – they are not loss share accounting, but switched accounting basically to more of a core basis and are building reserves because they are adding about three deals or a fair amount of assets here. How should we think about the absolute level of reserves as those deals are layered in as we move into 2015 and what provisioning can look like?

Michael, we’re experiencing the same thing as we’re moving loans from our acquired bucket to our legacy bucket, we have to start accounting for those loan losses in a traditional manner. So you can see that we have differed income of about $6.5 million for the differential between the accretable yield and the indemnification assets, but a lot of that – not all of it, but a lot of that’s going to be taken up in the addition to our provision as all those loans migrate into our legacy portfolio. You can expect a similar process with our pending acquisitions. Even though the marks aren't quite as substantial, who knows, as you have been used to seeing with our Metropolitan acquisition and certainly nothing like the marks we had on the loan portfolios of the FDIC acquisitions. But yes, you’re going to start seeing that mark go down and our provision go up as those loans move into our legacy portfolio.

Michael, one of the follow-up as I say too is, as we move and just for clarification, those loans that are impaired will stay in the acquired bucket and those are the ones that have the substantial mark against them. And as long as they are on the books, until they either payoff or we resolve them other ways, those marks will stay with them, but the unimpaired loans will be accreting those marks to income under FAS 91 type rule and as George said, those will migrate to our legacy portfolio. And as they migrate, well, I will say those loans on average will have about a 1.5% allowance if it’s typical to the rest of our portfolio, whereas the higher percent is allocated to those impaired loans. And so for example, this year we had $16 million of Metropolitan’s loans migrate from their acquired bucket to the legacy bucket in this quarter and I think it was 25 in the first quarter. We probably have somewhere in the $50 million for the balance of the year that will migrate, and as we move into the other acquisitions, those numbers will substantially increase. These accounting rules that we are under now, related to the loans makes it a challenge for you all on the outside to look at what are the exceptions on the provision and that allowance change, but that’s the rules we are under right now.

Okay, so maybe the way to think about it is, as more of these loans migrate and you also have a pickup in your legacy portfolio and stuff, the trim lines are relatively good. We should not only expect the dollar amount of provisioning to go up, but also the reserve to loan ratio to move up as well as. Am I thinking about that correctly?

Exactly, you hit it.

Okay, and then just a follow-up. You mentioned potentially starting a plan for crossing that $10 billion threshold and obviously these three deals (inaudible), they been a lot closer. Have you kind of quantified or can you quantify any sort of incremental cost that would come or that would be required and then what would the potential Durbin hit be for you and how long do you think it would take you to be able to replace those revenues? Thanks.

Well I’ll tell you the Durbin hit could be substantial for us in the $4 million range. So that’s going to be a big hit for us. We don’t have a timeline for making up that revenue. I will tell you this, also that most of the banks that we’ve talked to, who are currently over $10 billion, we were over $10 billion when the rules went into effects, so they sort of had the shock effect, all at one time. I’m sure that we have ramped up considerably over that period of time and we are absorbing a lot of that cost now, not all of it. So one of our objectives is to be able to quantify what that additional cost from the increased scrutiny and regulation is going to be and particularly things like the Durbin amendment that’s going to be a huge impact on us. So, we are not quite there yet. We know it’s going to be an impact, but we can’t put a dollar amount with it.

Okay, and then in terms of infrastructure, compliance cost, do you have any sort of outlook for what that may be incrementally?

We really don’t – we do what I consider to be an excellent job in the compliance arena now, and we are picking up excellent compliance people in the Liberty and Delta Trust and the First State acquisitions. So as far as trained personnel, I don’t have any problem with being able to ramp up in that area. What that means with regard to how much more we have to do internally than we’re currently doing, well that’s one of the big questions that we have to answer. So I really can’t tell you right now.

Okay, no problem. And just one final one if I could; any change to the expected closing timelines for any of the three deals?

The only change will be the Delta Trust closing date. If you recall, I think we announced a couple of weeks ago that we made an agreement with Southern Bancorp for the sale, well actually the gift of a current Delta location in Eudora, Arkansas. That was a branch that caused us an anticompetitive issue that took us a little longer to resolve than we expected on the front end. We didn’t have any other issues with the application, we just had to get the resolved before we could get regulatory approval, and of course this requires the Delta shareholder approval, so that timeline got pushed back until we got the regulatory approval. So all that’s on track now, just got pushed back a little bit. We had originally anticipated that the closing would be at the end July. It’s now going to be the middle of August. I would tell you that we have filed the S4 for the Delta acquisition this week. We expect to file the S4’s for the Liberty and First State acquisitions before August 1. So we are actually ahead of schedule with regard to our regulatory filings.

Okay, great. Thanks for taking my questions.

Sure.

(Operator Instructions). And there appear to be no further questions. I would now like to turn call back over to George Makris for closing remarks.

Okay, thank you very much. I want to clarify one comment I just made. We will file the S4 for Delta this week. It has not been filed as of today. I appreciate everyone listening in today, and if we don’t have an occasion to talk to you, in another three months we will look forward to talking to you then. Have a great day.

Ladies and gentlemen, that does conclude the conference for today. Again, thank you for your participation. You may all disconnect. Have a good day.