Socked by seasonal declines in its loan portfolio, Simmons First National Corp. reported Thursday before the opening bell that its first quarter profits fell short of both analysts’ expectations and last year’s results.
For the period ended March 31, the Pine Bluff-based regional bank reported earnings of $ 5.0 million or 29 cents per share, down 21.6 percent from a year ago’s earnings of $5.2 million, or 37 cents per share. The 2009 results were boosted by 18 cents per share by "nonrecurring items" related to Visa Inc.’s initial public offering.
On average, analysts’ expected the Arkansas regional bank to report earnings of 34 cents per share. At the close of market Wednesday, Simmons shares ended at $28.00, up 25 cents.
Still, Simmons First Chairman and CEO J. Thomas May remained upbeat and looked forward for possible acquisition opportunities in the future.
"Considering the conservative posture that we have taken relative to asset quality, capital and liquidity, we are willing to sacrifice some short-term earnings," May said. "As such, we are pleased with the first quarter earnings of $5 million."
In early March, May foretold declining activity at several of its community banks after announcing that it would close nine financial centers in nine cities throughout Arkansas in June, part of the bank’s "Branch Right Sizing" initiative.
"The affected financial centers have experienced a decline in transaction activity over the past several years," May said on March 5. "This decline in activity, without realistic expectations for reversing the decline, has led us to the decision to close these locations."
Overall, Simmons First’s total deposits were $2.4 billion and total assets for the company were $3.1 billion at March 31, 2010. Stockholders’ equity increased 27.8% to $373 million at March 31, 2010, compared to $292 million at March 31, 2009.
Simmon’s loan portfolio, which ranges from credit cards and student loans to commercial real estate, fell 3.5 percent for the period ended March 31.
May added that the company’s "exceptional level of capital" levels, made possible by a $75 million secondary stock offering in the fourth quarter of 2009, would continue to bolster the Pine Bluff-based bank.
"The excess capital positions us to take advantage of unprecedented acquisition opportunities through FDIC assisted transactions of failed banks and future traditional acquisitions of healthy banks," he said.