Home Bancshares, Simmons First report Q3 earnings

Two Arkansas-based banks that recently acquired failed banks in Florida, Kansas and Missouri posted relatively impressive third-quarter earnings on Thursday (Oct. 21), with Conway-based Home Bancshares’ earnings up 32%.

Home Bancshares, the parent company of Centennial Bank, said its earnings received an “FDIC-assisted bounce” as the Arkansas financial concern’s third quarter earnings jumped 32.1% from a year ago.

Simmons First National Corp. third quarter profits fell short of last year’s results and analysts’ expectation on Thursday as the Pine Bluff-based banks absorbs two recent FDIC-backed out-of-state acquisitions.

HOME BANCSHARES
“We are pleased with the exceptional results for the quarter just ended," said John Allison, board chairman. "The FDIC acquisitions of Coastal Community Bank, Bayside Savings Bank and Wakulla Bank are strong opportunistic acquisitions for our Company allowing us to expand our footprint into the Florida Panhandle. We continue to uphold our status as a ‘well-capitalized’ financial institution positioned to take advantage of FDIC deals as they become reasonably opportunistic."

For the period ended Sept. 30, the Arkansas regional bank reported third quarter earnings of $9.6 million, or 31 cents per diluted  share, compared to net income of $7.2 million, or 29 cents per diluted share  for the same quarter in 2009.

Wall Street analysts, on average, expected the financial holding company to report second quarter earnings of 30 cents per share, according to Thomson Reuters. Ahead of Thursday’s opening bell, Home Bancshares stock (NASDAQ: HOMB) was trading at $21.13. During the past 52 weeks, the share price has ranged from a $26.85 high to a $18.64 low.

Overall, this is the fifth FDIC-assisted deal that Home Bancshares has performed this year.

Earlier this month, Centennial Bank acquired all the deposits, substantially all of the assets, and certain liabilities of Wakulla Bank, which was based in Crawfordville, Fla., in the Tallahassee metro area. The buyout was part of an FDIC-assisted transaction.

In late July, Centennial acquired Panama City Beach-based Coastal Community and Port St. Joe-based Bayside Savings. With the Wakulla acquisition, Centennial now has branches from Panama City Beach to Tallahassee, in addition to its branches in Central and South Florida, including 10 branches in the Keys.

In the previous quarter, Home Bancshares also participated in two FDIC-assisted transactions, paying approximately $9.7 million for Orlando, Fla.-based Old Southern Bank and $3.3 million for Key West Bank in Key West, Fla.

Home Bancshares total deposits were $2.56 billion at Sept. 30, 2010 compared to $1.84 billion at Dec. 31, 2009. Total assets were $3.39 billion at Sept. 30, 2010 compared to $2.68 billion at Dec. 31, 2009.

SIMMONS FIRST
For the period ended Sept. 30, Simmons reported third quarter net income of $7.6 million of 44 cents per share, down 1.3 percent compared to $7.7 million or 54 cents for the same period in 2009.

Wall Street, on average, expected the Arkansas bank to report third quarter earnings of 46 cents per share, according to Thomson Reuters.

Simmons Chairman and CEO J. Thomas May said that while the impact of recent acquisition activity has negatively affected the past three quarters, the Arkansas bank should see a financial boost in the fourth quarter.

"Overall, we are pleased with our third quarter results. Highlights of the quarter include record net interest income, improvement in our net interest margin and continued good asset quality compared to the rest of the industry," May said in a statement. "While the impact of our 2009 stock offering was dilutive to our third quarter EPS by approximately $0.09, the excess capital positions us to continue to take advantage of unprecedented acquisition opportunities through FDIC assisted transactions of failed banks.”

Earlier in the month, Simmons reached an agreement with the FDIC to purchase substantially all of the assets and to assume substantially all of the deposits and certain other liabilities of Olathe, Kan.-based Security Savings Bank. As a result of this acquisition, Simmons enters Kansas for the first time with nine branches located in the communities of Olathe, Overland Park, Leawood, Salina and Wichita.

In May, Simmons reached its first deal with the FDIC to purchase a bank outside the state of Arkansas. That deal allowed the Arkansas regional bank to purchase substantially all of the assets and to assume substantially all of the deposits and certain other liabilities of Southwest Community Bank in Springfield, Mo. In the second quarter, Simmons recognized a pre-tax gain of $3 million on the transaction, and the acquisition also contributed 9 cents per share to the company’s earnings.

Overall, Simmons total assets for the quarter  were $3 billion, an increase of 3.5% from $2.9 billion at Sept. 30, 2009.

At Thursday’s opening bell, Simmons shares (NASDAQ: SFNC) were trading at $29.22, up 21 cents. During the past 52 weeks, the share price has ranged from a $29.94 high to a $24.18 low.