One-time Transaction Influences Simmons First Earnings

One-time items from a year ago affected Simmons First National Corp. fourth quarter and full year bottom lines, leading to lower earnings for the Pine Bluff-based bank holding company.

For the full year, Simmons First reported net income of $25.4 million, or $1.47 diluted earnings per share, compared to $37.1 million, or $2.15 diluted earnings per share for the same period in 2010. Bank leaders said that a 2010 fourth quarter acquisition in Kansas skewed year-ago results.

“Because the fourth quarter of 2010 included a considerable non-core net gain, there is a significant variance when comparing quarter to quarter earnings results,” said Simmons First Chairman and CEO J. Thomas May. “Obviously, there is a lot of noise in our fourth quarter comparative results due to the October 15, 2010, FDIC-assisted acquisition in Kansas. After taxes, the combined fourth quarter 2010 non-recurring items from that acquisition contributed $9.7 million to net income, or $0.56 to diluted earnings per share. After adjusting for the acquisition, comparable core earnings for the fourth quarter 2010 were $6.9 million, or $0.40 diluted core earnings per share.”

Key metrics for Simmons First included:

• Total assets of $3.3 billion at December 31, 2011, unchanged from December 31, 2010.
• Total loans, including those covered by FDIC loss share agreements, were $1.7 billion at December 31, 2011, a decrease of $177 million, or 9.3%, from the same period in 2010.
• Total deposits were $2.7 billion, an increase of $41 million, or 1.6%, compared to the same period in 2010.
• Non-interest income for the fourth quarter of 2011 was $12.8 million, a decrease of $20.8 million, or 61.8%, compared to the same period last year.
• Net interest income for the fourth quarter of 2011 increased 3.9% to $27.3 million compared to the same period of 2010.

May warned that loan demand remained soft, but he hoped for an improvement in the second half of 2012.

“[L]ike the rest of the financial industry in Arkansas, we continue to experience weak loan demand as a result of the overall general economic environment,” he said. “We believe loan demand is likely to remain soft through the first quarter of 2012, and likely into the second quarter, but we are cautiously optimistic relative to improved loan demand in the last half of 2012.”

Simmons First stock (NASDAQ: SFNC) closed trading Wednesday at $28.00 per share. During the past 52 weeks, the share price has ranged from a $18.71 low to a $29.31 high.