Simmons First, Home BancShares report earnings

Conway-based Home BancShares and Pine Bluff-based Simmons First National Corp. reported fourth quarter earnings on Thursday (Jan. 19), with Home BancShares up and Simmons posting a decline.

SIMMONS FIRST
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,” Simmons First Chairman and CEO J. Thomas May said in the earnings statement. “Obviously, there is a lot of noise in our fourth quarter comparative results due to the Oct. 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 Dec. 31, 2011, unchanged from Dec. 31, 2010.
• Total loans, including those covered by FDIC loss share agreements, were $1.7 billion at Dec. 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.

HOME BANCSHARES
Home BancShares, parent company of Centennial Bank, reported net income for the year ended December 31, 2011 of $54.7 million compared to $17.6 million one year ago.

Diluted earnings per share for the year ended 2011 were $1.85, compared to $0.52 for 2010.

For the fourth quarter of 2011, the Conway-based bank holding company recorded net income of $14.2 million, or $0.50 diluted earnings per share, compared to a net loss of $13.8 million, or $0.51 diluted loss per share, for the same period in 2010.

Home Bancshares has been on an acquisition spree for the last two years as it has gobbled up banks in northern Florida and a sliver of Alabama. In November, the bank acquired Vision Bank to expand its reach in the Florida panhandle market.

Also, last July, the bank announced it would exit the TARP (Troubled Asseet Relief Program) with the federal government, a program that allowed Home Bancshares to enter into nearly a half-dozen buyouts in cooperation with the FDIC.

Home Bancshares’ 2011 also glowed in comparison to the previous year, when the company took a $60-65 million one-time charge in the fourth quarter of 2010 for bad loans primarily from its Florida market.

“We are pleased with the record profit reported for 2011,” said Chairman John Allison. “Our efforts this year to make improvements were successful. We have continued to keep our strong capital levels considerably above the regulators’ capital requirements all year. It is possible, therefore, to remain poised to benefit from opportunistic FDIC deals as they are presented.”

Key metrics of the bank’s fourth quarter 2011 performance included:
• Net interest income for the fourth quarter of 2011 increased 5.8% to $35.3 million compared to $33.4 million for the fourth quarter of 2010.
• Non-interest income of $12.2 million for the fourth quarter of 2011, compared to $31.9 million for the fourth quarter of 2010.
• Total non-covered loans were $1.76 billion at Dec. 31, 2011 compared to $1.89 billion at Dec. 31, 2010.
• Total covered loans were $481.7 million at Dec. 31, 2011 compared to $575.8 million at Dec. 31, 2010.
• Total deposits were $2.86 billion at Dec. 31, 2011 compared to $2.96 billion at Dec. 31, 2010.
Total assets were $3.60 billion at Dec. 31, 2011 compared to $3.76 billion at Dec. 31, 2010.

Allowance for loan losses was $52.1 million at December 31, 2011, or 2.96% of total non-covered loans, compared to $53.3 million, or 2.82% of total non-covered loans, at December 31, 2010.

“Not only did we report distinct progress in our non-performing non-covered loans and non-performing non-covered assets when compared to those during 2010, but we also improved our net interest margin 54 basis points during the fourth quarter of 2011 over the fourth quarter of 2010,” said Home Bancshares CEO Randy Sims.

Home Bancshares stock (NASDAQ: HOMB) closed trading Wednesday at $26.13 per share. During the past 52 weeks, the share price has ranged from a $20.00 low to a $26.74 high.