Profits at Simmons First National Corp. jumped 14.5% in the second quarter as the Pine Bluff bank’s loan portfolio grew to $5 billion and total assets rose to $7.5 billion for the three-month period.
For the period ended June 30, 2016, Simmons First reported net income of $22.9 million, or 77 cents per share, compared to $20 million, or 67 cents per share a year ago. Analysts surveyed by Thomson Reuters on average forecasted the Arkansas banking group to report second quarter earnings of 81 cents per share on revenue of nearly $104 million.
“We are pleased with the results from the second quarter as we continue to absorb the acquisitions from the previous two years. Competitive pressures and artificially low interest rates continue to put pressure on our net interest income but we have done a good job of diversifying our revenue through other lines of business such as our trust operations, mortgage lending, credit card services, and other wealth management offerings. We will continue to focus on improving our efficiency throughout the remainder of the year,” said Simmons Chairman and CEO George Makris, Jr.
The Simmons First CEO said the bank also is looking to close on its previously announced acquisition of Citizens Bank in Athens, Tenn., later this year. Simmons entered into a definitive stock purchase agreement with Tennessee-based Citizens National Bancorp Inc. to acquire Citizens National Bank (CNB) on May 18.
According to the terms of the deal, Pine Bluff-based Simmons will acquire all of the outstanding common stock of CNB in a transaction valued at approximately $77 million based on the company’s May 17, 2016, closing price. The purchase price will consist of 835,741 shares of Simmons common stock and $40.3 million in cash.
CNB operates nine financial centers in eastern Tennessee with assets of $552 million, loans of $352 million, deposits of $473 million and trust assets of $217 million. Simmons said the acquisition is expected to be completed in the fourth quarter of 2016 and is subject to certain closing conditions, including approval by the shareholders of Citizens and customary regulatory approvals.
After closing, CNB is expected to continue operating as a separate bank subsidiary of the company for an interim period until it’s merged into Simmons Bank. The deal will also push Simmons closer to the $10 billion asset mark, the regulatory baseline between super-community banks and larger regional banking groups.
Other key second quarter financial highlights for Simmons First, which converted from a national banking association to an Arkansas state charter on April 1, include:
• Total loans, including those acquired, were $5 billion at June 30, an increase of $201 million, or 4.2%, compared with the same period in 2015. Legacy loans (all loans excluding acquired loans) grew $1.1 billion, or 42.7%.
• For the period ended June 30, total deposits were $6 billion, a decrease of $142 million, or 2.3%, compared to a year ago. Total non-time deposits were $4.8 billion, or 78.9% of total deposits.
• The Pine Bluff bank’s net interest income for the second quarter of 2016 was $66.6 million, a decline $6.6 million, or 9%, from the same period of 2015. This decrease was primarily driven by a $5.4 million decline in yield accretion on acquired loans, bank officials said.
• For the three-month period ended June 30, common stockholders’ equity was $1.1 billion, book value per share was $35.86 and tangible book value per share was $23.43. The company’s ratio of stockholders’ equity to total assets was 14.48% and its ratio of tangible common equity to tangible assets was 10%.
Simmons First shares (NASDAQ: SFNC) closed at $48.18, down three cents in Wednesday’s session. During the past 52 weeks, the share price has ranged from a $58.75 high to a $38.30 low.