Simmons First books 3Q profits of $23.4 million, completes acquisition of Tennessee community bank

by Wesley Brown ( 83 views 

Simmons First National Corp. on Wednesday (Oct. 19) reported that quarterly profits improved by 8.5% from a year ago as the publicly traded financial concern looks to digest its latest acquisition and edges closer to a key milestone of $10 billion in assets.

For the period ended Sept. 30, 2016, Pine Bluff-based Simmons First reported net income of $23.4 million, or 76 cents per share, compared to $21.6 million, or 72 cents per share a year ago. Included in third quarter 2016 results were related to noncore items. Excluding one-time after-tax expenses of $953,000, Simmons core earnings were $24.4 million for the third quarter of 2016 and79 cents per share.

Analysts surveyed by Thomson Reuters on average forecasted the Arkansas banking group to report third quarter earnings of 85 cents per share on revenue of nearly $105 million.

On Sept. 9, Simmons First CEO George Makris said the company completed its previously announced acquisition of Citizens Bank in Athens, Tenn. According to the terms of the deal, Pine Bluff-based Simmons acquired all 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.

Following the completion of last month’s deal, Simmons has approximately $8.1 billion in assets, $5.3 billion in loans, $6.5 billion in deposits and more than 145 locations across Arkansas, Kansas, Missouri and Tennessee.

According to Simmons First officials, Citizens National Bank will temporarily remain a separate bank and continue its operations as a subsidiary of Pine Bluff bank until it is fully merged into the company’s operations. The merger and system conversion is slated to be completed by the end of this week, after which nine branches will be merged in Simmons and current CNB President Jack Allen will to join the Arkansas bank’s executive staff as head of the bank’s East Tennessee operations.

“We welcome our newest associates from Citizens National Bank into the Simmons family.  We look forward to continued growth in our east Tennessee markets,” said George Makris Jr., chairman and CEO. “Our operating performance continues to produce good results.”

Following are other key third quarter financial highlights for Simmons First, which converted from a national banking association to an Arkansas state charter on April 1.
• Total loans, including those acquired, were $5.4 billion at Sept. 30, an increase of $548 million, or 11.3%, compared with the same period in 2015. Legacy loans (all loans excluding acquired loans) grew $1.1 billion, or 38.9%.

• For the period ended Sept. 30, total deposits were $6.6 billion, a decrease of $528 million, or 8.7%, compared to a year ago. Total non-time deposits were $5.3 billion, up $555 million, or 11.7%, or 80% of total deposits.

• The Pine Bluff bank’s net interest income for the third quarter of 2016 was $68.1 million, a decline $10.6 million, or 13.5%, from the same period of 2015. This decrease was primarily driven by a $10 million decline in yield accretion on acquired loans, bank officials said.

• For the three-month period ended Sept. 30, common stockholders’ equity was $1.1 billion, book value per share was $36.69 and tangible book value per share was $23.80. The company’s ratio of stockholders’ equity to total assets was 13.94% and its ratio of tangible common equity to tangible assets was 9.5%.

• Simmons First shares (NASDAQ: SFNC) closed at $49.60, up 25 cents or 0.51% in Wednesday’s session. During the past 52 weeks, the share price has ranged from a $58.75 high to a $38.30 low.