Simmons First 4Q, year-end results top analysts’ expectations, total assets at $15.1 billion

Simmons First National Corp., which expanded its reach into Oklahoma, Texas and Colorado in October, closed out its 2017 financial books with strong fourth quarter results and total assets topping $15.1 billion for the year, the Pine Bluff-based regional bank announced Monday (Jan. 22).

For the period ended Dec. 31, Simmons reported net income of $18.9 million, or 43 cents per share, compared to $27 million or 85 cents per share, a year ago. The fourth quarter results included a $14.2 million one-time charge related to two recent mergers and branch closings, a $5 million donation to the Simmons First Foundation, and a one-time tax adjustment of $11.5 million related to the GOP tax reform legislation passed in December.

Excluding those items, Simmons earnings were a robust $42 million, or 97 cents per share, up 46% from $28.8 million, or 91 cents per share, in the same period of 2016. That beat analysts’ expectations of 88 cent per share on quarterly revenue of $154.6 million, according to Thomson Reuters.

For the full year, Simmons reported year-to-date net income of $92.9 million, or $2.66 diluted earnings per share, down slightly from $96.7 million or $3.13 per share in 2016. Excluding one-time items, year-to-date earnings were $119 million, or $3.41 per share.

Last year, Simmons completed its previously announced acquisitions of Stillwater, Okla.-based Southwest Bancorp Inc. and parent company Bank SNB, and First Texas BHC Inc., or Southwest Bank of Fort Worth. The bank first announced a definitive agreement to acquire Oklahoma’s Southwest Bancorp Inc. for $565 million in December 2016, followed a month later by a slightly smaller $462 million deal to purchase First Texas in January 2017.

“We welcome our newest associates from Bank SNB and Southwest Bank and are pleased with our integration efforts thus far. We look forward to continued growth and profitability in their legacy markets,” said Simmons Chairman and CEO George Makris, Jr.

Following two of the largest acquisitions in the Pine Bluff financial concern’s history, Simmons now has 2,640 full-time employees, a 41% growth in the company’s workforce in the past year. Those employees work at 200 financial centers at locations across Arkansas, Colorado, Kansas, Missouri, Oklahoma, Tennessee and Texas.

CORPORATE TAX CUT BENEFITS

According to Makris, the effect of the GOP corporate tax cut will allow the fast-growing Arkansas bank to consider investing in several employee-related initiatives, including an increase in the profit-sharing component of the company’s 401(k) plan, consideration of raises for high-performing associates, and a $100 million technology outlay over five years to improve delivery of products and customer service.

Makris also noted the bank’s $5 million contribution to the Simmons First Foundation to support CRA-qualified community development grants across the banks growing seven-state footprint, and a strategy to get better return for shareholders through retention and deployment of additional capital to grow the bank and increasing dividends.

Just last week, Simmons’ board of directors has approved a two-for-one stock split in the form of a 100% stock dividend. The stock split will entitle each shareholder of record as of the close of business on January 30, 2018, to receive one additional share of Simmons common stock for every share of common stock owned on that date.

Shares from the split will be distributed on or about February 8, 2018, company officials said. Simmons currently has nearly 46,041,000 shares of common stock outstanding.

“These investments reflect our optimism for Simmons and we believe will help us achieve the growth potential we envision for our company,” said Makris.

Following are other selected financial highlights from the fourth quarter earnings report:

• Simmons’ net interest income for the third quarter of 2017 was $126.9 million, an increase of $52.6 million, or 70.8%, from the same period of 2016. Included in interest income was the yield accretion recognized on loans acquired of $15.7 million and $6.6 million for the third quarter of 2017 and 2016, respectively.

• On Dec. 31, 2017, total deposits were $11.1 billion, an increase of 64.7%, compared to the same period in 2016. The increase was from the recent acquisitions and growth in core deposits. Total non-time deposits increased 68.1% compared to the same period in 2016, and comprised 82.6% of total deposits.

• Total loans, including those acquired, were $10.8 billion at December 31, 2017, an increase of $5.2 billion, or 91.4% from December 31, 2016. The allowance for loan losses for legacy loans was $41.7 million. The allowance for loan losses for loans acquired was $418,000 and the acquired loan discount credit mark was $89.3 million. Provision for loan losses for the fourth quarter of 2017 was $9.6 million, an increase of $5.3 million compared to December 31, 2016.

• As of Dec. 31, common stockholders’ equity was $2.1 billion, book value per share was $45.30 and tangible book value per share was $24.68.

At the close of business Monday, Simmons’ shares were up 35 cents at $59.50. The Pine Bluff bank’s share price has ranged between $49.75 and $61.95 over the past 52 weeks.