Simmons First posts record first quarter profit of $51.3 million

by Wesley Brown ([email protected]) 499 views 

Simmons First National Corp., which pushed its reach into Oklahoma, Texas and Colorado in 2017, reported that quarterly profits more than doubled from a year ago as the Pine Bluff-based bank holding company continues to expand by focusing on loan and deposit growth.

For the period ended March 31, Simmons reported net income of $51.3 million, or 55 cents per share, up 132% compared to $22.1 million or 20 cents per share in the same period of 2017. The first quarter results include an after-tax merger-related and “branch right-sizing costs” related to several acquisitions in 2017.

Excluding those items, Simmons earnings were a robust $52.6 million, or 57 cents per share, up 133.5% from $30.1 million, or 36 cents per share, in the same period of 2017. That easily beat analysts’ expectations of 52 cents per share on quarterly revenue of $169.2 million, according to Thomson Reuters.

“We are off to a productive start for 2018,” Simmons First Chairman and CEO George Makris said. “The conversion of Southwest Bank is now complete and we look forward to continuing to serve our new customers in the Texas markets. We remain focused on the Bank SNB conversion and anticipate it will also be a smooth transition for our customers.  We are excited about building a stronger and more diverse organization.”

In September, 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 an agreement to acquire Oklahoma’s Southwest Bancorp for $565 million in December 2016, followed a month later by a slightly smaller $462 million deal to purchase First Texas.

During the first quarter, Simmons officials said the Pine Bluff bank completed a successful $330 million public offering. Nearly $22 million of the net proceeds will go to reduce outstanding debt and fund other corporate expenses, officials said.

The banking group also saw a $126 million net increase in loans from the previous quarterly, mainly due to Southwest Bank loans that were merged into Simmons’ portfolio in the first quarter.

“We continue to focus on core deposits as a funding source for growth. We believe we have an opportunity to capitalize on the successes of the first quarter, especially in our new markets,” said Makris.

Following are other items included in the first quarter earnings report.
• Simmons’ net interest income for the first quarter of 2017 was $135 million, an increase of $62.6 million, or 86.5%, from the same period of 2016. Included in interest income was the yield accretion recognized on loans acquired of $11.3 million and $4.4 million for the first quarter of 2018 and 2017, respectively.

• For the three months ended March 31, total deposits were $11.7 billion, an increase of 71.7%, compared to the same period in 2017. Total non-time deposits increased 70.6% compared to the same period in 2017 and comprised 81.1% of total deposits.

• Total loans, including those acquired, were $11 billion for the first three months of 2018, an increase of $5.2 billion, or 90.2% from a year ago. The allowance for loan losses for legacy loans was $47.2 million.

• As of March 31, common stockholders’ equity was $2.1 billion, book value per share was $22.86 and tangible book value per share was $12.62.

Simmons also noted foreclosed assets and other real estate owned were $29.1 million, an increase of $2.7 million, or 10.3%, compared to the same period in 2017 and a decrease of $3.0 million, or 9.3% from Dec. 31, 2017. Nearly $8.1 million of those added costs related to the closing of branch locations and employee relocation. The remaining $20 million in extra expenses dealt with foreclosed asset from the Arkansas regional bank’s legacy operations and real estate acquired from the recent acquisitions.

Entering the second quarter, Simmons now has total assets of $15.6 billion with financial operations throughout Arkansas, Colorado, Kansas, Missouri, Oklahoma, Tennessee and Texas.

At the close of business Monday, Simmons’ shares (NASDAQ: SFNC) were up 15 cents at $28.95. The Pine Bluff bank’s share price has ranged between $24.88 and $30.90 over the past 52 weeks. The Arkansas regional banking group completed a 2-for-1 stock split in the form of a 100% dividend on Feb. 8. Simmons has approximately 46,041,000 shares of common stock outstanding.