Simmons First posts record 2Q profit of $53.6 million

Simmons First National Corp. on Monday (July 23) posted record profits of nearly $54 million, the second consecutive quarterly benchmark for the Pine Bluff-based regional bank that has expanded its business operations into seven states following two key acquisitions in 2017.

For the period ended June 30, Simmons reported net income of $53.6 million, or 58 cents per share, up 132% compared to $30.5 million or 36 cents per share in the same period of 2017. The quarterly results include an after-tax merger-related expenses and “branch right-sizing costs” of $1.1 million related to several acquisitions in 2017.

Excluding those items, core earnings were $54.7 million for the quarter ended June 30, 2018, compared to $26.8 million in the same period a year ago, an increase of $27.9 million, or 104.3%. Core diluted earnings per share were 59 cents, an increase of 17 cents or 40.5% from a year ago. Wall Street had expected the bank to report second quarter earnings of 58 cents per share, according to Thomson Reuters.

“We are pleased to again report record earnings for this quarter building off the strong results in the first quarter,” said Simmons First Chairman and CEO George Makris. “The system conversions and integration for our most recent acquisitions are now complete and we are excited to turn our focus on expanding our products and services throughout our larger footprint.”

In September 2017, 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.

The recent acquisitions helped to double Simmons’ first quarter earnings to $51.3 million, up from $22.1 million in the previous year. The Pine Bluff bank also completed a successful $330 million public two-for-one stock offering in the first three months of the year, using nearly $22 million of the net proceeds to reduce outstanding debt and fund other corporate expenses, officials said.

In the second quarter, the strong earnings boost was primarily driven by total loans of $11.4 billion, up 82.6% from $6.2 billion a year ago. The bank’s legacy loan portfolio also increased 42% to $7.1 billion, up from $5 billion in the same period of 2017.

Following are other items included in the second quarter earnings report.
• Simmons’ net interest income for the second quarter was $136.8 million, an increase of $60 million, or 78,2%, from the same period of 2017. Included in interest income was the yield accretion recognized on loans acquired of $10.1 million and $4.8 million for the first quarter of 2018 and 2017, respectively.

• For the three months ended June 30, total deposits were $12 billion, an increase of 68.3%, compared to the same period in 2017. The increase is from continued focus on core deposits as a funding source for asset growth and the recent acquisitions, bank officials said. Total non-time deposits increased 65.7% compared to the same period in 2017 and comprised 80.3% of total deposits.

• As of June, common stockholders’ equity was $2.1 billion, book value per share was $23.26 and tangible book value per share was $13.05.

Entering the third quarter, Simmons had total assets of $16.2 billion with financial operations in Arkansas, Colorado, Kansas, Missouri, Oklahoma, Tennessee and Texas.

At the close of business Monday, Simmons’ shares (NASDAQ: SFNC) were up 55 cents at $31.75. The bank’s share price has ranged between $24.98 and $33.45 over the past 52 weeks.