Simmons First posts first quarter net income decline, but earnings beat expectations

Pine Bluff-based Simmons First National Corp. on Tuesday (April 20) reported first quarter net income of $67.407 million, down from $77.223 million in the same period of 2020. Per share net income of 59 cents was better than the consensus estimate of 51 cents.

The biggest source for the decline in comparable quarterly income was a more than $41 million decline in interest income from loans.

Total revenue in the quarter was $198.584 million, down from $249.877 million in the same quarter of 2020, but slightly better than the consensus estimate of $197.48 million.

First quarter results from the regional bank holding company included $4 million in an after-tax gain related to the sale of bank branches in Illinois. The bank, which no longer has physical locations in Illinois, ended the quarter with 198 physical locations, down from 240 and the end of the same quarter in 2020. Full-time equivalent employees totaled 2,962 at the end of the quarter, down fro, 3,079 at the end of the same quarter in 2020.

George Makris, Jr., chairman and CEO of Simmons First National Corp., said parts of the national economy continue to struggle but they are seeing a rising demand for loans and are optimistic about continued improvement in overall economic conditions.

“We are still feeling the effects of COVID in the economy. Some industries are still struggling to return to pre-COVID levels of performance and the government’s economic stimulus packages have created a rapid rise in liquidity. Loan demand has been well below historical levels, but we are encouraged by the rebuilding of the pipeline during the first quarter,” Makris noted in the earnings report. “Asset quality has improved as compared to 2020 and we are optimistic that trend will continue. Based on our current levels of capital and liquidity, we have lending capacity that we have not seen in several years, so Simmons is poised to do our part as the economy continues to return to normal.”

The bank reported “loan opportunities” of $1.2 billion at the end of the first quarter, well ahead of the $674 million as of Dec. 31.

Following are other items in the quarterly earrings report.
• Return on assets, a key metric in the banking sector, was 1.2% at the end of the first quarter, down from 1.48% at the end of the same quarter in 2020.

• Total assets as of March 31 were $23.348 billion, above the $20.841 billion at the end of the same quarter in 2020.

• Total deposits as of March 31 were $18.189 billion, above the $15.559 billion at the end of the same quarter in 2020.

• Total loans as of March 31 were $12.195 billion, below the $14.374 billion at the end of the same quarter in 2020.

• At March 31, 2021, foreclosed assets and other real estate owned were $11.2 million, a decrease of $9.6 million, or 46.3%, compared to the same period in 2020 and a decrease of $7.2 million, or 39.3% from Dec. 31, 2020.

Simmons First National Corp. is a financial holding company with operations in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas. Simmons shares (NASDAQ: SFNC) opened Tuesday at $29.55. During the past 52 weeks the share price has ranged between $33.43 and $13.75.