Simmons First posts $65.1 million in Q1 net income; inflation, interest rates, global unrest lead concerns

by Roby Brock ([email protected]) 715 views 

Simmons First National Corp. reported Thursday (April 28) net income of $65.1 million for the first quarter of 2022, compared to $67.4 million in the first quarter of 2021 as bank leaders warned of uncertainty in the near-term financial environment.

Diluted earnings per share beat analysts’ estimates at 58 cents. Revenue was slightly lower than expectations at $187.82 million.

“Simmons posted solid results in the quarter driven by accelerating loan demand across our footprint and continued growth of low-cost deposits,” said Simmons Chairman and CEO George Makris, Jr. “We also delivered another quarter of exceptional credit performance, with nonperforming assets dropping to historically low levels.”

The Pine Bluff-based banking operation recently closed on its acquisition of Spirit of Texas Banchsares, Inc., which will significantly expand Simmons’ footprint in Texas.

“We were able to achieve these results while simultaneously completing the acquisition and conversion of Spirit of Texas Bancshares, Inc. shortly after the end of the quarter. This acquisition more than doubles our size and scale in the Lone Star State, while complementing our existing presence in the Dallas-Fort Worth market and adding a platform for growth in Houston, Austin, San Antonio, Corpus Christi and College Station, as well as a number of other attractive community markets,” Makris added.

Some financial highlights of the quarter include:

  • Simmons’ commercial loan pipeline reached $2.4 billion, the 6th consecutive quarter of increased activity;
  • Total loans at the end of the first quarter of 2022 were $12.0 billion, compared to $12.0 billion at the end of the fourth quarter of 2021 and $12.2 billion at the end of the first quarter of 2021;
  • Total deposits increased to $19.4 billion;
  • Net interest income for the first quarter of 2022 totaled $145.6 million, compared to $153.1 million in the fourth quarter of 2021 and $146.7 million for the first quarter of 2021;
  • Noninterest income for the first quarter of 2022 was $42.2 million, compared to $46.6 million in the fourth quarter of 2021 and $49.5 million in the first quarter of 2021.

“While we are encouraged by our results to start the year, we also recognize the challenges ahead given expectations that interest rates are most likely to increase further during the remainder of 2022, the impact elevated inflation levels have on the cost of everyday goods and services, and the global unrest that adds uncertainty to the financial markets and potentially future economic growth,” Makris said. “In times like this, it certainly helps to have strong capital and liquidity positions, a commitment to maintaining strong underwriting standards and a team that is focused on meeting challenges head-on, while working to ensure we provide our customers exceptional service and access to the products and services they need to successfully manage their financial needs.”

The bank’s board of directors recently declared a quarterly cash dividend on Simmons’ Class A common stock of $0.19 per share, which was paid on April 4, 2022, to shareholders of record as of March 15, 2022. During the first quarter of 2022, Simmons also repurchased approximately 514,000 shares of its Class A common stock at an average price of $31.25.

Shares of Simmons’ stock (NASDAQ: SFNC) closed trading on Wednesday at $24.62. The company’s shares have traded between a low of $24.30 and a high of $32.76 over the past 52 weeks.