Simmons First Q2 net income slides on merger-related expenses

Simmons First National Corp. reported second quarter net income of $27.5 million Thursday (July 21) compared to $74.9 million one year ago. Diluted earnings per share were 21 cents for the second quarter of 2022, compared to 69 cents for the second quarter of 2021.

The Pine Bluff-based financial institution, parent company of Simmons Bank, had several factors contributing to its lower second quarter performance. $16.5 million in merger-related expenses tied to a Texas acquisition lowered earnings as did an increase in loan loss provisions totaling $33.8 million.

“Although second quarter results were significantly impacted by accounting adjustments and one-time merger expenses related to our acquisition of Spirit of Texas Bancshares during the quarter, Simmons’ operating results excluding these items were extremely strong,” said George Makris, Jr., Simmons’ chairman and CEO.

“Highlights for the quarter include a significant increase in revenue, well contained operating expense growth, improved asset quality, annualized organic loan growth in excess of 25%, marked improvement in the efficiency ratio, substantial expansion of the net interest margin, and excellent capital ratios,” Makris added. “Our strategy of restructuring our loan portfolio over the past two years not only diversified the risk profile but also established capacity which should provide the foundation for additional loan and revenue growth, which is evident in our loan pipeline and unfunded commitments. Our liquidity is solid, and our capital is strong. We are growing in all markets as demonstrated by the addition of nearly 2,000 new business deposit accounts in the quarter.”

During the second quarter, Simmons posted:

• Net interest income for the second quarter of 2022 totaled $185.1 million, compared to $145.6 million in the first quarter of 2022 and $146.5 million for the second quarter of 2021;
• Noninterest income for the second quarter of 2022 was $40.2 million, compared to $42.2 million in the first quarter of 2022 and $47.1 million in the second quarter of 2021;
• Total deposits at the end of the second quarter of 2022 were $22.0 billion, compared to $19.4 billion at the end of the first quarter of 2022 and $18.3 billion at the end of the second quarter of 2021; and
• Total loans at the end of the second quarter of 2022 were $15.1 billion, compared to $12 billion at the end of the first quarter of 2022 and $11.4 billion at the end of the second quarter of 2021.

In early morning trading, Simmons stock (NASDAQ: SFNC) was down slightly to $21.99 per share. Over the past 52 weeks, Simmons shares have traded between a low of $19.87 and a high of $32.76.