Third quarter net income was down more than 40% for Pine Bluff-based Simmons First National Corp., and total revenue fell 17%. Quarterly per share earnings were 37 cents, better than the consensus estimate of 35 cents.
The regional bank company posted third quarter net income of $47.247 million, down 41.4% compared with the $80.603 million in the same quarter of 2022. Total revenue in the quarter was $196.2 million, down 17% from the $236.6 million in the same quarter of 2022, and below the consensus estimate of $205.29 million.
“While the current economic and interest rate environment continues to pose challenges to the financial services industry, we remain resolute on serving our customers’ financial needs while diligently focusing on maintaining strong asset quality, capital and liquidity positions,” Bob Fehlman, Simmons’ CEO, noted in the earnings report. “On a year-over-year basis, average loans were up 9 percent and average deposits were up 3 percent as we continued to reinvest cash flows from our securities portfolio to fund loan growth and reduce wholesale borrowings.”
The company also reported progress on its Better Bank Initiative, saying the bank reached its goal of $15 million in annual cost savings one quarter ahead of schedule. Third quarter salaries and employee benefits totaled $65.8 million, down from $71.9 million in the same quarter of 2022. The company reported 3,005 employees at the end of the quarter, down from 3,206 at the end of the third quarter in 2022.
Asset quality was pressured during the quarter, according to the bank. Total nonperforming loans at the end of the third quarter of 2023 were $81.9 million, up from $72 million at the end of the second quarter of 2023 and well above the $57.8 million at the end of the third quarter of 2022. The allowance for credit losses at the end of the third quarter of 2023 was $218.5 million, just above the $210 million at the end of the second quarter of 2023 and above the $197.6 million at the end of the third quarter of 2022.
Following are other details from the third quarter report.
• Total assets as of Sept. 30 was $27.564 billion, up from $27.076 billion at the same time in 2022.
• Total deposits as of Sept. 30 was $22.231 billion, up from $22.149 billion at the same time in 2022.
• Total loans as of Sept. 30 was $16.772 billion, up from $15.607 billion at the same time in 2022.
•Return on assets, a closely watched metric in the banking sector, as of Sept. 30 was 0.68%, up from 1.19% at the same time in 2022.
Simmons Bank, founded in 1903, operates 232 branches in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas.
Simmons Bank shares (NASDAQ: SFNC) closed Monday at $15.35, and were trading lower in early Tuesday trading. During the past 52 weeks the share price has ranged between $24.85 and $14.68.