Arkansas banks, AT&T post positive earnings reports

Three publicly held companies based or active in Arkansas were part of a positive second quarter earnings report cycle that saw solid gains in the major U.S. stock markets.

AT&T
Telecom giant AT&T Inc. reported Thursday (July 22) double-digit earnings growth, driven by record iPhone sales and aggressive company-wide cost-cutting measures.

For the period ended June 30, the Dallas-based telecom giant reported second-quarter 2010 net income of $4 billion, or 68 cents per diluted share, up 25.9% from a year ago, including a seven cents one-time gain from the exchange of Telmex Internacional stock for shares of América Móvil. Excluding the one-time gain, AT&T earnings grew 13% to 61 cents per diluted share, compared to $3.2 billion, or 54 cents per diluted share, in the year-earlier second quarter. Wall Street expected the exclusive iPhone carrier to report earnings of 57 cents per share, according to analysts surveyed by Thomson Reuters.

Overall, AT&T’s consolidated revenues totaled $30.8 billion, up 0.6%.



On June 24, AT&T began offering the iPhone 4. AT&T said preorder sales of the iPhone 4 were 10 times higher than the first day of preordering for iPhone 3GS a year earlier. For the full second quarter, AT&T iPhone activations totaled 3.2 million, the most quarterly iPhone activations ever. Approximately 27% of those activations were for customers who were new to AT&T, the company said.



Wireless revenues increased 10.3 percent to $13.2 billion in the second quarter, and total wireless revenues, which include equipment sales, were up 7.7% to $14.2 billion.

AT&T is the largest telecom in Arkansas. In February, it announced that its total capital investment in its Arkansas wireless and wireline networks from 2007 through 2009 was more than $450 million. AT&T also unveiled its wireless network investment plans for Arkansas in 2010, which include the addition of nearly 50 new cell sites and the upgrade of nearly 200 additional cell sites to 3G throughout the state.

SIMMONS FIRST NATIONAL
Simmons First National Corp.’s earnings jumped more than 18% during the second quarter, propelled by the company’s first FDIC-assisted acquisition outside Arkansas.

For the period ended June 30, the Pine Bluff-based regional bank reported second quarter earnings of $8 million or 46 cents per diluted share, compared to $5.5 million or 39 cents per diluted share for the same period in 2009, an increase of 44.8%.

Excluding the non-recurring items, Simmons reported second quarter earnings of $6.5 million or 38 cents per diluted share, an increase of $1 million, or 18.1% from the same period in 2009.

On average, analysts’ expected Simmons to report earnings of 34 cents per share. At the close of market Wednesday, Simmons shares ended at $$25.90, down 67 cents.



Simmons results were largely affected by the bank’s first acquisition from the FDIC’s “problem bank list.” On May 14, Simmons purchased Southwest Community Bank of Springfield, Mo., which had approximately $98 million in assets and approximately $101 million in total deposits before opening on May 15 under the Simmons’ banner.



As a result of this acquisition, Simmons recognized a pre-tax gain of $3 million on this transaction and incurred pre-tax merger related costs of $400,000. After taxes, this gain, net of merger-related costs, contributed $1.6 million to second quarter 2010 net income, or nine cents per diluted share.



Also, Simmons announced in March a decision to close or consolidate 9 branches, primarily smaller branches in rural areas. These branches were closed late in the second quarter and the Arkansas bank recorded a one-time, non-recurring charge of one cent diluted earnings per share. All workers at the affected branches were reassigned to other locations and any reductions in headcount were through attrition, Simmons officials said.

Overall, Simmons total assets, including assets acquired in the Southwest Missouri bank transaction, were $3 billion, an increase of 4.4% from $2.9 billion a year ago. Total loans, excluding those covered by FDIC loss share agreements, were $1.8 billion, down 6.3 percent from the same period in 2009.

Total deposits were $2.4 billion, an increase of $74.5 million, or 3.2% compared to the same period in 2009. The total deposits include $26 million of recently acquired deposits in Missouri.

HOME BANCSHARES
Fast-growing Home Bancshares reported a whopping 65% spike in second quarter earnings, mainly on the strength of the company’s recent FDIC acquisitions and management’s strategy to maintain healthy reserves and capital levels.

For the period ended June 30, the Conway-based regional bank reported second quarter earnings earnings of $9 million, or 29 cents per diluted  share, compared to $5.4 million, or 22 cents per diluted share  for the same quarter in 2009.



Wall Street analysts, on average, expected the Conway-based parent of Centennial Bank to report second quarter earnings of 27 cents per share. At the closing bell Wednesday, Home Bancshares stock price ended at $22.04, up 41 cents.



The bank holding company recently acquired two small banks in Florida as part of two FDIC-assisted transactions. According to disclosure documents, Home Bancshares paid approximately $9.7 million for Old Southern Bank and $3.3 million for Key West Bank.