Simmons’ quarterly gain $8 million

Earnings up 45% from 2009, buoyed by Missouri purchase, PB bank says

— Simmons First National Corp. made $8 million in the second quarter, a 45 percent improvement over earnings in the same period last year, the Pine Bluff bank said Thursday.

The bank holding company earned 46 cents a share, well above the estimates of 34 cents a share by two analysts, according to a survey byThomson Reuters. Simmons earned 39 cents a share in the second quarter last year.

Its shares closed at $26.97, up $1.07, or 4.1 percent, in trading on the Nasdaq exchange.

Simmons bought Southwest Community Bank of Springfield, Mo., in a Federal Deposit Insurance Corp.-assisted purchase in May, the first time it had expanded outside Arkansas. SouthwestCommunity Bank had only one office.

The company realized a $3 million gain on the purchase. After taxes, the acquisition added $1.6 million to Simmons’ second-quarter earnings.

Simmons viewed the purchase as a “way to get their feet wet” in FDIC-assisted deals, said Matt Olney, who covers banks for Stephens Inc. of Little Rock.

“Simmons is very experienced in mergers and acquisitions,” said Olney, who does not own stock in the company. “But when you acquire [a bank] from the FDIC, it is a different animal. [Simmons] wanted to first do this smaller deal in Missouri before trying something larger.”

The integration of Southwest Community Bank into Simmons’ systems will becomparatively easy because the Springfield bank is a smaller institution, he said.

Simmons is considering other FDIC-assisted purchases in the next year or 18 months, J. Thomas May, Simmons’ chairman and chief executive officer, said in a conference call Thursday. The FDIC allows Simmons, which has $3 billion in assets, to review and bid on banks as large as $2 billion in assets, May said.

The target area is a 325-mile radius from central Arkansas, May said. That area extends to Dallas and much of eastern Texas; Tulsa and much of eastern Oklahoma; Springfield and much of southern Missouri; most of west Tennessee; most of Mississippi; and northern Louisiana.

“We will continue to actively pursue the right opportunities that meet our strategic plan,” May said. “As with our history, we will be very deliberative and disciplined in these acquisition opportunities.”

Simmons has had weak loan demand as a result of the recession, he said. The company expects loan demand to remain soft for the rest of this year.

Simmons banks added about 400 new credit-card accounts in the second quarter, a significant decline from 10,000 new accounts in the second quarter last year, May said. In the second quarter last year, Simmons benefited from major banks raising credit-card rates, but manyof those banks are becoming more competitive in the credit-card business.

Nine rural offices in Arkansas were closed by Simmons in the second quarter. It now has 80 offices in 40 Arkansas cities and one Missouri city.

Business, Pages 25 on 07/23/2010

Upcoming Events