LITTLE ROCK — Simmons First National Corp. had net income of $6.5 million in the second quarter, down 3 percent from $6.7 million in the same period last year, the Pine Bluff-based bank said Thursday.
Simmons earned 38 cents a share, down from earnings of 39 cents a share in the second quarter last year. The bank missed earnings estimates of 40 cents a share that were projected by four analysts surveyed by Thomson Reuters.
The bank’s shares closed at $23.46 on Thursday, down 1 cent, in trading on the Nasdaq exchange, after the morning earnings report. About 12,000 more shares were traded than the bank’s average daily volume of 65,000 shares.
Simmons, which bought two failed banks in Missouri and Kansas in 2010, stated that it still is interested in more acquisitions of failed banks offered by the Federal Deposit Insurance Corp.
J. Thomas May, Simmons’ chairman and chief executive officer, said in a conference call Thursday that the bank did due diligence on five banks in the second quarter. It bid on four but failed to acquire them.
“We will continue to actively pursue FDIC acquisition opportunities,” May said. “Our infra- structure will certainly support that effort.”
In the second quarter, Simmons had loans of $1.7 billion, down $98 million from the same period last year. Most of the decrease was related to a $79 million decline in loans covered by the FDIC from the two failed banks Simmons bought.
Excluding loans covered by the FDIC, Simmons’ loans increased $71 million.
Simmons’ loan growth was exceptional in the second quarter, said Matt Olney, an analyst with Stephens Inc. in Little Rock.
Olney doesn’t own Simmons stock. Stephens expects to pursue compensation for investment-banking services from Simmons in the next several months.
“Their core loans not covered by the FDIC were up 4.6 percent,” Olney said. “That’s the best loan growth from Simmons in one quarter going back further than 2008.”
Of the increase in loans, $54 million is related to seasonality in Simmons’ agricultural and credit-card portfolios, May said.
“Our real-estate portfolio increased $27 million,” May said. “We saw growth in our construction, commercial real estate and single-family loans.”
Simmons had total assets of $3.3 billion in the second quarter, a decrease of about $6 million from assets in the second quarter last year.
May said Simmons is beginning to see some improvement in the local economies where its eight regional banks are located — Pine Bluff, El Dorado, Lake Village, Hot Springs, Jonesboro, Rogers, Searcy and Russellville.
“During the last quarter, we have seen some slight improvement in our [potential loan growth], primarily from the central Arkansas region,” May said. “However, we have also seen reports that the economy and loan demand is showing some improvement in the Northwest Arkansas region and the northeast Arkansas region continues to show modest loan growth.”
Simmons announced this week that it will begin another stock-repurchase program, with up to 850,000 shares authorized to be bought or about 5 percent of the shares outstanding.
The bank recently ended a program of buying about 436,000 shares of its stock, at an average of $24.36 a share, May said.
The bank was more aggressive in buying back its own stock in the second quarter than analysts had anticipated, Olney said.
Simmons will continue to buy back shares, especially when the share price is below $25, Olney said.
“The company sees it as a good long-term value,” he said.
Business, Pages 29 on 07/27/2012