updated 10/21/2010 9:16:55 AM ET 2010-10-21T13:16:55

PINE BLUFF, Ark., Oct. 21, 2010 (GLOBE NEWSWIRE) -- Simmons First National Corporation (Nasdaq:SFNC) today announced third quarter net income of $7.6 million, compared to $7.7 million for the same period in 2009. Diluted earnings per share for the third quarter of 2010 were $0.44, compared to $0.54 for the third quarter of 2009. Net income for the nine months ended September 30, 2010, was $20.6 million, or $1.19 diluted earnings per share.

"Overall, we are pleased with our third quarter results. Highlights of the quarter include record net interest income, improvement in our net interest margin and continued good asset quality compared to the rest of the industry," commented J. Thomas May, Chairman and CEO. "While the impact of our 2009 stock offering was dilutive to our third quarter EPS by approximately $0.09, the excess capital positions us to continue to take advantage of unprecedented acquisition opportunities through FDIC assisted transactions of failed banks. We have seen the dilutive impact of the offering over the past three quarters; in contrast, we will see the accretive impact from our two acquisitions beginning in the fourth quarter."

On October 15, 2010, the Company announced that its wholly-owned bank subsidiary, Simmons First National Bank, entered into a purchase and assumption agreement with loss share arrangements with the Federal Deposit Insurance Corporation ("FDIC") to purchase substantially all of the assets and to assume substantially all of the deposits and certain other liabilities of Security Savings Bank, FSB ("SSB") in Olathe, Kansas. As a result of this acquisition, the Company expands its footprint into the state of Kansas for the first time, with nine branches located in the communities of Olathe, Overland Park, Leawood, Salina and Wichita.

The assets of SSB were purchased from the FDIC at a discount of $46.5 million, or approximately 10.9% of total assets. All deposits were acquired with no deposit premium. Through the loss share provisions of the purchase and assumption agreement, the FDIC will reimburse the Company for 80% of the losses it incurs on the disposition of loans and foreclosed real estate on all covered assets. The final valuation and purchase price of acquired assets and liabilities will be finally determined upon completion of appropriate valuation processes.

On May 14, 2010, the Company announced that its wholly-owned bank subsidiary, Simmons First National Bank, entered into a purchase and assumption agreement with loss share arrangements with the FDIC to purchase substantially all of the assets and to assume substantially all of the deposits and certain other liabilities of Southwest Community Bank ("SWCB") in Springfield, Missouri. In the second quarter 2010, the Company recognized a pre-tax gain of $3.0 million on this transaction and incurred pre-tax merger related costs of $0.4 million. After taxes, this gain, net of merger related costs, contributed $1.6 million to second quarter 2010 net income, or $0.09 to diluted earnings per share.

Total assets were $3.0 billion at September 30, 2010, an increase of 3.5% from $2.9 billion at September 30, 2009.

Loans

Total loans, excluding those covered by FDIC loss share agreements, were $1.7 billion at September 30, 2010, a decrease of 9.6% from the same period in 2009. "As expected, we saw a $41 million decrease in our Student Loan Portfolio as a result of the decision by the administration and congress to eliminate the private sector from providing student loans. Additionally, like the rest of the industry, we continue to experience weak loan demand as a result of the recession. We believe loan demand is likely to remain soft for the balance of 2010, but we are committed and positioned to meet the borrowing needs of our consumer and business customers," commented May. Loans covered by FDIC loss share agreements, which provide considerable protection against credit risk on those covered assets, were $38.2 million at September 30, 2010.

Deposits

At September 30, 2010, total deposits were $2.4 billion, an increase of $50.9 million, or 2.2% compared to the same period in 2009. The September 30, 2010, deposits include $20.2 million of previously acquired deposits in Missouri. "We are very pleased with the growth in deposits, more importantly, our non-time deposits as a percent of total deposits is a very favorable 64%," commented May.

Net Interest Income

The Company's net interest income for the third quarter of 2010 increased 2.6% to a record $26.1 million compared to the same period of 2009. Net interest margin increased 5 basis points to 4.02% from the third quarter of 2009. The yield on earning assets was 4.94%, a decrease of 37 basis points from the third quarter of 2009 and the rate on the cost of funds was 1.12%, a decrease of 47 basis points.

Non-Interest Income

Non-interest income for the third quarter decreased $141,000, or 0.9%, to $14.8 million compared to $15.0 million for the third quarter of 2009.

Non-Interest Expense

Non-interest expense for the third quarter of 2010 was $26.8 million, an increase of 1.7% from $26.3 million for the third quarter of 2009.  Included in third quarter 2010 non-interest expense is $134,000 in merger related costs associated with the previously mentioned FDIC assisted acquisitions.

Asset Quality

As part of its second quarter acquisition of Southwest Community Bank ("SWBC") in Springfield, Missouri, the Company acquired substantially all of the loans and foreclosed real estate ("OREO") of SWCB. Through the loss share provisions of the purchase and assumption agreement, the FDIC agreed to reimburse the Company for 80% of the losses incurred on the disposition of such loans and OREO. The loans and OREO covered by the FDIC loss share agreements and the related FDIC loss share receivable were presented in the Company's financial reports as "covered" assets (i.e., covered by the FDIC loss share agreements) with a carrying value equal to the discounted net present value of expected future proceeds. At September 30, 2010, loans covered by loss share were carried at $38.2 million, OREO covered by loss share was carried at $2.7 million and the FDIC loss share receivable was carried at $9.6 million. As a result of the FDIC loss share indemnification related to these assets and the discounted net present value method of valuing these assets, such assets are excluded from the computations of the following asset quality ratios, except for their inclusion in total assets.

Nonperforming assets as a percent of total assets were 1.23% as of September 30, 2010, a decrease from 1.24% as of June 30, 2010. Nonperforming loans as a percent of total loans were 0.75% as of September 30, 2010, a decrease of 20 basis points from 0.95% as of June 30, 2010. These ratios include approximately $2.2 million of Government guaranteed student loans that were over 90 days past due at the end of the quarter. Excluding the guaranteed past due student loans, non-performing assets as a percent of total assets were 1.16% and non-performing loans as a percent of total loans were 0.63%.

"While our nonperforming assets are above our internal target levels, we continue to have relatively good asset quality. In fact, our nonperforming asset ratio puts us in the 82nd percentile within our peer group," added May.

Excluding credit cards, the Company's annualized net charge-off ratio was 0.63% for the third quarter of 2010. The credit card annualized net charge-off ratio decreased to 2.24%, compared to 2.41% for the second quarter of 2010. The Company's credit card loss ratio continues to be more than 775 basis points below the most recently published credit card charge-off industry average of over 10%.

For the third quarter of 2010, the Company's provision for loan losses was $3.4 million, compared to $3.8 million for the second quarter of 2010 and $2.8 million for the third quarter of 2009. The Company's allowance for loan losses was $25.7 million at September 30, 2010, or 1.48% of total loans and 197% of non-performing loans.

Capital

At September 30, 2010, stockholders' equity was $384 million, book value per share was $22.28, and tangible book value per share was $18.70. The Company's ratio of stockholders' equity to total assets was 12.7% and its ratio of tangible stockholders' equity to tangible assets was 10.90%, as of September 30, 2010.

"One of the major strengths of our Company is our exceptional level of capital," continued May. "We enhanced the strength of our capital during the fourth quarter of 2009 when we completed a $75 million secondary stock offering. The offering bolstered our already strong capital ratios, placing us in the 92nd percentile in our peer group for risk-based regulatory capital."

As of September 30, 2010, the Company's regulatory capital ratios remain significantly higher than regulatory "well capitalized" guidelines:

 

Simmons First National Corporation

Simmons First National Corporation is an eight bank financial holding company with community banks in Pine Bluff, Lake Village, Jonesboro, Rogers, Searcy, Russellville, El Dorado and Hot Springs, Arkansas. Including the recently acquired Kansas locations, the Company's eight banks conduct financial operations from 89 offices, of which 85 are financial centers, in 46 communities in Arkansas, Missouri and Kansas. The Company's common stock trades on the NASDAQ Global Select Market under the symbol "SFNC".

The Simmons First National Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4819

Conference Call

Management will conduct a conference call to review this information beginning at 3:00 p.m. Central Time on Thursday, October 21, 2010. Interested persons can listen to this call by dialing 1-800-854-4175 (United States and Canada only) and asking for the Simmons First National Corporation conference call. A replay of the call will be available through 5:00 p.m. Central Time on October 28, 2010, by dialing 1-800-642-1687. The passcode for the replay is 16028005. In addition, the call will be available live or in recorded version on the Company's website at www.simmonsfirst.com .

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles (GAAP). The Company's management uses these non-GAAP financial measures in their analysis of the Company's performance. These measures typically adjust GAAP performance measures to exclude the effects of the amortization of intangibles and include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant activities or nonrecurring transactions. Since the presentation of these GAAP performance measures and their impact differ between companies, management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company's core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

Forward Looking Statements

Statements in this press release that are not historical facts should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements of this type speak only as of the date of this news release. By nature, forward-looking statements involve inherent risk and uncertainties. Various factors, including, but not limited to, economic conditions, credit quality, interest rates, loan demand and changes in the assumptions used in making the forward-looking statements, could cause actual results to differ materially from those contemplated by the forward-looking statements. Additional information on factors that might affect Simmons First National Corporation's financial results is included in its Form 10-K filing with the Securities and Exchange Commission.

 

 

 

 

 

 

 

 

 

 

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