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Simmons First Post 4Q Profit Decline But Assets Grow

2 min read

Simmons First National Corp. of Pine Bluff on Monday reported a 30 percent decline in fourth-quarter net income, as merger expenses, a one-time tax adjustment and other factors ate into profit.

The publicly traded bank holding company (Nasdaq: SFNC) reported quarterly net income of $18.9 million, down from $27.0 million in the same quarter last year. Diluted earnings per share were 43 cents, down from 85 cents in the same quarter last year.

In a news release, the company said that as a result of the “Tax Cuts & Jobs Act” signed into law on Dec. 22, the company took a one-time non-cash charge of $11.5 million.

Quarterly results also included $14.2 million in merger-related and branch “right-sizing” costs and a $5 million donation to the nonprofit Simmons Foundation.

Excluding one-time items, the company reported “core” earnings of $42 million, up 46 percent from the same quarter last year. Core earnings per share were 97 cents, up from 91 cents in the same quarter last year.

In a news release, Chairman and CEO George Makris said the tax law change would allow the company to “consider and increased investment” in its employees, including an increase in the profit-sharing component of its 401(k) plan. He also said the company would invest up to $100 million over five years in technology to improve products and services.

“These investments reflect our optimism for Simmons and we believe will help us achieve the growth potential we envision for our company,” Makris said.

During the quarter, the company completed two acquisitions: Southwest Bancorp Inc. of Stillwater, Oklahoma, and First Texas BHC Inc. of Fort Worth, Texas. Systems conversions for both are planned for the first half of the year.

Those acquisitions pushed Simmons First’s assets up almost 60 percent from the third quarter to $15.1 billion as of Dec. 31. That made it the state’s third-largest bank by assets, behind No. 1 Bank of the Ozarks of Little Rock ($21.3 billion) and No. 2 Arvest Bank of Fayetteville. ($16.9 billion as of Sept. 31). Total deposits were $11.1 billion, up 65 percent compared to the same period in 2016.

On Thursday, Simmons First declared a two-for-one stock split and a 20 percent increase in its quarterly dividend. Makris said the split will “create investment opportunities for a wide variety of investors. Our retail ownership is approximately 50 percent and we believe it is a valuable dynamic to have owners as customers and vice-versa.”

Simmons First also reported a fourth-quarter efficiency ratio of 51.36 percent, improved from 55.47 percent in the same quarter of 2016.

Simmons First operates in Arkansas, Colorado, Kansas, Missouri, Oklahoma, Tennessee and Texas.

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