Simmons First National Corp. of Pine Bluff (Nasdaq: SFNC) on Tuesday morning reported lower annual profit in 2022 despite record revenue.
The parent company of Simmons Bank also reported slowing activity in its commercial loan pipeline, which it attributed to "softening prospects of economic growth." Behind the slowdown, the bank said, are worries about "current market conditions and increased concerns of a potential recession."
For the full year, Simmons posted revenue of $887.4 million, up more than 13% from $783.3 million in 2021.
Net income was $256.4 million, down 5.4% from a record $271.1 million the previous year. Adjusted earnings per share came to $2.40 on the year, down from $2.68 in 2021.
Simmons reported that full-year income was hit by $22.5 million in expenses related to its $581 million acquisition of Spirit of Texas Bancshares, along with costs to right-size branches. The bank also put more money aside to cover bad loans, finishing the year with $33.8 million in credit loss provisions, up 52% from 2021.
Simmons finished the year strong with record fourth-quarter income of $83.3 million, rising nearly 73% from $48.2 million in the same period a year ago. Earnings adjusted for non-recurring gains came to 64 cents per share, beating Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of 63 cents per share.
The bank reported $27.5 billion in total assets, up from $24.7 billion in 2021.
Deposits totaled $22.5 billion, rising from $19.4 billion in 2021. Loans came to $16.1 billion, compared to $12 billion the previous year.
But unfunded commitments, a key indicator of future loan growth, shrunk from $5.1 billion to $5 billion in the fourth quarter. Simmons, citing economic uncertainty, said that "our emphasis remains on maintaining prudent underwriting standards and disciplined pricing strategies."
"Solid balance sheet growth helped us achieve the highest level of revenue in Simmons’ history," George Makris Jr., the bank's executive chairman, said in a statement. "That growth did not come at the expense of maintaining our conservative underwriting standards as credit quality metrics remain at historically low levels."
Simmons operates 230 branches in Arkansas, Kansas, Missouri, Oklahoma, Tennessee and Texas.
Bob Fehlman, who has worked for Simmons or its affiliates since 1988, succeeded Makris as CEO on Jan. 1. Fehlman was previously president and chief operating officer.
Shares of the company were down 4% late Tuesday morning.
The Associated Press contributed information to this report.