Simmons’ profits climb in 3Q

Integration of bank’s new holdings is priority, lender says

Simmons First National Corp. earned $28.9 million in the third quarter, up from $23.4 million in the same period last year, the Pine Bluff bank said Monday.

Simmons earned 89 cents per share for the quarter, compared with 76 cents per share earned in the third quarter of 2016, and beat the forecast of 86 cents a share from five analysts surveyed by Thomson Reuters.

Shares of Simmons fell 85 cents to close Monday at $59.60 in trading on the Nasdaq exchange.

The bank had deposits of $7.3 billion and loans of $6.3 billion in the third quarter.

Simmons saw good loan demand, though the rate of growth was lower than what the bank experienced in the first two quarters of the year, said George Makris, Simmons’ chairman and chief executive officer.

The bank has $245 million in loans in the “pipeline,” which Simmons defines as loans approved and ready to close. It also has $689 million in construction loans that have not yet been funded, Makris said.

Simmons had $9.5 billion in assets on Sept. 30, a gain of 16 percent from $8.2 billion in assets a year earlier.

Last week, after the third quarter had ended, Simmons closed on two acquisitions — Southwest Bancorp of Stillwater, Okla., the parent of Bank SNB, and First Texas BHC in Fort Worth, the parent of Southwest Bank.

Those purchases raised Simmons’ assets to $14.2 billion.

Matt Olney, a banking analyst in Little Rock with Stephens Inc., previously expected that Simmons would

close on the two acquisitions in early 2018.

With the addition of the two banks, Simmons’ $14.2 billion in assets will be split about evenly among its Arkansas market; its 2010-16 expansion markets of Tennessee, Kansas and Missouri; and its new acquisitions in Texas, Oklahoma and Colorado, Olney said.

Simmons is continuing to perform well, said Garland Binns, a Little Rock banking attorney.

“The challenge for Simmons to continue to perform well depends in part on its ability to integrate its completed acquisitions into its ongoing operations,” Binns said.

Simmons is confident about that.

Simmons’ goal when it makes an acquisition is to maintain loan balances where they were when the purchase was announced, Makris said.

“I think you’ll find that both Bank SNB and Southwest Bank have grown their loan portfolios significantly since those announcements,” Makris said. “And quite honestly, they still have good loan pipelines as well.”

All of Simmons’ regions are experiencing good loan growth, Makris said.

Simmons has closed on significant loans in Nashville, Tenn., and in the Kansas City, Mo., area, said Barry Ledbetter, Simmons’ chief banking officer. The bank expects to fund those loans in the next two quarters, Ledbetter said.

Simmons continues to see consistent loan growth in Northwest Arkansas, central Arkansas, northeast Arkansas, Kansas City and St. Louis, Ledbetter said. The bank has experienced loan growth in Springfield, Mo., and Knoxville, Tenn., with the hiring of new lenders, Ledbetter said.

“Looking towards 2018, we expect Simmons to maintain high single-digit loan growth and we expect the recent acquisitions to contribute to [existing] loan growth,” said Olney, who owns no Simmons stock. Simmons has been a client of Stephens in the past year.

The bank will focus on transitioning its two acquisitions into the same computer systems and operations that Simmons uses, Makris said.

“That is our top priority,” Makris said. “But that being said, we also believe there are more opportunities for acquisitions in our current [markets]. We have a lot of priority markets where we would really like to grow.”

Simmons will have continued discussions and possibly

new discussions with acquisition targets, he said.

“I think what you’ll probably see is a shift a little bit from acquisitions in new markets to acquisitions in current markets,” Makris said.

Generally, Simmons will concentrate on purchases of

banks with $1 billion in assets or more, Makris said. But smaller banks with niche businesses, such as agricultural, also could be considered for acquisitions, he said.

Simmons also was the successful bidder at an Aug. 28 public auction of Little Rockbased

Heartland Bank. The auction was held to discharge Heartland debt owed to Simmons, which is now the sole shareholder of Heartland. Heartland remains a separately chartered bank as Simmons evaluates what it will do with the bank.