Simmons First National Corp. (SFNC, Financial) filed Quarterly Report for the period ended 2010-03-31.
Simmons First National Corp. has a market cap of $480.2 million; its shares were traded at around $28.05 with a P/E ratio of 16.9 and P/S ratio of 2.5. The dividend yield of Simmons First National Corp. stocks is 2.7%. Simmons First National Corp. had an annual average earning growth of 5.3% over the past 10 years.
Total assets for the Company at March 31, 2010, were $3.097 billion, an increase of $4.2 million, or 0.14%, from December 31, 2009. Stockholders equity as of March 31, 2010 was $373.3 million, an increase of $2.0 million, or approximately 0.5%, from December 31, 2009.
We previously reported that we hired a consultant to help us identify and implement revenue enhancements, process improvements and branch staff level adjustments. The project is nearing completion and we have begun to implement the recommendations. We currently estimate a total annual benefit from the efficiency initiative of approximately $5 million before tax. Approximately one-third of the benefit is projected from revenue enhancements with the remainder from non-interest expense savings. We have assured our associates that no one will lose their job as a result of this initiative, as all positions impacted will be eliminated through attrition. Therefore, we will not recognize the full annual benefit immediately. Instead, we expect to achieve these annual benefits in increments of approximately 20%, or $1 million, in 2010; 60%, or $3 million in 2011; and the full $5 million in 2012 and each year thereafter.
For the three month period ended March 31, 2010, net interest income on a fully taxable equivalent basis was $25.7 million, an increase of $1.2 million, or 4.7%, over the same period in 2009. The increase in net interest income was the result of a $4.3 million decrease in interest expense offset by a $3.2 million decrease in interest income.
The $4.3 million decrease in interest expense is the result of a 77 basis point decrease in cost of funds due to competitive repricing during a falling interest rate environment, coupled with a shift in our mix of interest bearing deposits. The lower interest rates accounted for a $3.9 million decrease in interest expense. The most significant component of this decrease was the $2.5 million decrease associated with the repricing of the Company s time deposits that resulted from time deposits that matured during the period or were tied to a rate that fluctuated with changes in market rates. As a result, the average rate paid on time deposits decreased 113 basis points from 2.89% to 1.76%. Lower rates on interest bearing transaction and savings accounts resulted in an additional $1.3 million decrease in interest expense, with the average rate decreasing by 46 basis points from 0.99% to 0.53%. Although the level of average total interest bearing liabilities increased slightly by $114,000, interest expense due to volume decreased by $400,000 as a result of a change in deposit mix (higher costing time deposits declined while lower costing transaction accounts increased).
The $3.3 million decrease in interest income primarily is the result of a 67 basis point decrease in yield on earning assets associated with the repricing to a lower interest rate environment, partially offset by a $109.4 million increase in average interest earning assets. The lower interest rates accounted for a $2.2 million decrease in interest income. The most significant component of this decrease was a $1.5 million decrease associated with the repricing of our investment securities portfolio. As a result, the average rate earned on the securities portfolio decreased 62 basis points from 4.28% to 3.66%. Although the level of average interest earning assets increased by $109 million, interest income due to volume decreased by $924,000 as a result of a change in asset mix (higher yielding loans and investments declined while lower yielding balances due from banks increased). The decrease in average loans accounted for $778,000 of this decrease, while the decline in investment securities resulted in $232,000 of the decrease. The increase in balances due from banks was due to our 2008 and 2009 initiative to increase liquidity, along with our secondary stock offering completed in December 2009 which provided approximately $70.5 million in net proceeds.
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Simmons First National Corp. has a market cap of $480.2 million; its shares were traded at around $28.05 with a P/E ratio of 16.9 and P/S ratio of 2.5. The dividend yield of Simmons First National Corp. stocks is 2.7%. Simmons First National Corp. had an annual average earning growth of 5.3% over the past 10 years.
Highlight of Business Operations:
Our net income for the three months ended March 31, 2010, was $5.0 million, a decrease of $280,000, or 5.4%, from the same period in 2009. As expected, primarily due to our equity offering completed in December 2009, our diluted earnings per share were $0.29 for the three months ended March 31, 2010, compared to $0.37 for the same period in 2009.Total assets for the Company at March 31, 2010, were $3.097 billion, an increase of $4.2 million, or 0.14%, from December 31, 2009. Stockholders equity as of March 31, 2010 was $373.3 million, an increase of $2.0 million, or approximately 0.5%, from December 31, 2009.
We previously reported that we hired a consultant to help us identify and implement revenue enhancements, process improvements and branch staff level adjustments. The project is nearing completion and we have begun to implement the recommendations. We currently estimate a total annual benefit from the efficiency initiative of approximately $5 million before tax. Approximately one-third of the benefit is projected from revenue enhancements with the remainder from non-interest expense savings. We have assured our associates that no one will lose their job as a result of this initiative, as all positions impacted will be eliminated through attrition. Therefore, we will not recognize the full annual benefit immediately. Instead, we expect to achieve these annual benefits in increments of approximately 20%, or $1 million, in 2010; 60%, or $3 million in 2011; and the full $5 million in 2012 and each year thereafter.
For the three month period ended March 31, 2010, net interest income on a fully taxable equivalent basis was $25.7 million, an increase of $1.2 million, or 4.7%, over the same period in 2009. The increase in net interest income was the result of a $4.3 million decrease in interest expense offset by a $3.2 million decrease in interest income.
The $4.3 million decrease in interest expense is the result of a 77 basis point decrease in cost of funds due to competitive repricing during a falling interest rate environment, coupled with a shift in our mix of interest bearing deposits. The lower interest rates accounted for a $3.9 million decrease in interest expense. The most significant component of this decrease was the $2.5 million decrease associated with the repricing of the Company s time deposits that resulted from time deposits that matured during the period or were tied to a rate that fluctuated with changes in market rates. As a result, the average rate paid on time deposits decreased 113 basis points from 2.89% to 1.76%. Lower rates on interest bearing transaction and savings accounts resulted in an additional $1.3 million decrease in interest expense, with the average rate decreasing by 46 basis points from 0.99% to 0.53%. Although the level of average total interest bearing liabilities increased slightly by $114,000, interest expense due to volume decreased by $400,000 as a result of a change in deposit mix (higher costing time deposits declined while lower costing transaction accounts increased).
The $3.3 million decrease in interest income primarily is the result of a 67 basis point decrease in yield on earning assets associated with the repricing to a lower interest rate environment, partially offset by a $109.4 million increase in average interest earning assets. The lower interest rates accounted for a $2.2 million decrease in interest income. The most significant component of this decrease was a $1.5 million decrease associated with the repricing of our investment securities portfolio. As a result, the average rate earned on the securities portfolio decreased 62 basis points from 4.28% to 3.66%. Although the level of average interest earning assets increased by $109 million, interest income due to volume decreased by $924,000 as a result of a change in asset mix (higher yielding loans and investments declined while lower yielding balances due from banks increased). The decrease in average loans accounted for $778,000 of this decrease, while the decline in investment securities resulted in $232,000 of the decrease. The increase in balances due from banks was due to our 2008 and 2009 initiative to increase liquidity, along with our secondary stock offering completed in December 2009 which provided approximately $70.5 million in net proceeds.
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