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Citing a sharp decline in loan balances, Simmons First National Corp. in Pine Bluff, Ark., said Thursday that core earnings in the second quarter declined 4.6% from the same period last year, to $6.2 million. Diluted earnings per share fell 5.2%, to 36 cents.

The $3.3 billion-asset, multi-bank holding company blamed the decrease largely on weak loan demand in its markets in Arkansas, Kansas and Missouri and its retreat from the student-loan business.

Excluding loans covered by loss-sharing agreements with the Federal Deposit Insurance Corp., the company's loan portfolio shrunk by 10.3%, or $188 million, year over year, to $1.6 billion. The drop included a $79 million decrease in student loans that Chairman and Chief Executive Officer J. Thomas May said was "a result of the irrational decision by the [Obama] administration and Congress to eliminate the private sector from providing student loans."

Simmons First has acquired two failed banks over the last two years and in a news release May said that the company has the resources to do more deals. The company's total risk-based capital ratio at June 30 was 22.37%.

"Our exceptional level of capital puts us in the 97th percentile of our peer group and allows us to actively pursue the right opportunities that meet our strategic plan regarding mergers and acquisitions," May said.