Aided by strong loan growth and improved credit quality, Simmons First (SFNC) in Pine Bluff, Ark., said that its third-quarter profit climbed 12% from the same period last year, to $7.4 million. Earnings per share climbed 13%, to 45 cents, beating the estimates of analysts polled by Bloomberg by 4 cents.
Net interest income increased 13%, to $31.6 million, as total loans grew by 5%, to $2 billion. The company attributed the loan growth to strong production from new lenders it hired in its key markets. The companys net interest margin stood at 4.27%, up 33 basis points from the third quarter in 2012.
Simmons' noninterest income fell 13%, to $10.3 million, primarily because third quarter results in 2012 included a $1.1 million bargain purchase gain on the company's Federal Deposit Insurance Corp.-assisted acquisition of Truman Bank in St. Louis.
Noninterest expenses increased 8%, to $30.9 million, as the company took on costs associated with its 2012 failed-bank acquisitions and paid legal and advisory fees related to its recently announced acquisition of Metropolitan National Bank in Little Rock, Ark. Simmons also incurred a one-time cost of $533,000 related to the closure of five underperforming branches.
Simmons demonstrated markedly improved credit quality in the third quarter. Its provision for loan losses decreased 15% to $1.1 million, while net charge-offs plummeted 41% to $1.6 million.