Simmons’ 3Q EPS Beats Estimates; Analyst Sticks To Buy

Simmons First National Corp saw 3Q EPS decline 27.6% to $0.63 year-on-year, but beat analysts’ estimates of $0.40. Revenues fell 3.6% to $225.6 million and exceeded the Street consensus by $16.9 million during the same comparative period.

Simmons’ (SFNC) core net interest margin (NIM) continued to decline for the fourth straight quarter. Lower NIM in 3Q was due to “additional liquidity created in response to the COVID-19 pandemic and the lower yielding PPP (paycheck protection program) loans originated during the second and third quarters of 2020,” the company said.

The bank reported lower pre-tax, pre-provision (PTPP) earnings of $87.5 million in 3Q, compared with $97.7 million in 2Q and $122.6 million in the year-ago quarter.

Simmons’ CEO George A. Makris said “We have experienced very meaningful shifts in consumer habits which we believe will impact our delivery of products and services as well as the retail delivery of everyday amenities. Our investment in digital channels will continue to position our company for these changes and our associates are ready for the new normal.” (See SFNC stock analysis on TipRanks).

Following the results, Raymond James analyst David Feaster said “Lower-than-forecast net interest income more than offset higher-than-forecast core fee income and lower-than-forecast provision expense vs. our model.” Feaster maintained a Buy rating on the stock.

Currently, the Street has a cautiously optimistic outlook on the stock with a Moderate Buy analyst consensus. The average price target of $20 implies upside potential of about 20.6% to current levels. Shares are down 38.1% year-to-date.

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