Simmons First National Q3 adjusted EPS beats estimates on lower expenses, margin expansion

Overview

• U.S. regional bank's Q3 revenue was a slight miss versus analyst expectations

• Adjusted EPS for Q3 beat analyst expectations

• Company margin expansion and improved adjusted returns driven by strategic initiatives

Outlook

• Company plans to outline future financial targets at Investor Day in December

• Simmons expects efficiency gains to fund investments supporting organic growth

• Company says it will continue strengthening reserves to support capital levels

Result Drivers

• STRATEGIC INITIATIVES - Co said reductions in noninterest expenses and low-value loans and deposits, along with disciplined loan and deposit pricing, drove margin expansion and improved adjusted returns

• BALANCE SHEET DELEVERAGING - Co attributed loan declines to paydowns, early payoffs and focus on running off lower yielding, low relationship credits

• DEPOSIT MIX CHANGES - Co said decrease in interest bearing deposits was due to deleveraging of higher rate deposits, seasonal declines in public fund deposits and reduced use of brokered deposits

Company press release:

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 1 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the banks peer group is "buy"

• Wall Street's median 12-month price target for Simmons First National Corporation is $26.00, about 17.9% above its October 14 closing price of $22.05

• The stock recently traded at 10 times the next 12-month earnings vs. a P/E of 11 three months ago

Reuters Recommended Reads

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)