4. Simmons First National Corp.
Simmons First National Corp.
of Pine Bluff, Ark., closed at $24.14 Tuesday, down 11% year-to-date, following a 2% decline during 2011.
Based on a 20-cent quarterly payout, the shares have a 3.31% dividend yield.
Simmons First National Corp. had a very strong tangible common equity ratio of 10.66% as of March 31. The company announced back in September that it planned to "allocate its earnings, less dividends, to its stock repurchase program." The company was authorized to repurchase 372,000 additional shares as of March 31.
The company reported first-quarter net interest income of $27.7 million, increasing 1.5% from the previous quarter and 3% year-over-year. The first-quarter net interest margin was 3.75%, according to HighlineFI, increasing from 3.71% in the second quarter, and 3.68% in the first quarter of 2011.
First-quarter net income was $6.4 million, or 37 cents a share increasing from $6.3 million, or 37 cents a share, in the fourth quarter, and $5.1 million, or 29 cents a share, during the first quarter of 2011. The earnings improvement reflected a decline in the provision for loan losses to $771,000 during the first quarter, from $2.8 million the previous quarter, and $2.7 million a year earlier.
The decline in credit expenses during the first quarter was more than offset by a $2.8 million reduction in indemnification assets from increased cash flows on acquired loans covered Federal Deposit Insurance Corp. loss-sharing agreements.
The first-quarter ROA was 0.77%, while the ROE was 6.22%.
The shares trade for 1.2 times tangible book value, according to HighlineFI, and for 14 times the consensus 2013 EPS estimate of $1.75. The consensus 2012 EPS estimate is $1.60.
Simmons First National Corp. trades for the highest forward P/E ratio among this group of six banks.
Stephens analyst Matt Olney on Monday reiterated his "Equal-weight" rating for Simmons First National, while lowering his price target for the shares to $26 fro $29, "as that represents a 1.25x TBV multiple applied to our forecasted 1Q13" tangible book value of $20.88." Olney's target "also equates to 15x our 2013 forecasted EPS of $1.75."
The analyst said that "Considering SFNC's patient growth strategy and its discount valuation (1.2x TBV), we think SFNC is an attractive investment for long-term shareholders that appreciate a healthy dividend (3.3% yield) and a risk averse appetite."
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