Simmons earnings fell in the third quarter of 2026 as higher charges outweighed stronger lending margins and lower adjusted operating expenses. Simmons First National Corporation reported net income of $47.1 million, or $0.32 per diluted share, on October 15, down from $66.7 million, or $0.46 per share, in the second quarter. Adjusted earnings moved in the opposite direction, rising to $79.0 million from $72.2 million.
Key Takeaways
- Reported profit declined sequentially, while adjusted diluted earnings rose to $0.54 from $0.50.
- Net interest margin widened as loan yields increased and deposit costs declined.
- Loans and deposits contracted, while nonperforming loans and net charge-offs increased.
Table of Contents
- Simmons earnings reflect a larger adjustment gap
- Higher margins support adjusted profitability
- Balance-sheet reduction changes the funding mix
- Credit indicators show some deterioration
- Conclusion
Simmons earnings reflect a larger adjustment gap
The company’s third-quarter 2026 results announcement reconciles reported profit with adjusted earnings, a non-GAAP measure that excludes selected costs. Those adjustments totaled $43.2 million before tax, compared with $7.4 million in the second quarter.
The third-quarter adjustments included $17.1 million for certain professional services, $14.2 million for branch and real estate rightsizing, $6.0 million for severance and early retirement programs, and $5.9 million for accelerated prepaid expenses. Their combined after-tax effect was $31.9 million, or $0.22 per diluted share.
The year-earlier comparison also requires care. Simmons reported a $562.8 million loss in the third quarter of 2025, when an $801.5 million securities-sale loss weighed on results. Adjusted earnings for that period were $64.9 million, or $0.46 per diluted share.
| Item | Details |
|---|---|
| Total revenue | $251.2 million in Q3 2026, versus $248.6 million in Q2. |
| Adjusted efficiency ratio | 53.31%, compared with 54.26% in Q2. |
| Common equity tier 1 capital ratio | 12.05%, up from 11.60% in Q2. |
| Cash dividend declared | $0.2150 per share, unchanged from Q2. |
| Commercial loan pipeline | $1.3 billion at quarter-end, including $455 million of ready-to-close loans. |
Higher margins support adjusted profitability
Net interest income reached $204.0 million, compared with $200.6 million in the second quarter. Net interest margin on a fully taxable equivalent basis widened by eight basis points to 3.92%, as loan yields rose and funding costs declined.
Simmons attributed the improvement partly to lower-rate loans repricing higher, the runoff of lower-yielding loans with limited customer relationships, and reduced use of higher-cost funding. Total deposit costs fell to 1.85% from 1.93%.
Reported noninterest expense increased to $182.0 million from $147.7 million. Excluding the company’s selected items, adjusted noninterest expense declined to $138.9 million from $140.3 million. That distinction explains why adjusted profitability improved even as reported profit fell.
Balance-sheet reduction changes the funding mix
Total loans ended the quarter at $17.465 billion, down from $18.062 billion in June. Simmons cited paydowns, early payoffs and its deliberate reduction of lower-yielding loans with limited relationship value.
Deposits fell to $18.616 billion from $19.728 billion. The decline reflected reductions in higher-rate and brokered deposits, alongside seasonal decreases in public fund deposits. Other borrowings increased to $1.4 billion from $941.3 million as Simmons used more short-term Federal Home Loan Bank advances, citing favorable pricing.
The smaller balance sheet therefore accompanied better lending margins, rather than loan-volume growth. President and Chief Executive Jay Brogdon said the company remained focused on simplifying operations and investing in higher-value organic growth.
Credit indicators show some deterioration
Nonperforming loans increased to $179.9 million from $166.1 million in the second quarter. The annualized net charge-off ratio also rose, reaching 0.27% from 0.20%.
The allowance for credit losses on loans edged up to $238.5 million from $238.2 million. It represented 1.37% of total loans, compared with 1.32% in June, but coverage of nonperforming loans declined to 133% from 143%. These measures show that the higher reserve-to-loan ratio did not translate into stronger coverage of troubled loans.
Conclusion
The quarter combined improving adjusted profitability with substantial charges, a smaller balance sheet and weaker credit indicators. The next identified strategic milestone is Simmons’ planned December Investor Day, when management intends to outline its objectives and future financial targets.
Read More News
Disclaimer
This FinanceVelix article provides general information, not personalized financial, investment, legal, or tax advice. Market prices, interest rates and economic conditions can change; investments carry a risk of loss. Facts reflect the material available when published and may change. Check important information independently and consult a qualified professional when needed. Mentioning an asset, company, or service is not an endorsement.
