Regional banking company Simmons First National (NASDAQ:SFNC) fell short of the market’s revenue expectations in Q2 CY2025, but sales rose 8.6% year on year to $214.2 million. Its non-GAAP profit of $0.44 per share was 12.8% above analysts’ consensus estimates.
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Net Interest Income: $171.8 million vs analyst estimates of $170.7 million (11.6% year-on-year growth, 0.7% beat)
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Net Interest Margin: 3.1% vs analyst estimates of 3% (37 basis point year-on-year increase, 6.5 bps beat)
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Revenue: $214.2 million vs analyst estimates of $217.1 million (8.6% year-on-year growth, 1.4% miss)
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Efficiency Ratio: 62.8% vs analyst estimates of 63.1% (in line)
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Adjusted EPS: $0.44 vs analyst estimates of $0.39 (12.8% beat)
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Market Capitalization: $2.45 billion
With roots dating back to 1903 and a presence across Arkansas, Kansas, Missouri, Oklahoma, Tennessee, and Texas, Simmons First National (NASDAQ:SFNC) is a regional bank holding company that provides banking and financial services to individuals and businesses.
In general, banks make money from two primary sources. The first is net interest income, which is interest earned on loans, mortgages, and investments in securities minus interest paid out on deposits. The second source is non-interest income, which can come from bank account, credit card, wealth management, investing banking, and trading fees.
Over the last five years, Simmons First National’s demand was weak and its revenue declined by 2.1% per year. This wasn’t a great result and is a sign of poor business quality.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Simmons First National’s recent performance shows its demand remained suppressed as its revenue has declined by 4.9% annually over the last two years.
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Simmons First National’s revenue grew by 8.6% year on year to $214.2 million, missing Wall Street’s estimates.
Net interest income made up 78.6% of the company’s total revenue during the last five years, meaning lending operations are Simmons First National’s largest source of revenue.
While banks generate revenue from multiple sources, investors view net interest income as the cornerstone – its predictable, recurring characteristics stand in sharp contrast to the volatility of non-interest income.
