Simmons First National Q3 Earnings Miss Analyst Estimates with 426% YoY Sales Decline

Simmons First National (NASDAQ:SFNC) reported Q3 CY2025 sales of -$569.5 million, a 426% YoY decline, missing analyst estimates. Net interest income was $186.7 million, in line with expectations, while non-GAAP profit of $0.46 per share was in line with consensus estimates. The bank's revenue has consistently shrunk over the last two years, aligning with its five-year trend.

Simmons First National (NASDAQ:SFNC), a regional banking company, reported its Q3 CY2025 sales of -$569.5 million, marking a 426% year-on-year decline and significantly missing analyst estimates. The bank's non-GAAP profit of $0.46 per share was in line with consensus estimates, but the overall quarter was marked by a significant revenue shortfall.

Key highlights from the quarter include:
- Net Interest Income: $186.7 million, in line with analyst estimates of $187.7 million.
- Net Interest Margin: 3.5%, beating analyst estimates by 3.8 basis points.
- Efficiency Ratio: -25.1%, significantly lower than analyst estimates of 58.9%, indicating operational inefficiencies.
- Adjusted EPS: $0.46, in line with analyst estimates.

The revenue decline was attributed to a $801.5 million pre-tax loss on the sale of low-yielding securities, part of the bank's balance sheet repositioning strategy. This loss was included in non-interest income, contributing to the overall revenue decline.

Simmons First National's revenue has consistently shrunk over the last two years, aligning with its five-year trend. This quarter's results highlight the bank's struggle to maintain consistent demand for its services, which is a concern for investors. The bank's tangible book value per share (TBVPS) declined by 19.9% year-on-year, dropping from $13.68 to $13.45 per share.

Despite the challenging quarter, the stock traded down by 1.3% to $17.80 immediately following the results. Investors should consider the bank's valuation, business quality, and the latest quarter's performance before making any investment decisions.