Centennial Bank parent 4Q earnings up 30%, continues profitability streak

Home Bancshares Inc. saw fourth quarter earnings spike nearly 30% as the expanding Conway-based financial concern closed out another strong year by continuing its streak of 23 straight profitable quarters, bank officials reported before Thursday’s opening bell.

For the period ended Dec. 31, 2016, the Arkansas regional bank reported quarterly profits of $48.6 million, or 35 cents per share, compared to $37.4 million, or 27 cents per share, for the same quarter in 2015. Excluding $4.5 million for loan losses as a result merger expenses associated with the upcoming acquisitions, fourth quarter earnings were 33 cents per share.

For the full year, the Conway-based banking group reported earnings of $177.1 million, or $1.26 per share, up 28.2% from $138.2 million for the year ended 2015. Home Bancshares matched the consensus estimate of 33 cents per share by nine market analysts who cover the company, according to Thomson Reuters.

“The annual and quarterly earnings performance for 2016 exceeded expectations,” said Home Bancshares Chairman John Allison. “At the beginning of 2016, we had what we considered an aggressive goal in place to reach annual diluted earnings per share of $1.25. While it took both discipline and hard work, the company exceeded this goal for the year by reporting exceptional results for diluted earnings per share of $1.26 per share.”

In November, Home Bancshares, parent company of Centennial Bank, announced that it was designated as the successful bidder in federal bankruptcy proceedings to purchase The Bank of Commerce, a Florida state-chartered bank that operates in the Sarasota, Fla., area.

Home Bancshares has entered into a purchase agreement with Bank of Commerce Holdings Inc. (BCHI), the parent company of the Florida community bank, to purchase all of the issued and outstanding shares of common stock of BOC and certain other assets of BCHI. The closing of the acquisition is expected to occur in first quarter of 2017, subject to a court-approved final sale order relating to the acquired assets, approval of appropriate regulatory authorities, and the terms and conditions of the acquisition agreement. Upon closing, Bank of the Commerce will become part of Centennial Bank.

“As the fourth quarter organic loan growth and financial results show, the efforts made by our team of associates are rewarding. We are pleased with the strong finish for 2016, and look forward to the opportunities that 2017 will create,” said Centennial President and CEO Tracy French. “We aim to continue growing loans and cutting expenses to improve earnings, while continuing to look for acquisition opportunities in attractive markets to increase our return to our shareholders.”

Following are selected highlights from the Home Bancshares quarterly earnings report:

· Net interest income for the fourth quarter of 2015 increased only 3% to $103.2 million from $100 million during the fourth quarter of 2015.
· Total loans receivable rose to $7.39 billion for the quarter ended Dec. 31, compared to $6.64 billion a year ago. Total deposits were $6.94 billion, up 7.8% from $6.44 billion in the same period of 2015.
· Stockholders’ equity was $1.32 billion in the fourth quarter, compared to $1.2 billion at December 31, 2015, an increase of $125.1 million. Book value per common share was $9.43 in the fourth quarter of 2016.
· Non-performing loans in the fourth quarter were $28.5 million, $34.0 million, $656,000 and zero in the Arkansas, Florida, Alabama and Centennial CFG markets, respectively, for a total of $63.1 million. Non-performing loans as a percent of total loans were 0.85% as of Dec. 31, compared to a year ago.
· Total assets were $9.81 billion in the fourth quarter of 2016, compared to $9.29 billion in the same period of 2015.

During the fourth quarter of 2016, Centennial closed one branch in Mountain Home. In the first quarter of 2017, bank officials plan to open a branch location in Clearwater, Fla., and a loan production office in Los Angeles under the management of Centennial CFG. Today, the Arkansas bank currently has 76 branches in Arkansas, 59 branches in Florida, 6 branches in Alabama and one branch in New York City.

At the close of trade on Wednesday, Home Bancshares stock ended at $26.30, down nine cents. The bank’s shares have traded in the range of $10.93 and $28.62 during the past 52 weeks.