Home BancShares second-quarter income beats estimates, but down 13%

Conway-based Home BancShares, the parent company of Centennial Bank, posted second quarter revenue and income that beat the consensus estimate of analysts but fell below net income in the same period of 2019.

Net income in the second quarter was $62.827 million, down 13% from the $72.164 million in the same quarter of 2019. Earnings per share of 38 cents beat the consensus estimate of 26 cents per share. Total revenue in the quarter was $173.7 million, better than the $164.1 million in the same quarter of 2019, and well ahead of the $166.92 million consensus estimate.

Net income in the first half of the year for the multi-state banking operation was $63.334 million, well below the $142.574 million in the same period of 2019. Total revenue in the first half of 2020 was $336.342 million, up from the $327.195 million in the same period of 2019.

Home BancShares Board Chairman John Allison focused on the financial company’s ability to beat what the market expected.

“To say that during a full quarter of a pandemic that HOMB was able to meet EPS targets, set a record for revenue and maintain a solid net interest margin brings about an enormous sense of pride that I have in this team of bankers,” Allison said in the earnings report posted Thursday (July 16). “Our outlook for future dividends remains strong, which is also an important component to our solid performance.”

Return on Assets (ROA), a key metric in the banking sector, was 1.55% at the end of the second quarter, down from the 1.92% in the same quarter of 2019. Home BancShares participated in the federal Paycheck Protection Program (PPP) during the second quarter of 2020. As of June 30, 2020, the bank reported $848.6 million of PPP loans.

Following are other financial metrics in the earnings report.
• Total assets at the end of the quarter totaled $16.895 billion, up from $15.287 billion at the end of the second quarter of 2019.
• Total deposits at the end of the quarter totaled $13.177 billion, up from $11.347 billion at the end of the second quarter of 2019.
• The company reported $25 million of non-interest income for the second quarter of 2020, with $7.7 million from other service charges and fees, $6.2 million from mortgage lending income, $4.3 million from service charges on deposits accounts and $3.9 million from other income.
• Net interest margin was 4.11% during the second quarter, down from 4.22% during the first quarter.

Home BancShares has 5 branches in Alabama, 77 branches in Arkansas, 78 branches in Florida, and one branch in New York City.

Bank shares (NASDAQ: HOMB) were trading around $16.40 in mid-day trading, up more than 4%. During the past 52 weeks the share price has ranged between $9.71 and $21.04.