Third quarter net income dips for Home BancShares; per share earnings beat the estimate

Conway-based Home BancShares, the parent company of Centennial Bank, posted third quarter net income of $69.3 million, down 4.8% from the same quarter in 2019. Part of the decline was related to loan deferments related to “uncertainties” from the COVID-19 pandemic.

Per share net income of 42 cents beat the consensus estimate of 39 cents.

Revenue in the quarter totaled $176.1 million, up from the $167.7 million in the same quarter of 2019. The revenue was also better than the consensus estimate of $172.87 million. The return on assets in the quarter, a key metric in the banking industry, was 1.66% in the quarter, down from 1.93% in the same quarter of 2019.

“During the third quarter of 2020, we recorded $14.0 million of total credit loss expense which was primarily due to the Company increasing reserves on deferred loans resulting from ongoing uncertainties related to the COVID-19 pandemic,” the company noted in the earnings report. “Due to the inherent risk associated with deferred loans, management recorded an additional reserve on the deferred loans. As of September 30, 2020, we had deferrals of $933.8 million on 330 loans.”

Net income – available to shareholders – during the first nine months of the year was $132.654 million, own 38.9% compared with the $216.277 million during the same quarter in 2019. Revenue in the first nine months of the year was $512.431 million, up from $494.921 million in the same period of 2019.

Following are other financial metrics in the quarterly reported posted Thursday (Oct. 15) before the markets opened.
• Total assets were $16.017 billion as of Sept. 30, up from $15.056 billion on Sept. 30, 2019.
• Total deposits were $12.937 billion as of Sept. 30, up from $11.047 million in the same period of 2019.
• Return on assets during the first nine months of 2020 was 1.11%, down from $1.92% during the same period in 2019.
• Non-performing loans at Sept. 30, 2020 were $23.3 million, $40.2 million, $489,000, $4.4 million and $5.4 million in the Arkansas, Florida, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $73.8 million.
• Non-performing assets at Sept. 30, 2020 were $24.8 million, $43.3 million, $523,000, $4.4 million and $5.4 million in the Arkansas, Florida, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $78.4 million.
• The company’s allowance for credit losses on loans was $248.2 million at Sept. 30, 2020, or 2.12% of total loans, compared to the allowance for loan losses of $238.3 million, or 1.99% of total loans, at June 30, 2020.

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

The company shares (NASDAQ: HOMB) opened Thursday at $16.66. During the past 52 weeks the share price has ranged from $9.71 and $21.04.