Home BancShares quarterly revenue up 19.4%, net income beats expectations

Conway-based Home BancShares on Thursday (April 15) reported first quarter net income of $91.6 million, well ahead of the $507,000 in the first quarter of 2020. Per share net income of 55 cents was well ahead of the consensus estimate of 44 cents per share.

Revenue in the quarter for the parent company of Centennial Bank was $194.4 million, better than the $162.7 million in the same quarter of 2020 and better than the consensus estimate of $172.47 million.

“Great results come down to customer service and extreme discipline. We communicate with our customers and we helped them through the PPP process and that results in a long-term trusting partnership,” Tracy French, Centennial Bank president and CEO, said in the earnings statement.

The primary reason for the difference in year-over-year first quarter income is a $94.598 million provision for anticipated credit losses taken in the first quarter of 2020. The bank holding company did not record a provision loss in the first quarter of 2021.

“During the first quarter of 2021, the Company did not record any credit loss expense. The Company’s provisioning model is closely tied to unemployment rate projections which have continued to improve since the fourth quarter of 2020,” the bank noted in its earnings statement. “The Company determined that an additional provision for credit losses on loans was not necessary as the current level of the allowance for credit losses was considered adequate as of March 31, 2021. In addition, the Company determined that the current level of the unfunded commitment reserve was adequate and no additional provision for unfunded commitments was necessary.”

The company also reported that mortgage lending income in the quarter was $8.167 million, below the $10.071 million at the end of the fourth quarter of 2020 but significantly higher than the $2.621 million in the same quarter of 2020.

“The housing market continues to benefit from the current low interest rate environment; however, the decrease in mortgage lending income from the fourth quarter of 2020 is the result of normal seasonal fluctuations and harsher winter weather in several of our markets,” the company noted.

Following are other financial details in the quarterly report.
• Return on assets, a key metric in the banking industry, was 2.22%, better than the 0.01% at the end of the same quarter in 2020.

• Total assets as of March 31 was $17.24 billion, up from $15.531 billion at the end of the first quarter in 2020.

• Total deposits as of March 31 was $13.512 billion, up from $11.514 billion at the end of the first quarter in 2020.

• Total loans receivable as of March 31 was $10.78 billion, down from $11.384 billion at the end of the first quarter in 2020.

• As of March 31, 2021, the bank had $667.3 million of Paycheck Protection Program (PPP) loans outstanding.

Total net income for the regional banking operation in 2020 was $214.4 million compared to 2019 net income of $289.7 million. The bank has 76 branches in Arkansas, 78 branches in Florida, 5 branches in Alabama and one branch in New York City.

Shares of Home BancShares (NASDAQ: HOMB) closed Thursday at $26.88, down 10 cents. In the past 52 weeks, the stock price has ranged between $29.21 and $10.79.