Home BancShares, the parent company of Centennial Bank, posted second quarter net income of $79.1 million, up 26% from the $62.8 million in the same quarter of 2020. The gain, which beat the consensus estimate, came despite a more than 12% drop in quarterly loan revenue.
Second quarter earnings per share hit 48 cents, better than the consensus estimate of 46 cents among analysts who follow the company. Revenue in the quarter was $172.4 million, below the $173.7 million in the same quarter of 2020 and below the consensus estimate of $174.17 million.
Net income in the first half of the year was $170.672 million, well ahead of the $63.334 million during the same period in 2020.
“An annualized look at gross revenue and pre-tax, pre-provision, net income (PPNR) shows us on a steady track for the last four years,” Home BancShares Board Chairman John Allison said in the earnings report posted early Thursday (July 15). “Net income for the six-month period ended June 30, 2021 was $170.7 million, or $1.03 earnings per share, which is a record for the Company. The continued stable performance our team delivers each quarter brings both a sense of pride and comfort during these unstable economic times.”
A combination of monetary stimulus efforts by the Federal Reserve and Congress have reduced consumer loan demand. Home BancShares posted a $579.3 million loan decline in the second quarter, with loan revenue at $141.684 million in the quarter, down 12.2% from the same period in 2020. Loan revenue in the first six months of the year was $292.601 million, down 7.7% from the same period in 2020.
Centennial Bank President and CEO Tracy French said the bank will continue to adhere to its loan principles.
“One of the hardest things we do is maintain our discipline, and although loan growth might seem a little slow, we too plan to be patient as we do not intend to sell the future of our Company. We won’t be one to reach out in the market for short term gain to create long term pain,” French noted in the earnings report.
Following are other metrics in the earnings report.
• The bank had $17.627 billion in total assets at the end of the second quarter, up from $16.895 billion at the end of the second quarter in 2020.
• The bank had $13.891 billion in total deposits at the end of the second quarter, up from $13.177 billion at the end of the second quarter in 2020.
• Return on assets, a key metric in the banking sector, was 1.81% at the end of the second quarter, up from 1.55% in the second quarter of 2020.
• Non-performing loans at June 30, 2021 were $22.4 million, $31.8 million, $380,000, $1.6 million and $2.7 million in the Arkansas, Florida, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $58.9 million.
The bank holding company has 76 branches in Arkansas, 78 branches in Florida, 5 branches in Alabama and one branch in New York City. Bank shares (NASDAQ: HOMB) closed Wednesday at $23.50. Year-to-date, the share price is up 20.4%. During the past 52 weeks the share price has ranged from $29.76 to $14.42.