First quarter net income, revenue post big gains for Home BancShares

Thanks in large part to higher interest rates, Conway-based Home BancShares posted an almost 60% net income gain in the first quarter compared with the same quarter in 2022. Per share earnings of 51 cents was better than the consensus estimate of 50 cents.

Home BancShares, the parent company of Centennial Bank, posted first quarter net income of $102.962 million, up 58.6% compared with the $64.892 million in the same quarter of 2022. The bank posted total first quarter revenue of $248.8 million, well ahead of the $161.8 million in the same quarter of 2022. The revenue missed the consensus estimate of $253.69 million.

Execs with Home BancShares used their first quarter earnings report to assure depositors and others that it has enough money sources to cover deposits and conduct business. The assurance follows the March 10 failure of Santa Clara, Calif.-based Silicon Valley Bank and the March 12 failure of New York City-based Signature Bank.

“The strength of Home BancShares’ liquidity and availability provides more than 100% coverage for all uninsured and uncollateralized depositors as of March 31, 2023,” John Allison, chairman and CEO of HOMB said in the earnings report posted Thursday (April 20). “The strong liquidity of HOMB would have allowed HOMB to pay all uninsured and uncollateralized deposits in excess of the FDIC limits of $250,000 and still have $1.7 billion remaining. We are very proud of the fortress balance sheet we have built at Home BancShares. Home BancShares with its wholly-owned subsidiary Centennial Bank is one of the strongest financial institutions in America.”

Higher interest rates helped boost the bank’s bottom line in the quarter with interest income totaling $284.939 million, up 97% compared with $144.903 million in the same quarter of 2022. Non-interest income was $34.164 million, up 11.4% compared with the $30.669 million in the same quarter of 2022. On the expense side, interest paid on deposits in the quarter totaled $59.162 million, also significantly more than the $4.894 million in the same quarter of 2022.

Following are other key metrics in Thursday’s earnings report.
• Total assets as of March 31 were $22.518 billion, above the $18.617 billion in the same period of 2022.
• Total deposits as of March 31 were $17.445 billion, above the $14.58 billion in the same period of 2022.
• Total loans receivable as of March 31 were $14.386 billion, above the $10.052 billion in the same period of 2022.
• Return on assets, a closely-watched metric in the banking industry, was 1.84%, better than the 1.43% in the same period of 2022.

The regional banking company posted 2022 net income of $305.3 million, just below the $319 million in 2021.

Home BancShares has 5 branches in Alabama, 76 branches in Arkansas, 78 branches in Florida, 1 branch in New York City, and 63 branches in Texas. Company shares (NYSE: HOMB) opened Thursday at $21.82. During the past 52 weeks the share price has ranged between $26.20 and $19.83.