Home BancShares Announces Stock Split, Quarterly Dividend Hike

Chairman John Allison had a couple of surprises for shareholders who attended Home BancShares Inc.’s annual meeting in Conway Thursday night: Their stock will be split 2-for-1 on May 22, and their quarterly dividend will be increased from 13 cents to 15 cents per share.

Home BancShares stock (Nasdaq: HOMB) closed at $38.15 on Thursday.

HBI, the publicly traded parent company of Centennial Bank, had telegraphed the stock split by asking shareholders to increase the limit on shares included in the corporate bylaws from 50 million to 100 million. There are currently more than 28 million shares outstanding.

But the wiggle room on shares also gives the management currency with which to make acquisitions, and buying banks was mainly what Allison wanted to talk about at the Centennial Valley Country Club. The FDIC-assisted deals in which Centennial Bank has been one of the most active acquirers in the country are drying up, but Allison said the bank has "more opportunities today than I've ever seen."

The loquacious Allison revealed that Centennial is already working on deals in Florida and Mississippi, and he and his mergers-and-acquisition team will be talking with eight more potential acquisition targets in Florida during a three-day trip next week.

CEO Randy Sims told Arkansas Business after the meeting that none of the eight meetings scheduled for next week concern failing banks that the Federal Deposit Insurance Corp. is planning to close.

In a conference call with investors and analysts after announcing first-quarter earnings on Thursday, Alllison said Home BancShares' $528 million in equity capital was sufficient to increase the multi-state bank’s assets by almost 75, from the March 31 level of $4.23 billion.

In answering a question from analyst Michael Rose of Raymond James, Allison said: "I wouldn’t be afraid to go to $3 billion. If there was a $3 billion deal out there that might stretch us a little bit, but [for the] right transaction we might go that far. That's probably about the top of it, without having to go and raise some capital."