by Lance Turner
Posted 7/17/2014 08:30 am
Updated 6 days ago
Home BancShares Inc. of Conway on Thursday reported second quarter profit of $28.4 million or 43 cents per share, another record and a 60 percent increase from the $17.7 million or 31 cents per share it reported in the same quarter last year.
"I am pleased to report the company has again accomplished another record quarter," Chairman John Allison said in a news release. "During the upcoming quarters, we recognize there is a need for organic loan growth. We are encouraged by the opportunities we have in front of us because we currently have the largest unfunded loan pipeline in our history."
Randy Sims, CEO, noted that, excluding merger expenses, the company, which is the parent company of Centennial Bank, has reported record profits for 13 consecutive quarters.
"Additionally, two outstanding metrics were a 41.56 percent core efficiency ratio and a 1.70 percent return on average assets for the second quarter of 2014," Sims said. "These improvements and metrics reported by the company during the second quarter of 2014 are impressive."
The company said quarterly net interest income increased 74 percent to $78 million. The effective yield on non-covered loans and covered loans was 6.08 percent and 19.38 percent, respectively. Net interest margin, on a fully taxable equivalent basis, was 5.5 percent, up 32 basis points from the same quarter last year.
Home BancShares also said it increased its provision for loan losses for non-covered loans by $5.4 million. The bank said the increase in the provision wasn't related to loan quality, but an accounting requirement related to the migration of Liberty Bank loans. Home BancShares completed its purchase of the Jonesboro bank in October.
Home BancShares is also integrating another acqusition, that of Florida Traditions, which has eight banking locations in central Florida, including its main office in Dade City. The company announced the deal in April.
"For the Florida Traditions acquisition, we plan to achieve the anticipated cost savings as quickly as possible in order to maximize the returns to our shareholders," Sims said.
Home BancShares is issuing $43 million worth of stock to the buy the bank. Centennial has 50 branches in Florida and the Traditions branches will help fill the footprint between existing Centennial offices in Tampa and Orlando.
During the quarter, Home BancShares said it closed or merged four Arkansas branches and two Florida locations. It plans to open a new branch in Naples, Florida, during the third quarter.
In all, the company has 83 branches in Arkansas and seven in Alabama, in addition to the Florida properties.