Home BancShares Meets Q3 Earnings Expectations, Beats on Revenue

Home BancShares Meets Q3 Earnings Expectations, Beats on Revenue
The Home Bancshares logo. (Home BancShares)

Home BancShares Inc. of Conway on Thursday reported third-quarter profit of $75 million, up 8% from the same quarter last year.

The company, the parent of Centennial Bank, said it had earnings of 46 cents per share. Earnings, adjusted for non-recurring gains, were 45 cents per share.

They met Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of 45 cents per share.

The bank holding company posted revenue of $186.3 million in the period. Its revenue net of interest expense was $173.8 million, beating Wall Street forecasts. Three analysts surveyed by Zacks expected $168 million.

Also, net income for the nine-month period ended Sept. 30 was $245.7 million, or $1.49 earnings per share. Both were company records.

In a news release, Chairman John Allison said the company is on track to raking in more than $300 million in profit for the fourth consecutive year.

In addition, Home BancShares announced last month a $919 million deal to acquire Happy Bancshares Inc. of Happy, Texas, pushing up assets by more than a third from $17.6 billion to beyond $23 billion. The deal is expected to close during the first quarter of 2022.

Allison said in Thursday’s release, “On the Happy HOMB front, there may not have been a better deal done in the last several years … As a well-known analyst said, ‘HOMB threaded the needle perfectly on this deal.’ The market reaction has been favorable and a nod to the work we put into the structure of a triple accretive deal.”

As of Sept. 30, total deposits were $14 billion, up from $13.89 billion at June 30. Total assets were $17.77 billion, up from $17.63 billion.

In its earnings report, the company said it was optimistic that quality loan growth would continue.

The company also said the effects of COVID-19 continue to result in "a significant amount of excess liquidity in the market."

As a result, Home BancShares had an increase of $337.7 million of average interest-bearing cash balances in the third quarter compared to the second. The company said the excess liquidity diluted net interest margin by 8 basis points for the quarter.

The Associated Press contributed to this report.