Home BancShares Reports Record Revenue, Falling Profit in Q2

Home BancShares Reports Record Revenue, Falling Profit in Q2
John Allison, chairman and CEO of Home BancShares (Karen E. Segrave)

Home BancShares Inc. of Conway (NYSE: HOMB) on Thursday reported second-quarter net income of $16 million, down from $79.1 million in the same period a year ago.

The parent company of Centennial Bank reported earnings per share of 8 cents, down 83.3% from the same quarter in 2021.

Earnings, adjusted for non-recurring costs, came to 47 cents per share. The results exceeded Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of 38 cents per share.

Revenue for the three-month period ending June 30 was a record $243.3 million, up from $172.4 million a year ago.

The company completed its $962 million acquisition of Happy Bancshares of Texas in the quarter. Expenses related to the deal reduced earnings by $107.3 million and earnings per share by 39 cents.

Chairman and CEO John Allison said the company "remained disciplined" in the quarter and implemented defensive initiatives, such as not making low-rate loans, not deploying cash in low-rate securities, paying off debt and managing its loan to deposit ratio.

"As it appears, the pendulum is about to swing back toward defensive stocks from growth stocks, and when it does, HOMB is sitting in the catbird seat," Allison said.

Loans receivable at the end of the quarter totaled $13.92 billion, compared to $10.05 billion in the first quarter.

Total deposits were $19.58 billion, up from $14.58 billion in the first quarter.

Total assets for the period ending June 30 were $24.25 billion, up from $18.62 billion in the first quarter.

“It was a very busy quarter, and I’m very pleased with the operating results," Tracy French, Centennial Bank president & CEO, said in the release. "We are much farther ahead than I thought we would be after only one full quarter of the combined company. We expected a $100 million run rate for Happy by the second or third quarter of 2023, so this moves the ball down the field even quicker than we had hoped."

Home BancShares now has 76 branches in Arkansas, 78 branches in Florida, 62 branches in Texas, five branches in Alabama and one branch in New York City.

The company on June 8 paid a second-quarter cash dividend of $0.165 per share, which represents a 17.9%, increase over the dividend paid during the second quarter of 2021.

Shares were down 2% midday Thursday. For the year to date, shares have fallen 12%.

The Associated Press contributed to this report.

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