Johnny Allison
Home BancShares Inc. (NASDAQ:HOMB) of Conway, the parent company of Centennial Bank of Conway, announced $24.7 million third-quarter earnings, up 49 percent from $18.4 million for the same period of 2013.
That comes to 41 cents diluted earnings per share, compared to 33 cents diluted earnings per share for the third quarter of 2013. Not accounting for $3.8 million in merger expenses for the acquisition of Florida Traditions Bank, the company increased its earnings by $9 million from the same period of 2013, or to 45 cents diluted earnings per share.
Home BancShares completed the acquisition July 17. At the time, Florida Traditions Bank had $297.6 million in total assets, $241.6 million in loans after $8.5 million of loan discounts, and $267.3 million in deposits. Home BancShares had growth of $449.9 million in non-covered loans in the third quarter, and excluding loans acquired in the acquisition, produced $208.3 million of organic non-covered loan growth.
“At this point, we know there is still an ongoing need for organic loan growth and are diligently pursuing the opportunities set before us,” John Allison, chairman, said in a news release. “Additionally, on Sept. 26, we completed the systems conversions of Traditions and now can speed up the process of improving the financial metrics to maximize returns to our shareholders.”
Randy Sims, chief executive officer, said Home BancShares had a 41.88 percent core efficiency ratio and a 1.69 percent return on average assets, excluding merger expenses, in the third quarter.
As of Sept. 30, Home BancShares reported $7.1 billion in assets, up from $6.6 billion on June 30 and $4.1 billion a year ago.
- Net interest income increased 69.6 percent to $78.6 million in the third quarter of 2014, compared to $46.4 million in the same time period of 2013.
- The effective yield on non-covered loans and covered loans was 5.84 percent and 17.23 percent, respectively.
- Net interest margin, on a fully taxable equivalent basis, was 5.26 percent.
- There was a $4.2 million increase from a year ago in the provision for loan losses for non-covered loans. This is primarily a reflection of the migration of Liberty Bancshares Inc. of Jonesboro from purchased-loan accounting treatment to originated-loan accounting treatment.
- $10.8 million of non-interest income, compared to $9.3 million a year ago.
- Home BancShares is currently in negotiations with FDIC regarding the remaining loss share agreements associated with the Key West Bank loan portfolio on March 26, 2010. To date, no agreement has been reached with the FDIC to buyout the loss share. As a result, Home BancShares began accreting the credit improvement ($186,000) and amortized the indemnification asset ($1.1 million) and recorded a true-up expense ($41,000). This created a negative third quarter financial impact of about $1 million to earnings on a pre-tax basis.
- Non-interest expense was $42.8 million, compared to $26.7 million a year ago.
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