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Home Bancshares’ 3Q Profit Down 9%

2 min read

Home Bancshares Inc. of Conway on Thursday reported third-quarter net income of $72.8 million, down 9 percent from the same quarter last year.

The company (Nasdaq: HOMB), the parent of Centennial Bank, reported diluted earnings per share of 44 cents, down from 46 cents in the third quarter of 2018 but in line with consensus estimates.

Total net revenue was $167.7 million, down 2 percent from the same quarter last year.

In a news release, the company highlighted quarterly net interest margin of 4.32%, up from 4.28% in the second quarter. Chairman John Allison noted that book value per common share and tangible book value per common share rose 10.1% and 15.0% respectively.

“We made the strategic decision to participate in a stock repurchase program, although it is dilutive to tangible book,” Allison said. “If we had not bought back stock, our year over year increase in tangible book value would have been 20.2%. These are numbers I am very proud of.”

Executive also called out net interest margin at 4.32% and strong asset quality.

“Our non-performing assets to total assets was 0.45% in the third quarter as compared to 0.51% in the second quarter, which is a very reassuring position,” Home Bancshares CEO Randy Sims said.

The company also noted a $281.2 million decline in organic loans during the third quarter. Its Centennial Commercial Finance Group, formed when Centennial bought $289 million in national commercial real estate loans from J.C. Flowers & Co. LLC in 2015, experienced a $170.9 million decline, reporting loans of $1.5 billion at Sept. 30.

The company said its legacy footprint experienced $110.3 million in organic loan decline during the quarter.

During the third quarter, Home Bancshares’ efficiency ratio improved to 39.16% compared to 39.93% reported for the second quarter. Total deposits were $11.05 billion at Sept. 30, compared to $10.90 billion at Dec. 31. Total assets were $14.9 billion at Sept. 30, 2019, compared to $15.3 billion at Dec. 31.

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