Home BancShares Hit With $13M Assessment in Q4; Income Falls 25%

John Allison, CEO of Home BancShares (Karen E. Segrave | KES Photo)

Home BancShares Inc. (NYSE: HOMB) of Conway on Thursday reported falling fourth-quarter profit on a “surprise” $12.9 million FDIC special assessment.

The assessment was imposed to help recover losses to the Deposit Insurance Fund following the collapse of Silicon Valley Bank and Signature Bank. It dragged down Home BancShares’ fourth-quarter earnings by five cents to 43 cents per share.

The holding company for Centennial Bank posted net income of $86.2 million in the period, down 25.5% from from $115.7 million in the same quarter the previous year.

Still, the results topped Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of 45 cents per share.

Net revenue fell 9.8% to $245.6 million, but topped Street forecasts. Three analysts surveyed by Zacks expected $238.5 million.

The quarter concluded what CEO John Allison described as a “tough year” for the banking sector. For Home BancShares, one of the biggest challenges was alleged internal corporate espionage after its acquisition of Happy State Bank in Texas. More than 70 Happy employees left to join a competitor in the same market. Centennial sued 17 of them on accusations that they stole confidential information on their way out the door.

In a statement, Allison said the exodus resulted in lost income for Home BancShares in 2023 but did not provide a dollar amount. The bank’s federal lawsuit, he said, may prove the ex-staffers’ actions were “unethical and potentially criminal.”

The group being sued has called the lawsuit a retaliatory strike against them for leaving Happy State Bank and taking customers.

Home BancShares’ deposits have fallen more than 14% since the acquisition of Happy in the second quarter of 2022. After five consecutive quarters of decline, deposits rebounded in the fourth quarter of 2023 to $16.8 billion, up from $16.5 billion.

Loans grew 1.05% in the quarter to $14.42 billion. Compared to the same quarter in 2022, loans were up 0.06%.

Total assets were $22.66 billion at the end of the quarter, down from $22.88 billion a year ago.

The bank’s net available liquidity shrunk on a quarterly basis from $6.61 billion to $5.59 billion, an amount that exceeds uninsured and uncollateralized deposits by $867.6 million.

Home BancShares reported net interest margin of 4.17% in the fourth quarter, compared to 4.22% for the same period in 2022.

Centennial Bank currently has 76 branches in Arkansas, 78 branches in Florida, 63 branches in Texas, five branches in Alabama and one branch in New York City.

Shares of the company were up nearly 2% on Thursday morning to $23.50. Year to date, shares were down more than 7%.