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Home BancShares Q1 Net Income Beats Expectations

2 min read

Home BancShares Inc. of Conway on Thursday reported record first-quarter net income of $91.6 million, up from $507,000 in the same quarter last year.

The parent company of Centennial Bank said earnings per share rose to 55 cents from zero in the same quarter last year. 

Adjusted for non-recurring gains, earnings came to 47 cents per share, which beat Wall Street expectations of 44 cents per share, according to The Associated Press.

The bank holding company posted revenue of $207.9 million in the period. Its revenue net of interest expense was $193.4 million, also beating Street forecasts. Three analysts surveyed by Zacks expected $171.2 million, The AP reported.

“Approximately $11 billion in loans at a yield of 5.56% including accretion, PPP income, and event income; a 36.60% efficiency ratio; a ‘never give up’ approach to charge-offs; starting to reap the benefits of investments; along with a record $91.6 million in net income is paying off handsomely for HOMB shareholders,” Chairman John Allison said in a news release.

Thursday’s results were up against an unusual first quarter for the company in 2020, when the coronavirus pandemic and a change in accounting standards forced Home Bancshares to reserve an extra $77 million for potential loan losses. That sent first-quarter earnings down by more than 99% compared to the first quarter of 2019.

But during the first quarter of 2021, Home BancShares didn’t record any credit loss expense. It said that “an additional provision for credit losses on loans was not necessary as the current level of the allowance for credit losses was considered adequate as of March 31.”

Home BancShares’ provisioning model is tied to unemployment rate projections, which the company said have continued to improve since last year. 

Shares of Home BancShares (Nasdaq: HOMB) have climbed 39% since the beginning of the year and have more than doubled in the last 12 months. Shares were trading at about $26.51 mid-morning Thursday.

Total deposits were $13.51 billion as of March 31, compared to $12.73 billion as of Dec. 31. Total assets were $17.24 billion as of March 31, compared to $16.40 billion as of Dec. 31. 

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