Home BancShares’ Q2 Income Slides on Special Assessment, Credit Concerns

Johnny Allison, CEO of Home BancShares, at the company headquarters in Conway (Steve Lewis)

Home BancShares Inc. (NYSE: HOMB) of Conway on Wednesday reported second-quarter net income of $101.5 million, down 3.6% from $105.3 million in the same quarter last year.

Profit fell on a $2.3 million FDIC charge, which the company said was the “remaining portion” of a special assessment. The assessment was levied to help recover losses to the Deposit Insurance Fund following the collapse of Silicon Valley Bank and Signature Bank last year. Home BancShares reported a special assessment of $12.9 million in the fourth quarter of 2023.

The parent company of Centennial Bank also set aside more money for bad loans, raising its total allowance for credit losses by $5.6 million to $295.9 million.

Home BancShares said it had second-quarter earnings of 51 cents per share. Adjusted earnings came to 52 cents per share.

The numbers exceeded analyst expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of 48 cents per share.

The bank holding company reported $254.6 million in net revenue, down 1% from $257.2 million a year ago but better than Street forecasts. Three analysts surveyed by Zacks expected $244.8 million.

Deposits totaled $16.96 billion, up from $16.87 billion in the first quarter but down slightly from $16.99 billion in the second quarter of 2023.

Total assets were $22.92 billion, up from $22.84 billion in the first quarter but down nearly 17% from $27.6 billion a year ago.

Loans totaled $14.78 billion, up nearly 2% from $267.8 million in the first quarter and a 4% higher than in the same period a year ago.

Despite the special assessment expense, total non-interest expenses fell in the quarter to $113.2 million, compared to $116.3 million a year ago. Salaries and employee benefits were down, as were occupancy and equipment expenses and data processing expenses.

The company made leadership changes during the quarter that aim to “utilize the depth of our management team in a way that sets us up for the future,” CEO John Allison said.

Stephen Tipton was promoted from chief operating officer to CEO of Centennial Bank, stepping into a role held by Tracy French since 2015.

In a related move, Chief Lending Officer Kevin Hester was named president of Centennial Bank and president of Home BancShares, a role previously held by French.

French remained chair of Centennial Bank with a focus on special projects. John Allison remained as executive chair and CEO of the company.

Home BancShares currently has 76 branches in Arkansas, 78 branches in Florida, 58 branches in Texas, 5 branches in Alabama and one branch in New York City.

Shares of the company rose 0.5% on Thursday to $26.80. Year to date, shares were up  5.8%.

The Associated Press contributed information to this report.