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Home BancShares’ Q4 Profit Up 15% Despite Loan Charge-Offs and Hurricane Costs

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Home BancShares Inc. (NYSE: HOMB) of Conway, the holding company for Centennial Bank, on Wednesday reported fourth-quarter net income of $100.6 million, up 15% from $86.2 million a year earlier.

Per share, earnings were 51 cents, up from 43 cents in the same quarter last year.

Net revenue for the quarter was $258.4 million, up 5% from $245.6 million in the fourth quarter of 2023.

The bank’s net income did not meet analysts’ expectations, with Zacks Investment Research predicting 52 cents per share, though revenue topped expectations of $254.6 million.

The bank recorded an additional $16.7 million provision for credit losses during the quarter, due to Hurricanes Helene and Milton, bringing its total hurricane reserve to $33.4 million. The bank reported having $110.9 million in loans on deferral due to the two storms that hit Florida, where it has 78 branches, in the third and fourth quarters.

During the fourth quarter of 2024, the bank completed what it called a “proactive cleanup” of its loan portfolio, with net charge-offs of $53.4 million compared to $1.5 million in the third quarter. The bank said 89%, or $47.6 million, of the charge-offs were concentrated in Texas. Most were legacy loans from the company’s 2022 acquisition of Happy Bancshares.

Home BancShares also paid off its $700 million advance from the Federal Reserve’s Bank Term Funding Program.

Total loans were $14.76 billion, up 2.3% from $14.42 billion in the fourth quarter of 2023.

Deposits reached $17.15 billion, which is a 2.1% increase from $16.79 billion in the fourth quarter of 2023.

Total assets were down 0.7% from the same quarter last year to $22.49 billion.

For the full year of 2024, Home BancShares achieved two milestones: revenue surpassed $1 billion for the first time, reaching $1.02 billion, and annual earnings topped $400 million, ending at $402.2 million. The revenue consisted of $848.8 million in net interest income and $168.6 million in non-interest income.

“The fourth quarter was a strong finish to 2024, pushing us across the finish line to our first $400 million year in earnings,” John Allison, Chairman and CEO of HOMB, said in a news release. “I’m always proud of the strength of our company, but I’m especially proud of a quarter where margin is up, legacy loans are up, deposits are up, revenue is up, earnings are up, and we managed to swallow an asset quality cleanup that began with legacy loans from Happy Bank and led to a company-wide cleanup. Our strong balance sheet, capital and loan loss reserve allowed us to make a proactive cleanup that puts this in the rear-view mirror for HOMB and sets us up for an even greater year in 2025.”

Shares of the company rose 2.3% on Wednesday to $29.11. Over the past year, shares have risen 26%.

Centennial Bank has 76 branches in Arkansas, 78 branches in Florida, 58 branches in Texas, five branches in Alabama and one branch in New York City.

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