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Home BancShares Inc. of Conway (NYSE: HOMB) on Thursday reported fourth-quarter net income of $115.7 million, up nearly 58% from $73.4 million a year ago.
Chairman John Allison touted the results as evidence of the bank’s financial strength during tough economic times. “It’s obvious all banks are not created equal,” he said. “HOMB continues to try and separate ourselves from the pack.”
Allison also lauded the company’s resilience as it faces challenges related to its acquisition of Happy Bancshares of Texas. In the wake of the deal, which closed last April, entire teams of Happy employees have left and gone to a Texas competitor, S&P Global reported. Allison has called it a “mini mutiny” executed in a “very unprofessional manner without any notice.”
“Despite the headwinds that arose out of West Texas,” he said in an earnings release, “HOMB was able to rely on the patience and strength of the full franchise to deliver strong performance for the year.”
On a per-share basis, quarterly earnings came to 57 cents, falling short of Wall Street expectations. The average estimate of three analysts surveyed by Zacks Investment Research was for earnings of 54 cents per share.
Revenue in the period was $272.3 million, up more than 59% from the fourth quarter of 2021 and higher than Street forecasts. Three analysts surveyed by Zacks expected $260.7 million.
For the full year, the parent company of Centennial Bank reported profit of $305.3 million, or $1.57 per share, down from a record $319 million, or $1.94 per share, in 2021.
Total loans grew to $14.41 billion in the fourth quarter, bouncing back after falling to $13.83 billion in the third quarter.
But elsewhere in the bank’s earnings report, there were signs of a weakening economy. Deposits fell for the second straight quarter from $18.54 billion to $17.94 billion. Total assets also shrunk for the second quarter in a row, declining from $23.16 billion to $22.88 billion. And the company raised its allowance for credit losses by about $500,000 in the quarter to $289.7 million. That’s 23% higher than a year ago.
The bank saw net interest income rise to $217.7 million in the quarter, up $2.2 million from the third quarter. The increase was the result of a $25.5 million increase in loan interest income and a $4.6 million increase in investment income. Home BancShares also attributed the increase to the rising interest rate environment.
Home BancShares 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 down about 2% midday Thursday.
The Associated Press contributed information to this report.
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