LITTLE ROCK — Home BancShares Inc., the parent company of Centennial Bank, earned $9 million in the second quarter, up 65 percent from the second quarter last year, the Conway bank said Thursday.
The company earned 29 cents a share, beating the estimate of 27 cents a share projected by eight analysts surveyed by Thomson Reuters. A year ago the bank earned 22 cents per share.
Home BancShares closed at $22.58 Thursday, up 78 cents, or 3.6 percent, in trading on the Nasdaq exchange.
Matt Olney, a banking analyst with Little Rock-based Stephens Inc., said he was pleased with the quality of Home BancShares’ quarter.
Other banks in the Southeast had more credit problems in the second quarter than Home BancShares had, said Olney, who owns no stock in the bank.
“That speaks well of [the economy in] Arkansas,” Olney said.
Stephens was the lead underwriter on Home Banc-Shares’ initial public offering in 2006.
Home BancShares has $3 billion in assets, up from $2.6 billion a year ago.
In March, Home Banc-Shares acquired Old Southern Bank of Orlando, Fla., and Key West Bank of Key West, Fla., from the Federal Deposit Insurance Corp. after those banks closed. Home BancShares acquired eight branches in Florida in the two acquisitions - three in Orlando, two in Longwood, one in Winter Park, one in Clermont and one in Key West. It plans to keep all the branches open except one in downtown Orlando.
Home BancShares is considering buying other banks in Florida and in markets closer to Arkansas, such as eastern Texas, southern Missouri and west Tennessee, said John Allison, the bank’s chairman.
Home BancShares has bidon several FDIC-assisted bank sales recently, but didn’t makethe winning offers.
The deals offered by other winning banks “have really gotten silly,” Allison said on a conference call Thursday.
“We’re still in the game,” he said. “At some point in time, we’re hoping that sanity will return to the market. Some banks are opening their balance sheets to risk [with high bids] but we’re not willing to take those risks.”
The high-priced sales in Florida have persuaded Home BancShares to look at purchases closer to Arkansas, such as Oklahoma or Texas, Allison said.
The integration of the new banks in Florida is going well, said Randy Sims, Home BancShares’ chief executive officer.
Tracy French, who ran Home BancShares’ office inCabot, is now over the Orlando division. Home BancShares lost some customers who held high-paying certificates of deposit in the Orlando market because the bank didn’t want to continue such high interest rates, Sims said. The Key West acquisition has lost almost no deposits, Sims said.
“But we are well ahead of projections for our acquisitions,” Sims said.
Even with the acquisitions, Home BancShares has managed to keep its efficiency ratio below 50 percent, at 49.39 percent in the second quarter, Sims said. That is more than 13 percentage points below the bank’s efficiency ratio of 62.67 percent a year earlier.
A 49.39 percent efficiency ratio means it costs Home BancShares $49.39 to earn $100.
Business, Pages 25 on 07/23/2010