Conway bank’s earnings set mark

Profit soars 56% in the 1st quarter

Home BancShares, the parent company of Centennial Bank, had record net income of $27.3 million in the first quarter, the Conway bank said Thursday.

The bank’s net income was up 56 percent from $17.5 million in the same period last year. Shares of Home BancShares earned 42 cents for the quarter, matching the projections of analysts surveyed by Thomson Reuters.

Home BancShares closed at $33.54 Thursday, up 52 cents, in trading on the Nasdaq exchange.

Home BancShares completed its largest purchase last year, a $280 million deal for Liberty Bancshares of Jonesboro. The purchase raised Home BancShares’ assets to $6.8 billion, making it the second-largest Arkansas-based bank behind Arvest Bank, which has about $14.1 billion in assets.

Home BancShares has signed a letter of intent on the purchase of another bank and could announce the deal as early as today, John Allison, the bank’s chairman, said in a conference call Thursday.

“If we close that deal, you’ll see that it is really pretty strategic,” Allison said. It is a bank with $300 million in assets, although Allison didn’t include other details such as the bank’s location.

Home BancShares is looking at multiple acquisitions, but some potential sellers are suggesting “stupid” prices, Allison said.

“We have looked at some transactions that we’d like to do, but we can’t do them even as strong as our stock has been,” Allison said. “If we can’t do them, I don’t know who will do them. You just have to pass the ones that won’t work for you and go to the ones that will.”

Home BancShares also is working on a possible transaction with a big bank, Allison said. He may make a bid today or next week, Allison said.

Matt Olney, a banking analyst for Stephens Inc., said Home BancShares is expected to continue buying banks in Florida, Alabama and Arkansas. Olney owns no stock in Home BancShares.

“Home BancShares has [a good performing stock], great management and a great story to tell to other sellers,” Olney said. “It is looking at some pretty fertile markets in Florida, [southern] Alabama and Arkansas. So there seem to us to be quite a few candidates who would appreciate the Home BancShares story. We’re expecting Home [Banc-Shares] to be pretty acquisitive over the next 12 months.”

The bank had an efficiency ratio of 41.39 percent for the quarter, meaning it cost the bank $41.39 to make $100.

About 70 percent of Home BancShares’ assets are in Arkansas, 26 percent are in Florida and 4 percent in Alabama.

Centennial Bank has 147 branches - 88 in Arkansas, 52 in Florida and seven in Alabama. It closed one branch in Panacea, Fla., in the first quarter and plans to close four in Arkansas and two more in Florida in the next three months.

Business, Pages 25 on 04/18/2014

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