Conway lender's 4Q net a record

At Centennial’s hub, profit $48M

Graph showing Home BancShares' third quarter finances
Graph showing Home BancShares' third quarter finances

Home BancShares, which has 142 Centennial Bank branches in Arkansas, Florida, Alabama and New York, earned a record $48.6 million in the fourth quarter, the Conway-based bank said Thursday.

The fourth-quarter earnings, the 23rd-straight record for the company, was a 30 percent improvement over $37.4 million in net income in the fourth quarter of 2015.

Home BancShares earned 35 cents a share in the quarter, up from 27 cents a share in the fourth quarter in 2015, beating the average expectations of 33 cents a share from nine analysts surveyed by Thomson Reuters.

The bank had $177 million in net income in 2016.

Home BancShares closed at $25.87 Thursday, down 43 cents, in trading on the Nasdaq exchange.

The bank said it plans to open a loan office in Los Angeles early this year under the management of Chris Poulton, who runs Centennial's branch in New York City.

Poulton and his team had an office in Los Angeles when they worked for Puerto Rico-based Doral Bank. Home BancShares bought $289 million in loans from Doral Bank in 2015 and hired Poulton to remain in New York.

Poulton still has about 5 percent of his $1 billion New York loan package in the Los Angeles area, John Allison, chairman of Home BancShares, said Thursday during a conference call.

"He wants to have about 10 or 15 percent out there," Allison said.

Poulton will hire about three people for the Los Angeles office, said Tracy French, chief executive officer of Centennial Bank.

Randy Dennis, president of DD&F Consulting Group in Little Rock, advised Home BancShares when it was looking at Doral Bank.

Doral Bank, which later failed, was a mess, but the New York division of the bank was a solid performer, Dennis said.

"They had been doing [business in New York and other areas] for 15 to 20 years, and their portfolio was pristine," Dennis said. "They had a nationwide lending practice. [Home BancShares] is making a decision to go out to California, and they've probably based it on some good research."

Home BancShares had $7.4 billion in loans and $6.9 billion in deposits at the end of 2016.

The bank had $746 million in loan growth, excluding loans received through acquisitions.

Home BancShares has $9.8 billion in assets. It purposely waited last year to remain below the $10 billion threshold that brings more scrutiny from federal regulators and more costs.

In November, Home BancShares announced it would buy Giant Holdings Inc., the parent of Landmark Bank of Fort Lauderdale, Fla., and Bank of Commerce in Sarasota, Fla. Landmark has about $463 million in assets and Bank of Commerce has about $210 million.

Those two acquisitions should be completed early this year. With the two purchases, Home BancShares will have about $10.5 million in assets.

Home BancShares won't have to incur the extra fees and regulations because of being over $10 billion in assets until mid-2018.

"We had our foot off the accelerator in 2016, but we expect to be more aggressive in 2017 and 2018," Allison said.

Business on 01/20/2017

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