Conway-based Home BancShares reported $71 million of net income in the fourth quarter last year, the parent company of Centennial Bank said Thursday.
The bank earned 41 cents per share in the third quarter, more than three times the 13 cents a share it earned in the fourth quarter last year. But it missed the 45 cents-a-share projection of nine banking analysts surveyed by Thomson Reuters.
Home BancShares stock closed at $17.50 a share Thursday, down $1.11 or 6 percent in trading on the Nasdaq exchange.
The fourth quarter of 2017 was an anomaly for Home BancShares, which was hit hard by Hurricane Irma and the federal tax overhaul in the period. That was why the bank earned only $23.3 million and 13 cents a share in net income in the last three months of 2017.
Home BancShares had $1.1 billion in loan originations and about $239 million in loan growth in the fourth quarter, said Garland Binns, a Little Rock banking attorney.
Matt Olney, a bank analyst in Little Rock for Stephens Inc., said he was "encouraged to see [unacquired] loan growth accelerate to its strongest levels in over two years."
"However, soft fourth-quarter revenue was driven by lower fees and core [net interest margin] compression," said Olney, who rates Home BancShares as a buy.
Olney has a target price of $22 a share for Home BancShares.
With its stock price trading in the mid- to high teens, Home BancShares is continuing its stock buyback plan, said John Allison, Home BancShares' chairman.
The bank repurchased 5,308,000 shares in 2018, with more than 3.4 million of those shares acquired in the fourth quarter, Allison said in a conference call Thursday.
Home BancShares has asked regulators for approval to buy back almost $200 million in shares this year, possibly twice the number of shares as it bought last year.
Even with its stock trading at a lower price, Home BancShares isn't averse to making acquisitions this year, Allison said.
"We're actually looking pretty good," Allison said. "We're looking around to see what makes sense. I'm pretty happy. It's been a tough year, though, with all the pessimism out there. When the opportunity is there, Home BancShares is sure going to get our fair piece of the market. We're not going to do anything stupid in the meantime."
Home BancShares had $11 billion in total loans for the fourth quarter compared with $10.2 billion in loans a year earlier.
It had $10.9 billion in total deposits, up from $10.4 billion in deposits in the fourth quarter of 2017.
The bank had $15.3 billion in assets in the fourth quarter, up from $14.4 billion in the same period of 2017.
For all of 2018, Home BancShares earned slightly more than $300 million, more than double the $135 million it earned in 2017.
The bank's 2017 was a "great year," Allison said in a prepared statement, "however, 2018 was even better. Even though bank stocks have underperformed as a sector for the second consecutive year, we didn't."
For the second year in a row, Forbes magazine informed Home BancShares on Thursday that it had been recognized as the best bank in the country for the second year in a row, Allison said.
Home BancShares had an efficiency ratio of 42.18 percent in the fourth quarter, up from 37.05 percent in the fourth quarter of 2017. That means that it cost Home BancShares $42.18 to earn $100 during the fourth quarter last year.
Home BancShares has a total 159 branches in Arkansas, Florida, Alabama and New York City.
Business on 01/18/2019