Home BancShares Inc. on Thursday reported substantial decreases in net income and earnings per share -- well into double-digit drops for each metric -- in what the Conway bank described as a turbulent first quarter slowed by economic headwinds.
Net income for the quarter ending March 31 was $64.9 million, compared with net income of $91.6 million in last year's first quarter, a 29.1% drop for the first three months of the year.
Earnings per share of 40 cents in the quarter was down from 55 cents in the first quarter of 2021. Earnings, adjusted for nonrecurring gains, came in at 37 cents per share.
Bank Chairman and Chief Executive Officer John Allison cited the economic instability the company had to battle from outside forces in the quarter.
"The first quarter brought about record high wholesale prices, rising interest rates, future recession fears and global unrest, thus creating one of the most volatile quarters on record during my business career," Alison said in a news release. "During this time, HOMB has stayed true to our discipline and still delivered solid performance during the quarter."
In a first look from the Stephens Inc. banking team Thursday, the report noted that Home BancShares did beat Wall Street analysts' consensus on earnings per share by 2 cents though the review also noted the bank produced lower-than-expected organic loan growth.
On a conference call Thursday with industry analysts, Allison said Home BancShares remains well positioned with more than $3.5 billion in excess cash it is ready to deploy beginning this year into higher-yielding assets such as capital for loans and to invest in securities. Company officials said on the call they expect several rate increases to go into effect this year at a rapid pace.
"I think we're well positioned for a rate rise" environment, Allison said on the call. "We'll probably deploy [cash] over the next 18 months to 24 months."
In the quarter, total assets grew to $18.6 billion, compared with $17.2 billion during the same period a year ago. Total deposits were $14.6 billion in the first quarter, an increase from $13.5 billion reported in the first quarter of 2021.
Total loans were $10.05 billion in the first quarter, down from $10.8 billion last year. Total interest income was $144.9 million, down from $162.7 in last year's first quarter. Net interest income dropped to $131.1 million from $148 million. Net interest margin in the first quarter was 3.21% compared with 4.02% a year ago.
First-quarter figures do not include the acquisition of Happy Bancshares Inc., which closed earlier this month.
Home BancShares operates 62 branches in Texas, 76 branches in Arkansas, 78 branches in Florida, five in Alabama and one in New York City.
Home BancShares' stock fell 58 cents, or 2.5%, to close Thursday at $22.74.