Home BancShares Inc. (HOMB) filed Quarterly Report for the period ended 2009-09-30.
HOME BANCSHARES INC. is a bank holding company headquartered in Conway Arkansas with six wholly owned bank subsidiaries that provide a broad range of commercial and retail banking and related financial services to businesses real estate developers and investors individuals and municipalities. Three of the bank subsidiaries are located in the central Arkansas market area a fourth serves central and southern Arkansas a fifth serves Stone County in north central Arkansas and a sixth serves the Florida Keys and southwestern Florida. Home Bancshares Inc. has a market cap of $530.3 million; its shares were traded at around $21.29 with a P/E ratio of 56 and P/S ratio of 3. The dividend yield of Home Bancshares Inc. stocks is 1.1%.
Highlight of Business Operations:
Our total assets as of September 30, 2009 increased $51.6 million, an annualized growth of 2.7%, to $2.63 billion from the $2.58 billion reported as of December 31, 2008. Our loan portfolio increased slightly by $14.8 million, an annualized growth of 1.0%, to $1.97 billion as of September 30, 2009, from $1.96 billion as of December 31, 2008. Stockholders’ equity increased $163.5 million to $446.5 million as of September 30, 2009, compared to $283.0 million as of December 31, 2008. The increase in stockholders’ equity is primarily associated with the issuance of $50.0 million of preferred stock to the United States Department of Treasury and the net issuance of $93.3 million or 4,950,000 shares of common stock resulting from our recent common stock offering combined with retained earnings for the first nine months of 2009. Excluding the issuance of the $50.0 million of preferred stock and the net issuance of the $93.3 million of common stock, the annualized growth in stockholders equity for the first nine months of 2009 was 9.5%.
As of September 30, 2009, our non-performing loans increased to $34.7 million, or 1.76%, of total loans from $29.9 million, or 1.53%, of total loans as of December 31, 2008. The allowance for loan losses as a percent of non-performing loans decreased to 119% as of September 30, 2009, compared to 135% as of December 31, 2008. The increase in non-performing loans is primarily the result of the continued unfavorable economic conditions, particularly in Florida the market. Non-performing loans in Florida were $24.2 million at September 30, 2009 compared to $17.3 million as of December 31, 2008.
As of September 30, 2009, our non-performing assets increased to $53.9 million, or 2.05%, of total assets from $36.7 million, or 1.42%, of total assets as of December 31, 2008. The increase in non-performing assets is primarily the result of the continued unfavorable economic conditions, particularly in the Florida market. Non-performing assets in Florida were $36.7 million at September 30, 2009 compared to $22.0 million as of December 31, 2008.
On January 1, 2008, we acquired Centennial Bancshares, Inc., an Arkansas bank holding company. Centennial Bancshares, Inc. owned Centennial Bank, located in Little Rock, Arkansas which had total assets of $234.1 million, loans of $192.8 million and total deposits of $178.8 million on the date of acquisition. The consideration for the merger was $25.4 million, which was paid approximately 4.6%, or $1.2 million in cash and 95.4%, or $24.3 million, in shares of our common stock. In connection with the acquisition, $3.0 million of the purchase price, consisting of $139,000 in cash and 140,456 shares of our common stock, was placed in escrow related to possible losses from identified loans and an IRS examination. In the first quarter of 2008, the IRS examination was completed which resulted in $1.0 million of the escrow proceeds being released. In addition to the consideration given at the time of the merger, the merger agreement provided for additional contingent consideration to Centennial’s stockholders of up to a maximum of $4 million, which could be paid in cash or our common stock at the election of the former Centennial accredited stockholders, based upon the 2008 earnings performance. The final contingent consideration was computed and agreed upon in the amount of $3.1 million on March 11, 2009. We paid this amount to the former Centennial stockholders on a pro rata basis on March 12, 2009. All of the former Centennial stockholders elected to receive the contingent consideration in cash. As a result of this transaction, we recorded total goodwill of $15.4 million and a core deposit intangible of $694,000.
Net interest income on a fully taxable equivalent basis increased $2.1 million, or 9.2%, to $24.7 million for the three-month period ended September 30, 2009, from $22.6 million for the same period in 2008. This increase in net interest income was the result of a $2.5 million decrease in interest income combined with a $4.6 million decrease in interest expense. The $2.5 million decrease in interest income was primarily the result of the repricing of our earning assets in the declining interest rate environment combined with the lower level of earning assets. The repricing of our earning assets in the declining interest rate environment resulted in a $2.2 million decrease in interest income while the lower level of earning assets resulted in a decrease in interest income of $306,000, for the three-month period ended September 30, 2009. The $4.6 million decrease in interest expense for the three-month period ended September 30, 2009, is primarily the result of our interest bearing liabilities repricing in the declining interest rate environment combined with a reduction in our interest bearing liabilities. The repricing of our interest bearing liabilities in the declining interest rate environment resulted in a $3.9 million decrease in interest expense. The reduction of our interest bearing liabilities resulted in lower interest expense of $760,000.
Net interest income on a fully taxable equivalent basis increased $4.4 million, or 6.5%, to $71.0 million for the nine-month period ended September 30, 2009, from $66.7 million for the same period in 2008. This increase in net interest income was the result of an $11.0 million decrease in interest income combined with a $15.4 million decrease in interest expense. The $11.0 million decrease in interest income was primarily the result of the repricing of our earning assets in the declining interest rate environment offset by a higher level of earning assets. The repricing of our earning assets in the declining interest rate environment resulted in a $12.5 million decrease in interest income while the higher level of earning assets resulted in an increase in interest income of $1.5 million, for the nine-month period ended September 30, 2009. The $15.4 million decrease in interest expense for the nine-month period ended September 30, 2009, is primarily the result of our interest bearing liabilities repricing in the declining interest rate environment combined with a reduction in our interest bearing liabilities. The repricing of our interest bearing liabilities in the declining interest rate environment resulted in a $14.0 million decrease in interest expense. The reduction of our interest bearing liabilities resulted in lower interest expense of $1.3 million.
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