Home Bancshares Inc (HOMB) Q1 2021 Earnings Call Transcript

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Home Bancshares Inc (NASDAQ:HOMB)
Q1 2021 Earnings Call
Apr 15, 2021, 2:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the Home BancShares, Inc. First Quarter Earnings Conference Call. [Operator Instructions]. After today’s presentation there will be an opportunity to ask questions. [Operator Instructions].

I would now like to turn the conference over to Donna Townsell. Please go ahead.

Donna Townsell — Director of Investor Relations

Thank you, Lisa. I’m Donna Townsell, Director of Investor Relations. And our management team would like to thank you for joining our first quarterly conference call of 2021. Reporting today will be our Chairman, John Allison; Tracy French, President and CEO of Centennial Bank; Brian Davis, our Chief Financial Officer; Kevin Hester, Chief Lending Officer; Chris Poulton, President of CCFG; John Marshall, President of Shore Premier Finance; and Stephen Tipton, Chief Operating Officer.

Hopefully by now, you’ve had the opportunity to review our proxy and read about the work that we have done in the last year on our ESG initiatives. While our work is not complete, we’ve made great strides and this will be an ongoing effort at Home. Some other exciting news that I’d like to share is, on Tuesday Home was named to the Forbes list of World’s Best Banks. We made this list last year, and we’ve also been named to Forbes Best Banks in America every year since 2015. One aspect of this is the performance metric and the other aspect is driven by customer service. And because of that, that makes us very proud that we continue to sail in both of these categories.

Now for our first report on the quarter, we will hear from our Chairman, John Allison.

John W. Allison — Chairman, President and Chief Financial Officer

That was a mass award, we continue to stack them up over a period of time. Welcome to the Home BancShares’ first quarter earnings release and conference call. My name is John Allison, and I have the honor to serve as your Executive Chairman, President and Chief Executive Officer, and I’m also the co-founder of the company. We are here to discuss the results of our first quarter 2021 performance.

Donna mentioned the first release as you’ve probably seen it, the first quarter from a pure net profit and revenue perspective was the most powerful quarter in the company’s almost 22-year history, resulting in a record net income of $91.6 million. That’s another world record for our company as one of our former team mates would say. Home BancShares is known for being one of the top-performing banks and corporations in America for the last 10 to 15 years and this quarter was no different.

Sales revenue was off the charts, with total revenue of $207,927,000, the best ever. That’s total revenue. But what’s more important is how much of the total revenue we bring down to the bottom line after-tax for our shareholders. I want you to know that of the gross $207 million, we brought 44.05% to the after-tax bottom line or $91.6 million that is available to our shareholders. In addition to total revenue, our net revenue was also the highest it’d ever been at $193.4 million, and I think that’s a beat on the street, but our company also brought 47.36% of the net revenue after tax to the bottom line. These numbers reflect the earnings power of your company through the low cost of funds, strong yields and best-in-class efficiency, it resulted in another high watermark for our shareholders of $0.55 earnings per share for the quarter.

PPNR also hit a new record high of $120.5 million, representing a P5NR of 62.32%. That means that we brought 62.32% of the net revenue to the pre-tax pre-provision shoebox as our Long-time Director, Alex Lieblong has liability. Here’s some additional highlights. Pretax pre-provision ROA was 2.92%. I think that’s a record. I think it’s the…