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Community bank earnings: Loan recovery boosts Home BancShares

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Community bank earnings: Loan recovery boosts Home BancShares

In this feature, S&P Global Market Intelligence takes a look at earnings releases from a handful of community banks from around the country.

Southeast

Pine Bluff, Ark.-based Simmons First National Corp. reported fourth-quarter net income available to common shareholders of $27.0 million, or 85 cents per share, compared to $23.8 million, or 78 cents per share, in the fourth quarter of 2015. The most recent quarter's results included net after-tax merger-related and branch right-sizing costs of $1.8 million.

The company's year-to-date net income available to common shareholders was $96.8 million, or $3.13 per share, compared to $74.1 million, or $2.63 per share, in the same period a year prior.

Total loans, including those acquired, were $5.6 billion in the period, a 14.5% increase from the year-ago period. On a fully tax-equivalent basis, fourth-quarter net interest margin was 4.12%, down from 4.53% the previous year.

Additionally, the quarter's provision for loan losses was $4.3 million, compared to $3.2 million in the year-ago quarter.

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Home BancShares Inc. reported net income available to common shareholders of $48.6 million, or 35 cents per share, in the fourth quarter. For the year-ago period, it was $37.4 million, or 27 cents per share.

The Conway, Ark.-based company's net income available to common shareholders for full year 2016 was $177.1 million, or $1.26 per share, compared to $138.2 million, or $1.01 for full year 2015.

The company's provision for loan losses for the quarter was $1.7 million, compared to $8.9 million in the year-ago quarter, largely due to a significant loan recovery from a borrower which was charged-off in 2010. The company estimated the recovery lowered the provision by $4.5 million.

On a fully taxable equivalent basis, the bank's net interest margin was 4.75% for the recent quarter, compared to 4.95% for the same quarter in 2015.

Midwest

Mercantile Bank Corp. reported fourth-quarter net income of $8.1 million, or 49 cents per share, compared to $6.5 million, or 40 cents per share, in the year-ago quarter.

For the full year of 2016, the Grand Rapids, Mich.-based company reported net income of $31.9 million, or $1.96 per share, compared to $27.0 million, or $1.62 per share, in 2015. Total revenue was $31.0 million during the fourth quarter, up 4.5% from the year-ago quarter.

On a fully tax-equivalent basis, the net interest margin for the quarter was 3.72%, down from 3.81% in the fourth quarter of 2015, mainly due to a decreased yield on loans.

Additionally, total assets stood at $3.08 billion at Dec. 31, 2016, up 6.2% from $2.90 billion at Dec. 31, 2015.

Mid-Atlantic

Bethesda, Md.-based Eagle Bancorp Inc. posted net income available to common shareholders of $25.7 million, or 75 cents per share, in the fourth quarter of 2016. It was $22.3 million, or 65 cents per share, in the year-ago period.

For the full year, net income available to common shareholders was $97.7 million, or $2.86 per share, compared to $83.6 million, or $2.50 per share, in 2015. The net interest margin for the quarter was 3.96%, compared to 4.38% in the same quarter a year prior.

The company's provision for credit losses was $2.1 million at the close of the fourth quarter, compared to $4.6 million in the fourth quarter of 2015, primarily due to overall improved asset quality.

Eagle Bancorp also reported 15% growth in average total loans and 17% growth in average total deposits during the fourth quarter, compared to the same quarter in 2015. Meanwhile, total revenue for the quarter was $74.0 million, up 7% from $69.1 million a year ago.

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Olney, Md.-based Sandy Spring Bancorp Inc. reported fourth-quarter net income of $13.3 million, or 55 cents per share, compared to $12.8 million, or 52 cents per share, in the year-ago quarter.

For full year 2016, the company reported net income of $42.3 million, or $2.00 per share, compared to $45.3 million, or $1.84 per share, in 2015.

The net interest margin for the recent quarter was 3.52%, up from 3.45% in the prior year. The company's total assets were $5.09 billion at the end of the fourth quarter, up 9% from $4.66 billion at the end of the fourth quarter of 2015, driven by the increase in the loan portfolio. The quarter's provision for loan losses stood at $572,000, compared to $1.9 million, in the year-ago period.