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CONWAY, Ark., Jan. 3, 2011 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (Nasdaq:HOMB), parent company of Centennial Bank, today announced several financial developments and activities relating to the fourth quarter.
During December 2010, the Company finished the initial evaluations and calculations for the Wakulla Bank and Gulf State Community Bank FDIC-assisted acquisitions completed on October 1, 2010 and November 19, 2010, respectively. These results indicate the Wakulla Bank transaction will result in the Company reporting a pre-tax bargain purchase gain of $17.0 million. The Gulf State Community Bank transaction will result in the Company reporting a pre-tax bargain purchase gain of $8.1 million. The two transactions totaling $25.1 million in pre-tax bargain purchase gains less the related merger costs of approximately $2.2 million will result in an increase in diluted earnings per share for the fourth quarter by approximately $0.49 per share.
On December 29, 2010, the Company determined a material charge for impairment to certain loans is required pursuant to generally accepted accounting principles applicable to Centennial Bank and the Company. As a result, the Company has charged the reserve for approximately $53 million for these loans. Consequently, the Company has determined it will record a fourth quarter of 2010 provision for loan losses in the range of $60 million to $65 million. This transaction will result in a decrease in diluted earnings per share for the fourth quarter by approximately $1.27 to $1.38 per share. Even though these loans may be charged-off, the Company will continue to aggressively pursue their repayment.
Of the amount charged off for the impaired loans, approximately half is related to extensions of credit to several borrowers (whose financial condition has deteriorated) in the Company's Florida market. The other half relate to loans in the Company's Arkansas market, primarily involving one borrowing relationship. After a review of the loans to this borrower, the board determined the terms and conditions of the loan documents are unlikely to be met due to a recent change in circumstances regarding the collectability of pledged collateral. The board's conclusion with respect to the remainder of the impaired loans was based on the lack of significant economic recovery in certain areas of the Company's Florida market and the Company's unsuccessful efforts thus far to collect on the loans.