HOMB Home BancShares Inc

Home BancShares, Inc. (NASDAQ:HOMB), parent company of Centennial Bank, today announced a quarterly profit of $73.1 million for the first quarter of 2018 compared to $46.9 million, for the same quarter in 2017, which represents a $26.2 million or 55.9% increase.  Diluted earnings per share for the first quarter of 2018 was $0.42 per share compared to $0.33 per share for 2017, representing an increase of $0.09 per share or 27.3% for the first quarter of 2018 when compared to the same quarter in the prior year.

“Our first quarter earnings were $73.1 million and $97.0 million before taxes, both of which are records for Home,” said John Allison, Chairman. “We achieved an impressive return on average assets of 2.08%, which combined with our 37.83% efficiency ratio, has us positioned for another year of solid returns for our shareholders.”

Tracy French, Centennial Bank President and Chief Executive Officer, added, “We are pleased to deliver strong financial results for the first quarter while continuing to maintain high asset quality.  We maintained a non-performing assets to total assets ratio below 50 basis points and originated over $575 million in loans during the quarter. In addition, our conversion teams completed the system conversion of Stonegate during the quarter which will provide opportunity for continued efficiencies.”

“We are proud to report our most profitable quarter in the Company’s history,” said Randy Sims, Home BancShares, Inc. Chief Executive Officer.  “Diluted earnings per share for the quarter were $0.42 per share which was an increase of $0.09 or 27.3% from the first quarter of 2017. With outstanding performance results such as these, our shareholders can remain confident that we continue to focus on providing them with solid returns.”

Operating Highlights

Net interest margin, on a fully taxable equivalent basis, was 4.46% for the quarter just ended compared to 4.70% for the same quarter in 2017 and compared to 4.47% for the fourth quarter of 2017.  Net interest margin for the first quarter of 2018 includes accretion income of $10.6 million and average purchase accounting loan discounts of $164.1 million, compared to accretion income of $7.6 million and average purchase accounting loan discounts of $102.9 million for the first quarter of 2017.  Accretion yield decreased approximately $1.8 million from $12.4 million for the fourth quarter of 2017 to $10.6 million for first quarter of 2018.

During the first quarter of 2018, the Company recorded a provision for loan loss of $1.6 million compared to $3.9 million in the first quarter of 2017.  For the first quarter of 2018, net charge-offs were $1.7 million compared to net charge-offs of $3.6 million for the first quarter of 2017.

The Company reported $25.8 million of non-interest income for the first quarter of 2018, compared to $22.7 million, excluding gain on acquisitions for the first quarter of 2017.  The most important components of the first quarter non-interest income were $10.2 million from other service charges and fees, $6.1 million from service charges on deposits accounts, $2.7 million from mortgage lending income, $3.7 million from other income and $877,000 from dividends from FHLB, FRB, Bankers’ Bank & other.  

Non-interest expense for the first quarter of 2018 was $63.4 million compared to $55.1 million for the first quarter of 2017.  Excluding $6.7 million in merger expenses during the first quarter of 2017, non-interest expense increased $15.0 million from $48.4 million for the first quarter of 2017 to $63.4 million for the first quarter of 2018.  This increase excluding merger expenses is primarily the result of $7.6 million growth in salaries and employee benefits expense and $2.3 million growth in occupancy and equipment expense resulting from the acquisition of Stonegate Bank in the 3rd quarter of 2017.  For the first quarter of 2018, our efficiency ratio improved to 37.83% from the 40.76% reported for first quarter of 2017. 

Financial Condition

Total loans receivable were $10.33 billion at March 31, 2018 and December 31, 2017.  Total deposits were $10.40 billion at March 31, 2018 compared to $10.39 billion at December 31, 2017.  Total assets were $14.32 billion at March 31, 2018 compared to $14.45 billion at December 31, 2017.

During the first quarter of 2018, Centennial CFG produced $63.8 million of organic loan growth, while the legacy footprints experienced a decline of $69.3 million.  Centennial CFG had loans of $1.51 billion at March 31, 2018.

Non-performing loans at March 31, 2018 were $14.5 million, $34.9 million, $42,000 and zero in the Arkansas, Florida, Alabama and Centennial CFG markets, respectively, for a total of $49.5 million.  Non-performing loans as a percent of total loans were 0.48% as of March 31, 2018 compared to 0.43% as of December 31, 2017.  Non-performing assets at March 31, 2018 were $25.2 million, $43.0 million, $1.4 million and zero in the Arkansas, Florida and Alabama and Centennial CFG markets, respectively, for a total of $69.6 million.  Non-performing assets as a percent of total assets were 0.49% as of March 31, 2018 compared to 0.44% as of December 31, 2017.  

The Company’s allowance for loan losses was $110.2 million at March 31, 2018, or 1.07% of total loans, compared to $110.3 million, or 1.07% of total loans, at December 31, 2017. As of March 31, 2018 and December 31, 2017, the Company’s allowance for loan losses was 223% and 247% of its total non-performing loans, respectively.

Stockholders’ equity was $2.24 billion at March 31, 2018 compared to $2.20 billion at December 31, 2017, an increase of $33.9 million. The increase in stockholders’ equity is primarily associated with the $54.9 million increase in retained earnings offset by $16.9 million of comprehensive loss and the repurchase of $7.1 million of our common stock during the first quarter of 2018. Book value per common share was $12.89 at March 31, 2018 compared to $12.70 at December 31, 2017.  Tangible book value per common share was $7.27 at March 31, 2018 compared to $7.07 at December 31, 2017, an annualized increase of 11.47%. 

Branches

In an effort to achieve efficiencies primarily from our acquisitions, during the first quarter, the Company closed five branches in the Central Florida Region, one branch in the South Florida Region and six branches in the Southeast Florida Region.  The Company currently has 76 branches in Arkansas, 76 branches in Florida, 5 branches in Alabama and one branch in New York City.

Conference Call

Management will conduct a conference call to review this information at 1:00 p.m. CT (2:00 ET) on Thursday, April 19, 2018.  We encourage all participants to pre-register for the conference call using the following link:  http://dpregister.com/10118074.  Callers who pre-register will be given dial-in instructions and a unique PIN to gain immediate access to the live call.  Participants may pre-register now, or at any time prior to the call, and will immediately receive simple instructions via email.  The Home BancShares conference call will also be automatically scheduled as an event in your Outlook calendar.

Those without internet access or unable to pre-register may dial in and listen to the live call by calling 1-877-508-9586 and asking for the Home BancShares conference call.  A replay of the call will be available by calling 1-877-344-7529, Passcode: 10118074, which will be available until April 26, 2018 at 10:59 p.m. CT (11:59 ET).  Internet access to the call will be available live or in recorded version on the Company's website at www.homebancshares.com under “Investor Relations” for 12 months.

Non-GAAP Financial Measures

This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles (GAAP). The Company’s management uses these non-GAAP financial measures--including earnings, as adjusted; return on average assets excluding intangible amortization; return on average assets, as adjusted; return on average common equity excluding intangible amortization; efficiency ratio, as adjusted; tangible book value per common share; and the tangible common equity to tangible assets ratio--to provide meaningful supplemental information regarding our performance.  These measures typically adjust GAAP performance measures to include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant items or transactions.  Since the presentation of these GAAP performance measures and their impact differ between companies, management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s business. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. 

Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the tables of this release.  

General

This release contains forward-looking statements regarding the Company’s plans, expectations, goals and outlook for the future. Statements in this press release that are not historical facts should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements of this type speak only as of the date of this news release. By nature, forward-looking statements involve inherent risk and uncertainties. Various factors could cause actual results to differ materially from those contemplated by the forward-looking statements.  These factors include, but are not limited to, the following:  economic conditions, credit quality, interest rates, loan demand, the ability to successfully integrate new acquisitions, increased regulatory requirements as a result of our exceeding $10 billion in total assets, legislative and regulatory changes, technological changes and cybersecurity risks, competition from other financial institutions, changes in the assumptions used in making the forward-looking statements, and other factors described in reports we file with the Securities and Exchange Commission (the “SEC”), including those factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on February 27, 2018.

Home BancShares, Inc. is a bank holding company, headquartered in Conway, Arkansas. Its wholly-owned subsidiary, Centennial Bank, provides a broad range of commercial and retail banking plus related financial services to businesses, real estate developers, investors, individuals and municipalities. Centennial Bank has branch locations in Arkansas, Florida, South Alabama and New York City. The Company’s common stock is traded through the NASDAQ Global Select Market under the symbol “HOMB.”

FOR MORE INFORMATION CONTACT:

Jennifer C. FloydChief Accounting Officer & Investor Relations OfficerHome BancShares, Inc.(501) 339-2929

Home BancShares, Inc.
Consolidated End of Period Balance Sheets
(Unaudited)
	Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,
(In thousands)		2018			2017			2017			2017			2017
ASSETS
Cash and due from banks	$	185,479		$	166,915		$	197,953		$	147,041		$	163,662
Interest-bearing deposits with other banks		325,122			469,018			354,367			313,447			253,427
Cash and cash equivalents		510,601			635,933			552,320			460,488			417,089
Federal funds sold		1,825			24,109			4,545			-			1,700
Investment securities - available-for-sale		1,693,018			1,663,517			1,575,685			1,400,431			1,250,590
Investment securities - held-to-maturity		213,731			224,756			234,945			254,161			276,599
Loans receivable		10,325,736			10,331,188			10,286,193			7,834,475			7,849,645
Allowance for loan losses		(110,212	)		(110,266	)		(111,620	)		(80,138	)		(80,311	)
Loans receivable, net		10,215,524			10,220,922			10,174,573			7,754,337			7,769,334
Bank premises and equipment, net		235,607			237,439			239,990			207,071			212,813
Foreclosed assets held for sale		20,134			18,867			21,701			18,789			17,315
Cash value of life insurance		147,424			146,866			146,158			97,684			97,223
Accrued interest receivable		45,361			45,708			41,071			32,445			32,413
Deferred tax asset, net		78,328			76,564			121,787			68,368			67,063
Goodwill		927,949			927,949			929,129			420,941			420,941
Core deposit and other intangibles		47,726			49,351			50,982			21,019			21,885
Other assets		186,001			177,779			163,081			136,494			132,503
Total assets	$	14,323,229		$	14,449,760		$	14,255,967		$	10,872,228		$	10,717,468
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Demand and non-interest-bearing	$	2,473,602		$	2,385,252		$	2,555,465		$	1,957,677		$	1,862,996
Savings and interest-bearing transaction accounts		6,437,408			6,476,819			6,341,883			4,335,456			4,274,194
Time deposits		1,485,605			1,526,431			1,551,422			1,474,255			1,430,017
Total deposits		10,396,615			10,388,502			10,448,770			7,767,388			7,567,207
Federal funds purchased		-			-			-			-			-
Securities sold under agreements to repurchase		150,315			147,789			149,531			133,741			123,793
FHLB and other borrowed funds		1,115,061			1,299,188			1,044,333			1,099,478			1,455,040
Accrued interest payable and other liabilities		54,845			41,959			38,782			37,751			69,125
Subordinated debentures		368,212			368,031			367,835			357,838			60,735
Total liabilities		12,085,048			12,245,469			12,049,251			9,396,196			9,275,900
Stockholders' equity
Common stock		1,736			1,736			1,737			1,431			1,434
Capital surplus		1,671,141			1,675,318			1,674,642			940,821			948,982
Retained earnings		585,586			530,658			526,448			527,338			490,142
Accumulated other comprehensive (loss) income		(20,282	)		(3,421	)		3,889			6,442			1,010
Total stockholders' equity		2,238,181			2,204,291			2,206,716			1,476,032			1,441,568
Total liabilities and stockholders' equity	$	14,323,229		$	14,449,760		$	14,255,967		$	10,872,228		$	10,717,468

 

Home BancShares, Inc.
Consolidated Statements of Income
(Unaudited)
	Quarter Ended													Three Months Ended
	Mar. 31,		Dec. 31,		Sep. 30,			Jun. 30,		Mar. 31,				Mar. 31,		Mar. 31,
(In thousands)		2018		2017		2017			2017		2017				2018		2017
Interest income
Loans	$	148,065	$	147,426	$	113,269		$	112,732	$	105,762			$	148,065	$	105,762
Investment securities
Taxable		8,970		7,793		7,071			6,434		5,478				8,970		5,478
Tax-exempt		3,006		3,025		3,032			2,966		2,944				3,006		2,944
Deposits - other banks		929		736		538			727		308				929		308
Federal funds sold		6		1		3			4		2				6		2
Total interest income		160,976		158,981		123,913			122,863		114,494				160,976		114,494
Interest expense
Interest on deposits		14,806		12,946		8,535			6,810		5,486				14,806		5,486
Federal funds purchased		1		1		-			-		-				1		-
FHLB borrowed funds		4,580		3,806		3,408			3,710		3,589				4,580		3,589
Securities sold under agreements to repurchase		376		325		232			196		165				376		165
Subordinated debentures		5,004		4,934		4,969			4,795		439				5,004		439
Total interest expense		24,767		22,012		17,144			15,511		9,679				24,767		9,679
Net interest income		136,209		136,969		106,769			107,352		104,815				136,209		104,815
Provision for loan losses		1,600		4,926		35,023			387		3,914				1,600		3,914
Net interest income after
provision for loan losses		134,609		132,043		71,746			106,965		100,901				134,609		100,901
Non-interest income
Service charges on deposit accounts		6,075		6,566		6,408			5,966		5,982				6,075		5,982
Other service charges and fees		10,155		10,144		8,490			8,576		8,917				10,155		8,917
Trust fees		446		548		365			309		456				446		456
Mortgage lending income		2,657		3,573		3,172			3,750		2,791				2,657		2,791
Insurance commissions		679		466		472			465		545				679		545
Increase in cash value of life insurance		654		738		478			463		310				654		310
Dividends from FHLB, FRB, Bankers' Bank & other		877		1,030		834			472		1,149				877		1,149
Gain on acquisitions		-		-		-			-		3,807				-		3,807
Gain (loss) on SBA loans		182		-		163			387		188				182		188
Gain (loss) on branches, equipment and other assets, net		7		2		(1,337	)		431		(56	)			7		(56	)
Gain (loss) on OREO, net		405		176		335			393		121				405		121
Gain (loss) on securities, net		-		1,193		136			380		423				-		423
Other income		3,668		2,856		1,941			2,825		1,837				3,668		1,837
Total non-interest income		25,805		27,292		21,457			24,417		26,470				25,805		26,470
Non-interest expense
Salaries and employee benefits		35,014		35,404		28,510			28,034		27,421				35,014		27,421
Occupancy and equipment		8,983		9,009		7,887			7,034		6,681				8,983		6,681
Data processing expense		3,986		3,559		2,853			2,863		2,723				3,986		2,723
Other operating expenses		15,397		15,246		31,596			13,072		18,316				15,397		18,316
Total non-interest expense		63,380		63,218		70,846			51,003		55,141				63,380		55,141
Income before income taxes		97,034		96,117		22,357			80,379		72,230				97,034		72,230
Income tax expense		23,970		72,808		7,536			30,282		25,374				23,970		25,374
Net income	$	73,064	$	23,309	$	14,821		$	50,097	$	46,856			$	73,064	$	46,856

 

Home BancShares, Inc.
Selected Financial Information
(Unaudited)
	Quarter Ended																Three Months Ended
	Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,				Mar. 31,			Mar. 31,
(Dollars and shares in thousands, except per share data)		2018			2017			2017			2017			2017				2018			2017
PER SHARE DATA
Diluted earnings per common share	$	0.42		$	0.13		$	0.10		$	0.35		$	0.33			$	0.42		$	0.33
Diluted earnings per common share excluding gain on acquisitions, merger expenses, FDIC loss share buy-out expense, reduced provision for loan losses as a result of a significant loan recovery, hurricane expenses & effect of tax rate change (non-GAAP)(1)		0.42			0.35			0.32			0.35			0.33				0.42			0.33
Basic earnings per common share		0.42			0.13			0.10			0.35			0.33				0.42			0.33
Dividends per share - common		0.1100			0.1100			0.1100			0.0900			0.0900				0.1100			0.0900
Book value per common share		12.89			12.70			12.71			10.32			10.05				12.89			10.05
Tangible book value per common share (non-GAAP)(1)		7.27			7.07			7.06			7.23			6.96				7.27			6.96
STOCK INFORMATION
Average common shares outstanding		173,761			173,641			144,238			143,282			141,785				173,761			141,785
Average diluted shares outstanding		174,383			174,349			144,987			144,116			142,492				174,383			142,492
End of period common shares outstanding		173,603			173,633			173,666			143,071			143,442				173,603			143,442
ANNUALIZED PERFORMANCE METRICS
Return on average assets		2.08	%		0.66	%		0.54	%		1.86	%		1.86	%			2.08	%		1.86	%
Return on average assets excluding gain on acquisitions, merger expenses, FDIC loss share buy-out expense, reduced provision for loan losses as a result of a significant loan recovery, hurricane expenses & effect of tax rate change (non-GAAP)(1)		2.08	%		1.69	%		1.70	%		1.88	%		1.88	%			2.08	%		1.88	%
Return on average assets excluding intangible amortization (non-GAAP)(1)		2.27	%		0.73	%		0.59	%		1.96	%		1.96	%			2.27	%		1.96	%
Return on average assets excluding intangible amortization, provision for loan losses, gain on acquisitions, merger expenses, FDIC loss share buy-out expense, hurricane expenses and income taxes (ROA, as adjusted) (non-GAAP)(1)		3.07	%		3.10	%		2.94	%		3.19	%		3.31	%			3.07	%		3.31	%
Return on average common equity		13.38	%		4.17	%		3.88	%		13.83	%		13.85	%			13.38	%		13.85	%
Return on average tangible common equity excluding intangible amortization (non-GAAP)(1)		24.33	%		7.78	%		5.80	%		20.09	%		20.08	%			24.33	%		20.08	%
Efficiency ratio		37.83	%		37.05	%		53.77	%		37.48	%		40.76	%			37.83	%		40.76	%
Efficiency ratio, as adjusted (non-GAAP)(1)		37.97	%		37.35	%		39.12	%		37.29	%		36.96	%			37.97	%		36.96	%
Net interest margin - FTE		4.46	%		4.47	%		4.40	%		4.50	%		4.70	%			4.46	%		4.70	%
Fully taxable equivalent adjustment	$	1,209		$	1,983		$	1,846		$	2,016		$	2,011			$	1,209		$	2,011
Total revenue		186,781			186,273			145,370			147,280			140,964				186,781			140,964
Total purchase accounting accretion		10,608			12,397			7,174			8,497			7,652				10,608			7,652
Average purchase accounting loan discounts		164,122			178,027			97,978			104,384			102,906				164,122			102,906
OTHER OPERATING EXPENSES
Advertising	$	962		$	898		$	795		$	812		$	698			$	962		$	698
Merger and acquisition expenses		-			-			18,227			789			6,727				-			6,727
FDIC loss share buy-out expense		-			-			-			-			-				-			-
Amortization of intangibles		1,626			1,631			906			866			804				1,626			804
Electronic banking expense		1,878			1,777			1,712			1,654			1,519				1,878			1,519
Directors' fees		330			313			309			324			313				330			313
Due from bank service charges		219			254			472			456			420				219			420
FDIC and state assessment		1,608			1,476			1,293			1,182			1,288				1,608			1,288
Insurance		887			814			577			543			578				887			578
Legal and accounting		778			1,194			698			474			627				778			627
Other professional fees		1,639			1,537			1,436			1,233			1,153				1,639			1,153
Operating supplies		600			602			432			477			467				600			467
Postage		344			323			280			295			286				344			286
Telephone		373			347			305			398			324				373			324
Other expense		4,153			4,080			4,154			3,569			3,112				4,153			3,112
Total other operating expenses	$	15,397		$	15,246		$	31,596		$	13,072		$	18,316			$	15,397		$	18,316
(1) Calculation of this metric and the reconciliation to GAAP is included in the schedules accompanying this release.

 

Home BancShares, Inc.
Selected Financial Information
(Unaudited)
	Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,
(Dollars in thousands)		2018			2017			2017			2017			2017
BALANCE SHEET RATIOS
Total loans to total deposits		99.32	%		99.45	%		98.44	%		100.86	%		103.73	%
Common equity to assets		15.63	%		15.25	%		15.48	%		13.58	%		13.45	%
Tangible common equity to tangible assets (non-GAAP)(1)		9.46	%		9.11	%		9.24	%		9.91	%		9.72	%
LOANS RECEIVABLE
Real estate
Commercial real estate loans
Non-farm/non-residential	$	4,658,209		$	4,600,117		$	4,532,402		$	3,368,663		$	3,462,773
Construction/land development		1,641,834			1,700,491			1,648,923			1,315,309			1,217,519
Agricultural		81,151			82,229			88,295			78,260			79,940
Residential real estate loans
Residential 1-4 family		1,915,346			1,970,311			1,968,688			1,513,888			1,493,133
Multifamily residential		464,194			441,303			497,910			398,781			404,815
Total real estate		8,760,734			8,794,451			8,736,218			6,674,901			6,658,180
Consumer		40,842			46,148			51,515			38,424			41,893
Commercial and industrial		1,324,173			1,297,397			1,296,485			994,827			1,013,403
Agricultural		50,770			49,815			57,489			69,697			69,307
Other		149,217			143,377			144,486			56,626			66,862
Loans receivable	$	10,325,736		$	10,331,188		$	10,286,193		$	7,834,475		$	7,849,645
		-			-			-			-			-
Discount for credit losses on purchased loans	$	137,404		$	146,557		$	158,001		$	95,627		$	104,464
Purchased loans, net of discount for credit losses on purchased loans		3,232,004			3,464,990			3,653,079			1,355,922			1,375,210
ALLOWANCE FOR LOAN LOSSES
Balance, beginning of period	$	110,266		$	111,620		$	80,138		$	80,311		$	80,002
Loans charged off		2,540			6,936			4,424			1,405			4,706
Recoveries of loans previously charged off		886			656			883			845			1,101
Net loans (recovered)/charged off		1,654			6,280			3,541			560			3,605
Provision for loan losses		1,600			4,926			35,023			387			3,914
Balance, end of period	$	110,212		$	110,266		$	111,620		$	80,138		$	80,311
		-			-			-			-			-
Net (recoveries) charge-offs to average total loans		0.06	%		0.24	%		0.18	%		0.03	%		0.19	%
Allowance for loan losses to total loans		1.07	%		1.07	%		1.09	%		1.02	%		1.02	%
NON-PERFORMING ASSETS
Non-performing loans
Non-accrual loans	$	36,266		$	34,032		$	34,794		$	32,426		$	43,810
Loans past due 90 days or more		13,223			10,665			29,183			14,442			15,388
Total non-performing loans		49,489			44,697			63,977			46,868			59,198
Other non-performing assets
Foreclosed assets held for sale, net		20,134			18,867			21,701			18,789			17,315
Other non-performing assets		3			3			3			3			3
Total other non-performing assets		20,137			18,870			21,704			18,792			17,318
Total non-performing assets	$	69,626		$	63,567		$	85,681		$	65,660		$	76,516
Allowance for loan losses for loans to non-performing loans		222.70	%		246.70	%		174.47	%		170.99	%		135.67	%
Non-performing loans to total loans		0.48	%		0.43	%		0.62	%		0.60	%		0.75	%
Non-performing assets to total assets		0.49	%		0.44	%		0.60	%		0.60	%		0.71	%
(1)  Calculation of this metric and the reconciliation to GAAP is included in the schedules accompanying this release.

 

Home BancShares, Inc.
Consolidated Net Interest Margin
(Unaudited)
	Three Months Ended
	March 31, 2018							December 31, 2017
	Average		Income/		Yield/			Average		Income/		Yield/
(Dollars in thousands)	Balance		Expense		Rate			Balance		Expense		Rate
ASSETS
Earning assets
Interest-bearing balances due from banks	$	245,815	$	929	1.53	%		$	225,889	$	736	1.29	%
Federal funds sold		9,682		6	0.25	%			21,580		1	0.02	%
Investment securities - taxable		1,560,464		8,970	2.33	%			1,504,433		7,793	2.06	%
Investment securities - non-taxable - FTE		345,217		3,997	4.70	%			352,690		4,905	5.52	%
Loans receivable - FTE		10,325,439		148,283	5.82	%			10,234,713		147,529	5.72	%
Total interest-earning assets		12,486,617		162,185	5.27	%			12,339,305		160,964	5.18	%
Non-earning assets		1,747,752							1,774,631
Total assets	$	14,234,369						$	14,113,936
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts	$	6,409,585	$	11,242	0.71	%		$	6,329,858	$	9,732	0.61	%
Time deposits		1,513,854		3,564	0.95	%			1,532,201		3,214	0.83	%
Total interest-bearing deposits		7,923,439		14,806	0.76	%			7,862,059		12,946	0.65	%
Federal funds purchased		78		1	5.20	%			304		1	1.31	%
Securities sold under agreement to repurchase		152,716		376	1.00	%			149,849		325	0.86	%
FHLB borrowed funds		1,150,091		4,580	1.62	%			1,005,989		3,806	1.50	%
Subordinated debentures		368,124		5,004	5.51	%			367,935		4,934	5.32	%
Total interest-bearing liabilities		9,594,448		24,767	1.05	%			9,386,136		22,012	0.93	%
Non-interest bearing liabilities
Non-interest bearing deposits		2,381,259							2,473,853
Other liabilities		44,360							35,398
Total liabilities		12,020,067							11,895,387
Shareholders' equity		2,214,302							2,218,549
Total liabilities and shareholders' equity	$	14,234,369						$	14,113,936
Net interest spread					4.22	%						4.25	%
Net interest income and margin - FTE			$	137,418	4.46	%				$	138,952	4.47	%

 

Home BancShares, Inc.
Consolidated Net Interest Margin
(Unaudited)
	Year Ended
	March 31, 2018							March 31, 2017
	Average		Income/		Yield/			Average		Income/		Yield/
(Dollars in thousands)	Balance		Expense		Rate			Balance		Expense		Rate
ASSETS
Earning assets
Interest-bearing balances due from banks	$	245,815	$	929	1.53	%		$	170,500	$	308	0.73	%
Federal funds sold		9,682		6	0.25	%			1,182		2	0.69	%
Investment securities - taxable		1,560,464		8,970	2.33	%			1,110,166		5,478	2.00	%
Investment securities - non-taxable - FTE		345,217		3,997	4.70	%			347,085		4,786	5.59	%
Loans receivable - FTE		10,325,439		148,283	5.82	%			7,585,565		105,931	5.66	%
Total interest-earning assets		12,486,617		162,185	5.27	%			9,214,498		116,505	5.13	%
Non-earning assets		1,747,752							984,346
Total assets	$	14,234,369						$	10,198,844
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts	$	6,409,585	$	11,242	0.71	%		$	4,138,813	$	3,377	0.33	%
Time deposits		1,513,854		3,564	0.95	%			1,357,300		2,109	0.63	%
Total interest-bearing deposits		7,923,439		14,806	0.76	%			5,496,113		5,486	0.40	%
Federal funds purchased		78		1	5.20	%			-		-	0.00	%
Securities sold under agreement to repurchase		152,716		376	1.00	%			124,094		165	0.54	%
FHLB borrowed funds		1,150,091		4,580	1.62	%			1,373,217		3,589	1.06	%
Subordinated debentures		368,124		5,004	5.51	%			60,819		439	2.93	%
Total interest-bearing liabilities		9,594,448		24,767	1.05	%			7,054,243		9,679	0.56	%
Non-interest bearing liabilities
Non-interest bearing deposits		2,381,259							1,716,452
Other liabilities		44,360							56,419
Total liabilities		12,020,067							8,827,114
Shareholders' equity		2,214,302							1,371,730
Total liabilities and shareholders' equity	$	14,234,369						$	10,198,844
Net interest spread					4.22	%						4.57	%
Net interest income and margin - FTE			$	137,418	4.46	%				$	106,826	4.70	%

 

Home BancShares, Inc.
Non-GAAP Reconciliations
(Unaudited)
	Quarter Ended																Three Months Ended
(Dollars and shares in thousands,	Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,				Mar. 31,			Mar. 31,
except per share data)		2018			2017			2017			2017			2017				2018			2017
EARNINGS, AS ADJUSTED
GAAP net income available to common shareholders (A)	$	73,064		$	23,309		$	14,821		$	50,097		$	46,856			$	73,064		$	46,856
Adjustments
Gain on acquisitions		-			-			-			-			(3,807	)			-			(3,807	)
Merger and acquisition expenses		-			-			18,227			789			6,727				-			6,727
FDIC loss share buy-out expense		-			-			-			-			-				-			-
Reduced provision for loan losses as a result of a significant loan recovery		-			-			-			-			-				-			-
Hurricane expenses(2)		-			-			33,445			-			-				-			-
Effect of tax rate change		-			36,935			-			-			-				-			-
Total adjustments		-			36,935			51,672			789			2,920				-			2,920
Tax-effect of adjustments(3)		-			-			20,045			199			2,382				-			2,382
Adjustments after-tax (B)		-			36,935			31,627			590			538				-			538
Earnings, as adjusted (C)	$	73,064		$	60,244		$	46,448		$	50,687		$	47,394			$	73,064		$	47,394
Average diluted shares outstanding (D)		174,383			174,349			144,987			144,116			142,492				174,383			142,492
GAAP diluted earnings per share: A/D	$	0.42		$	0.13		$	0.10		$	0.35		$	0.33			$	0.42		$	0.33
Adjustments after-tax: B/D		-			0.22			0.22			-			-				-			-
Diluted earnings per common share excluding gain on acquisitions, merger expenses, FDIC loss share buy-out expense, reduced provision for loan losses as a result of a significant loan recovery, hurricane expenses & effect of tax rate change: C/D	$	0.42		$	0.35		$	0.32		$	0.35		$	0.33			$	0.42		$	0.33
		-			-			-			-			-				-			-
ANNUALIZED RETURN ON AVERAGE ASSETS
Return on average assets: A/H		2.08	%		0.66	%		0.54	%		1.86	%		1.86	%			2.08	%		1.86	%
Return on average assets excluding gain on acquisitions, merger expenses, FDIC loss share buy-out expense, reduced provision for loan losses as a result of a significant loan recovery, hurricane expenses & effect of tax rate change: (A+F)/H		2.08	%		1.69	%		1.70	%		1.88	%		1.88	%			2.08	%		1.88	%
Return on average assets excluding intangible amortization: (A+C)/(H-I)		2.27	%		0.73	%		0.59	%		1.96	%		1.96	%			2.27	%		1.96	%
Return on average assets excluding intangible amortization, provision for loan losses, gain on acquisitions, merger expenses, FDIC loss share buy-out expense, hurricane expenses and income taxes (ROA, as adjusted): (A+B+D+E+G)/(H-I)		3.07	%		3.10	%		2.94	%		3.19	%		3.31	%			3.07	%		3.31	%
GAAP net income available to common shareholders (A)	$	73,064		$	23,309		$	14,821		$	50,097		$	46,856			$	73,064		$	46,856
Amortization of intangibles (B)		1,626			1,631			906			866			804				1,626			804
Amortization of intangibles after-tax (C)		1,201			991			551			526			489				1,201			489
Provision for loan losses excluding hurricane provision (D)		1,600			4,926			2,134			387			3,914				1,600			3,914
Total adjustments (E)		-			36,935			51,672			789			2,920				-			2,920
Adjustments after-tax (F)		-			36,935			31,627			590			538				-			538
Income tax expense excluding effect of tax rate change (G)		23,970			35,873			7,536			30,282			25,374				23,970			25,374
Average assets (H)		14,234,369			14,113,936			10,853,559			10,793,770			10,198,844				14,234,369			10,198,844
Average goodwill, core deposits & other intangible assets (I)		976,451			979,209			462,799			442,380			415,699				976,451			415,699
(2)  Hurricane expenses includes $32,889 of provision for loan losses and $556 of damage expense related to Hurricane Irma.
(3)  Effective tax rate of 39.225%, adjusted for non-taxable gain on acquisition and non-deductible merger-related costs.

 

Home BancShares, Inc.
Non-GAAP Reconciliations
(Unaudited)
	Quarter Ended																Three Months Ended
(Dollars and shares in thousands,	Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,				Mar. 31,			Mar. 31,
except per share data)		2018			2017			2017			2017			2017				2018			2017
ANNUALIZED RETURN ON AVERAGE COMMON EQUITY
Return on average common equity: A/C		13.38	%		4.17	%		3.88	%		13.83	%		13.85	%			13.38	%		13.85	%
Return on average tangible common equity excluding intangible amortization: (A+B)/(C-D)		24.33	%		7.78	%		5.80	%		20.09	%		20.08	%			24.33	%		20.08	%
GAAP net income available to common shareholders (A)	$	73,064		$	23,309		$	14,821		$	50,097		$	46,856			$	73,064		$	46,856
Amortization of intangibles after-tax (B)		1,201			991			551			526			489				1,201			489
Average common equity (C)		2,214,302			2,218,549			1,513,829			1,453,099			1,371,730				2,214,302			1,371,730
Average goodwill, core deposits & other intangible assets (D)		976,451			979,209			462,799			442,380			415,699				976,451			415,699
EFFICIENCY RATIO
Efficiency ratio:  ((C-E)/(A+B+D))		37.83	%		37.05	%		53.77	%		37.48	%		40.76	%			37.83	%		40.76	%
Efficiency ratio, as adjusted:  ((C-E-G)/(A+B+D-F))		37.97	%		37.35	%		39.12	%		37.29	%		36.96	%			37.97	%		36.96	%
					-			-			-			-				-			-
Net interest income (A)	$	136,209		$	136,969		$	106,769		$	107,352		$	104,815			$	136,209		$	104,815
Non-interest income (B)		25,805			27,292			21,457			24,417			26,470				25,805			26,470
Non-interest expense (C)		63,380			63,218			70,846			51,003			55,141				63,380			55,141
Fully taxable equivalent adjustment (D)		1,209			1,983			1,846			2,016			2,011				1,209			2,011
Amortization of intangibles (E)		1,626			1,631			906			866			804				1,626			804
Adjustments:
Non-interest income:
Gain on acquisition	$	-		$	-		$	-		$	-		$	3,807			$	-		$	3,807
Gain (loss) on OREO		405			176			335			393			121				405			121
Gain (loss) on SBA loans		182			-			163			387			188				182			188
Gain (loss) on branches, equipment and other assets, net		7			2			(1,337	)		431			(56	)			7			(56	)
Gain (loss) on securities		-			1,193			136			380			423				-			423
Recoveries on historic losses		-			-			-			-			-				-			-
Total non-interest income adjustments (F)	$	594		$	1,371		$	(703	)	$	1,591		$	4,483			$	594		$	4,483
Non-interest expense:
Merger Expenses	$	-		$	-		$	18,227		$	789		$	6,727			$	-		$	6,727
Hurricane damage expense		-			-			556			-			-				-			-
Vacant properties write-downs		-			-			-			47			-				-			-
Total non-interest expense adjustments (G)	$	-		$	-		$	18,783		$	836		$	6,727			$	-		$	6,727

 

Home BancShares, Inc.
Non-GAAP Reconciliations
(Unaudited)
	Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Mar. 31,
(Dollars in thousands)		2018			2017			2017			2017			2017
TANGIBLE BOOK VALUE PER COMMON SHARE
Book value per common share: A/B	$	12.89		$	12.70		$	12.71		$	10.32		$	10.05
Tangible book value per common share: (A-C-D)/B		7.27			7.07			7.06			7.23			6.96
Total stockholders' equity (A)	$	2,238,181		$	2,204,291		$	2,206,716		$	1,476,032		$	1,441,568
End of period common shares outstanding (B)		173,603			173,633			173,666			143,071			143,442
Goodwill (C)	$	927,949		$	927,949		$	929,129		$	420,941		$	420,941
Core deposit and other intangibles (D)		47,726			49,351			50,982			21,019			21,885
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS
Equity to assets: B/A		15.63	%		15.25	%		15.48	%		13.58	%		13.45	%
Tangible common equity to tangible assets: (B-C-D)/(A-C-D)		9.46	%		9.11	%		9.24	%		9.91	%		9.72	%
					-			-			-			-
Total assets (A)	$	14,323,229		$	14,449,760		$	14,255,967		$	10,872,228		$	10,717,468
Total stockholders' equity (B)		2,238,181			2,204,291			2,206,716			1,476,032			1,441,568
Goodwill (C)		927,949			927,949			929,129			420,941			420,941
Core deposit and other intangibles (D)		47,726			49,351			50,982			21,019			21,885