EX-99.1 2 exh_991.htm PRESS RELEASE EdgarFiling

EXHIBIT 99.1

Home BancShares, Inc. Is Proud to Announce Record Quarterly Net Income and Record Loan Origination While Overcoming Durbin and “HOMB $2.00” Expenses in Q3

CONWAY, Ark., Oct. 18, 2018 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (NASDAQ GS: HOMB), parent company of Centennial Bank, today announced a quarterly profit of $80.3 million for the third quarter of 2018 compared to $14.8 million, a 443% increase for the same quarter in 2017.  Diluted earnings per share for the third quarter of 2018 was $0.46 per share compared to $0.10 per share, for the same period in 2017.

Highlights of the Third Quarter of 2018:

Performance MetricQ3Q2
Net Income$80.3 million$76.0 million
Total Revenue$205.9 million$194.2 million
Diluted Earnings Per Share$0.46$0.44
ROA2.14%2.13%
ROTCE24.56%24.27%
Margin4.46%4.47%
Loan Origination$987 million$958 million

The Company’s third quarter 2017 earnings included a hurricane reserve as a result of Hurricane Irma, which made initial landfall in the Florida Keys as a Category 4 hurricane on September 10, 2017.  The Company accrued $33.4 million of pre-tax hurricane expenses in the third quarter of 2017.  Excluding the previously mentioned impact of Hurricane Irma, the $18.2 million of merger expenses associated with the Stonegate acquisition and $20.0 million tax-effect of the adjustments, third quarter 2017 earnings, as adjusted (non-GAAP), were $46.4 million.  As a result, the third quarter 2018 earnings of $80.3 million represent an increase of $33.8 million or 72.8% compared to the third quarter 2017 earnings, as adjusted.

“I am very proud to report that in our first quarter of swimming upstream with Durbin and HOMB $2.00 expenses, HOMB was still able to report record quarterly net income of $80.3 million and record quarterly loan originations of $987 million,” said John Allison, Chairman.

“Our first full quarter with Shore Premier Finance did not create the drag on margin as much as we anticipated, with 4.46% compared to 4.47% in the second quarter, mostly due to the strong contribution by Centennial CFG this quarter,” said Tracy French, Centennial Bank President and Chief Executive Officer, added.

“We are once again proud to report our most profitable quarter in the Company’s history,” said Randy Sims, Home BancShares, Inc. Chief Executive Officer.  “We continue to control expenses and are pleased to report another strong efficiency ratio of 37.23%.”

Operating Highlights

Net interest margin, on a fully taxable equivalent basis, was 4.46% for the quarter just ended compared to 4.40% for the same quarter in 2017.   Net interest margin for the third quarter of 2018 includes accretion income of $10.7 million and average purchase accounting loan discounts of $151.4 million, compared to accretion income of $7.2 million and average purchase accounting loan discounts of $98.0 million for the third quarter of 2017.  Accretion yield remained consistent at $10.7 million for both the second and third quarters of 2018.

During the third quarter of 2018, the Company did not record a provision for loan loss compared to $1.6 million, excluding the $33.4 million of hurricane expense, recorded in the third quarter of 2017.  The Company continues to see improvement in asset quality.  Non-performing loans to total loans was 0.52% as of September 30, 2018 compared to 0.62% as of September 30, 2017, an improvement of 16.2%. Non-performing assets to total assets also improved from 0.60% as of September 30, 2017 to 0.47% as of September 30, 2018, an improvement of 21.5%.  For the third quarter of 2018, net charge-offs were $1.3 million compared to net charge-offs of $3.5 million for the third quarter of 2017.

The Company reported $25.8 million of non-interest income for the third quarter of 2018, compared to $21.5 million for the third quarter of 2017.  The most important components of the third quarter non-interest income were $9.0 million from other service charges and fees, $7.0 million from service charges on deposits accounts, $3.7 million from mortgage lending income, $2.4 million from other income and $1.3 million from dividends from the FHLB, FRB, FNBB & other equity investments.

Non-interest expense for the third quarter of 2018 was $66.1 million compared to $70.8 million for the third quarter of 2017.  Excluding $18.2 million in merger expenses during the third quarter of 2017, non-interest expense increased $13.5 million from $52.6 million for the third quarter of 2017 to $66.1 million for the third quarter of 2018.  This increase excluding merger expenses is primarily the result of $9.3 million growth in salaries and employee benefits expense and $3.3 million growth in other operating expense resulting from the acquisition of Stonegate Bank in the third quarter of 2017.  For the third quarter of 2018, our efficiency ratio improved to 37.23% from the 53.77% reported for the third quarter of 2017. 

Financial Condition

Total loans receivable were $10.83 billion at September 30, 2018 compared to $10.33 billion at December 31, 2017.  Total deposits were $10.62 billion at September 30, 2018 compared to $10.39 billion at December 31, 2017.  Total assets were $14.91 billion at September 30, 2018 compared to $14.45 billion at December 31, 2017.

During the third quarter 2018 the Company experienced approximately $67.5 million in organic loan decline.  Centennial CFG experienced $175.1 million of organic loan decline and had loans of $1.47 billion at September 30, 2018.  Our legacy footprint produced approximately $107.6 million in organic loan growth during the quarter.   

Non-performing loans at September 30, 2018 were $14.5 million, $40.0 million, $133,000, $1.8 million and zero in the Arkansas, Florida, Alabama, Shore Premier and Centennial CFG markets, respectively, for a total of $56.5 million.  Non-performing assets at September 30, 2018 were $21.1 million, $46.7 million, $774,000, $1.8 million and zero in the Arkansas, Florida, Alabama, Shore Premier and Centennial CFG markets, respectively, for a total of $70.4 million. 

The Company’s allowance for loan losses was $110.2 million at September 30, 2018, or 1.02% of total loans, compared to $110.3 million, or 1.07% of total loans, at December 31, 2017. As of September 30, 2018, and December 31, 2017, the Company’s allowance for loan losses was 195% and 247% of its total non-performing loans, respectively.

Stockholders’ equity was $2.34 billion at September 30, 2018 compared to $2.20 billion at December 31, 2017, an increase of $136.7 million. The increase in stockholders’ equity is primarily associated with the $171.2 million increase in retained earnings offset by $27.3 million of comprehensive loss and the repurchase of $43.2 million of our common stock during the first nine months of 2018. Book value per common share was $13.44 at September 30, 2018 compared to $12.70 at December 31, 2017.  Tangible book value per common share (non-GAAP) was $7.68 at September 30, 2018 compared to $7.07 at December 31, 2017, an annualized increase of 11.5%. 

Branches

During the fourth quarter of 2018, the Company plans to open a loan production office in Dallas, Texas. The Company currently has 77 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, October 18, 2018.  We encourage all participants to pre-register for the conference call using the following link:  http://dpregister.com/10123959.  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: 10123959, which will be available until October 25, 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:

Donna Townsell
Director of Investor Relations
Home BancShares, Inc.
(501) 328-4625

 

 
Home BancShares, Inc.
 Consolidated End of Period Balance Sheets
 (Unaudited)
      
  Sep. 30,  Jun. 30,  Mar. 31,  Dec. 31,  Sep. 30,
 (In thousands)   2018    2018    2018    2017    2017  
      
ASSETS     
      
 Cash and due from banks$  208,681 $  197,658 $  185,479 $  166,915 $  197,953 
 Interest-bearing deposits with other banks    323,376    298,085    325,122    469,018    354,367 
  Cash and cash equivalents   532,057    495,743    510,601    635,933    552,320 
 Federal funds sold   500    500    1,825    24,109    4,545 
 Investment securities - available-for-sale   1,744,430    1,718,704    1,693,018    1,663,517    1,575,685 
 Investment securities - held-to-maturity   199,266    204,401    213,731    224,756    234,945 
 Loans receivable   10,832,815    10,897,970    10,325,736    10,331,188    10,286,193 
 Allowance for loan losses   (110,191)   (111,516)   (110,212)   (110,266)   (111,620)
  Loans receivable, net   10,722,624    10,786,454    10,215,524    10,220,922    10,174,573 
 Bank premises and equipment, net   233,652    234,634    235,607    237,439    239,990 
 Foreclosed assets held for sale   13,507    17,853    20,134    18,867    21,701 
 Cash value of life insurance   148,014    147,281    147,424    146,866    146,158 
 Accrued interest receivable   48,909    45,682    45,361    45,708    41,071 
 Deferred tax asset, net   79,548    78,435    78,328    76,564    121,787 
 Goodwill   958,408    956,418    927,949    927,949    929,129 
 Core deposit and other intangibles   44,484    46,101    47,726    49,351    50,982 
 Other assets   187,339    191,914    186,001    177,779    163,081 
  Total assets $  14,912,738 $  14,924,120 $  14,323,229 $  14,449,760 $  14,255,967 
      
LIABILITIES AND STOCKHOLDERS' EQUITY     
      
Liabilities     
 Deposits:     
  Demand and non-interest-bearing$  2,482,857 $  2,523,553 $  2,473,602 $  2,385,252 $  2,555,465 
  Savings and interest-bearing transaction accounts   6,420,951    6,573,902    6,437,408    6,476,819    6,341,883 
  Time deposits   1,720,930    1,638,578    1,485,605    1,526,431    1,551,422 
    Total deposits   10,624,738    10,736,033    10,396,615    10,388,502    10,448,770 
 Federal funds purchased   -     -     -     -     -  
 Securities sold under agreements to repurchase   142,146    139,750    150,315    147,789    149,531 
 FHLB and other borrowed funds   1,363,851    1,309,950    1,115,061    1,299,188    1,044,333 
 Accrued interest payable and other liabilities   72,381    55,971    54,845    41,959    38,782 
 Subordinated debentures   368,596    368,403    368,212    368,031    367,835 
  Total liabilities    12,571,712    12,610,107    12,085,048    12,245,469    12,049,251 
      
 Stockholders' equity      
 Common stock   1,741    1,745    1,736    1,736    1,737 
 Capital surplus   1,668,106    1,693,337    1,671,141    1,675,318    1,674,642 
 Retained earnings   701,900    642,540    585,586    530,658    526,448 
 Accumulated other comprehensive (loss) income   (30,721)   (23,609)   (20,282)   (3,421)   3,889 
  Total stockholders' equity    2,341,026    2,314,013    2,238,181    2,204,291    2,206,716 
  Total liabilities and stockholders' equity $  14,912,738 $  14,924,120 $  14,323,229 $  14,449,760 $  14,255,967 
      
      


Home BancShares, Inc.
 Consolidated Statements of Income
 (Unaudited)
         
   Quarter Ended     Nine Months Ended  
   Sep. 30,    Jun. 30,   Mar. 31   Dec. 31,   Sep. 30,     Sep. 30,    Sep. 30,  
 (In thousands)   2018    2018   2018   2017   2017     2018    2017  
         
 Interest income         
  Loans$  166,334 $  152,996$  148,065$  147,426$  113,269  $  467,395 $  331,763 
  Investment securities        
    Taxable   9,011    8,979   8,970   7,793   7,071     26,960    18,983 
    Tax-exempt   3,427    3,368   3,006   3,025   3,032     9,801    8,942 
  Deposits - other banks   1,273    1,206   929   736   538     3,408    1,573 
  Federal funds sold   6    12   6   1   3     24    9 
         
 Total interest income   180,051    166,561   160,976   158,981   123,913     507,588    361,270 
         
 Interest expense         
  Interest on deposits   21,412    18,164   14,806   12,946   8,535     54,382    20,831 
  Federal funds purchased   -     -    1   1   -      1    -  
  FHLB borrowed funds   7,055    4,245   4,580   3,806   3,408     15,880    10,707 
  Securities sold under agreements to repurchase   472    372   376   325   232     1,220    593 
  Subordinated debentures   5,202    5,168   5,004   4,934   4,969     15,374    10,203 
         
 Total interest expense   34,141    27,949   24,767   22,012   17,144     86,857    42,334 
         
 Net interest income    145,910    138,612   136,209   136,969   106,769     420,731    318,936 
  Provision for loan losses   -     2,722   1,600   4,926   35,023     4,322    39,324 
 Net interest income after         
  provision for loan losses    145,910    135,890   134,609   132,043   71,746     416,409    279,612 
         
 Non-interest income         
  Service charges on deposit accounts   6,992    6,780   6,075   6,566   6,408     19,847    18,356 
  Other service charges and fees   9,041    9,797   10,155   10,144   8,490     28,993    25,983 
  Trust fees   437    379   446   548   365     1,262    1,130 
  Mortgage lending income   3,691    3,477   2,657   3,573   3,172     9,825    9,713 
  Insurance commissions   463    526   679   466   472     1,668    1,482 
  Increase in cash value of life insurance   735    730   654   738   478     2,119    1,251 
  Dividends from FHLB, FRB, FNBB & other   1,288    1,600   877   1,030   834     3,765    2,455 
  Gain on acquisitions   -     -    -    -    -      -     3,807 
  Gain (loss) on SBA loans   47    262   182   -    163     491    738 
  Gain (loss) on branches, equipment and other assets, net   (102)   -    7   2   (1,337)    (95)   (962)
  Gain (loss) on OREO, net   836    1,046   405   176   335     2,287    849 
  Gain (loss) on securities, net   -     -    -    1,193   136     -     939 
  Other income   2,419    3,076   3,668   2,856   1,941     9,163    6,603 
         
 Total non-interest income   25,847    27,673   25,805   27,292   21,457     79,325    72,344 
         
 Non-interest expense         
  Salaries and employee benefits   37,825    34,476   35,014   35,404   28,510     107,315    83,965 
  Occupancy and equipment   8,148    8,519   8,983   9,009   7,887     25,650    21,602 
  Data processing expense   3,461    3,339   3,986   3,559   2,853     10,786    8,439 
  Other operating expenses   16,689    16,894   15,397   15,246   31,596     48,980    62,984 
         
 Total non-interest expense   66,123    63,228   63,380   63,218   70,846     192,731    176,990 
         
 Income before income taxes     105,634    100,335   97,034   96,117   22,357     303,003    174,966 
  Income tax expense   25,350    24,310   23,970   72,808   7,536     73,630    63,192 
 Net income $  80,284 $  76,025$  73,064$  23,309$  14,821  $  229,373 $  111,774 
         
         


Home BancShares, Inc.
 Selected Financial Information
 (Unaudited)
         
   Quarter Ended        Nine Months Ended  
         
  Sep. 30,  Jun. 30,  Mar. 31  Dec. 31,  Sep. 30,   Sep. 30,  Sep. 30,
 (Dollars and shares in thousands, except per share data)   2018    2018    2018    2017    2017     2018    2017  
         
PER SHARE DATA        
         
Diluted earnings per common share$  0.46 $  0.44 $  0.42 $  0.13 $  0.10  $  1.32 $  0.78 
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)
   0.46    0.44    0.42    0.35    0.32     1.32    1.00 
Basic earnings per common share   0.46    0.44    0.42    0.13    0.10     1.32    0.78 
Dividends per share - common   0.1200    0.1100    0.1100    0.1100    0.1100     0.3400    0.2900 
Book value per common share   13.44    13.26    12.89    12.70    12.71     13.44    12.71 
Tangible book value per common share (non-GAAP)(1)   7.68    7.52    7.27    7.07    7.06     7.68    7.06 
         
         
STOCK INFORMATION        
         
Average common shares outstanding   174,440    173,403    173,761    173,641    144,238     173,870    143,111 
Average diluted shares outstanding   174,867    173,936    174,383    174,349    144,987     174,394    143,839 
End of period common shares outstanding   174,135    174,511    173,603    173,633    173,666     174,135    173,666 
         
         
ANNUALIZED PERFORMANCE METRICS        
         
Return on average assets 2.14% 2.13% 2.08% 0.66% 0.54%  2.12% 1.41%
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) 2.14% 2.13% 2.08% 1.69% 1.70%  2.12% 1.82%
Return on average assets excluding intangible amortization (non-GAAP)(1) 2.33% 2.32% 2.27% 0.73% 0.59%  2.31% 1.49%
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% 3.15% 3.07% 3.10% 2.94%  3.09% 3.14%
Return on average common equity 13.74% 13.54% 13.38% 4.17% 3.88%  13.56% 10.33%
Return on average tangible common equity excluding intangible  amortization (non-GAAP)(1) 24.56% 24.27% 24.33% 7.78% 5.80%  24.39% 15.06%
Efficiency ratio 37.23% 36.74% 37.83% 37.05% 53.77%  37.26% 43.92%
Efficiency ratio, as adjusted (non-GAAP)(1) 37.40% 37.03% 37.97% 37.35% 39.12%  37.46% 37.79%
Net interest margin - FTE 4.46% 4.47% 4.46% 4.47% 4.40%  4.46% 4.53%
Fully taxable equivalent adjustment$  1,489 $  1,403 $  1,209 $  1,983 $  1,846  $  4,101 $  5,873 
Total revenue   205,898    194,234    186,781    186,273    145,370     586,913    433,614 
Total purchase accounting accretion   10,744    10,669    10,608    12,397    7,174     32,021    23,319 
Average purchase accounting loan discounts   151,377    153,624    164,122    178,027    97,978     156,855    97,158 
         
         
OTHER OPERATING EXPENSES        
         
Advertising$  1,154 $  1,142 $  962 $  898 $  795  $  3,258 $  2,305 
Merger and acquisition expenses   -     -     -     -     18,227     -     25,743 
Amortization of intangibles   1,617    1,624    1,626    1,631    906     4,867    2,576 
Electronic banking expense   1,947    1,828    1,878    1,777    1,712     5,653    4,885 
Directors' fees   314    318    330    313    309     962    946 
Due from bank service charges   253    242    219    254    472     714    1,348 
FDIC and state assessment   2,293    2,788    1,608    1,476    1,293     6,689    3,763 
Insurance   762    714    887    814    577     2,363    1,698 
Legal and accounting   761    858    778    1,194    698     2,397    1,799 
Other professional fees   1,748    1,601    1,639    1,537    1,436     4,988    3,822 
Operating supplies   510    602    600    602    432     1,712    1,376 
Postage   311    323    344    323    280     978    861 
Telephone   337    371    373    347    305     1,081    1,027 
Other expense   4,682    4,483    4,153    4,080    4,154     13,318    10,835 
         
  Total other operating expenses$  16,689 $  16,894 $  15,397 $  15,246 $  31,596  $  48,980 $  62,984 
         
         
 (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)
      
  Sep. 30,   June. 30,   Mar. 31,   Dec. 31,   Sep. 30, 
 (Dollars in thousands)   2018    2018    2018    2017    2017  
      
BALANCE SHEET RATIOS     
      
Total loans to total deposits 101.96% 101.51% 99.32% 99.45% 98.44%
Common equity to assets 15.70% 15.51% 15.63% 15.25% 15.48%
Tangible common equity to tangible assets (non-GAAP)(1) 9.62% 9.42% 9.46% 9.11% 9.24%
      
      
LOANS RECEIVABLE     
      
Real estate     
  Commercial real estate loans     
    Non-farm/non-residential$  4,685,827 $  4,734,315 $  4,658,209 $  4,600,117 $  4,532,402 
    Construction/land development   1,550,910    1,662,199    1,641,834    1,700,491    1,648,923 
    Agricultural   72,930    77,053    81,151    82,229    88,295 
  Residential real estate loans     
    Residential 1-4 family   1,982,666    1,960,841    1,915,346    1,970,311    1,968,688 
    Multifamily residential   608,608    540,526    464,194    441,303    497,910 
Total real estate   8,900,941    8,974,934    8,760,734    8,794,451    8,736,218 
Consumer   428,192    417,499    40,842    46,148    51,515 
Commercial and industrial   1,303,841    1,287,637    1,324,173    1,297,397    1,296,485 
Agricultural   58,644    55,768    50,770    49,815    57,489 
Other   141,197    162,132    149,217    143,377    144,486 
  Loans receivable$  10,832,815 $  10,897,970 $  10,325,736 $  10,331,188 $  10,286,193 
                          
Discount for credit losses on purchased loans$  120,849 $  129,903 $  137,404 $  146,557 $  158,001 
Purchased loans, net of discount for credit losses on purchased loans   3,081,695    3,522,753    3,232,004    3,464,990    3,653,079 
      
      
ALLOWANCE FOR LOAN LOSSES     
      
Balance, beginning of period$  111,516 $  110,212 $  110,266 $  111,620 $  80,138 
Loans charged off   2,501    2,132    2,540    6,936    4,424 
Recoveries of loans previously charged off   1,176    714    886    656    883 
  Net loans (recovered)/charged off   1,325    1,418    1,654    6,280    3,541 
Provision for loan losses   -     2,722    1,600    4,926    35,023 
Balance, end of period$  110,191 $  111,516 $  110,212 $  110,266 $  111,620 
                
Net (recoveries) charge-offs to average total loans 0.05% 0.05% 0.06% 0.24% 0.18%
Allowance for loan losses to total loans 1.02% 1.02% 1.07% 1.07% 1.09%
      
      
NON-PERFORMING ASSETS     
      
Non-performing loans     
  Non-accrual loans$  36,198 $  37,082 $  36,266 $  34,032 $  34,794 
  Loans past due 90 days or more   20,267    19,696    13,223    10,665    29,183 
    Total non-performing loans   56,465    56,778    49,489    44,697    63,977 
Other non-performing assets     
  Foreclosed assets held for sale, net   13,507    17,853    20,134    18,867    21,701 
  Other non-performing assets   405    3    3    3    3 
    Total other non-performing assets   13,912    17,856    20,137    18,870    21,704 
    Total non-performing assets$  70,377 $  74,634 $  69,626 $  63,567 $  85,681 
      
Allowance for loan losses for loans to non-performing loans 195.15% 196.41% 222.70% 246.70% 174.47%
Non-performing loans to total loans 0.52% 0.52% 0.48% 0.43% 0.62%
Non-performing assets to total assets 0.47% 0.50% 0.49% 0.44% 0.60%
      
      
 (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
 
   September 30, 2018
    June 30, 2018
 
   Average   Income/  Yield/     Average   Income/  Yield/  
 (Dollars in thousands)   Balance   Expense  Rate     Balance   Expense  Rate  
              
ASSETS             
 Earning assets             
  Interest-bearing balances due from banks$  281,115$  1,2731.80% $  288,643$  1,2061.68%
  Federal funds sold   524   64.54%    679   127.09%
  Investment securities - taxable   1,526,455   9,0112.34%    1,528,613   8,9792.36%
  Investment securities - non-taxable - FTE   402,355   4,5074.44%    398,067   4,4764.51%
  Loans receivable - FTE   10,909,646   166,7436.06%    10,345,846   153,2915.94%
    Total interest-earning assets   13,120,095   181,5405.49%    12,561,848   167,9645.36%
  Non-earning assets   1,760,836      1,742,635  
    Total assets$ 14,880,931   $ 14,304,483  
        
LIABILITIES AND SHAREHOLDERS' EQUITY       
 Liabilities       
  Interest-bearing liabilities       
    Savings and interest-bearing transaction accounts$  6,406,711$  15,5960.97% $  6,451,204$  13,4890.84%
    Time deposits   1,661,129   5,8161.39%    1,611,353   4,6751.16%
      Total interest-bearing deposits   8,067,840   21,4121.05%    8,062,557   18,1640.90%
  Federal funds purchased   -    - 0.00%    46   - 0.00%
  Securities sold under agreement to repurchase   148,791   4721.26%    143,952   3721.04%
  FHLB borrowed funds   1,398,738   7,0552.00%    928,357   4,2451.83%
  Subordinated debentures   368,501   5,2025.60%    368,309   5,1685.63%
      Total interest-bearing liabilities   9,983,870   34,1411.36%    9,503,221   27,9491.18%
  Non-interest bearing liabilities       
    Non-interest bearing deposits   2,512,690      2,496,701  
    Other liabilities   66,441      53,149  
      Total liabilities   12,563,001      12,053,071  
 Shareholders' equity   2,317,930      2,251,412  
    Total liabilities and shareholders' equity$ 14,880,931   $ 14,304,483  
 Net interest spread  4.13%    4.18%
 Net interest income and margin - FTE $  147,3994.46%  $  140,0154.47%
         


Home BancShares, Inc.
 Consolidated Net Interest Margin
 (Unaudited)
        
   Nine Months Ended  
   September 30, 2018     September 30, 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$  271,987$  3,4081.68% $  218,324$  1,5730.96%
  Federal funds sold   3,595   240.89%    1,161   91.04%
  Investment securities - taxable   1,538,387   26,9602.34%    1,231,619   18,9832.06%
  Investment securities - non-taxable - FTE   382,088   12,9814.54%    347,578   14,5065.58%
  Loans receivable - FTE   10,529,117   468,3165.95%    7,785,925   332,0725.70%
    Total interest-earning assets   12,725,174   511,6895.38%    9,584,607   367,1435.12%
  Non-earning assets   1,750,456      1,033,310  
    Total assets$ 14,475,630   $ 10,617,917  
        
LIABILITIES AND SHAREHOLDERS' EQUITY       
 Liabilities       
  Interest-bearing liabilities       
    Savings and interest-bearing transaction accounts$  6,422,489$  40,3270.84% $  4,316,032$  13,4450.42%
    Time deposits   1,595,985   14,0551.18%    1,415,383   7,3860.70%
      Total interest-bearing deposits   8,018,474   54,3820.91%    5,731,415   20,8310.49%
  Federal funds purchased   41   13.26%    -    - 0.00%
  Securities sold under agreement to repurchase   148,472   1,2201.10%    129,580   5930.61%
  FHLB borrowed funds   1,159,973   15,8801.83%    1,155,503   10,7071.24%
  Subordinated debentures   368,313   15,3745.58%    258,032   10,2035.29%
    Total interest-bearing liabilities   9,695,273   86,8571.20%    7,274,530   42,3340.78%
  Non-interest bearing liabilities       
    Non-interest bearing deposits   2,464,032      1,847,843  
    Other liabilities   54,731      48,804  
      Total liabilities   12,214,036      9,171,177  
 Shareholders' equity   2,261,594      1,446,740  
    Total liabilities and shareholders' equity$ 14,475,630   $ 10,617,917  
 Net interest spread  4.18%   4.34%
 Net interest income and margin - FTE $  424,8324.46%  $  324,8094.53%
        
        

 

Home BancShares, Inc.
 Non-GAAP Reconciliations
 (Unaudited)
        
   Quarter Ended    Nine Months Ended  
 (Dollars and shares in thousands,   Sep. 30,    Jun. 30,    Mar. 31    Dec. 31,    Sep. 30,    Sep. 30,    Sep. 30,  
 except per share data)   2018    2018    2018    2017    2017    2018    2017  
        
EARNINGS, AS ADJUSTED       
        
GAAP net income available to common shareholders (A)$  80,284 $  76,025 $  73,064 $  23,309 $  14,821 $  229,373 $  111,774 
Adjustments       
Gain on acquisitions   -     -     -     -     -     -     (3,807)
Merger and acquisition expenses   -     -     -     -     18,227    -     25,743 
Hurricane expenses(1)   -     -     -     -     33,445    -     33,445 
Effect of tax rate change   -     -     -     36,935    -     -     -  
Total adjustments   -     -     -     36,935    51,672    -     55,381 
Tax-effect of adjustments(2)   -     -     -     -     20,045    -     22,626 
Adjustments after-tax (B)   -     -     -     36,935    31,627    -     32,755 
Earnings, as adjusted (C)$  80,284 $  76,025 $  73,064 $  60,244 $  46,448 $  229,373 $  144,529 
        
Average diluted shares outstanding (D)   174,867    173,936    174,383    174,349    144,987    174,394    143,839 
        
GAAP diluted earnings per share: A/D$  0.46 $  0.44 $  0.42 $  0.13 $  0.10 $  1.32 $  0.78 
Adjustments after-tax: B/D   -     -     -     0.22    0.22    -     0.22 
Diluted earnings per common share excluding gain on acquisitions, merger expenses,  hurricane expenses & effect of tax rate change: C/D$  0.46 $  0.44 $  0.42 $  0.35 $  0.32 $  1.32 $  1.00 
                      
        
ANNUALIZED RETURN ON AVERAGE ASSETS       
        
Return on average assets: A/H 2.14% 2.13% 2.08% 0.66% 0.54% 2.12% 1.41%
Return on average assets excluding gain on acquisitions, merger expenses, hurricane expenses & effect of tax rate change: (A+F)/H 2.14% 2.13% 2.08% 1.69% 1.70% 2.12% 1.82%
Return on average assets excluding intangible amortization:  (A+C)/(H-I) 2.33% 2.32% 2.27% 0.73% 0.59% 2.31% 1.49%
Return on average assets excluding intangible amortization, provision for loan losses, gain on acquisitions, merger expenses, hurricane expenses and income taxes (ROA, as adjusted): (A+B+D+E+G)/(H-I) 3.07% 3.15% 3.07% 3.10% 2.94% 3.09% 3.14%
        
GAAP net income available to common shareholders (A)$  80,284 $  76,025 $  73,064 $  23,309 $  14,821 $  229,373 $  111,774 
Amortization of intangibles (B)   1,617    1,624    1,626    1,631    906    4,867    2,576 
Amortization of intangibles after-tax (C)   1,194    1,200    1,201    991    551    3,595    1,566 
Provision for loan losses excluding hurricane provision (D)   -     2,722    1,600    4,926    2,134    4,322    6,435 
Total adjustments (E)   -     -     -     36,935    51,672    -     55,381 
Adjustments after-tax (F)   -     -     -     36,935    31,627    -     32,755 
Income tax expense excluding effect of tax rate change (G)   25,350    24,310    23,970    35,873    7,536    73,630    63,192 
Average assets (H) 14,880,931  14,304,483  14,234,369  14,113,936  10,853,559  14,475,630  10,617,917 
Average goodwill, core deposits & other intangible assets (I)   1,001,843    975,345    976,451    979,209    462,799    984,639    440,465 
        
        
 (1)  Hurricane expenses include $32,889 of provision for loan losses and $556 of damage expense related to Hurricane Irma.
 (2)  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        Nine Months Ended  
         
 (Dollars and shares in thousands,  Sep. 30,  Jun. 30,  Mar. 31  Dec. 31,  Sep. 30,   Sep. 30,  Sep. 30,
 except per share data)   2018    2018    2018    2017    2017     2018    2017  
         
ANNUALIZED RETURN ON AVERAGE COMMON EQUITY        
         
Return on average common equity: A/C 13.74% 13.54% 13.38% 4.17% 3.88%  13.56% 10.33%
Return on average tangible common equity excluding intangible  amortization: (A+B)/(C-D) 24.56% 24.27% 24.33% 7.78% 5.80%  24.39% 15.06%
         
         
GAAP net income available to common shareholders (A)$  80,284 $  76,025 $  73,064 $  23,309 $  14,821  $  229,373 $  111,774 
Amortization of intangibles after-tax (B)   1,194    1,200    1,201    991    551     3,595    1,566 
Average common equity (C)   2,317,930    2,251,412    2,214,302    2,218,549    1,513,829     2,261,594    1,446,740 
Average goodwill, core deposits & other intangible assets (D)   1,001,843    975,345    976,451    979,209    462,799     984,639    440,465 
         
         
EFFICIENCY RATIO        
         
 Efficiency ratio:  ((C-E)/(A+B+D)) 37.23% 36.74% 37.83% 37.05% 53.77%  37.26% 43.92%
 Efficiency ratio, as adjusted:  ((C-E-G)/(A+B+D-F)) 37.40% 37.03% 37.97% 37.35% 39.12%  37.46% 37.79%
                 
 Net interest income (A)$  145,910 $  138,612 $  136,209 $  136,969 $  106,769  $  420,731 $  318,936 
 Non-interest income (B)   25,847    27,673    25,805    27,292    21,457     79,325    72,344 
 Non-interest expense (C)   66,123    63,228    63,380    63,218    70,846     192,731    176,990 
 Fully taxable equivalent adjustment (D)   1,489    1,403    1,209    1,983    1,846     4,101    5,873 
 Amortization of intangibles (E)   1,617    1,624    1,626    1,631    906     4,867    2,576 
         
 Adjustments:        
 Non-interest income:        
 Gain on acquisition$  -  $  -  $  -  $  -  $  -   $  -  $  3,807 
 Gain (loss) on OREO   836    1,046    405    176    335     2,287    849 
 Gain (loss) on SBA loans   47    262    182    -     163     491    738 
 Gain (loss) on branches, equipment and other   assets, net   (102)   -     7    2    (1,337)    (95)   (962)
 Gain (loss) on securities   -     -     -     1,193    136     -     939 
 Recoveries on historic losses   -     -     -     -     -      -     -  
  Total non-interest income adjustments (F)$  781 $  1,308 $  594 $  1,371 $  (703) $  2,683 $  5,371 
         
 Non-interest expense:        
 Merger Expenses$  -  $  -  $  -  $  -  $  18,227  $  -  $  25,743 
 Hurricane damage expense   -     -     -     -     556     -     556 
 Vacant properties write-downs   -     -     -     -     -      -     47 
  Total non-interest expense adjustments (G)$  -  $  -  $  -  $  -  $  18,783  $  -  $  26,346 
         
         


Home BancShares, Inc.
 Non-GAAP Reconciliations
 (Unaudited)
      
  Sep. 30,  Jun. 30,  Mar. 31,  Dec. 31,  Sep. 30, 
 (Dollars in thousands)   2018    2018    2018    2017    2017  
      
TANGIBLE BOOK VALUE PER COMMON SHARE     
      
 Book value per common share: A/B$  13.44 $  13.26 $  12.89 $  12.70 $  12.71 
 Tangible book value per common share: (A-C-D)/B   7.68    7.52    7.27    7.07    7.06 
      
 Total stockholders' equity (A)$  2,341,026 $  2,314,013 $  2,238,181 $  2,204,291 $  2,206,716 
 End of period common shares outstanding (B)   174,135    174,511    173,603    173,633    173,666 
 Goodwill (C)$  958,408 $  956,418 $  927,949 $  927,949 $  929,129 
 Core deposit and other intangibles (D)   44,484    46,101    47,726    49,351    50,982 
      
      
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS     
      
 Equity to assets: B/A 15.70% 15.51% 15.63% 15.25% 15.48%
 Tangible common equity to tangible assets: (B-C-D)/(A-C-D) 9.62% 9.42% 9.46% 9.11% 9.24%
          
 Total assets (A)$  14,912,738 $  14,924,120 $  14,323,229 $  14,449,760 $  14,255,967 
 Total stockholders' equity (B)   2,341,026    2,314,013    2,238,181    2,204,291    2,206,716 
 Goodwill (C)   958,408    956,418    927,949    927,949    929,129 
 Core deposit and other intangibles (D)   44,484    46,101    47,726    49,351    50,982