• Home BancShares, Inc. Again Reports Strong and Stable Performance Metrics in All Areas During Turbulent Interest Rate Environment

    Source: Nasdaq GlobeNewswire / 18 Jul 2019 08:15:04   America/New_York

    CONWAY, Ark., July 18, 2019 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (NASDAQ GS: HOMB), parent company of Centennial Bank, released solid second quarter earnings today that included over $1 billion in loan production at an average interest rate of 6.1% and a strong net interest margin that was relatively flat at 4.28%.

    Highlights of the Second Quarter of 2019:

    Consolidated
    MetricQ2 2019Q1 2019Q4 2018
    Net Income$72.2 million$71.4 million$71.0 million
    Total Revenue$204.4 million$203.2 million$201.3 million
    ROA 1.92%  1.92%  1.90% 
    NIM 4.28%  4.30%  4.30% 
    Accretion$9.2 million$9.1 million$9.4 million
    ROE 12.18%  12.34%  12.05% 
    ROTCE (non-GAAP)(1) 21.01%  21.53%  21.08% 
    Diluted Earnings Per Share $0.43  $0.42  $0.41 


    Centennial Community Banking Centennial CFG
    MetricQ2 2019Q1 2019Q4 2018 MetricQ2 2019Q1 2019Q4 2018
    Net Income$59.5 million$58.1 million$57.7 million Net Income$11.2 million$12.0 million$12.2 million
    Total Revenue$166.5 million$166.9 million$165.9 million Total Revenue$32.4 million$31.1 million$30.6 million
    ROA1.83% 1.80% 1.77%  ROA 2.77%  3.08%  3.33% 
    NIM4.20% 4.20% 4.18%  NIM 5.25%  5.34%  5.50% 
    Accretion$8.4 million$8.3 million$8.6 million Accretion $146,000  $33,000  $33,000 


    Shore Premier Finance
    MetricQ2 2019Q1 2019Q4 2018
    Net Income$1.4 million$1.3 million$1.1 million
    Total Revenue$5.4 million$5.2 million$4.8 million
    ROA 1.27%  1.15%  1.06% 
    NIM 3.02%  3.04%  3.29% 
    Accretion $705,000  $741,000  $812,000 

     (1) Calculation of this metric and the reconciliation to GAAP are included in the schedules accompanying this release.

    “The last three quarters show a strong trend of stability and growth in all our key metrics,” said John Allison, Chairman. “We continue to produce solid results with a positive growth trend,” Allison continued.

    “Loan production was very strong during the second quarter,” said Tracy French, Centennial Bank President and Chief Executive Officer. “We saw loan production of over $1 billion dollars at an average interest rate of 6.1% and were able to increase the yield on the loan portfolio by 3 basis points,” added French.

    “Our return on assets remains strong and steady at 1.92% as it was in the first quarter,” stated Randy Sims, Chief Executive Officer of Home BancShares. “Diluted earnings per share of $0.43 as compared to $0.42 from last quarter and an impressive efficiency ratio of 39.93% are just a few of the powerful numbers that contributed to another successful quarter for our shareholders,” added Sims.

    Operating Highlights

    Our net interest margin was 4.28% for the three-month period ended June 30, 2019 compared to 4.30% for the three-month period ended March 31, 2019. The yield on loans was 6.06% and 6.03% for the three months ended June 30, 2019 and March 31, 2019, respectively, as average loans decreased from $11.04 billion to $11.00 billion. Additionally, the rate on interest bearing deposits increased to 1.38% as of June 30, 2019 from 1.34% as of March 31, 2019, with average balances of $8.62 billion and $8.50 billion, respectively. 

    During the second quarter of 2019, we experienced a $515,000 increase in investment premium amortization resulting from increased prepayment speeds on investment securities due to the declining interest rate environment. This increased investment premium amortization negatively impacted the net interest margin for the quarter ended June 30, 2019 by two basis points.

    For the three months ended June 30, 2019 and March 31, 2019, we recognized $9.2 million and $9.1 million, respectively, in total net accretion for acquired loans and deposits.  Purchase accounting accretion on acquired loans was $9.2 million and $9.0 million and average purchase accounting loan discounts were $122.2 million and $131.6 million for the three-month periods ended June 30, 2019 and March 31, 2019, respectively.  Net accretion of time deposit premiums was $30,000 for the quarters ended June 30, 2019 and March 30, 2019, and net average remaining CD premiums were $327,000 and $357,000 for the three-month periods ended June 30, 2019 and March 31, 2019, respectively. 

    Net interest income on a fully taxable equivalent basis increased $1.5 million, or 1.04%, to $142.3 million for the three-month period ended June 30, 2019, from $140.8 million for the three-month period ended March 31, 2019.  This increase in net interest income for the three-month period ended June 30, 2019 was the result of a $1.8 million increase in interest income, which was partially offset by a $283,000 increase in interest expense.  The $1.8 million increase in interest income was primarily the result of a $2.0 million increase in loan interest income. The $283,000 increase in interest expense was primarily the result of a $1.7 million increase in interest expense on deposits which was offset by a $1.4 million decrease in interest expense on FHLB and other borrowed funds resulting from the average balance of FHLB and other borrowings decreasing by $227.3 million or 19.60%.

    Centennial Commercial Finance Group (“Centennial CFG”) net interest margin was 5.25% for the quarter just ended compared to 5.34% for the quarter ended March 31, 2019. Centennial CFG net interest margin for the second quarter of 2019 includes average interest earning assets of $1.59 billion and net interest income of $20.9 million, compared to average interest earning assets of $1.55 billion and net interest income of $20.4 million for the quarter ended March 31, 2019.

    Centennial Community Banking (excluding Centennial CFG and Shore Premier Finance) net interest margin was 4.20% for the quarter just ended as well as for the quarter ended March 31, 2019. The net interest margin for the second quarter of 2019 includes average interest earning assets of $11.29 billion and net interest income of $118.1 million, compared to average interest earning assets of $11.31 billion and net interest income of $117.2 million for the first quarter of 2019. 

    During the second quarter of 2019, the Company recorded a $1.3 million provision for loan loss, but no provision was recorded during the first quarter of 2019.  The Company continues to see strong asset quality.  Non-performing loans to total loans was 0.57% as of June 30, 2019 compared to 0.58% as of March 31, 2019. Non-performing assets to total assets was 0.51% as of June 30, 2019 compared to 0.52% as of March 31, 2019. For the second quarter of 2019, net charge-offs were $1.6 million compared to net charge-offs of $2.4 million for the first quarter of 2019.

    The Company reported $23.1 million of non-interest income for the second quarter of 2019, compared to $23.7 million for the first quarter of 2019. The most important components of the second quarter non-interest income were $8.2 million from other service charges and fees, $6.3 million from service charges on deposits accounts, $3.5 million from mortgage lending income, $2.1 million from other income and $1.1 million from dividends from the FHLB, FRB, FNBB & other equity investments.  The Company exceeded $10 billion in assets during the first quarter of 2017 and became subject to the Durbin Amendment to the Dodd-Frank Act interchange fee restrictions beginning in the third quarter of 2018. The Durbin Amendment negatively impacted debit card and ATM fees beginning in the second half of 2018. The Company estimates quarterly interchange fees are approximately $3.0 million dollars lower as a result of the Durbin Amendment.

    Non-interest expense for the second quarter of 2019 was $67.6 million compared to $69.1 million for the first quarter of 2019.  The most important components of the second quarter non-interest expense were $38.0 million from salaries and employee benefits, $17.0 million in other expense and $8.9 million in occupancy and equipment expenses.  Non-interest expense for the first quarter of 2019 included $900,000 related to an outsourced special project and $897,000 in hurricane expense associated with Hurricane Michael which made landfall in Mexico Beach, Florida on October 10, 2018.  For the second quarter of 2019, our efficiency ratio improved to 39.93% compared to 41.01% reported for the first quarter of 2019. 

    Financial Condition

    Total loans receivable were $11.05 billion at June 30, 2019 compared to $11.07 billion at December 31, 2018.  Total deposits were $11.35 billion at June 30, 2019 compared to $10.90 billion at December 31, 2018.  Total assets were $15.29 billion at June 30, 2019 compared to $15.30 billion at December 31, 2018.

    During the second quarter 2019, the Company experienced approximately $74.2 million in organic loan growth. Centennial CFG experienced $146.1 million of organic loan growth and had loans of $1.67 billion at June 30, 2019.  Centennial Community Banking experienced approximately $77.8 million in organic loan decline.   Additionally, Shore Premier Finance experienced $5.8 million of organic loan growth and had loans of $442.1 million at June 30, 2019.

    Non-performing loans at June 30, 2019 were $20.0 million, $37.1 million, $3.3 million, $2.4 million and zero in the Arkansas, Florida, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $62.8 million.  Non-performing assets at June 30, 2019 were $26.6 million, $45.3 million, $3.3 million, $2.4 million and zero in the Arkansas, Florida, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $77.5 million. 

    The Company’s allowance for loan losses was $106.1 million at June 30, 2019, or 0.96% of total loans, compared to $108.8 million, or 0.98% of total loans, at December 31, 2018. As of June 30, 2019, and December 31, 2018, the Company’s allowance for loan losses was 168.9% and 169.4% of its total non-performing loans, respectively.

    Stockholders’ equity was $2.42 billion at June 30, 2019 compared to $2.35 billion at December 31, 2018, an increase of $71.5 million. The increase in stockholders’ equity is primarily associated with the $101.8 million increase in retained earnings and the $28.6 million increase in comprehensive income which were partially offset by the repurchase of $64.4 million of our common stock during 2019.  Book value per common share was $14.46 at June 30, 2019 compared to $13.76 at December 31, 2018.  Tangible book value per common share (non-GAAP) was $8.50 at June 30, 2019 compared to $7.90 at December 31, 2018, an annualized increase of 15.3%. 

    Branches

    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, July 18, 2019.  We encourage all participants to pre-register for the conference call using the following link:  http://dpregister.com/10132572.  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: 10132572, which will be available until July 25, 2019 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 net income (earnings), as adjusted; diluted earnings per common share, as adjusted; return on average assets, as adjusted; return on average common equity, as adjusted; return on average tangible common equity; return on average tangible common equity, as adjusted; efficiency ratio, as adjusted, tangible book value per common share and tangible common equity to tangible assets--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, 2018 filed with the SEC on February 26, 2019.

    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) 
           
       Jun. 30,  Mar. 31,  Dec. 31,  Sep. 30,  Jun. 30, 
     (In thousands)    2019     2019     2018     2018     2018  
                         
    ASSETS                    
                         
    Cash and due from banks $183,745  $141,027  $175,024  $208,681  $197,658 
    Interest-bearing deposits with other banks  373,557   421,443   482,915   323,376   298,085 
    Cash and cash equivalents  557,302   562,470   657,939   532,057   495,743 
    Federal funds sold  1,075   1,700   325   500   500 
    Investment securities - available-for-sale  2,053,939   2,013,123   1,785,862   1,744,430   1,718,704 
    Investment securities - held-to-maturity  -   -   192,776   199,266   204,401 
    Loans receivable  11,053,129   10,978,935   11,071,879   10,832,815   10,897,970 
    Allowance for loan losses  (106,066)  (106,357)  (108,791)  (110,191)  (111,516)
    Loans receivable, net  10,947,063   10,872,578   10,963,088   10,722,624   10,786,454 
    Bank premises and equipment, net  278,821   279,012   233,261   233,652   234,634 
    Foreclosed assets held for sale  13,734   14,466   13,236   13,507   17,853 
    Cash value of life insurance  149,708   149,353   148,621   148,014   147,281 
    Accrued interest receivable  48,992   50,288   48,945   48,909   45,682 
    Deferred tax asset, net  58,517   64,061   73,275   79,548   78,435 
    Goodwill  958,408   958,408   958,408   958,408   956,418 
    Core deposit and other intangibles  39,723   41,310   42,896   44,484   46,101 
    Other assets  180,293   172,732   183,806   187,339   191,914 
    Total assets  $15,287,575  $15,179,501  $15,302,438  $14,912,738  $14,924,120 
                         
    LIABILITIES AND STOCKHOLDERS' EQUITY                    
                         
    Liabilities                    
    Deposits:                    
    Demand and non-interest-bearing $2,575,696  $2,519,175  $2,401,232  $2,482,857  $2,523,553 
    Savings and interest-bearing transaction accounts  6,774,162   6,650,181   6,624,407   6,420,951   6,573,902 
    Time deposits  1,997,458   1,898,096   1,874,139   1,720,930   1,638,578 
    Total deposits  11,347,316   11,067,452   10,899,778   10,624,738   10,736,033 
    Securities sold under agreements to repurchase  142,541   152,239   143,679   142,146   139,750 
    FHLB and other borrowed funds  899,447   1,105,175   1,472,393   1,363,851   1,309,950 
    Accrued interest payable and other liabilities  107,695   124,172   67,912   72,381   55,971 
    Subordinated debentures  369,170   368,979   368,790   368,596   368,403 
    Total liabilities   12,866,169   12,818,017   12,952,552   12,571,712   12,610,107 
                         
     Stockholders' equity                     
    Common stock  1,675   1,682   1,707   1,741   1,745 
    Capital surplus  1,550,999   1,560,994   1,609,810   1,668,106   1,693,337 
    Retained earnings  853,964   803,629   752,184   701,900   642,540 
    Accumulated other comprehensive (loss) income  14,768   (4,821)  (13,815)  (30,721)  (23,609)
    Total stockholders' equity   2,421,406   2,361,484   2,349,886   2,341,026   2,314,013 
    Total liabilities and stockholders' equity  $15,287,575  $15,179,501  $15,302,438  $14,912,738  $14,924,120 
                         

     

     Home BancShares, Inc.  
     Consolidated Statements of Income  
     (Unaudited)  
               
       Quarter Ended   Six Months Ended  
       Jun. 30,  Mar. 31,  Dec. 31,  Sep. 30,  Jun. 30,   Jun. 30,  Jun. 30,  
     (In thousands)    2019     2019    2018     2018    2018    2019    2018  
                               
    Interest income                           
    Loans $165,816  $163,848 $163,201  $166,334  $152,996 $329,664  $301,061 
    Investment securities                          
    Taxable  10,650   10,706  9,873   9,011   8,979  21,356   17,949 
    Tax-exempt  3,183   3,379  3,456   3,427   3,368  6,562   6,374 
    Deposits - other banks  1,628   1,543  1,241   1,273   1,206  3,171   2,135 
    Federal funds sold  10   11  9   6   12  21   18 
                               
    Total interest income  181,287   179,487  177,780   180,051   166,561  360,774   327,537 
                               
    Interest expense                           
    Interest on deposits  29,709   28,006  25,207   21,412   18,164  57,715   32,970 
    Federal funds purchased  -   -  -   -   -  -   1 
    FHLB borrowed funds  4,722   6,118  6,474   7,055   4,245  10,840   8,825 
    Securities sold under agreements to repurchase  630   634  602   472   372  1,264   748 
    Subordinated debentures  5,239   5,259  5,215   5,202   5,168  10,498   10,172 
                               
    Total interest expense  40,300   40,017  37,498   34,141   27,949  80,317   52,716 
                               
     Net interest income   140,987   139,470  140,282   145,910   138,612  280,457   274,821 
    Provision for loan losses  1,325   -  -   -   2,722  1,325   4,322 
     Net interest income after                           
    provision for loan losses   139,662   139,470  140,282   145,910   135,890  279,132   270,499 
                               
    Non-interest income                           
    Service charges on deposit accounts  6,259   6,401  7,004   6,992   6,780  12,660   12,855 
    Other service charges and fees  8,177   6,563  7,598   9,041   9,797  14,740   19,952 
    Trust fees  391   403  290   437   379  794   825 
    Mortgage lending income  3,457   2,435  2,554   3,691   3,477  5,892   6,134 
    Insurance commissions  515   609  442   463   526  1,124   1,205 
    Increase in cash value of life insurance  740   736  737   735   730  1,476   1,384 
    Dividends from FHLB, FRB, FNBB & other  1,149   3,505  1,992   1,288   1,600  4,654   2,477 
    Gain (loss) on SBA loans  355   241  75   47   262  596   444 
    Gain (loss) on branches, equipment and
      other assets, net
      (129)  79  (25)  (102)  -  (50)  7 
    Gain (loss) on OREO, net  58   206  114   836   1,046  264   1,451 
    Other income  2,094   2,494  2,726   2,419   3,076  4,588   6,744 
                               
    Total non-interest income  23,066   23,672  23,507   25,847   27,673  46,738   53,478 
                               
    Non-interest expense                           
    Salaries and employee benefits  37,976   37,836  36,230   37,825   34,476  75,812   69,490 
    Occupancy and equipment  8,853   8,823  8,310   8,148   8,519  17,676   17,502 
    Data processing expense  3,838   3,970  3,642   3,461   3,339  7,808   7,325 
    Other operating expenses  16,957   18,428  23,090   16,689   16,894  35,385   32,291 
                               
    Total non-interest expense  67,624   69,057  71,272   66,123   63,228  136,681   126,608 
                               
    Income before income taxes   95,104   94,085  92,517   105,634   100,335  189,189   197,369 
    Income tax expense  22,940   22,735  21,487   25,350   24,310  45,675   48,280 
    Net income  $72,164  $71,350 $71,030  $80,284  $76,025 $143,514  $149,089 
                               

     

     Home BancShares, Inc.  
     Selected Financial Information  
     (Unaudited)  
              
       Quarter Ended 
      Six Months Ended  
      Jun. 30,  Mar. 31,  Dec. 31,  Sep. 30,  Jun. 30,   Jun. 30,  Jun. 30,  
     (Dollars and shares in thousands, except per share data)    2019    2019   2018    2018    2018     2019    2018   
                             
    PER SHARE DATA                        
                             
    Diluted earnings per common share $  0.43 $  0.42 $  0.41 $  0.46 $  0.44  $  0.85 $  0.86  
    Diluted earnings per common share, as adjusted, excluding
      special dividend from equity investment, merger expenses,
      hurricane expenses & outsourced special project expense
      (non-GAAP)(1)
        0.43    0.42    0.44    0.46    0.44     0.85    0.86  
    Basic earnings per common share    0.43    0.42    0.41    0.46    0.44     0.85    0.86  
    Dividends per share - common    0.1300    0.1200    0.1200    0.1200    0.1100     0.2500    0.2200  
    Book value per common share    14.46    14.04    13.76    13.44    13.26     14.46    13.26  
    Tangible book value per common share (non-GAAP)(1)    8.50    8.10    7.90    7.68    7.52     8.50    7.52  
              
              
    STOCK INFORMATION         
              
    Average common shares outstanding    167,791    169,592    173,023    174,440    173,403     168,686    173,581  
    Average diluted shares outstanding    167,791    169,592    173,311    174,867    173,936     168,686    174,168  
    End of period common shares outstanding    167,466    168,173    170,720    174,135    174,511     167,466    174,511  
              
              
    ANNUALIZED PERFORMANCE METRICS         
              
    Return on average assets  1.92%  1.92%  1.90%  2.14%  2.13%   1.92%  2.11%  
    Return on average assets excluding special dividend from
      equity investment, merger expenses, hurricane expenses &
      outsourced special project expense (ROA, as adjusted)
      (non-GAAP)(1)
      1.92%  1.91%  2.03%  2.14%  2.13%   1.91%  2.11%  
    Return on average assets excluding intangible
      amortization (non-GAAP)(1)
      2.09%  2.09%  2.07%  2.33%  2.32%   2.09%  2.30%  
    Return on average common equity  12.18%  12.34%  12.05%  13.74%  13.54%   12.26%  13.46%  
    Return on average common equity excluding special dividend from
      equity investment, merger expenses, hurricane expenses &
      outsourced special project expense: (ROE, as adjusted)
      (non-GAAP)(1)
      12.18%  12.30%  12.86%  13.74%  13.54%   12.24%  13.46%  
    Return on average tangible common equity (non-GAAP)(1)  21.01%  21.53%  21.08%  24.20%  23.90%   21.26%  23.92%  
    Return on average tangible common equity excluding intangible
      amortization (non-GAAP)(1)
      21.35%  21.88%  21.43%  24.56%  24.27%   21.61%  24.30%  
    Return on average tangible common equity excluding special
      dividend from equity investment, merger expenses, hurricane
      expenses & outsourced special project expense:
      (ROTCE, as adjusted) (non-GAAP)(1)
      21.01%  21.45%  22.50%  24.20%  23.90%   21.23%  23.92%  
    Efficiency ratio  39.93%  41.01%  42.18%  37.23%  36.74%   40.47%  37.28%  
    Efficiency ratio, as adjusted (non-GAAP)(1)  39.92%  40.52%  38.28%  37.39%  36.97%   40.21%  37.44%  
    Net interest margin - FTE  4.28%  4.30%  4.30%  4.46%  4.47%   4.29%  4.47%  
    Fully taxable equivalent adjustment $  1,319 $  1,367 $  1,412 $  1,489 $  1,403  $  2,686 $  2,612  
    Total revenue    204,353    203,159    201,287    205,898    194,234     407,512    381,015  
    Total purchase accounting accretion    9,240    9,055    9,432    10,744    10,669     18,295    21,276  
    Average purchase accounting loan discounts    122,197    131,596    141,244    151,377    153,624     126,871    159,443  
              
              
    OTHER OPERATING EXPENSES         
              
    Advertising $  1,095 $  1,051 $  1,214 $  1,154 $  1,142  $  2,146 $  2,104  
    Merger and acquisition expenses    -     -     6,013    -     -      -     -   
    Amortization of intangibles    1,587    1,586    1,587    1,617    1,624     3,173    3,250  
    Electronic banking expense    1,851    1,903    1,969    1,947    1,828     3,754    3,706  
    Directors' fees    392    434    319    314    318     826    648  
    Due from bank service charges    282    238    289    253    242     520    461  
    FDIC and state assessment    1,655    1,710    1,869    2,293    2,788     3,365    4,396  
    Hurricane expense    -     897    470    -     -      897    -   
    Insurance    661    697    737    762    714     1,358    1,601  
    Legal and accounting    989    981    1,151    761    858     1,970    1,636  
    Other professional fees    2,306    2,812    1,465    1,748    1,601     5,118    3,240  
    Operating supplies    505    536    510    510    602     1,041    1,202  
    Postage    293    326    325    311    323     619    667  
    Telephone    306    303    324    337    371     609    744  
    Other expense  5,035  4,954  4,848  4,682  4,483   9,989  8,636  
                             
    Total other operating expenses $16,957 $18,428 $23,090 $16,689 $16,894  $35,385 $32,291  
                             
              
     (1)  Calculation of this metric and the reconciliation to GAAP are included in the schedules accompanying this release.  

     

     Home BancShares, Inc.   
     Selected Financial Information   
     (Unaudited)   
             
       Jun. 30, 
      Mar. 31, 
      Dec. 31, 
      Sep. 30, 
      Jun. 30, 
       
     (Dollars in thousands)  2019   2019   2018   2018   2018    
                       
    BALANCE SHEET RATIOS                  
                       
    Total loans to total deposits  97.41%  99.20%  101.58%  101.96%  101.51%   
    Common equity to assets  15.84%  15.56%  15.36%  15.70%  15.51%   
    Tangible common equity to tangible assets (non-GAAP)(1)  9.96%  9.60%  9.43%  9.62%  9.42%   
                       
                       
    LOANS RECEIVABLE                  
                       
    Real estate                  
    Commercial real estate loans                  
    Non-farm/non-residential $4,495,558 $4,623,174 $4,806,684 $4,685,827 $4,734,315   
    Construction/land development  1,930,838  1,649,303  1,546,035  1,550,910  1,662,199   
    Agricultural  85,045  76,092  76,433  72,930  77,053   
    Residential real estate loans                  
    Residential 1-4 family  1,852,784  1,947,119  1,975,586  1,982,666  1,960,841   
    Multifamily residential  523,789  538,098  560,475  608,608  540,526   
    Total real estate  8,888,014  8,833,786  8,965,213  8,900,941  8,974,934   
    Consumer  455,554  448,093  443,105  428,192  417,499   
    Commercial and industrial  1,515,357  1,505,773  1,476,331  1,303,841  1,287,637   
    Agricultural  80,621  58,966  48,562  58,644  55,768   
    Other  113,583  132,317  138,668  141,197  162,132   
    Loans receivable $11,053,129 $10,978,935 $11,071,879 $10,832,815 $10,897,970   
                       
    Discount for credit losses on purchased loans $98,672 $106,617 $113,648 $120,849 $129,903   
    Purchased loans, net of discount for credit losses
      on purchased loans
      2,469,579  2,712,315  2,900,284  3,081,695  3,522,753   
                       
                       
    ALLOWANCE FOR LOAN LOSSES                  
                       
    Balance, beginning of period $106,357 $108,791 $110,191 $111,516 $110,212   
    Loans charged off  2,279  3,391  1,814  2,501  2,132   
    Recoveries of loans previously charged off  663  957  414  1,176  714   
    Net loans (recovered)/charged off  1,616  2,434  1,400  1,325  1,418   
    Provision for loan losses  1,325  -  -  -  2,722   
    Balance, end of period $106,066 $106,357 $108,791 $110,191 $111,516   
                       
    Net (recoveries) charge-offs to average total loans  0.06%  0.09%  0.05%  0.05%  0.05%   
    Allowance for loan losses to total loans  0.96%  0.97%  0.98%  1.02%  1.02%   
                       
                       
    NON-PERFORMING ASSETS                  
                       
    Non-performing loans                  
    Non-accrual loans $52,841 $49,616 $47,083 $36,198 $37,082   
    Loans past due 90 days or more  9,961  14,577  17,159  20,267  19,696   
    Total non-performing loans  62,802  64,193  64,242  56,465  56,778   
    Other non-performing assets                  
    Foreclosed assets held for sale, net  13,734  14,466  13,236  13,507  17,853   
    Other non-performing assets  947  947  497  405  3   
    Total other non-performing assets  14,681  15,413  13,733  13,912  17,856   
    Total non-performing assets $77,483 $79,606 $77,975 $70,377 $74,634   
                       
    Allowance for loan losses for loans to non-performing loans  168.89%  165.68%  169.35%  195.15%  196.41%   
    Non-performing loans to total loans  0.57%  0.58%  0.58%  0.52%  0.52%   
    Non-performing assets to total assets  0.51%  0.52%  0.51%  0.47%  0.50%   
                       
                       
    (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  
       June 30, 2019
       March 31, 2019
      
       Average 
      Income/ 
      Yield/    Average 
      Income/ 
      Yield/   
     (Dollars in thousands)   Balance 
      Expense 
      Rate    Balance 
      Expense 
      Rate   
                        
    ASSETS                   
    Earning assets                   
    Interest-bearing balances due from banks $298,821 $1,628 2.19%  $272,410 $1,543 2.30%  
    Federal funds sold  1,596  10 2.51%   1,491  11 2.99%  
    Investment securities - taxable  1,640,883  10,650 2.60%   1,595,605  10,706 2.72%  
    Investment securities - non-taxable - FTE  379,437  4,177 4.42%   390,754  4,424 4.59%  
    Loans receivable - FTE  11,000,926  166,141 6.06%   11,036,503  164,170 6.03%  
    Total interest-earning assets  13,321,663  182,606 5.50%   13,296,763  180,854 5.52%  
    Non-earning assets  1,776,937        1,782,909       
    Total assets $15,098,600       $15,079,672       
                        
    LIABILITIES AND SHAREHOLDERS' EQUITY                   
    Liabilities                   
    Interest-bearing liabilities                   
    Savings and interest-bearing transaction accounts $6,677,683 $20,637 1.24%  $6,596,895 $19,537 1.20%  
    Time deposits  1,943,320  9,072 1.87%   1,903,373  8,469 1.80%  
    Total interest-bearing deposits  8,621,003  29,709 1.38%   8,500,268  28,006 1.34%  
    Securities sold under agreement to repurchase  144,478  630 1.75%   150,803  634 1.71%  
    FHLB borrowed funds  932,365  4,722 2.03%   1,159,629  6,118 2.14%  
    Subordinated debentures  369,076  5,239 5.69%   368,884  5,259 5.78%  
    Total interest-bearing liabilities  10,066,922  40,300 1.61%   10,179,584  40,017 1.59%  
    Non-interest bearing liabilities                   
    Non-interest bearing deposits  2,553,060        2,439,520       
    Other liabilities  101,900        115,911       
    Total liabilities  12,721,882        12,735,015       
    Shareholders' equity  2,376,718        2,344,657       
    Total liabilities and shareholders' equity $15,098,600       $15,079,672       
    Net interest spread       3.89%        3.93%  
    Net interest income and margin - FTE    $142,306 4.28%     $140,837 4.30%  
                        

     

     Home BancShares, Inc.  
     Consolidated Net Interest Margin  
     (Unaudited)  
              
       Six Months Ended  
       June 30, 2019   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 $285,688 $3,171 2.24%  $267,347 $2,135 1.61%  
    Federal funds sold  1,544  21 2.74%   5,156  18 0.70%  
    Investment securities - taxable  1,618,369  21,356 2.66%   1,544,451  17,949 2.34%  
    Investment securities - non-taxable - FTE  385,064  8,602 4.50%   371,788  8,473 4.60%  
    Loans receivable - FTE  11,018,616  330,310 6.05%   10,335,699  301,574 5.88%  
    Total interest-earning assets  13,309,281  363,460 5.51%   12,524,441  330,149 5.32%  
    Non-earning assets  1,779,908       1,745,179      
    Total assets $15,089,189    $14,269,620    
                        
    LIABILITIES AND SHAREHOLDERS' EQUITY                   
    Liabilities                   
    Interest-bearing liabilities                   
    Savings and interest-bearing transaction accounts $6,637,512 $40,174 1.22%  $6,430,509 $24,731 0.78%  
    Time deposits  1,923,457  17,541 1.84%   1,562,873  8,239 1.06%  
    Total interest-bearing deposits  8,560,969  57,715 1.36%   7,993,382  32,970 0.83%  
    Federal funds purchased  -  - 0.00%   62  1 3.25%  
    Securities sold under agreement to repurchase  147,623  1,264 1.73%   148,310  748 1.02%  
    FHLB borrowed funds  1,045,370  10,840 2.09%   1,038,612  8,825 1.71%  
    Subordinated debentures  368,981  10,498 5.74%   368,217  10,172 5.57%  
    Total interest-bearing liabilities  10,122,943  80,317 1.60%   9,548,583  52,716 1.11%  
    Non-interest bearing liabilities                
    Non-interest bearing deposits  2,496,604     2,439,299       
    Other liabilities  108,866     48,779       
    Total liabilities  12,728,413     12,036,661       
    Shareholders' equity  2,360,776     2,232,959       
    Total liabilities and shareholders' equity $15,089,189    $14,269,620       
    Net interest spread     3.91%      4.21%  
    Net interest income and margin - FTE    $283,143 4.29%     $277,433 4.47%  
                        

     

     Home BancShares, Inc.   
     Non-GAAP Reconciliations   
     (Unaudited)   
               
      Quarter Ended 
      Six Months Ended
       
    (Dollars and shares in thousands,  Jun. 30,  Mar. 31,  Dec. 31,  Sep. 30,  Jun. 30, 
       Jun. 30,  Jun. 30, 
       
     except per share data)   2019    2019    2018    2018    2018     2019    2018    
                             
    EARNINGS, AS ADJUSTED                        
                             
    GAAP net income available to common shareholders (A)$72,164 $71,350 $71,030 $80,284 $76,025  $143,514 $149,089   
    Adjustments                        
    Special dividend from equity investment -  (2,134) -  -  -   (2,134) -   
    Merger and acquisition expenses -  -  6,013  -  -   -  -   
    Hurricane expenses -  897  470  -  -   897  -   
    Outsourced special project expense -  900  -  -  -   900   -   
    Total adjustments -  (337) 6,483  -  -   (337) -   
    Tax-effect of adjustments -  (88) 1,694  -  -   (88) -   
    Adjustments after-tax (B) -  (249) 4,789  -  -   (249) -   
    Earnings, as adjusted (C)$72,164 $71,101 $75,819 $80,284 $76,025  $143,265 $149,089   
                             
    Average diluted shares outstanding (D) 167,791  169,592  173,311  174,867  173,936   168,686  174,168   
                             
    GAAP diluted earnings per share: (A/D)$0.43 $0.42 $0.41 $0.46 $0.44  $0.85 $0.86   
    Adjustments after-tax: (B/D) -  -  0.03  -  -   -  -   
    Diluted earnings per common share excluding special dividend from
      equity investment, merger expenses, hurricane expenses &
      outsourced special project expense: (C/D)
    $0.43 $0.42 $0.44 $0.46 $0.44  $0.85 $0.86   
                           
               
    ANNUALIZED RETURN ON AVERAGE ASSETS          
               
    Return on average assets: (A/F) 1.92%  1.92%  1.90%  2.14%  2.13%   1.92%  2.11%   
    Return on average assets excluding special dividend from
      equity investment, merger expenses, hurricane expenses &
      outsourced special project expense: (ROA, as adjusted)
      ((A+E)/F)
     1.92%  1.91%  2.03%  2.14%  2.13%   1.91%  2.11%   
    Return on average assets excluding intangible
      amortization: ((A+C)/(F-G))
     2.09%  2.09%  2.07%  2.33%  2.32%   2.09%  2.30%   
               
    GAAP net income available to common shareholders (A)$72,164 $71,350 $71,030 $80,284 $76,025  $143,514 $149,089   
    Amortization of intangibles (B) 1,587  1,586  1,587  1,617  1,624   3,173  3,250   
    Amortization of intangibles after-tax (C) 1,172  1,172  1,172  1,194  1,200   2,344  2,401   
    Total adjustments (D) -  (337) 6,483  -  -   (337) -   
    Adjustments after-tax (E) -  (249) 4,789  -  -   (249) -   
    Average assets (F) 15,098,600  15,079,672  14,838,979  14,880,931  14,304,483   15,089,189  14,269,620   
    Average goodwill, core deposits & other intangible assets (G) 998,898  1,000,494  1,002,070  1,001,843  975,345   999,692  975,895   
                             

     

     Home BancShares, Inc.   
     Non-GAAP Reconciliations   
     (Unaudited)   
                
       Quarter Ended 
       Six Months Ended 
       
     (Dollars and shares in thousands,   Jun. 30, 
      Mar. 31, 
      Dec. 31, 
      Sep. 30, 
      Jun. 30, 
       Jun. 30, 
      Jun. 30, 
       
     except per share data)    2019    2019    2018    2018    2018     2019    2018    
                              
    ANNUALIZED RETURN ON AVERAGE COMMON EQUITY                         
                              
    Return on average common equity: (A/D)  12.18%  12.34%  12.05%  13.74%  13.54%   12.26%  13.46%   
    Return on average common equity excluding special dividend
      from equity investment, merger expenses, hurricane
      expenses & outsourced special project expense:
      (ROE, as adjusted) ((A+C)/D)
      12.18%  12.30%  12.86%  13.74%  13.54%   12.24%  13.46%   
    Return on average tangible common equity: (A/(D-E))  21.01%  21.53%  21.08%  24.20%  23.90%   21.26%  23.92%   
    Return on average tangible common equity excluding intangible
      amortization: (B/(D-E))
      21.35%  21.88%  21.43%  24.56%  24.27%   21.61%  24.30%   
    Return on average tangible common equity excluding special
      dividend from equity investment, merger expenses, hurricane
      expenses & outsourced special project expense:
      (ROTCE, as adjusted) ((A+C)/(D-E))
      21.01%  21.45%  22.50%  24.20%  23.90%   21.23%  23.92%   
                              
    GAAP net income available to common shareholders (A) $72,164 $71,350 $71,030 $80,284 $76,025  $143,514 $149,089   
    Earnings excluding intagible amortization (B)  73,336  72,522  72,202  81,478  77,225   145,858  151,490   
    Adjustments after-tax (C)  -  (249) 4,789  -  -   (249) -   
    Average common equity (D)  2,376,718  2,344,657  2,338,802  2,317,930  2,251,412   2,360,776  2,232,959   
    Average goodwill, core deposits & other intangible assets (E)  998,898  1,000,494  1,002,070  1,001,843  975,345   999,692  975,895   
                              
                              
    EFFICIENCY RATIO                         
                              
    Efficiency ratio:  ((C-E)/(A+B+D))  39.93%  41.01%  42.18%  37.23%  36.74%   40.47%  37.28%   
    Efficiency ratio, as adjusted:  ((C-E-G)/(A+B+D-F))  39.92%  40.52%  38.28%  37.39%  36.97%   40.21%  37.44%   
                              
    Net interest income (A) $140,987 $139,470 $140,282 $145,910 $138,612  $280,457 $274,821   
    Non-interest income (B)  23,066  23,672  23,507  25,847  27,673   46,738  53,478   
    Non-interest expense (C)  67,624  69,057  71,272  66,123  63,228   136,681  126,608   
    Fully taxable equivalent adjustment (D)  1,319  1,367  1,412  1,489  1,403   2,686  2,612   
    Amortization of intangibles (E)  1,587  1,586  1,587  1,617  1,624   3,173  3,250   
                              
    Adjustments:                         
    Non-interest income:                         
    Special dividend from equity investment $- $2,134 $- $- $-  $2,134 $-   
    Gain (loss) on OREO  58  206  114  836  1,046   264  1,451   
    Gain (loss) on branches, equipment and other assets, net  (129) 79  (25) (102) -   (50) 7   
    Total non-interest income adjustments (F) $(71)$2,419 $89 $734 $1,046  $2,348 $1,458   
                              
    Non-interest expense:                         
    Merger Expenses $- $- $6,013 $- $-  $- $-   
    Hurricane damage expense  -  897  470  -  -   897  -   
    Outsourced special project expense  -  900  -  -  -   900  -   
    Total non-interest expense adjustments (G) $- $1,797 $6,483 $- $-  $1,797 $-   
                              

     

     Home BancShares, Inc.  
     Non-GAAP Reconciliations  
     (Unaudited)  
            
       Jun. 30, 
      Mar. 31, 
      Dec. 31, 
      Sep. 30, 
      Jun. 30, 
      
     (Dollars in thousands)    2019    2019    2018    2018    2018   
                      
    TANGIBLE BOOK VALUE PER COMMON SHARE                 
                      
    Book value per common share: (A/B) $  14.46 $  14.04 $  13.76 $  13.44 $  13.26  
    Tangible book value per common share: ((A-C-D)/B)    8.50    8.10    7.90    7.68    7.52  
            
    Total stockholders' equity (A) $  2,421,406 $  2,361,484 $  2,349,886 $  2,341,026 $  2,314,013  
    End of period common shares outstanding (B)    167,466    168,173    170,720    174,135    174,511  
    Goodwill (C) $  958,408 $  958,408 $  958,408 $  958,408 $  956,418  
    Core deposit and other intangibles (D)    39,723    41,310    42,896    44,484    46,101  
            
            
    TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS       
            
    Equity to assets: (B/A)  15.84%  15.56%  15.36%  15.70%  15.51%  
    Tangible common equity to tangible assets: ((B-C-D)/(A-C-D))  9.96%  9.60%  9.43%  9.62%  9.42%  
            
    Total assets (A) $  15,287,575 $  15,179,501 $  15,302,438 $  14,912,738 $  14,924,120  
    Total stockholders' equity (B)    2,421,406    2,361,484    2,349,886    2,341,026    2,314,013  
    Goodwill (C)    958,408    958,408    958,408    958,408    956,418  
    Core deposit and other intangibles (D)    39,723    41,310    42,896    44,484    46,101  
            

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