CONWAY, Ark., Jan. 17, 2019 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (NASDAQ GS: HOMB), parent company of Centennial Bank, today announced reaching $300.4 million in net income for the year of 2018, an increase of $165.3 million or 122.4%, compared to $135.1 million for the year of 2017.  Additionally, the Company ranked #1 on the Forbes “Best Banks in America” list for the second consecutive year.

Highlights of the Fourth Quarter of 2018:

Performance Metric	Q4 2018			Q4 2017			Q4 2018, As Adjusted (non-GAAP)(1)
Net Income	$71.0 million			$23.3 million			$75.8 million
Total Revenue	$201.3 million			$186.3 million			$201.3 million
Diluted Earnings Per Share	$0.41			$0.13			$0.44
ROA	1.90%			0.66%			2.03%
ROE	12.05%			4.17%			12.86%
ROTCE (non-GAAP)(1)	21.08%			7.46%			22.50%
Organic Loan Growth	$239.1 million			$45.0 million			$239.1 million
(1) Calculation of this metric and the reconciliation to GAAP are included in the schedules accompanying this release.

“2017 was a great year for HOMB; however, 2018 was even better,” said John Allison, Chairman. “Even though bank stocks have underperformed as a sector for the second consecutive year, we didn’t. We saw our earnings, as adjusted (non-GAAP), grow from a record $204.8 million in 2017 to a record $305.2 million in 2018 and were recognized again by Forbes as the Best Bank in America for the second year in a row,” Allison continued.

“Reaching a record $1.14 billion in loan originations this quarter indicates that loan demand is still out there,” said Tracy French, Centennial Bank President and Chief Executive Officer. “I am pleased with our $239.1 million in loan growth for the fourth quarter,” French added.

“I am proud once again and for the 31^st time to report record quarterly earnings, as adjusted (non-GAAP), when compared to the same quarter of previous year,” said Randy Sims, Home BancShares, Inc. Chief Executive Officer. “This has been a special year and we anticipate continuing our record pace in 2019,” added Sims.

Operating Highlights

Net interest margin, on a fully taxable equivalent basis, was 4.30% for the quarter just ended compared to 4.47% for the same quarter in 2017.   Net interest margin for the fourth quarter of 2018 includes accretion income of $9.4 million and average purchase accounting loan discounts of $141.2 million, compared to accretion income of $12.4 million and average purchase accounting loan discounts of $178.0 million for the fourth quarter of 2017.

During the fourth quarter of 2018, the Company did not record a provision for loan loss compared to $4.9 million recorded in the fourth quarter of 2017.  The Company continues to see strong asset quality including a decline in net charge-offs.  Non-performing loans to total loans was 0.58% as of December 31, 2018 compared to 0.43% as of December 31, 2017. Non-performing assets to total assets also increased from 0.44% as of December 31, 2017 to 0.51% as of December 31, 2018.  For the fourth quarter of 2018, net charge-offs were $1.4 million compared to net charge-offs of $6.3 million for the fourth quarter of 2017.

The Company reported $23.5 million of non-interest income for the fourth quarter of 2018, compared to $27.3 million for the fourth quarter of 2017.  Excluding securities gains during the fourth quarter of 2017, non-interest income decreased $2.6 million from $26.1 million for the fourth quarter of 2017 to $23.5 million for the fourth quarter of 2018. The most important components of the fourth quarter non-interest income were $7.6 million from other service charges and fees, $7.0 million from service charges on deposits accounts, $2.6 million from mortgage lending income, $2.7 million from other income and $2.0 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 fourth quarter of 2018 was $71.3 million compared to $63.2 million for the fourth quarter of 2017.  Excluding $6.5 million in merger and hurricane expenses during the fourth quarter of 2018, non-interest expense increased $1.6 million from $63.2 million for the fourth quarter of 2017 to $64.8 million for the fourth quarter of 2018.  For the fourth quarter of 2018, our efficiency ratio increased to 42.18% from the 37.05% reported for the fourth quarter of 2017. 

Financial Condition

Total loans receivable were $11.07 billion at December 31, 2018 compared to $10.33 billion at December 31, 2017.  Total deposits were $10.90 billion at December 31, 2018 compared to $10.39 billion at December 31, 2017.  Total assets were $15.30 billion at December 31, 2018 compared to $14.45 billion at December 31, 2017.

During the fourth quarter 2018 the Company experienced approximately $239.1 million in organic loan growth.  Centennial CFG experienced $86.6 million of organic loan growth and had loans of $1.56 billion at December 31, 2018.  Our legacy footprint produced approximately $152.5 million in organic loan growth during the quarter.

Non-performing loans at December 31, 2018 were $17.4 million, $43.3 million, $179,000, $3.4 million and zero in the Arkansas, Florida, Alabama, Shore Premier and Centennial CFG markets, respectively, for a total of $64.2 million.  Non-performing assets at December 31, 2018 were $24.0 million, $50.2 million, $306,000, $3.4 million and zero in the Arkansas, Florida, Alabama, Shore Premier and Centennial CFG markets, respectively, for a total of $78.0 million. 

The Company’s allowance for loan losses was $108.8 million at December 31, 2018, or 0.98% of total loans, compared to $110.3 million, or 1.07% of total loans, at December 31, 2017. As of December 31, 2018, and December 31, 2017, the Company’s allowance for loan losses was 169% and 247% of its total non-performing loans, respectively.

Stockholders’ equity was $2.35 billion at December 31, 2018 compared to $2.20 billion at December 31, 2017, an increase of $145.6 million. The increase in stockholders’ equity is primarily associated with the $221.5 million increase in retained earnings and the issuance of $28.2 million in stock as a part of the acquisition of Shore Premier Finance, partially offset by $10.4 million of comprehensive loss and the repurchase of $104.3 million of our common stock during 2018, which includes the repurchase during the 4^th quarter of 2018 of the shares issued as part of the acquisition of the Shore Premier Finance. Book value per common share was $13.76 at December 31, 2018 compared to $12.70 at December 31, 2017.  Tangible book value per common share (non-GAAP) was $7.90 at December 31, 2018 compared to $7.07 at December 31, 2017, an increase of 11.7%. 

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, January 17, 2019.  We encourage all participants to pre-register for the conference call using the following link:  http://dpregister.com/10127084.  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: 10127084, which will be available until January 24, 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 and tangible book value per common share--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)
		Dec. 31,				Sep. 30,				Jun. 30,				Mar. 31,				Dec. 31,
(In thousands)		2018				2018				2018				2018				2017
ASSETS
Cash and due from banks		$	175,024			$	208,681			$	197,658			$	185,479			$	166,915
Interest-bearing deposits with other banks			482,915				323,376				298,085				325,122				469,018
Cash and cash equivalents			657,939				532,057				495,743				510,601				635,933
Federal funds sold			325				500				500				1,825				24,109
Investment securities - available-for-sale			1,785,862				1,744,430				1,718,704				1,693,018				1,663,517
Investment securities - held-to-maturity			192,776				199,266				204,401				213,731				224,756
Loans receivable			11,071,879				10,832,815				10,897,970				10,325,736				10,331,188
Allowance for loan losses			(108,791	)			(110,191	)			(111,516	)			(110,212	)			(110,266	)
Loans receivable, net			10,963,088				10,722,624				10,786,454				10,215,524				10,220,922
Bank premises and equipment, net			233,261				233,652				234,634				235,607				237,439
Foreclosed assets held for sale			13,236				13,507				17,853				20,134				18,867
Cash value of life insurance			148,621				148,014				147,281				147,424				146,866
Accrued interest receivable			48,945				48,909				45,682				45,361				45,708
Deferred tax asset, net			73,275				79,548				78,435				78,328				76,564
Goodwill			958,408				958,408				956,418				927,949				927,949
Core deposit and other intangibles			42,896				44,484				46,101				47,726				49,351
Other assets			183,806				187,339				191,914				186,001				177,779
Total assets		$	15,302,438			$	14,912,738			$	14,924,120			$	14,323,229			$	14,449,760
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Demand and non-interest-bearing		$	2,401,232			$	2,482,857			$	2,523,553			$	2,473,602			$	2,385,252
Savings and interest-bearing transaction accounts			6,624,407				6,420,951				6,573,902				6,437,408				6,476,819
Time deposits			1,874,139				1,720,930				1,638,578				1,485,605				1,526,431
Total deposits			10,899,778				10,624,738				10,736,033				10,396,615				10,388,502
Federal funds purchased			-				-				-				-				-
Securities sold under agreements to repurchase			143,679				142,146				139,750				150,315				147,789
FHLB and other borrowed funds			1,472,393				1,363,851				1,309,950				1,115,061				1,299,188
Accrued interest payable and other liabilities			67,912				72,381				55,971				54,845				41,959
Subordinated debentures			368,790				368,596				368,403				368,212				368,031
Total liabilities			12,952,552				12,571,712				12,610,107				12,085,048				12,245,469
Stockholders' equity
Common stock			1,707				1,741				1,745				1,736				1,736
Capital surplus			1,609,810				1,668,106				1,693,337				1,671,141				1,675,318
Retained earnings			752,184				701,900				642,540				585,586				530,658
Accumulated other comprehensive (loss) income			(13,815	)			(30,721	)			(23,609	)			(20,282	)			(3,421	)
Total stockholders' equity			2,349,886				2,341,026				2,314,013				2,238,181				2,204,291
Total liabilities and stockholders' equity		$	15,302,438			$	14,912,738			$	14,924,120			$	14,323,229			$	14,449,760

 

Home BancShares, Inc.
Consolidated Statements of Income
(Unaudited)
		Quarter Ended																				Year Ended
		Dec. 31,				Sep. 30,				Jun. 30,				Mar. 31,				Dec. 31,				Dec. 31,				Dec. 31,
(In thousands)		2018				2018				2018				2018				2017				2018				2017
Interest income
Loans		$	163,201			$	166,334			$	152,996			$	148,065			$	147,426			$	630,596			$	479,189
Investment securities
Taxable			9,873				9,011				8,979				8,970				7,793				36,833				26,776
Tax-exempt			3,456				3,427				3,368				3,006				3,025				13,257				11,967
Deposits - other banks			1,241				1,273				1,206				929				736				4,649				2,309
Federal funds sold			9				6				12				6				1				33				10
Total interest income			177,780				180,051				166,561				160,976				158,981				685,368				520,251
Interest expense
Interest on deposits			25,207				21,412				18,164				14,806				12,946				79,589				33,777
Federal funds purchased			-				-				-				1				1				1				1
FHLB borrowed funds			6,474				7,055				4,245				4,580				3,806				22,354				14,513
Securities sold under agreements to repurchase			602				472				372				376				325				1,822				918
Subordinated debentures			5,215				5,202				5,168				5,004				4,934				20,589				15,137
Total interest expense			37,498				34,141				27,949				24,767				22,012				124,355				64,346
Net interest income			140,282				145,910				138,612				136,209				136,969				561,013				455,905
Provision for loan losses			-				-				2,722				1,600				4,926				4,322				44,250
Net interest income after provision for loan losses			140,282				145,910				135,890				134,609				132,043				556,691				411,655
Non-interest income
Service charges on deposit accounts			7,004				6,992				6,780				6,075				6,566				26,851				24,922
Other service charges and fees			7,598				9,041				9,797				10,155				10,144				36,591				36,127
Trust fees			290				437				379				446				548				1,552				1,678
Mortgage lending income			2,554				3,691				3,477				2,657				3,573				12,379				13,286
Insurance commissions			442				463				526				679				466				2,110				1,948
Increase in cash value of life insurance			737				735				730				654				738				2,856				1,989
Dividends from FHLB, FRB, FNBB & other			1,992				1,288				1,600				877				1,030				5,757				3,485
Gain on acquisitions			-				-				-				-				-				-				3,807
Gain (loss) on SBA loans			75				47				262				182				-				566				738
Gain (loss) on branches, equipment and other assets, net			(25	)			(102	)			-				7				2				(120	)			(960	)
Gain (loss) on OREO, net			114				836				1,046				405				176				2,401				1,025
Gain (loss) on securities, net			-				-				-				-				1,193				-				2,132
Other income			2,726				2,419				3,076				3,668				2,856				11,889				9,459
Total non-interest income			23,507				25,847				27,673				25,805				27,292				102,832				99,636
Non-interest expense
Salaries and employee benefits			36,230				37,825				34,476				35,014				35,404				143,545				119,369
Occupancy and equipment			8,310				8,148				8,519				8,983				9,009				33,960				30,055
Data processing expense			3,642				3,461				3,339				3,986				3,559				14,428				11,998
Other operating expenses			23,090				16,689				16,894				15,397				15,246				72,070				78,786
Total non-interest expense			71,272				66,123				63,228				63,380				63,218				264,003				240,208
Income before income taxes			92,517				105,634				100,335				97,034				96,117				395,520				271,083
Income tax expense			21,487				25,350				24,310				23,970				72,808				95,117				136,000
Net income		$	71,030			$	80,284			$	76,025			$	73,064			$	23,309			$	300,403			$	135,083

 

Home BancShares, Inc.
Selected Financial Information
(Unaudited)
		Quarter Ended																				Year Ended
		Dec. 31,				Sep. 30,				Jun. 30,				Mar. 31,				Dec. 31,				Dec. 31,				Dec. 31,
(Dollars and shares in thousands, except per share data)		2018				2018				2018				2018				2017				2018				2017
PER SHARE DATA
Diluted earnings per common share		$	0.41			$	0.46			$	0.44			$	0.42			$	0.13			$	1.73			$	0.89
Diluted earnings per common share, as adjusted, 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)			0.44				0.46				0.44				0.42				0.35				1.75				1.35
Basic earnings per common share			0.41				0.46				0.44				0.42				0.13				1.73				0.90
Dividends per share - common			0.1200				0.1200				0.1100				0.1100				0.1100				0.4600				0.4000
Book value per common share			13.76				13.44				13.26				12.89				12.70				13.76				12.70
Tangible book value per common share (non-GAAP)(1)			7.90				7.68				7.52				7.27				7.07				7.90				7.07
STOCK INFORMATION
Average common shares outstanding			173,023				174,440				173,403				173,761				173,641				173,657				150,806
Average diluted shares outstanding			173,311				174,867				173,936				174,383				174,349				174,124				151,528
End of period common shares outstanding			170,720				174,135				174,511				173,603				173,633				170,720				173,633
ANNUALIZED PERFORMANCE METRICS
Return on average assets			1.90	%			2.14	%			2.13	%			2.08	%			0.66	%			2.06	%			1.17	%
Return on average assets excluding gain on acquisitions, merger expenses, hurricane expenses & effect of tax rate change (ROA, as adjusted) (non-GAAP)(1)			2.03	%			2.14	%			2.13	%			2.08	%			1.69	%			2.10	%			1.78	%
Return on average assets excluding intangible amortization (non-GAAP)(1)			2.07	%			2.33	%			2.32	%			2.27	%			0.73	%			2.25	%			1.26	%
Return on average assets, excluding intangible amortization, provision for loan losses, gain on acquisitions, merger expenses, hurricane expenses and income taxes (ROA, as fully adjusted) (non-GAAP)(1)			2.88	%			3.07	%			3.15	%			3.07	%			3.10	%			3.04	%			3.13	%
Return on average common equity			12.05	%			13.74	%			13.54	%			13.38	%			4.17	%			13.17	%			8.23	%
Return on average common equity excluding gain on acquisitions, merger expenses, hurricane expenses & effect of tax rate change: (ROE, as adjusted) (non-GAAP)(1)			12.86	%			13.74	%			13.54	%			13.38	%			10.77	%			13.38	%			12.48	%
Return on average tangible common equity (non-GAAP)(1)			21.08	%			24.20	%			23.90	%			23.94	%			7.46	%			23.25	%			12.68	%
Return on average tangible common equity excluding gain on acquisitions, merger expenses, hurricane expenses & effect of tax rate change: (ROTCE, as adjusted) (non-GAAP)(1)			22.50	%			24.20	%			23.90	%			23.94	%			19.29	%			23.62	%			19.23	%
Efficiency ratio			42.18	%			37.23	%			36.74	%			37.83	%			37.05	%			38.48	%			41.89	%
Efficiency ratio, as adjusted (non-GAAP)(1)			38.30	%			37.40	%			37.03	%			37.97	%			37.35	%			37.67	%			37.66	%
Net interest margin - FTE			4.30	%			4.46	%			4.47	%			4.46	%			4.47	%			4.42	%			4.51	%
Fully taxable equivalent adjustment		$	1,412			$	1,489			$	1,403			$	1,209			$	1,983			$	5,513			$	7,856
Total revenue			201,287				205,898				194,234				186,781				186,273				788,200				619,887
Total purchase accounting accretion			9,432				10,744				10,669				10,608				12,397				41,455				35,716
Average purchase accounting loan discounts			141,244				151,377				153,624				164,122				178,027				152,948				120,160
OTHER OPERATING EXPENSES
Advertising		$	1,214			$	1,154			$	1,142			$	962			$	898			$	4,472			$	3,203
Merger and acquisition expenses			6,013				-				-				-				-				6,013				25,743
Amortization of intangibles			1,587				1,617				1,624				1,626				1,631				6,454				4,207
Electronic banking expense			1,969				1,947				1,828				1,878				1,777				7,622				6,662
Directors' fees			319				314				318				330				313				1,281				1,259
Due from bank service charges			289				253				242				219				254				1,003				1,602
FDIC and state assessment			1,869				2,293				2,788				1,608				1,476				8,558				5,239
Hurricane expense			470				-				-				-				-				470				556
Insurance			737				762				714				887				814				3,100				2,512
Legal and accounting			1,151				761				858				778				1,194				3,548				2,993
Other professional fees			1,465				1,748				1,601				1,639				1,537				6,453				5,359
Operating supplies			510				510				602				600				602				2,222				1,978
Postage			325				311				323				344				323				1,303				1,184
Telephone			324				337				371				373				347				1,405				1,374
Other expense			4,848				4,682				4,483				4,153				4,080				18,166				14,915
Total other operating expenses		$	23,090			$	16,689			$	16,894			$	15,397			$	15,246			$	72,070			$	78,786
(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)
		Dec. 31,				Sep. 30,				June. 30,				Mar. 31,				Dec. 31,
(Dollars in thousands)		2018				2018				2018				2018				2017
BALANCE SHEET RATIOS
Total loans to total deposits			101.58	%			101.96	%			101.51	%			99.32	%			99.45	%
Common equity to assets			15.36	%			15.70	%			15.51	%			15.63	%			15.25	%
Tangible common equity to tangible assets (non-GAAP)(1)			9.43	%			9.62	%			9.42	%			9.46	%			9.11	%
LOANS RECEIVABLE
Real estate
Commercial real estate loans
Non-farm/non-residential		$	4,806,684			$	4,685,827			$	4,734,315			$	4,658,209			$	4,600,117
Construction/land development			1,546,035				1,550,910				1,662,199				1,641,834				1,700,491
Agricultural			76,433				72,930				77,053				81,151				82,229
Residential real estate loans
Residential 1-4 family			1,975,586				1,982,666				1,960,841				1,915,346				1,970,311
Multifamily residential			560,475				608,608				540,526				464,194				441,303
Total real estate			8,965,213				8,900,941				8,974,934				8,760,734				8,794,451
Consumer			443,105				428,192				417,499				40,842				46,148
Commercial and industrial			1,476,331				1,303,841				1,287,637				1,324,173				1,297,397
Agricultural			48,562				58,644				55,768				50,770				49,815
Other			138,668				141,197				162,132				149,217				143,377
Loans receivable		$	11,071,879			$	10,832,815			$	10,897,970			$	10,325,736			$	10,331,188
Discount for credit losses on purchased loans		$	113,648			$	120,849			$	129,903			$	137,404			$	146,557
Purchased loans, net of discount for credit losses on purchased loans			2,900,284				3,081,695				3,522,753				3,232,004				3,464,990
ALLOWANCE FOR LOAN LOSSES
Balance, beginning of period		$	110,191			$	111,516			$	110,212			$	110,266			$	111,620
Loans charged off			1,814				2,501				2,132				2,540				6,936
Recoveries of loans previously charged off			414				1,176				714				886				656
Net loans (recovered)/charged off			1,400				1,325				1,418				1,654				6,280
Provision for loan losses			-				-				2,722				1,600				4,926
Balance, end of period		$	108,791			$	110,191			$	111,516			$	110,212			$	110,266
Net (recoveries) charge-offs to average total loans			0.05	%			0.05	%			0.05	%			0.06	%			0.24	%
Allowance for loan losses to total loans			0.98	%			1.02	%			1.02	%			1.07	%			1.07	%
NON-PERFORMING ASSETS
Non-performing loans
Non-accrual loans		$	47,083			$	36,198			$	37,082			$	36,266			$	34,032
Loans past due 90 days or more			17,159				20,267				19,696				13,223				10,665
Total non-performing loans			64,242				56,465				56,778				49,489				44,697
Other non-performing assets
Foreclosed assets held for sale, net			13,236				13,507				17,853				20,134				18,867
Other non-performing assets			497				405				3				3				3
Total other non-performing assets			13,733				13,912				17,856				20,137				18,870
Total non-performing assets		$	77,975			$	70,377			$	74,634			$	69,626			$	63,567
Allowance for loan losses for loans to non-performing loans			169.35	%			195.15	%			196.41	%			222.70	%			246.70	%
Non-performing loans to total loans			0.58	%			0.52	%			0.52	%			0.48	%			0.43	%
Non-performing assets to total assets			0.51	%			0.47	%			0.50	%			0.49	%			0.44	%
(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
		December 31, 2018									September 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		$	244,551		$	1,241		2.01	%		$	281,115		$	1,273		1.80	%
Federal funds sold			741			9		4.82	%			524			6		4.54	%
Investment securities - taxable			1,553,467			9,873		2.52	%			1,526,455			9,011		2.34	%
Investment securities - non-taxable - FTE			400,742			4,453		4.41	%			402,355			4,507		4.44	%
Loans receivable - FTE			10,884,911			163,616		5.96	%			10,909,646			166,743		6.06	%
Total interest-earning assets			13,084,412			179,192		5.43	%			13,120,095			181,540		5.49	%
Non-earning assets			1,754,567									1,760,836
Total assets		$	14,838,979								$	14,880,931
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts		$	6,405,419		$	17,873		1.11	%		$	6,406,711		$	15,596		0.97	%
Time deposits			1,794,358			7,334		1.62	%			1,661,129			5,816		1.39	%
Total interest-bearing deposits			8,199,777			25,207		1.22	%			8,067,840			21,412		1.05	%
Federal funds purchased			-			-		0.00	%			-			-		0.00	%
Securities sold under agreement to repurchase			147,895			602		1.61	%			148,791			472		1.26	%
FHLB borrowed funds			1,242,985			6,474		2.07	%			1,398,738			7,055		2.00	%
Subordinated debentures			368,695			5,215		5.61	%			368,501			5,202		5.60	%
Total interest-bearing liabilities			9,959,352			37,498		1.49	%			9,983,870			34,141		1.36	%
Non-interest bearing liabilities
Non-interest bearing deposits			2,464,003									2,512,690
Other liabilities			76,822									66,441
Total liabilities			12,500,177									12,563,001
Shareholders' equity			2,338,802									2,317,930
Total liabilities and shareholders' equity		$	14,838,979								$	14,880,931
Net interest spread								3.94	%								4.13	%
Net interest income and margin - FTE					$	141,694		4.30	%					$	147,399		4.46	%

 

Home BancShares, Inc.
Consolidated Net Interest Margin
(Unaudited)
		Year Ended
		December 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		$	265,071		$	4,649		1.75	%		$	220,231		$	2,309		1.05	%
Federal funds sold			2,876			33		1.15	%			6,308			10		0.16	%
Investment securities - taxable			1,542,188			36,833		2.39	%			1,300,384			26,776		2.06	%
Investment securities - non-taxable - FTE			386,790			17,434		4.51	%			348,865			19,411		5.56	%
Loans receivable - FTE			10,618,796			631,932		5.95	%			8,403,154			479,601		5.71	%
Total interest-earning assets			12,815,721			690,881		5.39	%			10,278,942			528,107		5.14	%
Non-earning assets			1,751,492									1,220,163
Total assets		$	14,567,213								$	11,499,105
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts		$	6,418,186		$	58,199		0.91	%		$	4,823,626		$	23,176		0.48	%
Time deposits			1,645,986			21,390		1.30	%			1,444,828			10,601		0.73	%
Total interest-bearing deposits			8,064,172			79,589		0.99	%			6,268,454			33,777		0.54	%
Federal funds purchased			31			1		3.23	%			77			1		1.30	%
Securities sold under agreement to repurchase			148,327			1,822		1.23	%			134,689			918		0.68	%
FHLB borrowed funds			1,180,897			22,354		1.89	%			1,117,817			14,513		1.30	%
Subordinated debentures			368,409			20,589		5.59	%			285,733			15,137		5.30	%
Total interest-bearing liabilities			9,761,836			124,355		1.27	%			7,806,770			64,346		0.82	%
Non-interest bearing liabilities
Non-interest bearing deposits			2,464,024									2,005,632
Other liabilities			60,298									45,425
Total liabilities			12,286,158									9,857,827
Shareholders' equity			2,281,055									1,641,278
Total liabilities and shareholders' equity		$	14,567,213								$	11,499,105
Net interest spread								4.12	%								4.32	%
Net interest income and margin - FTE					$	566,526		4.42	%					$	463,761		4.51	%

 

Home BancShares, Inc.
Non-GAAP Reconciliations
(Unaudited)
		Quarter Ended																				Year Ended
(Dollars and shares in thousands,		Dec. 31,			Sep. 30,				Jun. 30,				Mar. 31				Dec. 31,					Dec. 31,			Dec. 31,
except per share data)			2018				2018				2018				2018				2017				2018				2017
EARNINGS, AS ADJUSTED
GAAP net income available to common shareholders (A)		$	71,030			$	80,284			$	76,025			$	73,064			$	23,309			$	300,403			$	135,083
Adjustments
Gain on acquisitions			-				-				-				-				-				-				(3,807	)
Merger and acquisition expenses			6,013				-				-				-				-				6,013				25,743
Hurricane expenses(1)			470				-				-				-				-				470				33,445
Effect of tax rate change			-				-				-				-				36,935				-				36,935
Total adjustments			6,483				-				-				-				36,935				6,483				92,316
Tax-effect of adjustments(2)			1,694				-				-				-				-				1,694				22,626
Adjustments after-tax (B)			4,789				-				-				-				36,935				4,789				69,690
Earnings, as adjusted (C)		$	75,819			$	80,284			$	76,025			$	73,064			$	60,244			$	305,192			$	204,773
Average diluted shares outstanding (D)			173,311				174,867				173,936				174,383				174,349				174,124				151,528
GAAP diluted earnings per share: A/D		$	0.41			$	0.46			$	0.44			$	0.42			$	0.13			$	1.73			$	0.89
Adjustments after-tax: B/D			0.03				-				-				-				0.22				0.02				0.46
Diluted earnings per common share excluding gain on acquisitions, merger expenses, hurricane expenses & effect of  tax rate change: C/D		$	0.44			$	0.46			$	0.44			$	0.42			$	0.35			$	1.75			$	1.35
ANNUALIZED RETURN ON AVERAGE ASSETS
Return on average assets: A/H			1.90	%			2.14	%			2.13	%			2.08	%			0.66	%			2.06	%			1.17	%
Return on average assets excluding gain on acquisitions, merger expenses, hurricane expenses & effect of tax rate change: (ROA, as adjusted) (A+F)/H			2.03	%			2.14	%			2.13	%			2.08	%			1.69	%			2.10	%			1.78	%
Return on average assets excluding intangible amortization: (A+C)/(H-I)			2.07	%			2.33	%			2.32	%			2.27	%			0.73	%			2.25	%			1.26	%
Return on average assets excluding intangible amortization, provision for loan losses, gain on acquisitions, merger expenses, hurricane expenses and income taxes (ROA, as fully adjusted): (A+B+D+E+G)/(H-I)			2.88	%			3.07	%			3.15	%			3.07	%			3.10	%			3.04	%			3.13	%
GAAP net income available to common shareholders (A)		$	71,030			$	80,284			$	76,025			$	73,064			$	23,309			$	300,403			$	135,083
Amortization of intangibles (B)			1,587				1,617				1,624				1,626				1,631				6,454				4,207
Amortization of intangibles after-tax (C)			1,172				1,194				1,200				1,201				991				4,767				2,557
Provision for loan losses excluding hurricane provision (D)			-				-				2,722				1,600				4,926				4,322				11,361
Total adjustments (E)			6,483				-				-				-				36,935				6,483				92,316
Adjustments after-tax (F)			4,789				-				-				-				36,935				4,789				69,690
Income tax expense excluding effect of tax rate change (G)			21,487				25,350				24,310				23,970				35,873				95,117				99,065
Average assets (H)			14,838,979				14,880,931				14,304,483				14,234,369				14,113,936				14,567,213				11,499,105
Average goodwill, core deposits & other intangible assets (I)			1,002,070				1,001,843				975,345				976,451				979,209				989,033				576,258
(1)  Hurricane expenses for 2018 include $470 of damage expense related to Hurricane Michael and expenses for 2017 include $32,889 of provision for loan losses and $556 of damage expense related to Hurricane Irma.
(2)  Effective tax rate of 26.135% for 2018 and 39.225% for 2017, adjusted for non-taxable gain on acquisition and non-deductible merger-related costs.

 

Home BancShares, Inc.
Non-GAAP Reconciliations
(Unaudited)
		Quarter Ended																				Year Ended
(Dollars and shares in thousands,	Dec. 31,				Sep. 30,				Jun. 30,				Mar. 31				Dec. 31,					Dec. 31,			Dec. 31,
except per share data)			2018				2018				2018				2018				2017				2018				2017
ANNUALIZED RETURN ON AVERAGE COMMON EQUITY
Return on average common equity: A/C			12.05	%			13.74	%			13.54	%			13.38	%			4.17	%			13.17	%			8.23	%
Return on average common equity excluding gain on acquisitions, merger expenses, hurricane expenses & effect of tax rate change: (ROE, as adjusted) (A+B)/C			12.86	%			13.74	%			13.54	%			13.38	%			10.77	%			13.38	%			12.48	%
Return on average tangible common equity: A/(C-D)			21.08	%			24.20	%			23.90	%			23.94	%			7.46	%			23.25	%			12.68	%
Return on average tangible common equity excluding gain on acquisitions, merger expenses, hurricane expenses & effect of tax rate change: (ROTCE, as adjusted) (A+B)/(C-D)			22.50	%			24.20	%			23.90	%			23.94	%			19.29	%			23.62	%			19.23	%
GAAP net income available to common shareholders (A)		$	71,030			$	80,284			$	76,025			$	73,064			$	23,309			$	300,403			$	135,083
Adjustments after-tax (B)			4,789				-				-				-				36,935				4,789				69,690
Average common equity (C)			2,338,802				2,317,930				2,251,412				2,214,302				2,218,549				2,281,055				1,641,278
Average goodwill, core deposits & other intangible assets (D)			1,002,070				1,001,843				975,345				976,451				979,209				989,033				576,258
EFFICIENCY RATIO
Efficiency ratio:  ((C-E)/(A+B+D))			42.18	%			37.23	%			36.74	%			37.83	%			37.05	%			38.48	%			41.89	%
Efficiency ratio, as adjusted:  ((C-E-G)/(A+B+D-F))			38.30	%			37.40	%			37.03	%			37.97	%			37.35	%			37.67	%			37.66	%
																			-				-				-
Net interest income (A)		$	140,282			$	145,910			$	138,612			$	136,209			$	136,969			$	561,013			$	455,905
Non-interest income (B)			23,507				25,847				27,673				25,805				27,292				102,832				99,636
Non-interest expense (C)			71,272				66,123				63,228				63,380				63,218				264,003				240,208
Fully taxable equivalent adjustment (D)			1,412				1,489				1,403				1,209				1,983				5,513				7,856
Amortization of intangibles (E)			1,587				1,617				1,624				1,626				1,631				6,454				4,207
Adjustments:
Non-interest income:
Gain on acquisition		$	-			$	-			$	-			$	-			$	-			$	-			$	3,807
Gain (loss) on OREO			114				836				1,046				405				176				2,401				1,025
Gain (loss) on SBA loans			75				47				262				182				-				566				738
Gain (loss) on branches, equipment and other assets, net			(25	)			(102	)			-				7				2				(120	)			(960	)
Gain (loss) on securities			-				-				-				-				1,193				-				2,132
Recoveries on historic losses			-				-				-				-				-				-				-
Total non-interest income adjustments (F)		$	164			$	781			$	1,308			$	594			$	1,371			$	2,847			$	6,742
Non-interest expense:
Merger Expenses		$	6,013			$	-			$	-			$	-			$	-			$	6,013			$	25,743
Hurricane damage expense			470				-				-				-				-				470				556
Vacant properties write-downs			-				-				-				-				-				-				47
Total non-interest expense adjustments (G)		$	6,483			$	-			$	-			$	-			$	-			$	6,483			$	26,346

 

Home BancShares, Inc.
Non-GAAP Reconciliations
(Unaudited)
		Dec. 31,			Sep. 30,				Jun. 30,				Mar. 31,				Dec. 31,
(Dollars in thousands)			2018				2018				2018				2018				2017
TANGIBLE BOOK VALUE PER COMMON SHARE
Book value per common share: A/B		$	13.76			$	13.44			$	13.26			$	12.89			$	12.70
Tangible book value per common share: (A-C-D)/B			7.90				7.68				7.52				7.27				7.07
Total stockholders' equity (A)		$	2,349,886			$	2,341,026			$	2,314,013			$	2,238,181			$	2,204,291
End of period common shares outstanding (B)			170,720				174,135				174,511				173,603				173,633
Goodwill (C)		$	958,408			$	958,408			$	956,418			$	927,949			$	927,949
Core deposit and other intangibles (D)			42,896				44,484				46,101				47,726				49,351
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS
Equity to assets: B/A			15.36	%			15.70	%			15.51	%			15.63	%			15.25	%
Tangible common equity to tangible assets: (B-C-D)/(A-C-D)			9.43	%			9.62	%			9.42	%			9.46	%			9.11	%
																			-
Total assets (A)		$	15,302,438			$	14,912,738			$	14,924,120			$	14,323,229			$	14,449,760
Total stockholders' equity (B)			2,349,886				2,341,026				2,314,013				2,238,181				2,204,291
Goodwill (C)			958,408				958,408				956,418				927,949				927,949
Core deposit and other intangibles (D)			42,896				44,484				46,101				47,726				49,351