Home BancShares, Inc. Reaches $300 Million in Net Income for 2018 and Earns #1 Ranking on the Forbes “Best Banks in America” List Two Years in a Row – Centennial Bank
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Home BancShares, Inc. Reaches $300 Million in Net Income for 2018 and Earns #1 Ranking on the Forbes “Best Banks in America” List Two Years in a Row

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 31st 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 4th 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

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