Home BancShares, Inc. Announces a 55.9% Increase in First Quarter Net Income

4/19/2018

CONWAY, Ark., April 19, 2018 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (NASDAQ:HOMB), parent company of Centennial Bank, today announced a quarterly profit of $73.1 million for the first quarter of 2018 compared to $46.9 million, for the same quarter in 2017, which represents a $26.2 million or 55.9% increase.  Diluted earnings per share for the first quarter of 2018 was $0.42 per share compared to $0.33 per share for 2017, representing an increase of $0.09 per share or 27.3% for the first quarter of 2018 when compared to the same quarter in the prior year.

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

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

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

Operating Highlights

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

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

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

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

Financial Condition

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

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

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

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

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

Branches

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

Conference Call

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

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

Non-GAAP Financial Measures

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

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

General

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

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

FOR MORE INFORMATION CONTACT:

Jennifer C. Floyd
Chief Accounting Officer & Investor Relations Officer
Home BancShares, Inc.
(501) 339-2929

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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Source: Home BancShares, Inc.

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