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Section 1: 8-K (FORM 8-K)

Form 8-K
0001331520 False 0001331520 2020-01-16 2020-01-16 iso4217:USD xbrli:shares iso4217:USD xbrli:shares
 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 8-K

_________________

CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  January 16, 2020

_______________________________

Home BancShares, Inc.

(Exact name of registrant as specified in its charter)

_______________________________

Arkansas000-5190471-0682831
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification No.)

719 Harkrider, Suite 100

Conway, Arkansas 72032

(Address of Principal Executive Offices) (Zip Code)

(501) 339-2929

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

_______________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.01 per shareHOMBNASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 
 
Item 2.02. Results of Operations and Financial Condition.

     The Registrant hereby furnishes its January 16, 2020 press release announcing fourth quarter 2019 earnings, which is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 7.01. Regulation FD Disclosure.

     See Item 2.02. Results of Operations and Financial Condition.

Item 9.01. Financial Statements and Exhibits.

     (d) Exhibits

99.1 Press Release: Home BancShares, Inc. Announces Fourth Quarter Earnings.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 Home BancShares, Inc.
   
  
Date: January 16, 2020By: /s/ Jennifer C. Floyd        
  Jennifer C. Floyd
  Chief Accounting Officer
  

 

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Section 2: EX-99.1 (PRESS RELEASE)

EdgarFiling

EXHIBIT 99.1

Home BancShares, Inc. Tops Earnings Per Share and Revenue for the Fourth Quarter

CONWAY, Ark., Jan. 16, 2020 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (NASDAQ GS: HOMB), parent company of Centennial Bank, released fourth quarter earnings today revealing four consecutive quarters of increased profitability.

Highlights of the Fourth Quarter of 2019:

MetricQ4 2019Q3 2019Q2 2019Q1 2019Q4 2018
Net Income$73.3 million$72.8 million$72.2 million$71.4 million$71.0 million
Total Revenue (net)$167.8 million$167.7 million$164.1 million$163.1 million$163.8 million
ROA1.94%1.93%1.92%1.92%1.90%
NIM4.24%4.32%4.28%4.30%4.30%
Purchase Accounting Accretion$9.1 million$8.5 million$9.2 million$9.1 million$9.4 million
ROE11.71%11.84%12.18%12.34%12.05%
ROTCE (non-GAAP)(1)19.55%20.04%21.01%21.53%21.08%
Diluted Earnings Per Share$0.44$0.44$0.43$0.42$0.41
Non-Performing Assets to Total Assets0.43%0.45%0.51%0.52%0.51%
(1) Calculation of this metric and the reconciliation to GAAP are included in the schedules accompanying this release.
 

“I am very pleased with our fourth quarter results as well as our performance for all of 2019,” said John Allison, Chairman. “Increasing our profitability during a year of fluctuating interest rates is certainly an accomplishment to be proud of,” continued Allison.

“Our steady increase in two key banking metrics: diluted earnings per share and return on assets, showcase the solid foundation of Home BancShares,” said Tracy French, Centennial Bank President and Chief Executive Officer.

 Operating Highlights

Our net interest margin was 4.24% for the three-month period ended December 31, 2019 compared to 4.32% for the three-month period ended September 30, 2019. The yield on loans was 5.90% and 6.08% for the three months ended December 31, 2019 and September 30, 2019, respectively, as average loans decreased from $10.94 billion to $10.87 billion. Additionally, the rate on interest bearing deposits decreased to 1.21% as of December 31, 2019 from 1.36% as of September 30, 2019, with average balances of $8.82 billion and $8.64 billion, respectively. 

From the third quarter of 2019 to the fourth quarter of 2019, we experienced a $468,000 increase in investment premium amortization primarily resulting from increased prepayment speeds on investment securities due to the declining interest rate environment. This increased investment premium amortization negatively impacted the net interest margin for the quarter ended December 31, 2019 by 1.4 basis points.

During the third quarter of 2019, we had several interest income events primarily related to large payoffs.  These events totaled $2.8 million of interest income and increased the net interest margin by 8.4 basis points for the third quarter of 2019. During the fourth quarter of 2019, event interest income was $549,000 which increased the net interest margin by 1.7 basis points.  The lower event interest income from the third quarter of 2019 to the fourth quarter of 2019 resulted in a 6.7 basis point decline for the margin.

For the three months ended December 31, 2019 and September 30, 2019, we recognized $9.1 million and $8.5 million, respectively, in total net accretion for acquired loans and deposits. The $671,000 increase in accretion income increased the net interest margin by 2.0 basis points for the fourth quarter of 2019.

Purchase accounting accretion on acquired loans was $9.1 million and $8.4 million and average purchase accounting loan discounts were $91.9 million and $112.6 million for the three-month periods ended December 31, 2019 and September 30, 2019, respectively. Net amortization of time deposit premiums was $30,000 per quarter and net average remaining CD premiums were $266,000 and $297,000 for the three-month periods ended December 31, 2019 and September 30, 2019, respectively.

Net interest income on a fully taxable equivalent basis decreased $3.1 million, or 2.16%, to $141.1 million for the three-month period ended December 31, 2019, from $144.2 million for the three-month period ended September 30, 2019. This decrease in net interest income for the three-month period ended December 31, 2019 was the result of a $6.9 million decrease in interest income which was partially offset by a $3.8 million decrease in interest expense. The $6.9 million decrease in interest income was primarily the result of a $6.3 million decrease in loan interest income, a $490,000 decrease in investment income and a $119,000 decrease in income on deposits with other banks. The $3.8 million decrease in interest expense was primarily the result of a $2.7 million decrease in interest expense on deposits. This decrease was the result of a $2.2 million decrease in interest expense on savings and interest-bearing transaction accounts and a $534,000 decrease in interest expense on time deposits.

During the fourth quarter of 2019, no provision for loan loss was recorded. The Company continued to see strong asset quality. Non-performing loans to total loans was 0.50% as of December 31, 2019 compared to 0.54% as of September 30, 2019, an improvement of 7.26%. Non-performing assets to total assets improved by 5.63% from 0.45% as of September 30, 2019 to 0.43% as of December 31, 2019. For the fourth quarter of 2019, net charge-offs were $2.2 million compared to net charge-offs of $1.8 million for the third quarter of 2019.

The Company reported $28.0 million of non-interest income for the fourth quarter of 2019, compared to $24.7 million for the third quarter of 2019. The most important components of the fourth quarter non-interest income were $10.6 million from other service charges and fees, $6.8 million from service charges on deposits accounts, $3.8 million from mortgage lending income, $2.5 million from other income and $2.0 million from dividends from FHLB, FRB, FNBB & other equity investments. Non-interest income for the fourth quarter of 2019 includes $861,000 in dividends related to a special dividend from an equity investment.

Non-interest expense for the fourth quarter of 2019 was $71.3 million compared to $67.8 million for the third quarter of 2019. The most important components of the fourth quarter non-interest expense were $38.4 million from salaries and employee benefits, $19.9 million in other expense and $8.7 million in occupancy and equipment expenses. For the fourth quarter of 2019, our efficiency ratio was 41.26%. 

Non-interest expense for the fourth quarter of 2019 included $631,000 in other professional fees related to an outsourced special project, and non-interest expense for the third quarter of 2019 included a $2.3 million FDIC small bank assessment credit.

Financial Condition

Total loans receivable were $10.87 billion at December 31, 2019 compared to $11.07 billion at December 31, 2018. Total deposits were $11.28 billion at December 31, 2019 compared to $10.90 billion at December 31, 2018. Total assets were $15.03 billion at December 31, 2019 compared to $15.30 billion at December 31, 2018.

During the fourth quarter 2019, the Company experienced approximately $97.8 million in organic loan growth. Centennial CFG experienced $99.4 million of organic loan growth and had loans of $1.60 billion at December 31, 2019. Our legacy footprint experienced $1.7 million in organic loan decline during the quarter.  

Non-performing loans at December 31, 2019 were $17.9 million, $34.7 million, $429,000, $1.8 million and zero in the Arkansas, Florida, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $54.8 million. Non-performing assets at December 31, 2019 were $22.9 million, $39.2 million, $463,000, $1.8 million and zero in the Arkansas, Florida, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $64.4 million. 

The Company’s allowance for loan losses was $102.1 million at December 31, 2019, or 0.94% of total loans, compared to $108.8 million, or 0.98% of total loans, at December 31, 2018. As of December 31, 2019, and December 31, 2018, the Company’s allowance for loan losses was 186.2% and 169.4% of its total non-performing loans, respectively.

Stockholders’ equity was $2.51 billion at December 31, 2019 compared to $2.35 billion at December 31, 2018, an increase of approximately $161.6 million. The increase in stockholders’ equity is primarily associated with the $204.4 million increase in retained earnings and the $30.0 million increase in accumulated other comprehensive income which were partially offset by the repurchase of $84.9 million of our common stock during 2019.  Book value per common share was $15.10 at December 31, 2019 compared to $13.76 at December 31, 2018.  Tangible book value per common share (non-GAAP) was $9.12 at December 31, 2019 compared to $7.90 at December 31, 2018, an increase of 15.4%. 

Branches

The Company currently has 77 branches in Arkansas, 78 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 16, 2020.  We encourage all participants to pre-register for the conference call using the following link:  http://dpregister.com/10137496.  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: 10137496, which will be available until January 23, 2020 at 10:59 p.m. CT (11:59 p.m. ET).  Internet access to the call will be available live or in recorded version on the Company's website at www.homebancshares.com under “Investor Relations” for 12 months.

Non-GAAP Financial Measures

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

General

This release may contain 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, legislative and regulatory changes and risks associated with current and future regulations, technological changes and cybersecurity risks, competition from other financial institutions, changes in the assumptions used in making the forward-looking statements, and other factors described in reports we file with the Securities and Exchange Commission (the “SEC”), including those factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 26, 2019.

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

FOR MORE INFORMATION CONTACT:

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

 
Home BancShares, Inc.
Consolidated End of Period Balance Sheets
(Unaudited)
      
   Dec. 31,   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31, 
(In thousands)  2019   2019   2019   2019   2018 
      
ASSETS     
      
Cash and due from banks $168,914  $171,492  $183,745  $141,027  $175,024 
Interest-bearing deposits with other banks  321,687   270,804   373,557   421,443   482,915 
  Cash and cash equivalents  490,601   442,296   557,302   562,470   657,939 
Federal funds sold  -   1,650   1,075   1,700   325 
Investment securities - available-for-sale  2,083,838   2,087,508   2,053,939   2,013,123   1,785,862 
Investment securities - held-to-maturity  -   -   -   -   192,776 
Loans receivable  10,869,710   10,771,946   11,053,129   10,978,935   11,071,879 
Allowance for loan losses  (102,122)  (104,304)  (106,066)  (106,357)  (108,791)
  Loans receivable, net  10,767,588   10,667,642   10,947,063   10,872,578   10,963,088 
Bank premises and equipment, net  280,103   277,966   278,821   279,012   233,261 
Foreclosed assets held for sale  9,143   8,639   13,734   14,466   13,236 
Cash value of life insurance  102,562   102,003   149,708   149,353   148,621 
Accrued interest receivable  45,086   47,557   48,992   50,288   48,945 
Deferred tax asset, net  44,301   53,436   58,517   64,061   73,275 
Goodwill  958,408   958,408   958,408   958,408   958,408 
Core deposit and other intangibles  36,572   38,136   39,723   41,310   42,896 
Other assets  213,845   216,694   180,293   172,732   183,806 
  Total assets $15,032,047  $14,901,935  $15,287,575  $15,179,501  $15,302,438 
      
LIABILITIES AND STOCKHOLDERS' EQUITY     
      
Liabilities     
Deposits:     
  Demand and non-interest-bearing $2,367,091  $2,394,207  $2,575,696  $2,519,175  $2,401,232 
  Savings and interest-bearing transaction accounts  6,933,964   6,620,616   6,774,162   6,650,181   6,624,407 
  Time deposits  1,977,328   2,032,547   1,997,458   1,898,096   1,874,139 
  Total deposits  11,278,383   11,047,370   11,347,316   11,067,452   10,899,778 
Federal funds purchased  5,000   50,000   -   -   - 
Securities sold under agreements to repurchase  143,727   157,038   142,541   152,239   143,679 
FHLB and other borrowed funds  621,439   691,443   899,447   1,105,175   1,472,393 
Accrued interest payable and other liabilities  102,410   117,332   107,695   124,172   67,912 
Subordinated debentures  369,557   369,363   369,170   368,979   368,790 
  Total liabilities  12,520,516   12,432,546   12,866,169   12,818,017   12,952,552 
      
Stockholders' equity     
Common stock  1,664   1,669   1,675   1,682   1,707 
Capital surplus  1,537,091   1,542,858   1,550,999   1,560,994   1,609,810 
Retained earnings  956,555   904,980   853,964   803,629   752,184 
Accumulated other comprehensive (loss) income  16,221   19,882   14,768   (4,821)  (13,815)
  Total stockholders' equity  2,511,531   2,469,389   2,421,406   2,361,484   2,349,886 
  Total liabilities and stockholders' equity $15,032,047  $14,901,935  $15,287,575  $15,179,501  $15,302,438 
      


 
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)  2019   2019  2019   2019  2018   2019   2018 
         
Interest income        
  Loans $161,211  $167,470 $165,816  $163,848 $163,201  $658,345  $630,596 
  Investment securities        
  Taxable  9,707   10,343  10,650   10,706  9,873   41,406   36,833 
  Tax-exempt  3,260   3,193  3,183   3,379  3,456   13,015   13,257 
  Deposits - other banks  949   1,068  1,628   1,543  1,241   5,188   4,649 
  Federal funds sold  5   8  10   11  9   34   33 
         
Total interest income  175,132   182,082  181,287   179,487  177,780   717,988   685,368 
         
Interest expense        
  Interest on deposits  26,823   29,566  29,709   28,006  25,207   114,104   79,589 
  Federal funds purchased  33   21  -   -  -   54   1 
  FHLB borrowed funds  2,686   3,683  4,722   6,118  6,474   17,209   22,354 
  Securities sold under agreements to repurchase  652   628  630   634  602   2,544   1,822 
  Subordinated debentures  5,155   5,207  5,239   5,259  5,215   20,860   20,589 
         
Total interest expense  35,349   39,105  40,300   40,017  37,498   154,771   124,355 
         
Net interest income  139,783   142,977  140,987   139,470  140,282   563,217   561,013 
  Provision for loan losses  -   -  1,325   -  -   1,325   4,322 
Net interest income after        
  provision for loan losses  139,783   142,977  139,662   139,470  140,282   561,892   556,691 
         
Non-interest income        
  Service charges on deposit accounts  6,778   6,492  6,259   6,401  7,004   25,930   26,851 
  Other service charges and fees  10,636   8,710  8,177   6,563  7,598   34,086   36,591 
  Trust fees  390   382  391   403  290   1,566   1,552 
  Mortgage lending income  3,801   4,610  3,457   2,435  2,554   14,303   12,379 
  Insurance commissions  551   603  515   609  442   2,278   2,110 
  Increase in cash value of life insurance  562   714  740   736  737   2,752   2,856 
  Dividends from FHLB, FRB, FNBB & other  1,952   1,101  1,149   3,505  1,992   7,707   5,757 
  Gain (loss) on SBA loans  686   291  355   241  75   1,573   566 
 Gain (loss) on branches, equipment and                          
   other assets, net  35   12  (129)  79  (25)  (3)  (120)
  Gain (loss) on OREO, net  159   334  58   206  114   757   2,401 
  Gain (loss) on securities, net  (2)  -  -   -  -   (2)  - 
  Other income  2,481   1,500  2,094   2,494  2,726   8,569   11,889 
         
Total non-interest income  28,029   24,749  23,066   23,672  23,507   99,516   102,832 
         
Non-interest expense        
  Salaries and employee benefits  38,446   39,919  37,976   37,836  36,230   154,177   143,545 
  Occupancy and equipment  8,729   9,047  8,853   8,823  8,310   35,452   33,960 
  Data processing expense  4,294   4,059  3,838   3,970  3,642   16,161   14,428 
  Other operating expenses  19,873   14,739  16,957   18,428  23,090   69,997   72,070 
         
Total non-interest expense  71,342   67,764  67,624   69,057  71,272   275,787   264,003 
         
Income before income taxes   96,470   99,962  95,104   94,085  92,517   385,621   395,520 
  Income tax expense  23,208   27,199  22,940   22,735  21,487   96,082   95,117 
Net income $73,262  $72,763 $72,164  $71,350 $71,030  $289,539  $300,403 
         


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)  2019   2019   2019   2019   2018   2019   2018 
        
PER SHARE DATA       
        
Diluted earnings per common share $0.44  $0.44  $0.43  $0.42  $0.41  $1.73  $1.73 
Diluted earnings per common share, as adjusted, excluding special dividend from equity investment, outsourced special project expense, FDIC Small Bank Assessment Credit, Florida tax savings, BOLI redemption tax, merger expenses & hurricane expenses (non-GAAP)(1)  0.44   0.44   0.43   0.42   0.44   1.73   1.75 
Basic earnings per common share  0.44   0.44   0.43   0.42   0.41   1.73   1.73 
Dividends per share - common  0.1300   0.1300   0.1300   0.1200   0.1200   0.5100   0.4600 
Book value per common share  15.10   14.80   14.46   14.04   13.76   15.10   13.76 
Tangible book value per common share (non-GAAP)(1)  9.12   8.83   8.50   8.10   7.90   9.12   7.90 
        
        
STOCK INFORMATION       
        
Average common shares outstanding  166,696   167,178   167,791   169,592   173,023   167,804   173,657 
Average diluted shares outstanding  166,696   167,178   167,791   169,592   173,311   167,804   174,124 
End of period common shares outstanding  166,373   166,860   167,466   168,173   170,720   166,373   170,720 
        
        
ANNUALIZED PERFORMANCE METRICS       
        
Return on average assets  1.94%  1.93%  1.92%  1.92%  1.90%  1.93%  2.06%
Return on average assets excluding special dividend from equity investment, outsourced special project expense, FDIC Small Bank Assessment Credit, Florida tax savings, BOLI redemption tax, merger expenses & hurricane expenses (ROA, as adjusted) (non-GAAP)(1)  1.94%  1.96%  1.92%  1.92%  2.03%  1.94%  2.10%
Return on average assets excluding intangible amortization (non-GAAP)(1)  2.12%  2.10%  2.09%  2.09%  2.07%  2.10%  2.25%
Return on average common equity  11.71%  11.84%  12.18%  12.34%  12.05%  12.01%  13.17%
Return on average common equity excluding special dividend from equity investment, outsourced special project expense, FDIC Small Bank Assessment Credit, Florida tax savings, BOLI redemption tax, merger expenses & hurricane expenses: (ROE, as adjusted) (non-GAAP)(1)  11.68%  12.08%  12.22%  12.34%  12.86%  12.07%  13.38%
Return on average tangible common equity (non-GAAP)(1)  19.55%  20.04%  21.01%  21.53%  21.08%  20.49%  23.25%
Return on average tangible common equity excluding intangible amortization (non-GAAP)(1)  19.86%  20.36%  21.35%  21.88%  21.43%  20.83%  23.62%
Return on average tangible common equity excluding special dividend from equity investment, outsourced special project expense, FDIC Small Bank Assessment Credit, Florida tax savings, BOLI redemption tax, merger expenses & hurricane expenses: (ROTCE, as adjusted) (non-GAAP)(1)  19.51%  20.45%  21.08%  21.53%  22.50%  20.60%  23.62%
Efficiency ratio  41.26%  39.16%  39.93%  41.01%  42.18%  40.34%  38.48%
Efficiency ratio, as adjusted (non-GAAP)(1)  41.14%  40.60%  39.92%  40.52%  38.28%  40.55%  37.64%
Net interest margin - FTE  4.24%  4.32%  4.28%  4.30%  4.30%  4.29%  4.42%
Fully taxable equivalent adjustment $1,322  $1,247  $1,319  $1,367  $1,412  $5,255  $5,513 
Total revenue (net)  167,812   167,726   164,053   163,142   163,789   662,733   663,845 
Total purchase accounting accretion  9,133   8,462   9,240   9,055   9,432   35,890   41,455 
Average purchase accounting loan discounts  91,869   112,623   122,197   131,596   141,244   114,521   152,948 
        
        
OTHER OPERATING EXPENSES       
        
Advertising $1,340  $1,201  $1,095  $1,051  $1,214  $4,687  $4,472 
Merger and acquisition expenses  -   -   -   -   6,013   -   6,013 
Amortization of intangibles  1,565   1,587   1,587   1,586   1,587   6,325   6,455 
Electronic banking expense  1,870   1,901   1,851   1,903   1,969   7,525   7,622 
Directors' fees  396   380   392   434   319   1,602   1,281 
Due from bank service charges  289   272   282   238   289   1,081   1,003 
FDIC and state assessment  1,635   (532)  1,655   1,710   1,869   4,468   8,558 
Hurricane expense  -   -   -   897   470   897   470 
Insurance  790   698   661   697   737   2,846   3,100 
Legal and accounting  1,633   1,414   989   981   1,151   5,017   3,548 
Other professional fees  3,189   1,906   2,306   2,812   1,465   10,213   6,453 
Operating supplies  469   511   505   536   510   2,021   2,222 
Postage  327   320   293   326   325   1,266   1,303 
Telephone  312   289   306   303   324   1,210   1,405 
Other expense  6,058   4,792   5,035   4,954   4,848   20,839   18,165 
        
  Total other operating expenses $19,873  $14,739  $16,957  $18,428  $23,090  $69,997  $72,070 
        
        
(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,    Jun. 30,    Mar. 31,    Dec. 31,  
(Dollars in thousands)  2019   2019   2019   2019   2018 
      
BALANCE SHEET RATIOS     
      
Total loans to total deposits  96.38%  97.51%  97.41%  99.20%  101.58%
Common equity to assets  16.71%  16.57%  15.84%  15.56%  15.36%
Tangible common equity to tangible assets (non-GAAP)(1)  10.80%  10.59%  9.96%  9.60%  9.43%
      
      
LOANS RECEIVABLE     
      
Real estate     
  Commercial real estate loans     
  Non-farm/non-residential $4,412,769  $4,375,970  $4,495,558  $4,623,174  $4,806,684 
  Construction/land development  1,776,689   1,827,454   1,930,838   1,649,303   1,546,035 
  Agricultural  88,400   87,087   85,045   76,092   76,433 
  Residential real estate loans     
  Residential 1-4 family  1,819,221   1,808,099   1,852,784   1,947,119   1,975,586 
  Multifamily residential  488,278   498,079   523,789   538,098   560,475 
Total real estate  8,585,357   8,596,689   8,888,014   8,833,786   8,965,213 
Consumer  511,909   469,741   455,554   448,093   443,105 
Commercial and industrial  1,528,003   1,479,724   1,515,357   1,505,773   1,476,331 
Agricultural  63,644   90,343   80,621   58,966   48,562 
Other  180,797   135,449   113,583   132,317   138,668 
  Loans receivable $10,869,710  $10,771,946  $11,053,129  $10,978,935  $11,071,879 
   -   -   -   -   - 
Discount for credit losses on purchased loans $58,719  $89,615  $98,672  $106,617  $113,648 
Purchased loans, net of discount for credit losses on purchased loans  1,985,241   2,227,386   2,469,579   2,712,315   2,900,284 
      
      
ALLOWANCE FOR LOAN LOSSES     
      
Balance, beginning of period $104,304  $106,066  $106,357  $108,791  $110,191 
Loans charged off  2,631   2,302   2,279   3,391   1,814 
Recoveries of loans previously charged off  449   540   663   957   414 
  Net loans (recovered)/charged off  2,182   1,762   1,616   2,434   1,400 
Provision for loan losses  -   -   1,325   -   - 
Balance, end of period $102,122  $104,304  $106,066  $106,357  $108,791 
   -   -   -   -   - 
Net (recoveries) charge-offs to average total loans  0.08%  0.06%  0.06%  0.09%  0.05%
Allowance for loan losses to total loans  0.94%  0.97%  0.96%  0.97%  0.98%
      
      
NON-PERFORMING ASSETS     
      
Non-performing loans     
  Non-accrual loans $47,607  $48,640  $52,841  $49,616  $47,083 
  Loans past due 90 days or more  7,238   9,964   9,961   14,577   17,159 
  Total non-performing loans  54,845   58,604   62,802   64,193   64,242 
Other non-performing assets     
  Foreclosed assets held for sale, net  9,143   8,639   13,734   14,466   13,236 
  Other non-performing assets  447   447   947   947   497 
  Total other non-performing assets  9,590   9,086   14,681   15,413   13,733 
  Total non-performing assets $64,435  $67,690  $77,483  $79,606  $77,975 
      
Allowance for loan losses for loans to non-performing loans  186.20%  177.98%  168.89%  165.68%  169.35%
Non-performing loans to total loans  0.50%  0.54%  0.57%  0.58%  0.58%
Non-performing assets to total assets  0.43%  0.45%  0.51%  0.52%  0.51%
      
      
(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, 2019 September 30, 2019
  Average  Income/ Yield/   Average  Income/ Yield/ 
(Dollars in thousands) Balance  Expense Rate   Balance  Expense Rate 
        
ASSETS       
Earning assets       
  Interest-bearing balances due from banks $234,159 $949 1.61% $213,671 $1,068 1.98%
  Federal funds sold  1,158  5 1.71%  1,442  8 2.20%
  Investment securities - taxable  1,710,192  9,707 2.25%  1,705,647  10,343 2.41%
  Investment securities - non-taxable - FTE  376,613  4,285 4.51%  370,376  4,139 4.43%
  Loans receivable - FTE  10,866,386  161,508 5.90%  10,944,638  167,771 6.08%
  Total interest-earning assets  13,188,508  176,454 5.31%  13,235,774  183,329 5.50%
  Non-earning assets  1,755,860    1,757,458  
  Total assets $14,944,368   $14,993,232  
        
LIABILITIES AND SHAREHOLDERS' EQUITY       
Liabilities       
  Interest-bearing liabilities       
  Savings and interest-bearing transaction accounts $6,792,252 $17,406 1.02% $6,629,491 $19,615 1.17%
  Time deposits  2,025,032  9,417 1.84%  2,014,630  9,951 1.96%
  Total interest-bearing deposits  8,817,284  26,823 1.21%  8,644,121  29,566 1.36%
  Federal funds purchased  6,684  33 1.96%  4,801  21 1.74%
  Securities sold under agreement to repurchase  159,719  652 1.62%  143,628  628 1.73%
  FHLB borrowed funds  562,963  2,686 1.89%  748,577  3,683 1.95%
  Subordinated debentures  369,462  5,155 5.54%  369,269  5,207 5.59%
  Total interest-bearing liabilities  9,916,112  35,349 1.41%  9,910,396  39,105 1.57%
  Non-interest bearing liabilities       
Non-interest bearing deposits  2,433,384    2,530,664  
Other liabilities  112,466    114,352  
  Total liabilities  12,461,962    12,555,412  
Shareholders' equity  2,482,406    2,437,820  
  Total liabilities and shareholders' equity $14,944,368   $14,993,232  
Net interest spread   3.90%    3.93%
Net interest income and margin - FTE  $141,105 4.24%   $144,224 4.32%
        


Home BancShares, Inc.
Consolidated Net Interest Margin
(Unaudited)
        
  Year Ended
  December 31, 2019 December 31, 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 $254,548 $5,188 2.04% $265,071 $4,649 1.75%
  Federal funds sold  1,421  34 2.39%  2,876  33 1.15%
  Investment securities - taxable  1,663,512  41,406 2.49%  1,542,188  36,833 2.39%
  Investment securities - non-taxable - FTE  379,232  17,026 4.49%  386,790  17,434 4.51%
  Loans receivable - FTE  10,961,599  659,589 6.02%  10,618,796  631,932 5.95%
  Total interest-earning assets  13,260,312  723,243 5.45%  12,815,721  690,881 5.39%
  Non-earning assets  1,768,188    1,751,492  
  Total assets $15,028,500   $14,567,213  
        
LIABILITIES AND SHAREHOLDERS' EQUITY       
Liabilities       
  Interest-bearing liabilities       
  Savings and interest-bearing transaction accounts $6,674,493 $77,194 1.16% $6,418,186 $58,199 0.91%
  Time deposits  1,972,040  36,910 1.87%  1,645,986  21,390 1.30%
  Total interest-bearing deposits  8,646,533  114,104 1.32%  8,064,172  79,589 0.99%
  Federal funds purchased  2,895  54 1.87%  31  1 3.23%
  Securities sold under agreement to repurchase  149,665  2,544 1.70%  148,327  1,822 1.23%
  FHLB borrowed funds  848,969  17,209 2.03%  1,180,897  22,354 1.89%
  Subordinated debentures  369,175  20,860 5.65%  368,409  20,589 5.59%
  Total interest-bearing liabilities  10,017,237  154,771 1.55%  9,761,836  124,355 1.27%
  Non-interest bearing liabilities       
  Non-interest bearing deposits  2,489,254    2,464,024  
  Other liabilities  111,156    60,298  
  Total liabilities  12,617,647    12,286,158  
Shareholders' equity  2,410,853    2,281,055  
  Total liabilities and shareholders' equity $15,028,500   $14,567,213  
Net interest spread   3.90%    4.12%
Net interest income and margin - FTE  $568,472 4.29%   $566,526 4.42%
        


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)  2019   2019   2019   2019   2018   2019   2018 
         
EARNINGS, AS ADJUSTED        
         
GAAP net income available to common shareholders (A) $73,262  $72,763  $72,164  $71,350  $71,030  $289,539  $300,403 
Pre-tax adjustments        
FDIC Small Bank Assessment Credit  -   (2,291)  -   -   -   (2,291)  - 
Special dividend from equity investment  (861)  -   -   (2,134)  -   (2,995)  - 
Merger and acquisition expenses  -   -   -   -   6,013   -   6,013 
Hurricane expenses  -   -   -   897   470   897   470 
Outsourced special project expense  631   -   -   900   -   1,531   - 
Total pre-tax adjustments  (230)  (2,291)  -   (337)  6,483   (2,858)  6,483 
Tax-effect of adjustments  (59)  (592)  -   (87)  1,694   (738)  1,694 
Adjustments after-tax  (171)  (1,699)  -   (250)  4,789 - (2,120)  4,789 
Florida tax savings  -   (497)  252   245   -   -   - 
BOLI redemption tax  -   3,667   -   -   -   3,667   - 
Total adjustments after-tax (B)  (171)  1,471   252   (5)  4,789 - 1,547   4,789 
Earnings, as adjusted (C) $73,091  $74,234  $72,416  $71,345  $75,819  $291,086  $305,192 
         
Average diluted shares outstanding (D)  166,696   167,178   167,791   169,592   173,311   167,804   174,124 
         
GAAP diluted earnings per share: (A/D) $0.44  $0.44  $0.43  $0.42  $0.41  $1.73  $1.73 
Adjustments after-tax: (B/D)  -   -   -   -   0.03   -   0.02 
Diluted earnings per common share excluding special dividend from equity investment, outsourced special project expense, FDIC Small Bank Assessment Credit, Florida tax savings, BOLI redemption tax, merger expenses & hurricane expenses: (C/D) $0.44  $0.44  $0.43  $0.42  $0.44  $1.73  $1.75 
                          
         
ANNUALIZED RETURN ON AVERAGE ASSETS        
         
Return on average assets: (A/E)  1.94%  1.93%  1.92%  1.92%  1.90%  1.93%  2.06%
Return on average assets excluding special dividend from equity investment, outsourced special project expense, FDIC Small Bank Assessment Credit, Florida tax savings, BOLI redemption tax, merger expenses & hurricane expenses: (ROA, as adjusted) ((A+D)/E)  1.94%  1.96%  1.92%  1.92%  2.03%  1.94%  2.10%
Return on average assets excluding intangible amortization: ((A+C)/(E-F))  2.12%  2.10%  2.09%  2.09%  2.07%  2.10%  2.25%
         
GAAP net income available to common shareholders (A) $73,262  $72,763  $72,164  $71,350  $71,030  $289,539  $300,403 
Amortization of intangibles (B)  1,565   1,587   1,587   1,586   1,587   6,325   6,455 
Amortization of intangibles after-tax (C)  1,161   1,177   1,177   1,177   1,172   4,692   4,768 
Adjustments after-tax (D)  (171)  1,471   252   (5)  4,789   1,547   4,789 
Average assets (E)  14,944,368   14,993,232   15,098,600   15,079,672   14,838,979   15,028,500   14,567,213 
Average goodwill, core deposits & other intangible assets (F)  995,721   997,309   998,898   1,000,494   1,002,070   998,090   989,033 
         


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)  2019   2019   2019   2019   2018   2019   2018 
        
ANNUALIZED RETURN ON AVERAGE COMMON EQUITY          
        
Return on average common equity: (A/D)  11.71%  11.84%  12.18%  12.34%  12.05%  12.01%  13.17%
Return on average common equity excluding special dividend from equity investment, outsourced special project expense, FDIC Small Bank Assessment Credit, Florida tax savings, BOLI redemption tax, merger expenses & hurricane expenses: (ROE, as adjusted) ((A+C)/D)  11.68%  12.08%  12.22%  12.34%  12.86%  12.07%  13.38%
Return on average tangible common equity: (A/(D-E))  19.55%  20.04%  21.01%  21.53%  21.08%  20.49%  23.25%
Return on average tangible common equity excluding intangible amortization: (B/(D-E))  19.86%  20.36%  21.35%  21.88%  21.43%  20.83%  23.62%
Return on average tangible common equity excluding special dividend from equity investment, outsourced special project expense, FDIC Small Bank Assessment Credit, Florida tax savings, BOLI redemption tax, merger expenses & hurricane expenses: (ROTCE, as adjusted) ((A+C)/(D-E))  19.51%  20.45%  21.08%  21.53%  22.50%  20.60%  23.62%
        
GAAP net income available to common shareholders (A) $73,262  $72,763  $72,164  $71,350  $71,030  $289,539  $300,403 
Earnings excluding intangible amortization (B)  74,423   73,940   73,341   72,527   72,202   294,231   305,171 
Adjustments after-tax (C)  (171)  1,471   252   (5)  4,789   1,547   4,789 
Average common equity (D)  2,482,406   2,437,820   2,376,718   2,344,657   2,338,802   2,410,853   2,281,055 
Average goodwill, core deposits & other intangible assets (E)  995,721   997,309   998,898   1,000,494   1,002,070   998,090   989,033 
        
        
EFFICIENCY RATIO       
        
Efficiency ratio: ((C-E)/(A+B+D))  41.26%  39.16%  39.93%  41.01%  42.18%  40.34%  38.48%
Efficiency ratio, as adjusted: ((C-E-G)/(A+B+D-F))  41.14%  40.60%  39.92%  40.52%  38.28%  40.55%  37.64%
        -   - 
Net interest income (A) $139,783  $142,977  $140,987  $139,470  $140,282  $563,217  $561,013 
Non-interest income (B)  28,029   24,749   23,066   23,672   23,507   99,516   102,832 
Non-interest expense (C)  71,342   67,764   67,624   69,057   71,272   275,787   264,003 
Fully taxable equivalent adjustment (D)  1,322   1,247   1,319   1,367   1,412   5,255   5,513 
Amortization of intangibles (E)  1,565   1,587   1,587   1,586   1,587   6,325   6,455 
        
Adjustments:       
Non-interest income:       
Special dividend from equity investment $861  $-  $-  $2,134  $-  $2,995  $- 
Gain (loss) on OREO  159   334   58   206   114   757   2,401 
Gain (loss) on branches, equipment and other assets, net  35   12   (129)  79   (25)  (3)  (120)
Gain (loss) on securities  (2)  -   -   -   -   (2)  - 
Total non-interest income adjustments (F) $1,053  $346  $(71) $2,419  $89  $3,747  $2,281 
        
Non-interest expense:       
FDIC Small Bank Assessment Credit $-  $(2,291) $-  $-  $-  $(2,291) $- 
Merger Expenses  -   -   -   -   6,013   -   6,013 
Hurricane damage expense  -   -   -   897   470   897   470 
  Outsourced special project expense  631   -   -   900   -   1,531   - 
Total non-interest expense adjustments (G) $631  $(2,291) $-  $1,797  $6,483  $137  $6,483 
        


Home BancShares, Inc.
Non-GAAP Reconciliations
(Unaudited)
      
   Dec. 31,   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31, 
(Dollars in thousands)  2019   2019   2019   2019   2018 
      
TANGIBLE BOOK VALUE PER COMMON SHARE     
      
Book value per common share: (A/B) $15.10  $14.80  $14.46  $14.04  $13.76 
Tangible book value per common share: ((A-C-D)/B)  9.12   8.83   8.50   8.10   7.90 
      
Total stockholders' equity (A) $2,511,531  $2,469,389  $2,421,406  $2,361,484  $2,349,886 
End of period common shares outstanding (B)  166,373   166,860   167,466   168,173   170,720 
Goodwill (C) $958,408  $958,408  $958,408  $958,408  $958,408 
Core deposit and other intangibles (D)  36,572   38,136   39,723   41,310   42,896 
      
      
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS     
      
Equity to assets: (B/A)  16.71%  16.57%  15.84%  15.56%  15.36%
Tangible common equity to tangible assets: ((B-C-D)/(A-C-D))  10.80%  10.59%  9.96%  9.60%  9.43%
      
Total assets (A) $15,032,047  $14,901,935  $15,287,575  $15,179,501  $15,302,438 
Total stockholders' equity (B)  2,511,531   2,469,389   2,421,406   2,361,484   2,349,886 
Goodwill (C)  958,408   958,408   958,408   958,408   958,408 
Core deposit and other intangibles (D)  36,572   38,136   39,723   41,310   42,896 
      


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