Home BancShares, Inc. Announces a 30.6% Increase in Third Quarter Earnings, $350.8 Million of Quarterly Organic Loan Growth and a 39% Efficiency Ratio

CONWAY, Ark., Oct. 15, 2015 (GLOBE NEWSWIRE) — Home BancShares, Inc. (NASDAQ:HOMB), parent company of Centennial Bank, today announced a 30.6% increase in quarterly profit to $35.7 million, or $0.52 diluted earnings per share, for the third quarter of 2015 compared to $27.4 million, or $0.41 diluted earnings per share, for the same quarter in 2014. Excluding the $474,000 of merger expenses associated with the recently completed acquisition of Florida Business BancGroup, Inc., diluted earnings per share for the third quarter of 2015 was $0.53 per share. The Company also announced $350.8 million in quarterly organic non-covered loan growth during the third quarter of 2015 and a core efficiency ratio of 39.30%.

Because acquisitions are growth and capital management strategies, earnings excluding amortization of intangibles after-tax are useful in evaluating the Company. Diluted earnings per share excluding intangible amortization for the third quarter of 2015 was $0.53 compared to $0.42 diluted earnings per share excluding intangible amortization for the same period in 2014.

“In the last six months, there has been a $906.1 million increase in our total loan portfolio,” said John Allison, Chairman. “By maintaining a strong capital position, Home BancShares was adequately prepared to support loan growth when the opportunities presented themselves. We will continue seeking growth opportunities in areas within and surrounding our existing footprint while supporting additional loan growth in our legacy organization so we can enhance the franchise value of HOMB and maximize returns to our shareholders.”

Tracy French, Centennial Bank President and Chief Executive Officer, added, “We are pleased with the third quarter’s strong financial results and another active quarter of loan growth. We are busy maintaining this growth momentum with our recently closed acquisition of Bay Cities on October 1, 2015, which is due to have its systems conversion on November 6, 2015.”

“In the last several quarters our Chairman has made it known that his goal for us was to reach a 39.99% core efficiency ratio,” said Donna Townsell, Centennial Bank Vice President of Corporate Efficiencies. “Since we started tracking the core efficiency in 2008, we have dropped from 59.25% to 39.30% while acquiring fifteen banks. This group of bankers worked hard to get us there and know it will be hard work to stay there, but measuring revenue versus expense has become part of the culture at Home BancShares.”

Operating Highlights

Each quarter we perform credit impairment tests on the loans acquired in our FDIC loss sharing and non-loss sharing acquisitions. During our third quarter 2015 impairment testing, several non-loss share pools were determined to have a material projected credit improvement. This projected credit improvement offset by the expected decline in accretion income from the other purchase accounting loans, resulted in a net improvement of $2.1 million of recognized accretion income when compared to the second quarter of 2015.  Consequently, yields on loans and net interest margin for the quarter just ended are slightly increased when compared to the second quarter of 2015.    

Net interest income for the third quarter of 2015 increased 15.9% to $91.1 million from $78.6 million during the third quarter of 2014.  For the third quarter of 2015, the effective yield on non-covered loans and covered loans was 5.77% and 19.04%, respectively.  Net interest margin, on a fully taxable equivalent basis, was 5.03% for the quarter just ended. 

During the third quarter of 2015, the Company recorded a provision for loan loss of $7.1 million compared to $4.2 million in the third quarter of 2014. This expected increase of $2.9 million is primarily a reflection of the organic loan growth generated during 2015.

The Company reported $16.5 million of non-interest income for the third quarter of 2015, compared to $10.8 million for the third quarter of 2014. The most important components of the third quarter non-interest income were $6.6 million from other service charges and fees, $6.3 million from service charges on deposits accounts, $3.1 million from mortgage lending income, $993,000 from other income, $548,000 from insurance commissions, and $398,000 from trust fees offset by the $2.0 million of net amortization on the FDIC indemnification asset.  

As a result of the recognized credit improvements in prior years, the Company has been decreasing the base of the indemnification asset to be recognized as FDIC amortization over the weighted average life of the loss-share agreements. The recognition of this amortization has begun to slow down as the five-year loss-share is beginning to expire. Consequently, there was a $5.0 million decline of FDIC indemnification amortization from the third quarter of 2014 to the third quarter of 2015. 

Non-interest expense for the third quarter of 2015 was $44.6 million compared to $42.8 million for the third quarter of 2014. This increase is primarily associated with the establishment of the Centennial Commercial Finance Group (Centennial CFG) in New York City during the second quarter of 2015. For the third quarter of 2015, our core efficiency ratio was 39.30% which is improved from the 41.88% reported for third quarter of 2014. 

Financial Condition

Total non-covered loans were $5.90 billion at September 30, 2015 compared to $4.82 billion at December 31, 2014. Total covered loans were $105.4 million at September 30, 2015 compared to $240.2 million at December 31, 2014.  Total deposits were $5.95 billion at September 30, 2015 compared to $5.42 billion at December 31, 2014.  Total assets were $8.52 billion at September 30, 2015 compared to $7.40 billion at December 31, 2014.

Since the second quarter of 2015, non-covered loans increased $401.1 million. During the third quarter of 2015, the five-year loss share agreements on the commercial real estate and commercial and industrial loans acquired through the FDIC-assisted acquisitions of Coastal and Bayside concluded. As a result, $50.3 million of these loans including their associated discounts previously classified as covered loans have migrated to non-covered loans status. As a result, the Company produced approximately $350.8 million of organic non-covered loan growth since June 30, 2015, of which $169.5 million is associated with loan originations in the legacy footprint with the remaining $181.3 million being associated with Centennial CFG.

Non-performing non-covered loans were $48.8 million as of September 30, 2015, of which $29.4 million, $18.4 million and $985,000 were located in Arkansas, Florida and Alabama, respectively. Non-performing non-covered loans as a percent of total non-covered loans were 0.83% as of September 30, 2015 compared to 0.82% as of December 31, 2014.  Non-performing non-covered assets were $67.0 million as of September 30, 2015, of which $41.4 million, $24.7 million and $985,000 were located in Arkansas, Florida and Alabama, respectively. Non-performing non-covered assets as a percent of total non-covered assets were 0.80% as of September 30, 2015 compared to 0.79% as of December 31, 2014.

The Company’s allowance for loan losses for non-covered loans was $60.6 million at September 30, 2015, or 1.03% of total non-covered loans, compared to $52.5 million, or 1.09% of total non-covered loans, at December 31, 2014.  As of September 30, 2015 and December 31, 2014, the allowance for loan losses for non-covered loans plus discount for credit losses on non-covered loans acquired to total non-covered loans plus discount for credit losses on non-covered loans acquired was 3.23% and 3.88%, respectively. This decrease is primarily the result of the increase in non-covered loans during 2015 plus projected credit improvement on the acquired impaired loans. As of September 30, 2015 and December 31, 2014, the Company’s allowance for loan losses for non-covered loans was 124% and 133% of its total non-performing non-covered loans, respectively.

Stockholders’ equity was $1.09 billion at September 30, 2015 compared to $1.02 billion at December 31, 2014, an increase of $76.0 million. Book value per common share was $16.05 at September 30, 2015 compared to $15.03 at December 31, 2014.  Tangible book value per common share was $11.03 at September 30, 2015 compared to $9.90 at December 31, 2014 for an annualized increase of 15.3%. 

Branches

In an effort to achieve efficiencies primarily from the acquisitions, the Company closed two Arkansas, one Alabama and two Florida locations during the third quarter of 2015 and has plans to close one Arkansas and three Florida locations during the fourth quarter of 2015. The Company currently has 80 branches in Arkansas, 58 branches in Florida, 6 branches in Alabama and a loan production office 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, October 15, 2015. Interested parties can listen to this 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: 10072538, which will be available until October 22, 2015 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. 

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, including, but not limited to, economic conditions, credit quality, interest rates, loan demand, the ability to successfully integrate new acquisitions and changes in the assumptions used in making the forward-looking statements, could cause actual results to differ materially from those contemplated by the forward-looking statements. Additional information on factors that might affect Home BancShares, Inc.’s financial results is included in its Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission (the “SEC”) on February 27, 2015, and in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015.

Home BancShares, Inc. is a bank holding company, headquartered in Conway, Arkansas. Our 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 a loan production office in New York City. The Company’s common stock is traded through the NASDAQ Global Select Market under the symbol “HOMB.”

 Home BancShares, Inc. 
 Consolidated End of Period Balance Sheets 
 (Unaudited) 
           
   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31,   Sep. 30, 
 (In thousands)   2015   2015   2015   2014   2014 
           
ASSETS          
           
Cash and due from banks   $ 120,262  $ 116,682  $ 115,448  $ 105,438  $ 109,067
Interest-bearing deposits with other banks   108,394  87,729  82,123  7,090  28,416
Cash and cash equivalents   228,656  204,411  197,571  112,528  137,483
Federal funds sold   —   —   6,100  250  44,275
Investment securities – available-for-sale   1,141,405  1,080,000  1,069,745  1,067,287  1,067,617
Investment securities – held-to-maturity   324,949  336,993  344,518  356,790  296,036
Loans receivable not covered by loss share   5,900,175  5,499,028  4,929,989  4,817,314  4,583,015
Loans receivable covered by FDIC loss share   105,414  159,891  169,460  240,188  250,970
Allowance for loan losses   (63,659)  (60,258)  (56,526)  (55,011)  (52,844)
Loans receivable, net   5,941,930  5,598,661  5,042,923  5,002,491  4,781,141
Bank premises and equipment, net   205,505  209,425  209,326  206,912  211,726
Foreclosed assets held for sale not covered by loss share   18,204  16,539  17,402  16,951  19,367
Foreclosed assets held for sale covered by FDIC loss share   2,612  4,472  6,309  7,871  13,513
FDIC indemnification asset   11,290  15,874  19,435  28,409  42,104
Cash value of life insurance   75,281  75,015  74,722  74,444  70,913
Accrued interest receivable   26,977  24,447  23,542  24,075  23,366
Deferred tax asset, net   63,075  62,088  59,594  65,227  68,070
Goodwill   322,728  322,728  322,728  325,423  313,320
Core deposit and other intangibles   18,828  19,816  20,916  20,925  21,004
Other assets   134,113  103,913  99,143  93,689  86,436
Total assets   $ 8,515,553  $ 8,074,382  $ 7,513,974  $ 7,403,272  $ 7,196,371
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
Liabilities          
Deposits:           
Demand and non-interest-bearing   $ 1,409,949  $ 1,406,051  $ 1,328,689  $ 1,203,306  $ 1,170,441
Savings and interest-bearing transaction accounts   3,230,722  3,099,522  3,120,803  2,974,850  2,830,829
Time deposits   1,312,343  1,372,463  1,452,733  1,245,815  1,276,001
Total deposits   5,953,014  5,878,036  5,902,225  5,423,971  5,277,271
Federal funds purchased   —   —   —   —   — 
Securities sold under agreements to repurchase   134,142  150,746  178,615  176,465  160,895
FHLB borrowed funds   1,216,152  866,907  277,477  697,957  713,553
Accrued interest payable and other liabilities   60,141  56,166  55,268  28,761  25,145
Subordinated debentures   60,826  60,826  60,826  60,826  60,826
Total liabilities   7,424,275  7,012,681  6,474,411  6,387,980  6,237,690
           
Stockholders’ equity           
Common stock   680  677  676  676  665
Capital surplus   782,500  780,731  779,856  781,328  749,573
Retained earnings   299,984  274,409  248,951  226,279  203,107
Accumulated other comprehensive income   8,114  5,884  10,080  7,009  5,336
Total stockholders’ equity   1,091,278  1,061,701  1,039,563  1,015,292  958,681
Total liabilities and stockholders’ equity   $ 8,515,553  $ 8,074,382  $ 7,513,974  $ 7,403,272  $ 7,196,371
 
 
 Home BancShares, Inc. 
 Consolidated Statements of Income 
 (Unaudited) 
               
   Quarter Ended   Nine Months Ended 
   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31,   Sep. 30,   Sep. 30,   Sep. 30, 
(In thousands)   2015   2015   2015   2014   2014   2015   2014 
               
               
Interest income               
Loans   $ 88,671  $ 82,360  $ 75,487  $ 80,011  $ 75,917  $ 246,518  $ 226,334
Investment securities               
Taxable   5,157  5,130  5,543  5,168  4,905  15,830  14,137
Tax-exempt   2,789  2,774  2,752  2,843  2,552  8,315  7,248
Deposits – other banks   32  44  91  24  20  167  73
Federal funds sold   4  3  8  15  7  15  35
               
Total interest income   96,653  90,311  83,881  88,061  83,401  270,845  247,827
               
Interest expense               
Interest on deposits   3,045  3,311  3,258  3,074  3,243  9,614  9,722
Federal funds purchased   1  1  1  1  2  3  2
FHLB borrowed funds   2,030  1,053  1,050  1,108  1,035  4,133  2,933
Securities sold under agreements to repurchase   146  163  172  181  186  481  536
Subordinated debentures   340  334  329  327  330  1,003  986
               
Total interest expense   5,562  4,862  4,810  4,691  4,796  15,234  14,179
               
Net interest income   91,091  85,449  79,071  83,370  78,605  255,611  233,648
Provision for loan losses   7,106  5,381  3,787  5,370  4,241  16,274  17,294
Net interest income after provision for loan losses   83,985  80,068  75,284  78,000  74,364  239,337  216,354
               
Non-interest income               
Service charges on deposit accounts   6,250  6,056  5,418  6,143  6,275  17,724  18,379
Other service charges and fees   6,644  6,499  6,216  6,273  5,977  19,359  17,641
Trust fees   398  1,186  432  313  306  2,016  1,065
Mortgage lending income   3,132  2,955  1,932  2,341  1,901  8,019  5,215
Insurance commissions   548  640  567  977  984  1,755  3,334
Income from title services   28  36  34  60  59  98  162
Increase in cash value of life insurance   268  295  308  319  322  871  891
Dividends from FHLB, FRB, Bankers’ bank & other   433  419  415  405  389  1,267  1,206
Gain on acquisitions   —   —   1,635  —   —   1,635  — 
Gain on sale of SBA loans   151  —   —   —   183  151  183
Gain (loss) on sale of premises & equipment, net   (266)  21  8  (97)  (35)  (237)  419
Gain (loss) on OREO, net   (40)  (263)  493  264  529  190  1,927
Gain (loss) on securities, net   —   —   4  —   —   4  — 
FDIC indemnification accretion/(amortization), net   (1,994)  (2,202)  (3,956)  (7,439)  (6,947)  (8,152)  (18,313)
Other income   993  1,385  1,164  652  888  3,542  2,442
               
Total non-interest income   16,545  17,027  14,670  10,211  10,831  48,242  34,551
               
Non-interest expense               
Salaries and employee benefits   22,225  22,056  19,390  19,911  19,368  63,671  57,114
Occupancy and equipment   6,540  6,678  6,049  6,320  6,234  19,267  18,711
Data processing expense   2,619  3,063  2,419  1,842  1,801  8,101  5,387
Other operating expenses   13,209  11,453  12,855  13,076  15,414  37,517  39,582
               
Total non-interest expense   44,593  43,250  40,713  41,149  42,817  128,556  120,794
               
Income before income taxes   55,937  53,845  49,241  47,062  42,378  159,023  130,111
Income tax expense   20,196  19,939  18,122  17,136  15,007  58,257  46,974
Net income   $ 35,741  $ 33,906  $ 31,119  $ 29,926  $ 27,371  $ 100,766  $ 83,137
 
 
Home BancShares, Inc. 
Selected Financial Information 
(Unaudited) 
               
   Quarter Ended   Nine Months Ended 
(Dollars and shares in thousands,   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31,   Sep. 30,   Sep. 30,   Sep. 30, 
except per share data)   2015   2015   2015   2014   2014   2015   2014 
               
               
PER SHARE DATA              
               
Diluted earnings per common share   $ 0.52  $ 0.50  $ 0.46  $ 0.44  $ 0.41  $ 1.48  $ 1.26
Diluted earnings per common share excluding merger expenses   0.53  0.50  0.47  0.46  0.45  1.50  1.31
Diluted earnings per common share excluding intangible amortization   0.53  0.51  0.47  0.46  0.42  1.51  1.29
Basic earnings per common share   0.53  0.50  0.46  0.44  0.41  1.49  1.27
Dividends per share – common   0.150  0.125  0.125  0.100  0.100  0.400  0.250
Book value per common share   16.05  15.67  15.38  15.03  14.42  16.05  14.42
Tangible book value per common share   11.03  10.61  10.30  9.90  9.39  11.03  9.39
               
STOCK INFORMATION              
               
Average common shares outstanding   67,869  67,632  67,589  67,291  66,223  67,698  65,499
Average diluted shares outstanding   68,081  67,915  67,923  67,653  66,616  67,971  65,889
End of period common shares outstanding   68,000  67,774  67,577  67,571  66,483  68,000  66,483
               
ANNUALIZED PERFORMANCE METRICS              
               
Return on average assets  1.72% 1.72% 1.67% 1.62% 1.56% 1.71% 1.63%
Return on average assets excluding intangible amortization  1.83% 1.83% 1.79% 1.74% 1.68% 1.82% 1.76%
Return on average assets excluding intangible amortization, provision for loan losses, merger expenses, bargain purchase gain, gain on life insurance proceeds and income taxes (Core ROA)  3.24% 3.20% 3.04% 3.13% 3.08% 3.17% 3.20%
Return on average common equity  13.23% 12.98% 12.33% 11.96% 11.58% 12.86% 12.48%
Return on average tangible common equity excluding intangible amortization  19.76% 19.68% 18.99% 18.72% 18.46% 19.49% 20.21%
Efficiency ratio  39.79% 40.39% 41.41% 41.87% 45.70% 40.49% 42.95%
Core efficiency ratio  39.30% 40.30% 40.84% 40.15% 41.88% 40.11% 41.61%
Net interest margin – FTE  5.03% 5.00% 4.94% 5.26% 5.26% 4.99% 5.41%
Fully taxable equivalent adjustment   $ 1,951  $ 1,879  $ 1,855  $ 1,911  $ 1,728  $ 5,685  $ 4,943
Total revenue   113,198  107,338  98,551  98,272  94,232  319,087  282,378
               
EARNINGS EXCLUDING              
INTANGIBLE AMORTIZATION              
               
GAAP net income available to common shareholders   $ 35,741  $ 33,906  $ 31,119  $ 29,926  $ 27,371  $ 100,766  $ 83,137
Intangible amortization after-tax   600  669  686  707  701  1,955  2,107
Earnings excluding intangible amortization   $ 36,341  $ 34,575  $ 31,805  $ 30,633  $ 28,072  $ 102,721  $ 85,244
               
GAAP diluted earnings per share   $ 0.52  $ 0.50  $ 0.46  $ 0.44  $ 0.41  $ 1.48  $ 1.26
Intangible amortization after-tax   0.01  0.01  0.01  0.02  0.01  0.03  0.03
Diluted earnings per share excluding intangible amortization   $ 0.53  $ 0.51  $ 0.47  $ 0.46  $ 0.42  $ 1.51  $ 1.29
               
OTHER OPERATING EXPENSES              
               
Advertising   $ 906  $ 657  $ 779  $ 792  $ 673  $ 2,342  $ 1,776
Merger and acquisition expenses   474  —   1,417  1,711  3,772  1,891  4,727
Amortization of intangibles   988  1,100  1,129  1,163  1,153  3,217  3,467
Electronic banking expense   1,352  1,299  1,232  1,351  1,307  3,883  3,957
Directors’ fees   233  281  295  243  236  809  669
Due from bank service charges   291  286  215  199  200  792  604
FDIC and state assessment   1,276  1,172  1,396  1,144  972  3,844  3,144
Insurance   617  617  666  685  657  1,900  1,853
Legal and accounting   338  706  447  666  510  1,491  1,346
Other professional fees   947  560  488  394  716  1,995  1,806
Operating supplies   464  509  434  473  468  1,407  1,455
Postage   293  295  309  329  323  897  1,002
Telephone   444  470  504  503  548  1,418  1,465
Other expense   4,586  3,501  3,544  3,423  3,879  11,631  12,311
               
Total other operating expenses   $ 13,209  $ 11,453  $ 12,855  $ 13,076  $ 15,414  $ 37,517  $ 39,582
 
 
Home BancShares, Inc. 
Selected Financial Information 
(Unaudited) 
           
   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31,   Sep. 30, 
(Dollars in thousands)   2015   2015   2015   2014   2014 
           
BALANCE SHEET RATIOS          
           
Total loans to total deposits  100.88% 96.27% 86.40% 93.24% 91.60%
Common equity to assets  12.8% 13.1% 13.8% 13.7% 13.3%
Tangible common equity to tangible assets  9.2% 9.3% 9.7% 9.5% 9.1%
           
ALLOWANCE FOR LOAN LOSSES          
           
Non-Covered           
Balance, beginning of period   $ 55,877  $ 52,731  $ 52,471  $ 50,695  $ 48,248
Loans charged off   3,966  3,339  3,150  3,811  2,544
Recoveries of loans previously charged off   535  1,184  541  1,121  750
Net loans (recovered)/charged off   3,431  2,155  2,609  2,690  1,794
Provision for loan losses   7,106  5,301  2,869  4,466  4,241
Reclass of provision for loan losses attributable to FDIC loss share agreements   1,029  —   —   —   — 
Balance, end of period   $ 60,581  $ 55,877  $ 52,731  $ 52,471  $ 50,695
           
Discount for credit losses on non-covered loans acquired   134,131  131,746  134,699  139,720  148,172
Net (recoveries) charge-offs on loans not covered by loss share to average non-covered loans  0.24% 0.16% 0.22% 0.23% 0.16%
Allowance for loan losses for non-covered loans to total non-covered loans  1.03% 1.02% 1.07% 1.09% 1.11%
Allowance for loan losses for non-covered loans plus discount for credit losses on non-covered loans acquired to total non-covered loans plus discount  for credit losses on non-covered loans acquired  3.23% 3.33% 3.70% 3.88% 4.20%
           
Covered          
Balance, beginning of period   $ 4,381  $ 3,795  $ 2,540  $ 2,149  $ 2,925
Loans charged off   251  —   772  858  863
Recoveries of loans previously charged off   (318)  186  265  345  87
Net loans charged off/(recovered)   569  (186)  507  513  776
Provision for loan losses forecasted outside of loss share   295  —   (295)  904  — 
Provision for loan losses before benefit attributable to FDIC loss share agreements   —   400  2,057  —   — 
Benefit attributable to FDIC loss share agreements   (295)  (320)  (844)  —   — 
Net provision for loan losses   —   80  918  904  — 
Reclass of provision for loan losses attributable to FDIC loss share agreements   (1,029)  —   —   —   — 
Increase (decrease) in FDIC indemnification asset   295  320  844  —   — 
Balance, end of period   $ 3,078  $ 4,381  $ 3,795  $ 2,540  $ 2,149
           
Total allowance for loan losses   $ 63,659  $ 60,258  $ 56,526  $ 55,011  $ 52,844
           
NON-PERFORMING ASSETS          
NOT COVERED BY LOSS SHARE          
           
Non-performing non-covered loans           
Non-accrual non-covered loans   $ 37,405  $ 29,033  $ 25,354  $ 24,691  $ 22,381
Non-covered loans past due 90 days or more   11,390  10,847  12,160  14,871  18,644
Total non-performing non-covered loans   48,795  39,880  37,514  39,562  41,025
Other non-performing non-covered assets           
Non-covered foreclosed assets held for sale, net   18,204  16,539  17,402  16,951  19,367
Other non-performing non-covered assets   14  12  —   —   — 
Total other non-performing non-covered assets   18,218  16,551  17,402  16,951  19,367
Total non-performing non-covered assets   $ 67,013  $ 56,431  $ 54,916  $ 56,513  $ 60,392
           
Allowance for loan losses for non-covered loans to non-performing non-covered loans  124.15% 140.11% 140.56% 132.63% 123.57%
Non-performing non-covered loans to total non-covered loans  0.83% 0.73% 0.76% 0.82% 0.90%
Non-performing non-covered assets to total non-covered assets  0.80% 0.71% 0.75% 0.79% 0.88%
 
 
Home BancShares, Inc. 
Loan Information 
(Unaudited) 
           
   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31,   Sep. 30, 
(Dollars in thousands)   2015   2015   2015   2014   2014 
           
           
LOANS NOT COVERED BY LOSS SHARE          
           
Real estate           
Commercial real estate loans           
Non-farm/non-residential   $ 2,655,882  $ 2,477,688  $ 2,042,781  $ 1,987,890  $ 1,918,827
Construction/land development   805,003  796,589  733,564  700,139  660,107
Agricultural   75,233  81,633  82,985  72,211  78,243
Residential real estate loans           
Residential 1-4 family   1,055,504  997,952  976,719  963,990  935,547
Multifamily residential   392,483  321,593  274,515  250,222  251,726
Total real estate   4,984,105  4,675,455  4,110,564  3,974,452  3,844,450
Consumer   46,677  48,320  51,852  56,720  57,821
Commercial and industrial   749,846  658,501  641,411  670,124  547,706
Agricultural   78,217  72,766  58,317  48,833  64,875
Other   41,330  43,986  67,845  67,185  68,163
Loans receivable not covered by loss share   $ 5,900,175  $ 5,499,028  $ 4,929,989  $ 4,817,314  $ 4,583,015
           
           
LOANS COVERED BY LOSS SHARE          
           
Real estate           
Commercial real estate loans           
Non-farm/non-residential   $ 25,903  $ 54,777  $ 58,251  $ 93,979  $ 99,518
Construction/land development   7,836  24,003  25,495  39,946  42,713
Agricultural   735  848  875  943  1,039
Residential real estate loans           
Residential 1-4 family   66,447  72,002  76,758  87,309  90,088
Multifamily residential   1,200  1,394  1,421  8,617  8,263
Total real estate   102,121  153,024  162,800  230,794  241,621
Consumer   10  17  17  16  22
Commercial and industrial   2,682  6,118  5,887  8,651  8,295
Agricultural   —   —   —   —   — 
Other   601  732  756  727  1,032
Loans receivable covered by loss share   $ 105,414  $ 159,891  $ 169,460  $ 240,188  $ 250,970
 
 
Home BancShares, Inc. 
Consolidated Net Interest Margin 
(Unaudited) 
             
   Three Months Ended 
   September 30, 2015   June 30, 2015 
   Average   Income/   Yield/   Average   Income/   Yield/ 
(Dollars in thousands)   Balance   Expense   Rate   Balance   Expense   Rate 
             
             
ASSETS            
Earning assets             
Interest-bearing balances due from banks   $ 78,783  $ 32 0.16%  $ 84,443  $ 44 0.21%
Federal funds sold   5,293  4 0.30%  4,355  3 0.28%
Investment securities – taxable   1,129,453  5,157 1.81%  1,082,113  5,130 1.90%
Investment securities – non-taxable – FTE   326,069  4,557 5.54%  327,088  4,543 5.57%
Loans receivable – FTE   5,800,688  88,854 6.08%  5,507,405  82,470 6.01%
Total interest-earning assets   7,340,286  98,604 5.33%  7,005,404  92,190 5.28%
Non-earning assets   890,551      895,317    
Total assets   $ 8,230,837      $ 7,900,721    
             
LIABILITIES AND SHAREHOLDERS’ EQUITY            
Liabilities             
Interest-bearing liabilities             
Savings and interest-bearing transaction accounts   $ 3,157,279  $ 1,514 0.19%  $ 3,149,490  $ 1,576 0.20%
Time deposits   1,320,995  1,531 0.46%  1,418,803  1,735 0.49%
Total interest-bearing deposits   4,478,274  3,045 0.27%  4,568,293  3,311 0.29%
Federal funds purchased   1,250  1 0.32%  213  1 1.88%
Securities sold under agreement to repurchase   143,672  146 0.40%  168,314  163 0.39%
FHLB borrowed funds   1,044,369  2,030 0.77%  677,108  1,053 0.62%
Subordinated debentures   60,826  340 2.22%  60,826  334 2.20%
Total interest-bearing liabilities   5,728,391  5,562 0.39%  5,474,754  4,862 0.36%
Non-interest bearing liabilities             
Non-interest bearing deposits  1,371,924      1,344,580    
Other liabilities   58,729      33,622    
Total liabilities   7,159,044      6,852,956    
Shareholders’ equity   1,071,793      1,047,765    
Total liabilities and shareholders’ equity   $ 8,230,837      $ 7,900,721    
Net interest spread      4.94%     4.92%
Net interest income and margin – FTE     $ 93,042 5.03%    $ 87,328 5.00%
 
 
Home BancShares, Inc. 
Consolidated Net Interest Margin 
(Unaudited) 
             
   Nine Months Ended 
   September 30, 2015   September 30, 2014 
   Average   Income/   Yield/   Average   Income/   Yield/ 
(Dollars in thousands)   Balance   Expense   Rate   Balance   Expense   Rate 
             
             
ASSETS            
Earning assets             
Interest-bearing balances due from banks   $ 104,764  $ 167 0.21%  $ 52,741  $ 73 0.19%
Federal funds sold   8,276  15 0.24%  22,746  35 0.21%
Investment securities – taxable   1,097,901  15,830 1.93%  1,029,496  14,137 1.84%
Investment securities – non-taxable – FTE   327,040  13,604 5.56%  292,349  11,852 5.42%
Loans receivable – FTE   5,461,573  246,914 6.04%  4,498,643  226,674 6.74%
Total interest-earning assets   6,999,554  276,530 5.28%  5,895,975  252,771 5.73%
Non-earning assets   894,092      923,800    
Total assets   $ 7,893,646      $ 6,819,775    
             
LIABILITIES AND SHAREHOLDERS’ EQUITY            
Liabilities             
Interest-bearing liabilities             
Savings and interest-bearing transaction accounts   $ 3,116,308  $ 4,564 0.20%  $ 2,809,963  $ 3,882 0.18%
Time deposits   1,358,539  5,050 0.50%  1,407,255  5,840 0.55%
Total interest-bearing deposits   4,474,847  9,614 0.29%  4,217,218  9,722 0.31%
Federal funds purchased   863  3 0.46%  1,001  2 0.27%
Securities sold under agreement to repurchase   163,718  481 0.39%  145,348  536 0.49%
FHLB borrowed funds   788,393  4,133 0.70%  416,531  2,933 0.94%
Subordinated debentures   60,826  1,003 2.20%  60,826  986 2.17%
Total interest-bearing liabilities   5,488,647  15,234 0.37%  4,840,924  14,179 0.39%
Non-interest bearing liabilities             
Non-interest bearing deposits  1,315,160      1,068,626    
Other liabilities   41,982      19,642    
Total liabilities   6,845,789      5,929,192    
Shareholders’ equity   1,047,857      890,583    
Total liabilities and shareholders’ equity   $ 7,893,646      $ 6,819,775    
Net interest spread      4.91%     5.34%
Net interest income and margin – FTE     $ 261,296 4.99%    $ 238,592 5.41%
CONTACT: Jennifer C. Floyd
         Chief Accounting Officer &
         Investor Relations Officer
         Home BancShares, Inc.
         (501) 339-2929