Home BancShares, Inc. Announces a 13.8% Increase in First Quarter Earnings Per Share

CONWAY, Ark., April 20, 2017 (GLOBE NEWSWIRE) — Home BancShares, Inc. (NASDAQ:HOMB), parent company of Centennial Bank, today announced a quarterly profit of $46.9 million for the first quarter of 2017 compared to $41.4 million, for the same quarter in 2016.  Diluted earnings per share for the first quarter of 2017 was $0.33 per share compared to $0.29 per share (split adjusted) for 2016, representing an increase of $0.04 per share or 13.8% for the first quarter of 2017 when compared to the same quarter in the prior year.  Excluding the $6.7 million of merger expenses associated with the recently completed acquisitions of Giant Holdings, Inc. (“GHI”) and The Bank of Commerce (“Commerce”) offset by $3.8 million of one-time non-taxable gain on acquisition associated with Commerce, diluted earnings per share for the first quarter of 2017 remained $0.33 per share.

“We were active on many fronts during the first quarter of 2017, and we delivered solid quarterly financial results in spite of the additional expenses associated with the recently closed acquisitions of GHI and Commerce,” said John Allison, Chairman.  “We also look forward to the completion of the merger with Stonegate Bank in Pompano Beach, Florida later this year and the opportunity to welcome them to the Home BancShares family.”

Tracy French, Centennial Bank President and Chief Executive Officer, added, “We are pleased with the first quarter’s solid financial results.  We are busy managing the growth momentum associated with our recently closed acquisitions of GHI on February 23, 2017 and Commerce on February 28, 2017.  GHI completed its systems conversion on March 24, 2017; while Commerce is due to have its systems conversion on May 12, 2017.”

“We are pleased with reporting our twenty-fourth consecutive most profitable quarter in the Company’s history, when excluding the $4.5 million of reduced provision for loan losses as a result of a significant loan recovery offset by $433,000 of merger expenses associated with the GHI and Commerce acquisitions from the fourth quarter of 2016, record net interest income for the first quarter of 2017 and improvements in our non-performing assets,” said Randy Sims, Home BancShares, Inc. Chief Executive Officer.  “Our team continues to do an excellent job of controlling expenses.  We have been able to maintain a strong core efficiency ratio of 36.96%, even though we added nine branch locations with the GHI and Commerce transactions in the first quarter of 2017.”

Operating Highlights

Each quarter we perform credit impairment tests on the loans acquired in our acquisitions.  During our first quarter 2017 impairment testing, several pools were determined to have a material projected credit improvement. This projected credit improvement offset by the expected decline in accretion income from the maturing and reduction of pay-offs in the acquired loan portfolios, resulted in a net decline of recognized accretion income when compared to the fourth quarter of 2016.  Accretion yield decreased approximately $1.0 million from $8.6 million for the fourth quarter of 2016 to $7.6 million for first quarter of 2017. 

Net interest margin, on a fully taxable equivalent basis, was 4.70% for the quarter just ended compared to 4.81% for the same quarter in 2016 and compared to 4.75% for the fourth quarter of 2016.  The net interest margin, excluding accretion yield was slightly increased when comparing the fourth quarter of 2016 to the first quarter of 2017 at 4.31% and 4.32%, respectively.

During the first quarter of 2017, the Company recorded a provision for loan loss of $3.9 million compared to $5.7 million in the first quarter of 2016.  For the first quarter of 2017, net charge-offs were $3.6 million compared to net charge-offs of $2.6 million for the first quarter of 2016.

The Company reported $26.5 million of non-interest income for the first quarter of 2017, compared to $19.4 million for the first quarter of 2016.  The most important components of the first quarter non-interest income were $8.9 million from other service charges and fees, $6.0 million from service charges on deposits accounts, $3.8 million from gain on acquisitions, $2.8 million from mortgage lending income, $1.8 million from other income and $1.1 million from dividends from FHLB, FRB, Bankers’ Bank & other.

Non-interest expense for the first quarter of 2017 was $55.1 million compared to $45.6 million for the first quarter of 2016.  Non-interest expense excluding merger expenses for the first quarter of 2017 was $48.4 million compared to $45.6 million for the first quarter of 2016, an increase of $2.8 million.  This increase excluding merger expenses is primarily the result of $1.7 million growth in non-interest expense related to the Centennial Commercial Finance Group (“Centennial CFG”) combined with an increase in the costs associated with asset growth from the acquisitions in the first quarter of 2017.  For the first quarter of 2017, our core efficiency ratio was 36.96% which is relatively unchanged from the 36.92% reported for first quarter of 2016.

Financial Condition

Total loans receivable were $7.85 billion at March 31, 2017 compared to $7.39 billion at December 31, 2016.  Total deposits were $7.57 billion at March 31, 2017 compared to $6.94 billion at December 31, 2016.  Total assets were $10.72 billion at March 31, 2017 compared to $9.81 billion at December 31, 2016.

During the first quarter of 2017, the Company acquired $446.3 million of loans, net of purchase accounting discounts.  From December 31, 2016 to March 31, 2017, the Company produced organic loan growth of approximately $15.7 million in addition to the acquired loans.  The legacy footprint produced $43.1 million of organic loan growth during the first quarter of 2017 while Centennial CFG experienced significant payoffs during the first quarter of 2017 resulting in a decline of $27.4 million.  Centennial CFG had loans of $1.08 billion at March 31, 2017.

Non-performing loans at March 31, 2017 are $26.1 million, $33.0 million, $74,000 and zero in the Arkansas, Florida, Alabama and Centennial CFG markets, respectively, for a total of $59.2 million.  Non-performing loans as a percent of total loans were 0.75% as of March 31, 2017 compared to 0.85% as of December 31, 2016.  Non-performing assets at March 31, 2017 are $35.6 million, $39.8 million, $1.1 million and zero in the Arkansas, Florida and Alabama and Centennial CFG markets, respectively, for a total of $76.5 million.  Non-performing assets as a percent of total assets were 0.71% as of March 31, 2017 compared to 0.81% as of December 31, 2016.

The Company’s allowance for loan losses was $80.3 million at March 31, 2017, or 1.02% of total loans, compared to $80.0 million, or 1.08% of total loans, at December 31, 2016.  This decrease is primarily the result of acquiring $446.3 million of loans which do not have an associated allowance for loan losses as a result of purchase accounting.  As of March 31, 2017 and December 31, 2016, the Company’s allowance for loan losses was 136% and 127% of its total non-performing loans, respectively.

Stockholders’ equity was $1.44 billion at March 31, 2017 compared to $1.33 billion at December 31, 2016, an increase of $114.1 million.  Book value per common share was $10.05 at March 31, 2017 compared to $9.45 at December 31, 2016.  Tangible book value per common share was $6.96 at March 31, 2017 compared to $6.63 at December 31, 2016 for an annualized increase of 20.2%. 

Branches

In an effort to achieve efficiencies primarily from our acquisitions, during the first quarter, the Company closed one branch in Davie, Florida.  During the second quarter the Company has plans to close one branch in Sarasota, Florida and two branches in Ft. Lauderdale, Florida.  During the second quarter of 2017, the Company has plans to open a branch location in Clearwater, Florida and a loan production office in Los Angeles under the management of Centennial CFG.  The Company currently has 76 branches in Arkansas, 68 branches in Florida, 6 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 20, 2017.  We encourage all participants to pre-register for the conference call using the following link:  http://dpregister.com/10103407.  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: 10103407, which will be available until April 27, 2017 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 excluding non-fundamental items, return on average assets excluding intangible amortization, return on average assets excluding non-fundamental items, return on average common equity excluding intangible amortization, core efficiency ratio, non-GAAP net interest margin, 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 non-fundamental items or non-recurring 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 core 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, 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, 2016 filed with the Securities and Exchange Commission (the “SEC”) on February 28, 2017.

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.” 

 Home BancShares, Inc. 
 Consolidated End of Period Balance Sheets 
 (Unaudited) 
           
   Mar. 31,   Dec. 31,   Sep. 30,   Jun. 30,   Mar. 31, 
(In thousands)     2017       2016       2016       2016       2016   
           
ASSETS          
           
Cash and due from banks $   163,662   $   123,758   $   123,126   $   136,632   $   115,206  
Interest-bearing deposits with other banks     253,427       92,891       173,034       48,762       42,866  
Cash and cash equivalents     417,089       216,649       296,160       185,394       158,072  
Federal funds sold     1,700       1,550       1,850       525       7,050  
Investment securities – available-for-sale     1,250,590       1,072,920       1,233,269       1,221,778       1,207,773  
Investment securities – held-to-maturity     276,599       284,176       275,544       287,725       299,050  
Loans receivable     7,849,645       7,387,699       7,112,291       7,022,156       6,852,212  
Allowance for loan losses     (80,311 )     (80,002 )     (76,370 )     (74,341 )     (72,306 )
Loans receivable, net     7,769,334       7,307,697       7,035,921       6,947,815       6,779,906  
Bank premises and equipment, net     212,813       205,301       208,137       207,932       210,764  
Foreclosed assets held for sale     17,315       15,951       17,053       17,778       20,202  
Cash value of life insurance     97,223       86,491       86,230       85,889       85,538  
Accrued interest receivable     32,413       30,838       29,398       28,548       28,833  
Deferred tax asset, net     67,063       61,298       56,435       61,613       69,564  
Goodwill     420,941       377,983       377,983       377,983       377,983  
Core deposit and other intangibles     21,885       18,311       19,073       19,835       20,597  
Other assets     132,503       129,300       127,185       139,311       132,119  
Total assets  $   10,717,468   $   9,808,465   $   9,764,238   $   9,582,126   $   9,397,451  
                               
LIABILITIES AND STOCKHOLDERS’ EQUITY          
           
Liabilities          
Deposits:          
Demand and non-interest-bearing $   1,862,996   $   1,695,184   $   1,717,467   $   1,645,472   $   1,562,565  
Savings and interest-bearing transaction accounts     4,274,194       3,963,241       3,792,229       3,678,546       3,602,868  
Time deposits     1,430,017       1,284,002       1,330,597       1,388,930       1,412,086  
Total deposits     7,567,207       6,942,427       6,840,293       6,712,948       6,577,519  
Federal funds purchased     –        –        –        –        –   
Securities sold under agreements to repurchase     123,793       121,290       109,350       111,072       121,906  
FHLB and other borrowed funds     1,455,040       1,305,198       1,420,369       1,380,889       1,336,233  
Accrued interest payable and other liabilities     69,125       51,234       37,382       51,476       73,185  
Subordinated debentures     60,735       60,826       60,826       60,826       60,826  
Total liabilities      9,275,900       8,480,975       8,468,220       8,317,211       8,169,669  
                               
Stockholders’ equity           
Common stock     1,434       1,405       1,405       1,404       702  
Capital surplus     948,982       869,737       866,310       863,560       862,827  
Retained earnings     490,142       455,948       419,999       389,014       357,788  
Accumulated other comprehensive income     1,010       400       8,304       10,937       6,465  
Total stockholders’ equity      1,441,568       1,327,490       1,296,018       1,264,915       1,227,782  
Total liabilities and stockholders’ equity  $   10,717,468   $   9,808,465   $   9,764,238   $   9,582,126   $   9,397,451  

 

 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)     2017       2016       2016       2016       2016         2017       2016   
                 
Interest income                 
Loans $   105,762   $   103,113   $   102,953   $   100,415   $   96,913     $   105,762   $   96,913  
Investment securities                
Taxable     5,478       5,068       5,583       5,145       5,450         5,478       5,450  
Tax-exempt     2,944       3,059       2,720       2,823       2,815         2,944       2,815  
Deposits – other banks     308       146       117       106       102         308       102  
Federal funds sold     2       2       2       1       4         2       4  
                                             
Total interest income     114,494       111,388       111,375       108,490       105,284         114,494       105,284  
                                             
Interest expense                                             
Interest on deposits     5,486       4,398       4,040       3,854       3,634         5,486       3,634  
Federal funds purchased     –        –        –        1       1         –        1  
FHLB borrowed funds     3,589       3,201       3,139       3,074       3,070         3,589       3,070  
Securities sold under agreements to repurchase     165       153       142       134       145         165       145  
Subordinated debentures     439       429       401       386       377         439       377  
                                             
Total interest expense     9,679       8,181       7,722       7,449       7,227         9,679       7,227  
                                             
Net interest income      104,815       103,207       103,653       101,041       98,057         104,815       98,057  
Provision for loan losses     3,914       1,703       5,536       5,692       5,677         3,914       5,677  
Net interest income after provision for loan losses      100,901       101,504       98,117       95,349       92,380         100,901       92,380  
                                             
Non-interest income                 
Service charges on deposit accounts     5,982       6,442       6,527       6,151       5,929         5,982       5,929  
Other service charges and fees     8,917       7,611       7,504       7,968       7,117         8,917       7,117  
Trust fees     456       329       365       359       404         456       404  
Mortgage lending income     2,791       4,123       3,932       3,481       2,863         2,791       2,863  
Insurance commissions     545       488       534       617       657         545       657  
Increase in cash value of life insurance     310       320       344       353       395         310       395  
Dividends from FHLB, FRB, Bankers’ Bank & other     1,149       944       808       719       620         1,149       620  
Gain on acquisitions     3,807       –        –        –        –          3,807       –   
Gain on sale of SBA loans     188       645       364       79       –          188       –   
Gain (loss) on sale of branches, equipment and other assets, net     (56 )     (1 )     (86 )     840       (53 )       (56 )     (53 )
Gain (loss) on OREO, net     121       159       132       (941 )     96         121       96  
Gain (loss) on securities, net     423       644       –        15       10         423       10  
FDIC indemnification accretion/(amortization), net     –        –        –        (410 )     (362 )       –        (362 )
Other income     1,837       2,124       1,590       2,541       1,761         1,837       1,761  
                                             
Total non-interest income     26,470       23,828       22,014       21,772       19,437         26,470       19,437  
                                             
Non-interest expense                                             
Salaries and employee benefits     27,421       26,944       25,623       25,437       23,958         27,421       23,958  
Occupancy and equipment     6,681       6,281       6,668       6,509       6,671         6,681       6,671  
Data processing expense     2,723       2,278       2,791       2,766       2,664         2,723       2,664  
Other operating expenses     18,316       11,991       15,944       12,875       12,355         18,316       12,355  
                                             
Total non-interest expense     55,141       47,494       51,026       47,587       45,648         55,141       45,648  
                                             
Income before income taxes      72,230       77,838       69,105       69,534       66,169         72,230       66,169  
Income tax expense     25,374       29,248       25,485       26,025       24,742         25,374       24,742  
Net income  $   46,856   $   48,590   $   43,620   $   43,509   $   41,427     $   46,856   $   41,427  

 

 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)     2017       2016       2016       2016       2016         2017       2016   
                 
PER SHARE DATA                
                 
Diluted earnings per common share $   0.33   $   0.35   $   0.31   $   0.31   $   0.29     $   0.33   $   0.29  
Diluted earnings per common share excluding gain on acquisitions, merger expenses, reduced provision for loan losses as a result of a significant loan recovery & FDIC loss share buy-out expense (non-GAAP)(1)     0.33       0.33       0.33       0.31       0.29         0.33       0.29  
Basic earnings per common share     0.33       0.35       0.31       0.31       0.30         0.33       0.30  
Dividends per share – common   0.0900     0.0900     0.0900     0.0875     0.0750       0.0900     0.0750  
Book value per common share     10.05       9.45       9.22       9.01       8.75         10.05       8.75  
Tangible book value per common share (non-GAAP)(1)     6.96       6.63       6.40       6.18       5.91         6.96       5.91  
                 
                 
STOCK INFORMATION                
                 
Average common shares outstanding   141,785     140,465     140,436     140,382     140,390       141,785     140,390  
Average diluted shares outstanding   142,492     140,781     140,703     140,608     140,687       142,492     140,687  
End of period common shares outstanding   143,442     140,472     140,490     140,382     140,380       143,442     140,380  
                 
                 
ANNUALIZED PERFORMANCE METRICS                
                 
Return on average assets   1.86 %   1.98 %   1.81 %   1.83 %   1.79 %     1.86 %   1.79 %
Return on average assets excluding intangible amortization (non-GAAP)(1)   1.96 %   2.08 %   1.91 %   1.93 %   1.89 %     1.96 %   1.89 %
Return on average assets excluding intangible amortization, provision for loan losses, merger expenses, gain on acquisitions, reduced provision for loan losses as a result of a significant loan recovery, loss on FDIC loss share buyout and income taxes (Core ROA) (non-GAAP)(1)   3.31 %   3.23 %   3.43 %   3.33 %   3.27 %     3.31 %   3.27 %
Return on average common equity   13.85 %   14.79 %   13.62 %   14.11 %   13.77 %     13.85 %   13.77 %
Return on average tangible common equity excluding intangible amortization (non-GAAP)(1)   20.08 %   21.45 %   20.01 %   21.01 %   20.79 %     20.08 %   20.79 %
Efficiency ratio   40.76 %   36.19 %   39.41 %   37.52 %   37.50 %     40.76 %   37.50 %
Core efficiency ratio (non-GAAP)(1)   36.96 %   35.97 %   36.51 %   36.84 %   36.92 %     36.96 %   36.92 %
Net interest margin – FTE   4.70 %   4.75 %   4.86 %   4.83 %   4.81 %     4.70 %   4.81 %
Fully taxable equivalent adjustment $   2,011   $   2,108   $   1,869   $   1,974   $   1,973     $   2,011   $   1,973  
Total revenue     140,964       135,216       133,389       130,262       124,721         140,964       124,721  
                 
                 
OTHER OPERATING EXPENSES                
                 
Advertising $   698   $   910   $   866   $   733   $   823     $   698   $   823  
Merger and acquisition expenses     6,727       433       –        –        –          6,727       –   
FDIC loss share buy-out expense     –        –        3,849       –        –          –        –   
Amortization of intangibles     804       762       762       763       845         804       845  
Electronic banking expense     1,519       1,621       1,428       1,237       1,456         1,519       1,456  
Directors’ fees     313       294       292       289       275         313       275  
Due from bank service charges     420       393       319       337       305         420       305  
FDIC and state assessment     1,288       1,097       1,502       1,446       1,446         1,288       1,446  
Insurance     578       563       553       544       533         578       533  
Legal and accounting     627       442       583       658       523         627       523  
Other professional fees     1,153       943       1,137       1,044       925         1,153       925  
Operating supplies     467       466       437       419       436         467       436  
Postage     286       269       269       260       286         286       286  
Telephone     324       360       449       455       487         324       487  
Other expense     3,112       3,438       3,498       4,690       4,015         3,112       4,015  
                                             
Total other operating expenses $ 18,316   $ 11,991   $ 15,944   $ 12,875   $ 12,355     $ 18,316   $ 12,355  
                                             
 
 (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)    2017     2016      2016       2016       2016   
           
BALANCE SHEET RATIOS          
           
Total loans to total deposits   103.73 %   106.41 %   103.98 %   104.61 %   104.18 %
Common equity to assets   13.45 %   13.53 %   13.27 %   13.20 %   13.07 %
Tangible common equity to tangible assets (non-GAAP)(1)   9.72 %   9.89 %   9.60 %   9.44 %   9.21 %
           
           
LOANS RECEIVABLE          
           
Real estate          
Commercial real estate loans          
Non-farm/non-residential $   3,462,773   $   3,153,121   $   2,954,618   $   2,884,162   $   2,889,927  
Construction/land development     1,217,519       1,135,843       1,065,204       1,068,544       977,800  
Agricultural     79,940       77,736       77,556       78,535       75,763  
Residential real estate loans          
Residential 1-4 family     1,493,133       1,356,136       1,264,384       1,262,416       1,202,323  
Multifamily residential     404,815       340,926       328,089       395,352       438,100  
Total real estate     6,658,180       6,063,762       5,689,851       5,689,009       5,583,913  
Consumer     41,893       41,745       42,487       48,933       50,090  
Commercial and industrial     1,013,403       1,123,213       1,225,043       1,130,776       1,070,553  
Agricultural     69,307       74,673       73,413       69,666       63,482  
Other     66,862       84,306       81,497       83,772       84,174  
Loans receivable $   7,849,645   $   7,387,699   $   7,112,291   $   7,022,156   $   6,852,212  
      –        –        –        –        –   
Discount for credit losses on purchased loans $   104,464   $   100,148   $   108,017   $   120,910   $   142,223  
Purchased loans, net of discount for credit losses on purchased loans     1,375,210       1,125,599       1,368,305       1,597,903       1,991,357  
           
           
ALLOWANCE FOR LOAN LOSSES          
           
Balance, beginning of period $   80,002   $   76,370   $   74,341   $   72,306   $   69,224  
Loans charged off     4,706       4,836       4,351       4,367       3,947  
Recoveries of loans previously charged off     1,101       6,765       844       710       1,352  
Net loans (recovered)/charged off     3,605       (1,929 )     3,507       3,657       2,595  
Provision for loan losses     3,914       1,703       5,536       5,692       5,677  
Balance, end of period $   80,311   $   80,002   $   76,370   $   74,341   $   72,306  
      –        –        –        –        –   
Net (recoveries) charge-offs to average total loans   0.19 %   -0.11 %   0.20 %   0.21 %   0.16 %
Allowance for loan losses to total loans   1.02 %   1.08 %   1.07 %   1.06 %   1.06 %
           
           
NON-PERFORMING ASSETS          
           
Non-performing loans          
Non-accrual loans $   43,810   $   47,182   $   39,353   $   36,660   $   33,409  
Loans past due 90 days or more     15,388       15,942       20,737       22,998       25,144  
Total non-performing loans     59,198       63,124       60,090       59,658       58,553  
Other non-performing assets                              
Foreclosed assets held for sale, net     17,315       15,951       17,053       17,778       20,202  
Other non-performing assets     3       3       –        –        –   
Total other non-performing assets     17,318       15,954       17,053       17,778       20,202  
Total non-performing assets $   76,516   $   79,078   $   77,143   $   77,436   $   78,755  
                               
Allowance for loan losses for loans to non-performing loans   135.67 %   126.74 %   127.09 %   124.61 %   123.49 %
Non-performing loans to total loans   0.75 %   0.85 %   0.84 %   0.85 %   0.85 %
Non-performing assets to total assets   0.71 %   0.81 %   0.79 %   0.81 %   0.84 %
           
           
 (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, 2017     December 31, 2016 
   Average   Income/   Yield/     Average   Income/   Yield/ 
(Dollars in thousands)  Balance   Expense   Rate   Balance   Expense   Rate
               
ASSETS              
Earning assets              
Interest-bearing balances due from banks $   170,500 $   308 0.73 %   $   135,276 $   146 0.43 %
Federal funds sold     1,182     2 0.69 %       1,374     2 0.58 %
Investment securities – taxable     1,110,166     5,478 2.00 %       1,121,012     5,068 1.80 %
Investment securities – non-taxable – FTE     347,085     4,786 5.59 %       349,175     4,982 5.68 %
Loans receivable – FTE     7,585,565     105,931 5.66 %       7,217,631     103,298 5.69 %
Total interest-earning assets     9,214,498     116,505 5.13 %       8,824,468     113,496 5.12 %
Non-earning assets     984,346           952,680    
Total assets $  10,198,844       $   9,777,148    
               
LIABILITIES AND SHAREHOLDERS’ EQUITY              
Liabilities              
Interest-bearing liabilities              
Savings and interest-bearing transaction accounts $   4,138,813 $   3,377 0.33 %   $   3,877,152 $   2,551 0.26 %
Time deposits     1,357,300     2,109 0.63 %       1,303,182     1,847 0.56 %
Total interest-bearing deposits     5,496,113     5,486 0.40 %       5,180,334     4,398 0.34 %
Federal funds purchased     –      –  0.00 %       86     –  0.00 %
Securities sold under agreement to repurchase     124,094     165 0.54 %       119,413     153 0.51 %
FHLB borrowed funds     1,373,217     3,589 1.06 %       1,377,017     3,201 0.92 %
Subordinated debentures     60,819     439 2.93 %       60,826     429 2.81 %
Total interest-bearing liabilities     7,054,243     9,679 0.56 %       6,737,676     8,181 0.48 %
Non-interest bearing liabilities              
Non-interest bearing deposits     1,716,452           1,686,214    
Other liabilities     56,419           46,687    
Total liabilities     8,827,114           8,470,577    
Shareholders’ equity     1,371,730           1,306,571    
Total liabilities and shareholders’ equity $  10,198,844       $   9,777,148    
Net interest spread     4.57 %       4.64 %
Net interest income and margin – FTE   $   106,826 4.70 %     $   105,315 4.75 %

 

 Home BancShares, Inc. 
 Consolidated Net Interest Margin 
 (Unaudited) 
               
   Three Months Ended 
  March 31, 2017   March 31, 2016
   Average   Income/   Yield/     Average   Income/   Yield/ 
(Dollars in thousands)   Balance   Expense   Rate     Balance   Expense   Rate 
               
ASSETS              
Earning assets              
Interest-bearing balances due from banks $   170,500 $   308 0.73 %   $   113,831 $   102 0.36 %
Federal funds sold     1,182     2 0.69 %       3,049     4 0.53 %
Investment securities – taxable     1,110,166     5,478 2.00 %       1,177,595     5,450 1.86 %
Investment securities – non-taxable – FTE     347,085     4,786 5.59 %       338,988     4,598 5.46 %
Loans receivable – FTE     7,585,565     105,931 5.66 %       6,729,060     97,103 5.80 %
Total interest-earning assets     9,214,498     116,505 5.13 %       8,362,523     107,257 5.16 %
Non-earning assets     984,346               968,099      
Total assets $  10,198,844       $   9,330,622    
                           
LIABILITIES AND SHAREHOLDERS’ EQUITY              
Liabilities              
Interest-bearing liabilities              
Savings and interest-bearing transaction accounts $   4,138,813 $   3,377 0.33 %   $   3,593,914 $   2,018 0.23 %
Time deposits     1,357,300     2,109 0.63 %       1,393,591     1,616 0.47 %
Total interest-bearing deposits     5,496,113     5,486 0.40 %       4,987,505     3,634 0.29 %
Federal funds purchased     –      –  0.00 %       610     1 0.66 %
Securities sold under agreement to repurchase     124,094     165 0.54 %       128,897     145 0.45 %
FHLB borrowed funds     1,373,217     3,589 1.06 %       1,368,457     3,070 0.90 %
Subordinated debentures     60,819     439 2.93 %       60,826     377 2.49 %
Total interest-bearing liabilities     7,054,243     9,679 0.56 %       6,546,295     7,227 0.44 %
Non-interest bearing liabilities                          
Non-interest bearing deposits     1,716,452           1,514,169    
Other liabilities     56,419           59,891    
Total liabilities     8,827,114           8,120,355    
Shareholders’ equity     1,371,730           1,210,267    
Total liabilities and shareholders’ equity $  10,198,844       $   9,330,622    
Net interest spread         4.57 %           4.72 %
Net interest income and margin – FTE   $   106,826 4.70 %     $   100,030 4.81 %

 

 Home BancShares, Inc. 
 Non-GAAP Reconciliations 
 (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)     2017       2016       2016       2016       2016         2017       2016   
                 
EARNINGS EXCLUDING NON-FUNDAMENTAL ITEMS                
                 
GAAP net income available to common shareholders (A) $   46,856   $   48,590   $   43,620   $   43,509   $   41,427     $   46,856   $   41,427  
Non-fundamental items                
Gain on acquisitions     (3,807 )     –        –        –        –          (3,807 )     –   
Merger and acquisition expenses     6,727       433       –        –        –          6,727       –   
FDIC loss share buy-out expense     –        –        3,849       –        –          –        –   
Reduced provision for loan losses as a result of a significant loan recovery     –        (4,457 )     –        –        –          –        –   
Total non-fundamental items     2,920       (4,024 )     3,849       –        –          2,920       –   
Tax-effect of non-fundamental items(2)     2,382       (1,578 )     1,510       –        –          2,382       –   
Non-fundamental items after-tax (B)     538       (2,446 )     2,339       –        –          538       –   
Earnings excluding non-fundamental items (C) $   47,394   $   46,144   $   45,959   $   43,509   $   41,427     $   47,394   $   41,427  
                                             
Average diluted shares outstanding (D)     142,492       140,781       140,703       140,608       140,687         142,492       140,687  
   
GAAP diluted earnings per share: A/D $   0.33   $   0.35   $   0.31   $   0.31   $   0.29     $   0.33   $   0.29  
Non-fundamental items after-tax: B/D     –        (0.02 )     0.02       –        –          –        –   
Diluted earnings per common share excluding gain on acquisitions, merger expenses, reduced provision for loan losses as a result of a significant loan recovery & FDIC loss share buy-out expense: C/D $   0.33   $   0.33   $   0.33   $   0.31   $   0.29     $   0.33   $   0.29  
      –        –        –        –        –          –        –   
                 
ANNUALIZED RETURN ON AVERAGE ASSETS                
                 
Return on average assets: A/G    1.86 %   1.98 %   1.81 %   1.83 %   1.79 %     1.86 %   1.79 %
Return on average assets excluding intangible amortization: (A+C)/(G-H)    1.96 %   2.08 %   1.91 %   1.93 %   1.89 %     1.96 %   1.89 %
Return on average assets excluding intangible amortization, provision for loan losses, merger expenses, gain on acquisitions, reduced provision for loan losses as a result of a significant loan recovery, loss on FDIC loss share buyout and income taxes (Core ROA): (A+B+D+E+F)/(G-H)   3.31 %   3.23 %   3.43 %   3.33 %   3.27 %     3.31 %   3.27 %
                 
 GAAP net income available to common shareholders (A)  $   46,856   $   48,590   $   43,620   $   43,509   $   41,427     $   46,856   $   41,427  
 Amortization of intangibles (B)      804       762       762       763       845         804       845  
 Amortization of intangibles after-tax (C)      489       463       463       464       514         489       514  
 Provision for loan losses (D)      3,914       1,703       5,536       5,692       5,677         3,914       5,677  
 Total non-fundamental items (E)      2,920       (4,024 )     3,849       –        –          2,920       –   
 Income tax expense (F)      25,374       29,248       25,485       26,025       24,742         25,374       24,742  
 Average assets (G)      10,198,844       9,777,148       9,602,363       9,562,624       9,330,622         10,198,844       9,330,622  
 Average goodwill, core deposits & other intangible assets (H)      415,699       396,662       397,429       398,184       398,978         415,699       398,978  
                 
                 
ANNUALIZED RETURN ON AVERAGE COMMON EQUITY                
                 
 Return on average common equity: A/C    13.85 %   14.79 %   13.62 %   14.11 %   13.77 %     13.85 %   13.77 %
 Return on average tangible common equity excluding intangible amortization: (A+B)/(C-D)    20.08 %   21.45 %   20.01 %   21.01 %   20.79 %     20.08 %   20.79 %
                 
                 
 GAAP net income available to common shareholders (A)  $   46,856   $   48,590   $   43,620   $   43,509   $   41,427     $   46,856   $   41,427  
 Amortization of intangibles after-tax (B)      489       463       463       464       514         489       514  
 Average common equity (C)    1,371,730     1,306,571     1,274,077     1,240,080     1,210,267       1,371,730     1,210,267  
 Average goodwill, core deposits & other intangible assets (D)      415,699       396,662       397,429       398,184       398,978         415,699       398,978  
                 
                 
(2)  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 
   Mar. 31,   Dec. 31,   Sep. 30,   Jun. 30,   Mar. 31,     Mar. 31,   Mar. 31, 
(Dollars and shares in thousands, except per share data)    2017       2016       2016       2016       2016         2017       2016   
                 
EFFICIENCY RATIO                
                 
Efficiency ratio: ((C-E)/(A+B+D))   40.76 %   36.19 %   39.41 %   37.52 %   37.50 %     40.76 %   37.50 %
Core efficiency ratio: ((C-E-G)/(A+B+D-F))   36.96 %   35.97 %   36.51 %   36.84 %   36.92 %     36.96 %   36.92 %
      –        –        –        –        –          –        –   
Net interest income (A) $   104,815   $   103,207   $   103,653   $   101,041   $   98,057     $   104,815   $   98,057  
Non-interest income (B)     26,470       23,828       22,014       21,772       19,437         26,470       19,437  
Non-interest expense (C)     55,141       47,494       51,026       47,587       45,648         55,141       45,648  
Fully taxable equivalent adjustment (D)     2,011       2,108       1,869       1,974       1,973         2,011       1,973  
Amortization of intangibles (E)     804       762       762       763       845         804       845  
                 
Non-fundamental items:                
 Non-interest income:                 
 Gain on acquisition  $   3,807   $   –    $   –    $   –    $   –      $   3,807   $   –   
 Gain (loss) on OREO      121       159       132       (941 )     96         121       96  
 Gain (loss) on SBA      188       645       364       79       –          188       –   
 Gain on sale of branches, equipment & other assets, net      (56 )     (1 )     (86 )     840       (53 )       (56 )     (53 )
 Gain (loss) on securities      423       644       –        15       10         423       10  
 Recoveries on historic losses      –        –        –        925       –          –        –   
Total non-fundamental non-interest income (F) $   4,483   $   1,447   $   410   $   918   $   53     $   4,483   $   53  
                                             
 Non-interest expense:                 
 Merger Expenses  $   6,727   $   433   $   –    $   –    $   –      $   6,727   $   –   
 FDIC loss share buy-out      –        –        3,849       –        –          –        –   
 Vacant properties write-downs      –        369       –        1,194       720         –        720  
Total non-fundamental non-interest expense (G) $   6,727   $   802   $   3,849   $   1,194   $   720     $   6,727   $   720  
                                             
                 
ANNUALIZED NET INTEREST MARGIN                
                 
Net interest margin: A/C   4.70 %   4.75 %   4.86 %   4.83 %   4.81 %     4.70 %   4.81 %
Net interest margin (non-GAAP): B/D   4.32 %   4.31 %   4.25 %   4.24 %   4.22 %     4.32 %   4.22 %
                 
Net interest income – FTE (A) $   106,826   $   105,315   $   105,522   $   103,015   $   100,030     $   106,826   $   100,030  
Total purchase accounting accretion     7,652       8,659       11,937       11,017       10,730         7,652       10,730  
Net interest income – FTE (non-GAAP) (B) $   99,174   $   96,656   $   93,585   $   91,998   $   89,300     $   99,174   $   89,300  
                                             
Average interest-earning assets (C) $   9,214,498   $   8,824,468   $   8,646,026   $   8,585,955   $   8,362,523     $   9,214,498   $   8,362,523  
Average purchase accounting loan discounts     102,906       104,783       115,766       135,172       149,763         102,906       149,763  
Average interest-earning assets (non-GAAP) (D) $   9,317,404   $   8,929,251   $   8,761,792   $   8,721,127   $   8,512,286     $   9,317,404   $   8,512,286  

 

 Home BancShares, Inc. 
 Non-GAAP Reconciliations 
 (Unaudited) 
           
   Mar. 31,   Dec. 31,   Sep. 30,   Jun. 30,   Mar. 31, 
(Dollars in thousands)     2017       2016       2016       2016       2016   
           
TANGIBLE BOOK VALUE PER COMMON SHARE          
           
Book value per common share: A/B $   10.05   $   9.45   $   9.22   $   9.01   $   8.75  
Tangible book value per common share: (A-C-D)/B     6.96       6.63       6.40       6.18       5.91  
           
Total stockholders’ equity (A) $   1,441,568   $   1,327,490   $   1,296,018   $   1,264,915   $   1,227,782  
End of period common shares outstanding (B)     143,442       140,472       140,490       140,382       140,380  
Goodwill (C)     420,941       377,983       377,983       377,983       377,983  
Core deposit and other intangibles (D)     21,885       18,311       19,073       19,835       20,597  
           
           
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS          
           
Equity to assets: B/A   13.45 %   13.53 %   13.27 %   13.20 %   13.07 %
Tangible common equity to tangible assets: (B-C-D)/(A-C-D)   9.72 %   9.89 %   9.60 %   9.44 %   9.21 %
      –        –        –        –        –   
Total assets (A) $   10,717,468   $   9,808,465   $   9,764,238   $   9,582,126   $   9,397,451  
Total stockholders’ equity (B)     1,441,568       1,327,490       1,296,018       1,264,915       1,227,782  
Goodwill (C)     420,941       377,983       377,983       377,983       377,983  
Core deposit and other intangibles (D)     21,885       18,311       19,073       19,835       20,597  
CONTACT: FOR MORE INFORMATION CONTACT:

Jennifer C. Floyd

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

Logo Header Menu