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Home BancShares, Inc. Announces a 28.3% Increase in Second Quarter Earnings

CONWAY, Ark., July 21, 2016 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (NASDAQ:HOMB), parent company of Centennial Bank, today announced a record quarterly profit of $43.5 million, or $0.31 diluted earnings per share for the second quarter of 2016 compared to $33.9 million or $0.25 diluted earnings per share (split adjusted) for the same quarter in 2015. The Company increased its second quarter earnings by $9.6 million or 28.3% for the three months ended June 30, 2016 compared to the same period of the previous year. The Company also announced $172.5 million in quarterly organic loan growth during the second quarter of 2016, a core efficiency ratio of 36.84% and a quarterly return on assets of 1.83%.

“During the second quarter of 2016, we continued our momentum growing both earnings and organic loans,” said John Allison, Chairman. “Organic loans grew by $172.5 million for the quarter, while the core efficiency ratio improved again to an impressive 36.84%. Additionally, we are pleased to have crossed another milestone by reporting a quarterly return on assets greater than 1.80% for the second quarter of 2016 at 1.83%.”

“The second quarter of 2016 marked the twenty-first consecutive quarter we have successively reported the most profitable quarter in the Company's history,” said Randy Sims, Home BancShares, Inc. Chief Executive Officer. “Our second quarter earnings are $43.5 million, which is 5.0%, higher than the previous record quarterly earnings reported for Home BancShares. The Company’s diluted earnings per share reached a new high of $0.31 per share for the quarter just ended.”

“The Company’s second quarter financial results and organic loan growth are excellent considering the amount of loan payoffs during the quarter. This gives us the momentum to seek opportunities to expand our existing footprint or enter new markets,” added Tracy French, Centennial Bank President and Chief Executive Officer. “Because we have the ability to both generate and retain a substantial amount of capital each quarter, this puts us in the enviable position to self-fund the capital we need for organic growth opportunities as they arise.”

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 second quarter 2016 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 maturing of acquired loan portfolios, resulted in a net improvement of recognized accretion income when compared to the first quarter of 2016. Consequently, yields on loans and net interest margin for the quarter just ended are slightly increased when compared to the first quarter of 2016.

Net interest margin, on a fully taxable equivalent basis, was 4.83% for the quarter just ended compared to 5.00% for the same quarter in 2015 and compared to 4.81% for the first quarter of 2016. Accretion yield on purchased loans increased $300,000 from $10.7 million for the first quarter of 2016 to $11.0 million for second quarter of 2016. The net interest margin, excluding accretion yield on purchased loans increased slightly from the first quarter of 2016 to the second quarter of 2016 at 4.22% and 4.24%, respectively.

During the second quarter of 2016, the Company recorded a provision for loan loss of $5.7 million compared to $5.4 million in the second quarter of 2015. The $5.7 million of provision for loan loss is a reflection of the organic loan growth and net charge-offs for the second quarter of 2016.

The Company reported $21.8 million of non-interest income for the second quarter of 2016, compared to $17.0 million for the second quarter of 2015. The most important components of the second quarter non-interest income were $8.0 million from other service charges and fees, $6.2 million from service charges on deposits accounts, $3.5 million from mortgage lending income, $2.5 million from other income, $840,000 from gain on sale of branches, equipment and other assets, net and $617,000 from insurance commissions offset by the $941,000 of loss on OREO and $410,000 of net amortization on the FDIC indemnification asset. Other income includes $241,000 of loan recoveries on our FDIC covered transactions and a $925,000 recovery on other historical losses.

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 has expired and only the ten-year loss-share remains. Consequently, there was a $1.8 million decline of FDIC indemnification amortization from the second quarter of 2015 to the second quarter of 2016.

Non-interest expense for the second quarter of 2016 was $47.6 million compared to $43.3 million for the second quarter of 2015. 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, the acquisition of FBBI during the fourth quarter of 2015 and $1.2 million of write-downs on vacant properties from closed branches during the second quarter of 2016. For the second quarter of 2016, our core efficiency ratio was 36.84% which is improved from the 40.30% reported for second quarter of 2015.

Financial Condition

Total non-covered loans were $6.96 billion at June 30, 2016 compared to $6.58 billion at December 31, 2015. Total covered loans were $57.4 million at June 30, 2016 compared to $62.2 million at December 31, 2015. Total deposits were $6.71 billion at June 30, 2016 compared to $6.44 billion at December 31, 2015. Total assets were $9.58 billion at June 30, 2016 compared to $9.29 billion at December 31, 2015.

From December 31, 2015 to June 30, 2016, the Company produced approximately $385.3 million of organic non-covered loan growth, of which $209.7 million is associated with loan originations in the legacy footprint with the remaining $175.6 million being associated with Centennial CFG. Centennial CFG had loans of $891.3 million at June 30, 2016.

From March 31, 2016 to June 30, 2016, the Company produced approximately $172.5 million of organic non-covered loan growth, of which $132.6 million is associated with loan originations in the legacy footprint with the remaining $39.9 million being associated with Centennial CFG.

Non-performing non-covered loans at June 30, 2016 are $27.3 million, $28.3 million, $397,000 and zero in the Arkansas, Florida, Alabama and Centennial CFG markets, respectively, for a total of $56.0 million. Non-performing non-covered loans as a percent of total non-covered loans were 0.80% as of June 30, 2016 compared to 0.92% as of December 31, 2015. Non-performing non-covered assets at June 30, 2016 are $40.6 million, $31.9 million, $998,000 and zero in the Arkansas, Florida and Alabama and Centennial CFG markets, respectively, for a total of $73.5 million. Non-performing non-covered assets as a percent of total non-covered assets were 0.77% as of June 30, 2016 compared to 0.85% as of December 31, 2015.

The Company’s allowance for loan losses for non-covered loans was $71.8 million at June 30, 2016, or 1.03% of total non-covered loans, compared to $66.6 million, or 1.01% of total non-covered loans, at December 31, 2015. As of June 30, 2016 and December 31, 2015, 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 2.56% and 3.07%, respectively. This decrease is primarily the result of organic loan growth in 2016 plus projected credit improvement from previous periods on the acquired impaired loans and write-downs on purchased credit impaired loans. As of June 30, 2016 and December 31, 2015, the Company’s allowance for loan losses for non-covered loans was 128% and 111% of its total non-performing non-covered loans, respectively.

Stockholders’ equity was $1.26 billion at June 30, 2016 compared to $1.20 billion at December 31, 2015, an increase of $65.2 million. Book value per common share was $9.01 at June 30, 2016 compared to $8.55 (split adjusted) at December 31, 2015. Tangible book value per common share was $6.18 at June 30, 2016 compared to $5.71 (split adjusted) at December 31, 2015 for an annualized increase of 16.6%.

Branches

In an effort to achieve efficiencies primarily from the acquisitions, the Company closed and sold its Clermont, Florida location during the second quarter of 2016 for a gain of $738,000. During the third quarter of 2016, the Company has plans to add deposit operations to its loan production office in New York City and close one Arkansas location. The Company currently has 77 branches in Arkansas, 58 branches in Florida, 6 branches in Alabama plus one branch and one 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, July 21, 2016. We encourage all participants to pre-register for the conference call using the following link: http://dpregister.com/10087841. 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 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: 10087841, which will be available until July 28, 2016 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, 2015 filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2016.

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)
Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30,
(In thousands) 2016 2016 2015 2015 2015
ASSETS
Cash and due from banks$136,632 $115,206 $111,258 $120,262 $116,682
Interest-bearing deposits with other banks 48,762 42,866 144,565 108,394 87,729
Cash and cash equivalents 185,394 158,072 255,823 228,656 204,411
Federal funds sold 525 7,050 1,550 - -
Investment securities - available-for-sale 1,221,778 1,207,773 1,206,580 1,141,405 1,080,000
Investment securities - held-to-maturity 287,725 299,050 309,042 324,949 336,993
Loans receivable not covered by loss share 6,964,716 6,792,170 6,579,401 5,900,175 5,499,028
Loans receivable covered by FDIC loss share 57,440 60,042 62,170 105,414 159,891
Allowance for loan losses (74,341) (72,306) (69,224) (63,659) (60,258)
Loans receivable, net 6,947,815 6,779,906 6,572,347 5,941,930 5,598,661
Bank premises and equipment, net 207,932 210,764 212,163 205,505 209,425
Foreclosed assets held for sale not covered by loss share 17,573 19,657 18,526 18,204 16,539
Foreclosed assets held for sale covered by FDIC loss share 205 545 614 2,612 4,472
FDIC indemnification asset 8,130 8,656 9,284 11,290 15,874
Cash value of life insurance 85,889 85,538 85,146 75,281 75,015
Accrued interest receivable 28,548 28,833 29,132 26,977 24,447
Deferred tax asset, net 61,613 69,564 71,565 63,075 62,088
Goodwill 377,983 377,983 377,983 322,728 322,728
Core deposit and other intangibles 19,835 20,597 21,443 18,828 19,816
Other assets 131,181 123,463 117,924 134,113 103,913
Total assets $ 9,582,126 $ 9,397,451 $ 9,289,122 $ 8,515,553 $ 8,074,382
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Demand and non-interest-bearing$1,645,472 $1,562,565 $1,456,624 $1,409,949 $1,406,051
Savings and interest-bearing transaction accounts 3,678,546 3,602,868 3,551,684 3,230,722 3,099,522
Time deposits 1,388,930 1,412,086 1,430,201 1,312,343 1,372,463
Total deposits 6,712,948 6,577,519 6,438,509 5,953,014 5,878,036
Federal funds purchased - - - - -
Securities sold under agreements to repurchase 111,072 121,906 128,389 134,142 150,746
FHLB and other borrowed funds 1,380,889 1,336,233 1,405,945 1,216,152 866,907
Accrued interest payable and other liabilities 51,476 73,185 55,696 60,141 56,166
Subordinated debentures 60,826 60,826 60,826 60,826 60,826
Total liabilities 8,317,211 8,169,669 8,089,365 7,424,275 7,012,681
Stockholders' equity
Common stock 1,404 702 701 680 677
Capital surplus 863,560 862,827 867,981 782,500 780,731
Retained earnings 389,014 357,788 326,898 299,984 274,409
Accumulated other comprehensive income 10,937 6,465 4,177 8,114 5,884
Total stockholders' equity 1,264,915 1,227,782 1,199,757 1,091,278 1,061,701
Total liabilities and stockholders' equity $ 9,582,126 $ 9,397,451 $ 9,289,122 $ 8,515,553 $ 8,074,382

Home BancShares, Inc.
Consolidated Statements of Income
(Unaudited)
Quarter Ended Six Months Ended
Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30, Jun. 30, Jun. 30,
(In thousands) 2016 2016 2015 2015 2015 2016 2015
Interest income
Loans$100,415 $96,913 $97,772 $88,671 $82,360 $197,328 $157,847
Investment securities
Taxable 5,145 5,450 5,865 5,157 5,130 10,595 10,673
Tax-exempt 2,823 2,815 2,879 2,789 2,774 5,638 5,526
Deposits - other banks 106 102 66 32 44 208 135
Federal funds sold 1 4 9 4 3 5 11
Total interest income 108,490 105,284 106,591 96,653 90,311 213,774 174,192
Interest expense
Interest on deposits 3,854 3,634 3,357 3,045 3,311 7,488 6,569
Federal funds purchased 1 1 1 1 1 2 2
FHLB borrowed funds 3,074 3,070 2,641 2,030 1,053 6,144 2,103
Securities sold under agreements to repurchase 134 145 140 146 163 279 335
Subordinated debentures 386 377 351 340 334 763 663
Total interest expense 7,449 7,227 6,490 5,562 4,862 14,676 9,672
Net interest income 101,041 98,057 100,101 91,091 85,449 199,098 164,520
Provision for loan losses 5,692 5,677 8,890 7,106 5,381 11,369 9,168
Net interest income after
provision for loan losses 95,349 92,380 91,211 83,985 80,068 187,729 155,352
Non-interest income
Service charges on deposit accounts 6,151 5,929 6,528 6,250 6,056 12,080 11,474
Other service charges and fees 7,968 7,117 6,827 6,644 6,499 15,085 12,715
Trust fees 359 404 365 398 1,186 763 1,618
Mortgage lending income 3,481 2,863 2,404 3,132 2,955 6,344 4,887
Insurance commissions 617 657 513 548 640 1,274 1,207
Income from title services 3 4 54 28 36 7 70
Increase in cash value of life insurance 353 395 328 268 295 748 603
Dividends from FHLB, FRB, Bankers' bank & other 719 620 431 433 419 1,339 834
Gain on acquisitions - - - - - - 1,635
Gain on sale of SBA loans 79 - 390 151 - 79 -
Gain (loss) on sale of branches, equipment and other assets, net 840 (53) 23 (266) 21 787 29
Gain (loss) on OREO, net (941) 96 (507) (40) (263) (845) 230
Gain (loss) on securities, net 15 10 - - - 25 4
FDIC indemnification accretion/(amortization), net (410) (362) (1,239) (1,994) (2,202) (772) (6,158)
Other income 2,538 1,757 1,139 993 1,385 4,295 2,549
Total non-interest income 21,772 19,437 17,256 16,545 17,027 41,209 31,697
Non-interest expense
Salaries and employee benefits 25,437 23,958 23,841 22,225 22,056 49,395 41,446
Occupancy and equipment 6,509 6,671 6,700 6,540 6,678 13,180 12,727
Data processing expense 2,766 2,664 2,673 2,619 3,063 5,430 5,482
Other operating expenses 12,875 12,355 15,785 13,209 11,453 25,230 24,308
Total non-interest expense 47,587 45,648 48,999 44,593 43,250 93,235 83,963
Income before income taxes 69,534 66,169 59,468 55,937 53,845 135,703 103,086
Income tax expense 26,025 24,742 22,035 20,196 19,939 50,767 38,061
Net income $43,509 $41,427 $37,433 $35,741 $33,906 $84,936 $65,025

Home BancShares, Inc.
Selected Financial Information
(Unaudited)
Quarter Ended Six Months Ended
(Dollars and shares in thousands, Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30, Jun. 30, Jun. 30,
except per share data) 2016 2016 2015 2015 2015 2016 2015
PER SHARE DATA
Diluted earnings per common share$0.31 $0.29 $0.27 $0.26 $0.25 $0.60 $0.48
Diluted earnings per common share excluding merger expenses 0.31 0.29 0.28 0.26 0.25 0.60 0.49
Diluted earnings per common share excluding intangible amortization 0.31 0.30 0.27 0.27 0.25 0.61 0.49
Basic earnings per common share 0.31 0.30 0.27 0.26 0.25 0.61 0.48
Dividends per share - common 0.0875 0.0750 0.0750 0.0750 0.0625 0.1625 0.1250
Book value per common share 9.01 8.75 8.55 8.02 7.83 9.01 7.83
Tangible book value per common share 6.18 5.91 5.71 5.51 5.31 6.18 5.31
STOCK INFORMATION
Average common shares outstanding 140,382 140,390 140,234 135,738 135,265 140,386 135,222
Average diluted shares outstanding 140,608 140,687 140,617 136,162 135,832 140,667 135,825
End of period common shares outstanding 140,382 140,380 140,241 136,001 135,549 140,382 135,549
ANNUALIZED PERFORMANCE METRICS
Return on average assets 1.83% 1.79% 1.62% 1.72% 1.72% 1.81% 1.70%
Return on average assets excluding intangible amortization 1.93% 1.89% 1.72% 1.83% 1.83% 1.91% 1.81%
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) 3.33% 3.27% 3.27% 3.24% 3.20% 3.30% 3.12%
Return on average common equity 14.11% 13.77% 12.53% 13.23% 12.98% 13.94% 12.66%
Return on average tangible common equity excluding intangible amortization 21.01% 20.79% 19.07% 19.76% 19.68% 20.90% 19.34%
Efficiency ratio 37.52% 37.50% 40.32% 39.79% 40.39% 37.51% 40.88%
Core efficiency ratio 36.84% 36.92% 37.86% 39.30% 40.30% 36.88% 40.55%
Net interest margin - FTE 4.83% 4.81% 4.95% 5.03% 5.00% 4.82% 4.97%
Fully taxable equivalent adjustment$1,974 $1,973 $2,025 $1,951 $1,879 $3,947 $3,734
Total revenue 130,262 124,721 123,847 113,198 107,338 254,983 205,889
EARNINGS EXCLUDING
INTANGIBLE AMORTIZATION
GAAP net income available to common shareholders$43,509 $41,427 $37,433 $35,741 $33,906 $84,936 $65,025
Intangible amortization after-tax 463 514 524 600 669 977 1,355
Earnings excluding intangible amortization$ 43,972 $ 41,941 $ 37,957 $ 36,341 $ 34,575 $ 85,913 $ 66,380
GAAP diluted earnings per share$0.31 $0.29 $0.27 $0.26 $0.25 $0.60 $0.48
Intangible amortization after-tax - 0.01 - 0.01 - 0.01 0.01
Diluted earnings per share excluding intangible amortization$ 0.31 $ 0.30 $ 0.27 $ 0.27 $ 0.25 $ 0.61 $ 0.49
OTHER OPERATING EXPENSES
Advertising$733 $823 $644 $906 $657 $1,556 $1,436
Merger and acquisition expenses - - 2,909 474 - - 1,417
Amortization of intangibles 763 845 862 988 1,100 1,608 2,229
Electronic banking expense 1,237 1,456 1,283 1,352 1,299 2,693 2,531
Directors' fees 289 275 262 233 281 564 576
Due from bank service charges 337 305 304 291 286 642 501
FDIC and state assessment 1,446 1,446 1,443 1,276 1,172 2,892 2,568
Insurance 544 533 642 617 617 1,077 1,283
Legal and accounting 658 523 537 338 706 1,181 1,153
Other professional fees 1,044 925 1,231 947 560 1,969 1,048
Operating supplies 419 436 473 464 509 855 943
Postage 260 286 299 293 295 546 604
Telephone 455 487 499 444 470 942 974
Other expense 4,690 4,015 4,397 4,586 3,501 8,705 7,045
Total other operating expenses$ 12,875 $ 12,355 $ 15,785 $ 13,209 $ 11,453 $ 25,230 $ 24,308

Home BancShares, Inc.
Selected Financial Information
(Unaudited)
Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30,
(Dollars in thousands) 2016 2016 2015 2015 2015
BALANCE SHEET RATIOS
Total loans to total deposits 104.61% 104.18% 103.15% 100.88% 96.27%
Common equity to assets 13.20% 13.07% 12.92% 12.82% 13.15%
Tangible common equity to tangible assets 9.44% 9.21% 9.00% 9.17% 9.30%
ALLOWANCE FOR LOAN LOSSES
Non-Covered
Balance, beginning of period$69,780 $66,636 $60,581 $55,877 $52,731
Loans charged off 4,367 3,876 4,316 3,966 3,339
Recoveries of loans previously charged off 709 1,343 1,188 535 1,184
Net loans (recovered)/charged off 3,658 2,533 3,128 3,431 2,155
Provision for loan losses 5,692 5,677 8,890 7,106 5,301
Reclass of provision for loan losses attributable to FDIC loss share agreements - - 293 1,029 -
Balance, end of period$71,814 $69,780 $66,636 $60,581 $55,877
Discount for credit losses on non-covered loans acquired 109,485 129,837 139,498 134,131 131,746
Net (recoveries) charge-offs on loans not covered by loss share to average non-covered loans 0.21% 0.15% 0.19% 0.24% 0.16%
Allowance for loan losses for non-covered loans to total non-covered loans 1.03% 1.03% 1.01% 1.03% 1.02%
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 2.56% 2.88% 3.07% 3.23% 3.33%
Covered
Balance, beginning of period$2,526 $2,588 $3,078 $4,381 $3,795
Loans charged off - 71 158 251 -
Recoveries of loans previously charged off 1 9 (39) (318) 186
Net loans charged off/(recovered) (1) 62 197 569 (186)
Provision for loan losses forecasted outside of loss share - - - 295 -
Provision for loan losses before benefit attributable to FDIC loss share agreements - - - - 400
Benefit attributable to FDIC loss share agreements - - - (295) (320)
Net provision for loan losses - - - - 80
Reclass of provision for loan losses attributable to FDIC loss share agreements - - (293) (1,029) -
Increase (decrease) in FDIC indemnification asset - - - 295 320
Balance, end of period$2,527 $2,526 $2,588 $3,078 $4,381
Total allowance for loan losses$ 74,341 $ 72,306 $ 69,224 $ 63,659 $ 60,258
NON-PERFORMING ASSETS
NOT COVERED BY LOSS SHARE
Non-performing non-covered loans
Non-accrual non-covered loans$36,660 $33,409 $36,374 $37,405 $29,033
Non-covered loans past due 90 days or more 19,302 22,008 23,845 11,390 10,847
Total non-performing non-covered loans 55,962 55,417 60,219 48,795 39,880
Other non-performing non-covered assets
Non-covered foreclosed assets held for sale, net 17,573 19,657 18,526 18,204 16,539
Other non-performing non-covered assets - - 38 14 12
Total other non-performing non-covered assets 17,573 19,657 18,564 18,218 16,551
Total non-performing non-covered assets$ 73,535 $ 75,074 $ 78,783 $ 67,013 $ 56,431
Allowance for loan losses for non-covered loans to non-performing non-covered loans 128.33% 125.92% 110.66% 124.15% 140.11%
Non-performing non-covered loans to total non-covered loans 0.80% 0.82% 0.92% 0.83% 0.73%
Non-performing non-covered assets to total non-covered assets 0.77% 0.80% 0.85% 0.80% 0.71%

Home BancShares, Inc.
Loan Information
(Unaudited)
Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30,
(Dollars in thousands) 2016 2016 2015 2015 2015
LOANS NOT COVERED BY LOSS SHARE
Real estate
Commercial real estate loans
Non-farm/non-residential$2,883,970 $2,889,735 $2,968,147 $2,655,882 $2,477,688
Construction/land development 1,066,844 976,098 943,095 805,003 796,589
Agricultural 78,535 75,763 75,027 75,233 81,633
Residential real estate loans
Residential 1-4 family 1,207,756 1,145,080 1,130,714 1,055,504 997,952
Multifamily residential 394,980 437,721 429,872 392,483 321,593
Total real estate 5,632,085 5,524,397 5,546,855 4,984,105 4,675,455
Consumer 48,933 50,090 52,258 46,677 48,320
Commercial and industrial 1,130,372 1,070,139 850,357 749,846 658,501
Agricultural 69,666 63,482 67,109 78,217 72,766
Other 83,660 84,062 62,822 41,330 43,986
Loans receivable not covered by loss share$ 6,964,716 $ 6,792,170 $ 6,579,401 $ 5,900,175 $ 5,499,028
LOANS COVERED BY LOSS SHARE
Real estate
Commercial real estate loans
Non-farm/non-residential$192 $192 $188 $25,903 $54,777
Construction/land development 1,700 1,702 1,692 7,836 24,003
Agricultural - - - 735 848
Residential real estate loans
Residential 1-4 family 54,660 57,243 59,565 66,447 72,002
Multifamily residential 372 379 384 1,200 1,394
Total real estate 56,924 59,516 61,829 102,121 153,024
Consumer - - - 10 17
Commercial and industrial 404 414 230 2,682 6,118
Agricultural - - - - -
Other 112 112 111 601 732
Loans receivable covered by loss share$ 57,440 $ 60,042 $ 62,170 $ 105,414 $ 159,891

Home BancShares, Inc.
Consolidated Net Interest Margin
(Unaudited)
Three Months Ended
June 30, 2016 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$112,537 $106 0.38% $113,831 $102 0.36%
Federal funds sold 1,509 1 0.27% 3,049 4 0.53%
Investment securities - taxable 1,170,091 5,145 1.77% 1,177,595 5,450 1.86%
Investment securities - non-taxable - FTE 332,091 4,611 5.58% 338,988 4,598 5.46%
Loans receivable - FTE 6,969,727 100,601 5.81% 6,729,060 97,103 5.80%
Total interest-earning assets 8,585,955 110,464 5.17% 8,362,523 107,257 5.16%
Non-earning assets 976,669 968,099
Total assets$ 9,562,624 $ 9,330,622
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts$3,677,650 $2,141 0.23% $3,593,914 $2,018 0.23%
Time deposits 1,393,023 1,713 0.49% 1,393,591 1,616 0.47%
Total interest-bearing deposits 5,070,673 3,854 0.31% 4,987,505 3,634 0.29%
Federal funds purchased 330 1 1.22% 610 1 0.66%
Securities sold under agreement to repurchase 115,849 134 0.47% 128,897 145 0.45%
FHLB borrowed funds 1,402,465 3,074 0.88% 1,368,457 3,070 0.90%
Subordinated debentures 60,826 386 2.55% 60,826 377 2.49%
Total interest-bearing liabilities 6,650,143 7,449 0.45% 6,546,295 7,227 0.44%
Non-interest bearing liabilities
Non-interest bearing deposits 1,611,282 1,514,169
Other liabilities 61,119 59,891
Total liabilities 8,322,544 8,120,355
Shareholders' equity 1,240,080 1,210,267
Total liabilities and shareholders' equity$ 9,562,624 $ 9,330,622
Net interest spread 4.72% 4.72%
Net interest income and margin - FTE $ 103,015 4.83% $ 100,030 4.81%

Home BancShares, Inc.
Consolidated Net Interest Margin
(Unaudited)
Six Months Ended
June 30, 2016 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$110,842 $208 0.38% $117,883 $135 0.23%
Federal funds sold 2,279 5 0.44% 9,792 11 0.23%
Investment securities - taxable 1,173,843 10,595 1.82% 1,081,864 10,673 1.99%
Investment securities - non-taxable - FTE 335,539 9,209 5.52% 327,534 9,047 5.57%
Loans receivable - FTE 6,849,394 197,704 5.80% 5,289,205 158,060 6.03%
Total interest-earning assets 8,471,897 217,721 5.17% 6,826,278 177,926 5.26%
Non-earning assets 974,726 895,978
Total assets$ 9,446,623 $ 7,722,256
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts$3,635,782 $4,159 0.23% $3,095,483 $3,050 0.20%
Time deposits 1,393,307 3,329 0.48% 1,377,623 3,519 0.52%
Total interest-bearing deposits 5,029,089 7,488 0.30% 4,473,106 6,569 0.30%
Federal funds purchased 470 2 0.86% 666 2 0.61%
Securities sold under agreement to repurchase 122,373 279 0.46% 173,906 335 0.39%
FHLB borrowed funds 1,385,461 6,144 0.89% 658,284 2,103 0.64%
Subordinated debentures 60,826 763 2.52% 60,826 663 2.20%
Total interest-bearing liabilities 6,598,219 14,676 0.45% 5,366,788 9,672 0.36%
Non-interest bearing liabilities
Non-interest bearing deposits 1,562,725 1,286,275
Other liabilities 60,505 33,502
Total liabilities 8,221,449 6,686,565
Shareholders' equity 1,225,174 1,035,691
Total liabilities and shareholders' equity$ 9,446,623 $ 7,722,256
Net interest spread 4.72% 4.90%
Net interest income and margin - FTE $ 203,045 4.82% $ 168,254 4.97%

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

Source:Home BancShares, Inc.