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Home BancShares, Inc. Announces a 22.0% Increase in Third Quarter Earnings

CONWAY, Ark., Oct. 20, 2016 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (NASDAQ:HOMB), parent company of Centennial Bank, today announced a record quarterly profit of $43.6 million, or $0.31 diluted earnings per share for the third quarter of 2016 compared to $35.7 million or $0.26 diluted earnings per share (split adjusted) for the same quarter in 2015. Excluding the $3.8 million of FDIC loss share buy-out expense, diluted earnings per share for the third quarter of 2016 was $0.33 per share. The Company increased its third quarter earnings by $7.9 million or 22.0% for the three months ended September 30, 2016 compared to the same period of the previous year. The Company also announced $90.1 million in quarterly organic loan growth during the third quarter of 2016, a core efficiency ratio of 36.51% and a quarterly return on assets excluding FDIC loss share buy-out of 1.90%.

“We are pleased with the earnings performance this quarter, excluding expenses incurred to buy-out the FDIC loss share portfolio,” said John Allison, Chairman. “For the quarter, the Company reported outstanding results for diluted earnings per share excluding the FDIC loss share buy-out of $0.33 per share. We continue to see growth in loans and earnings and are committed to finding more efficient ways to provide exceptional service to our customers.”

“The third quarter of 2016 marked the twenty-second consecutive quarter we have successively reported the most profitable quarter in the Company's history,” said Randy Sims, Home BancShares, Inc. Chief Executive Officer. “During the third quarter of 2016, we again improved our core efficiency ratio, reaching 36.51%. Our Company continues to search for opportunities to not only maximize our efficiencies but also increase earnings for the benefit of the shareholders.”

“Our financial results and organic loan growth for the quarter just ended are giving us momentum to continue to seek additional growth opportunities in attractive markets,” added Tracy French, Centennial Bank President and Chief Executive Officer. “We will remain diligent in our commitment to both generate and retain a substantial amount of capital each quarter so we are consistently in a position to support organic growth that will also produce additional earnings and increase shareholder value.”

Operating Highlights

Each quarter we perform credit impairment tests on the loans acquired in our acquisitions. During our third quarter 2016 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 of acquired loan portfolios, resulted in a net improvement of recognized accretion income when compared to the second quarter of 2016. Consequently, yields on loans and net interest margin for the quarter just ended are slightly increased when compared to the second quarter of 2016.

Net interest margin, on a fully taxable equivalent basis, was 4.86% for the quarter just ended compared to 5.03% for the same quarter in 2015 and compared to 4.83% for the second quarter of 2016. Accretion yield on purchased loans increased approximately $920,000 from $11.0 million for the second quarter of 2016 to $11.9 million for third quarter of 2016. The net interest margin, excluding accretion yield on purchased loans increased slightly from the second quarter of 2016 to the third quarter of 2016 at 4.24% and 4.25%, respectively.

During the third quarter of 2016, the Company recorded a provision for loan loss of $5.5 million compared to $7.1 million in the third quarter of 2015. The $5.5 million of provision for loan loss is a reflection of the organic loan growth and net charge-offs for the third quarter of 2016.

The Company reported $22.0 million of non-interest income for the third quarter of 2016, compared to $16.5 million for the third quarter of 2015. The most important components of the third quarter non-interest income were $7.5 million from other service charges and fees, $6.5 million from service charges on deposits accounts, $3.9 million from mortgage lending income and $1.6 million from other income.

Non-interest expense for the third quarter of 2016 was $51.0 million compared to $44.6 million for the third 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 $3.8 million FDIC loss-share buy-out expense recognized during the third quarter of 2016. For the third quarter of 2016, our core efficiency ratio was 36.51% which is improved from the 39.30% reported for third quarter of 2015.

Financial Condition

Total loans receivable were $7.11 billion at September 30, 2016 compared to $6.64 billion at December 31, 2015. Total deposits were $6.84 billion at September 30, 2016 compared to $6.44 billion at December 31, 2015. Total assets were $9.76 billion at September 30, 2016 compared to $9.29 billion at December 31, 2015.

From December 31, 2015 to September 30, 2016, the Company produced approximately $470.7 million of organic loan growth, of which $222.7 million is associated with loan originations in the legacy footprint with the remaining $248.0 million being associated with Centennial CFG. Centennial CFG had loans of $963.8 million at September 30, 2016.

From June 30, 2016 to September 30, 2016, the Company produced approximately $90.1 million of organic loan growth, of which $17.6 million is associated with loan originations in the legacy footprint with the remaining $72.5 million being associated with Centennial CFG.

Non-performing loans at September 30, 2016 are $25.1 million, $33.9 million, $1.1 million and zero in the Arkansas, Florida, Alabama and Centennial CFG markets, respectively, for a total of $60.1 million. Non-performing loans as a percent of total loans were 0.84% as of September 30, 2016 compared to 0.96% as of December 31, 2015. Non-performing assets at September 30, 2016 are $38.1 million, $37.3 million, $1.7 million and zero in the Arkansas, Florida and Alabama and Centennial CFG markets, respectively, for a total of $77.1 million. Non-performing assets as a percent of total assets were 0.79% as of September 30, 2016 compared to 0.89% as of December 31, 2015.

The Company’s allowance for loan losses was $76.4 million at September 30, 2016, or 1.07% of total loans, compared to $69.2 million, or 1.04% of total loans, at December 31, 2015. As of September 30, 2016 and December 31, 2015, the allowance for loan losses plus discount for credit losses on loans acquired to total loans plus discount for credit losses on loans acquired was 2.55% and 3.22%, 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 September 30, 2016 and December 31, 2015, the Company’s allowance for loan losses was 127% and 109% of its total non-performing loans, respectively.

Stockholders’ equity was $1.30 billion at September 30, 2016 compared to $1.20 billion at December 31, 2015, an increase of $96.3 million. Book value per common share was $9.22 at September 30, 2016 compared to $8.55 (split adjusted) at December 31, 2015. Tangible book value per common share was $6.40 at September 30, 2016 compared to $5.71 (split adjusted) at December 31, 2015 for an annualized increase of 16.1%.

Branches

In an effort to achieve efficiencies primarily from our acquisitions, during the third quarter the Company added deposit operations to its loan production office in New York City and opened one branch location in Davie, Florida. During the fourth quarter of 2016, the Company has plans to close one Arkansas location. The Company currently has 77 branches in Arkansas, 59 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, October 20, 2016. We encourage all participants to pre-register for the conference call using the following link: http://dpregister.com/10092972. 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: 10092972, which will be available until October 27, 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. 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)
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
(In thousands) 2016 2016 2016 2015 2015
ASSETS
Cash and due from banks$ 123,126 $ 136,632 $ 115,206 $ 111,258 $ 120,262
Interest-bearing deposits with other banks 173,034 48,762 42,866 144,565 108,394
Cash and cash equivalents 296,160 185,394 158,072 255,823 228,656
Federal funds sold 1,850 525 7,050 1,550 -
Investment securities - available-for-sale 1,233,269 1,221,778 1,207,773 1,206,580 1,141,405
Investment securities - held-to-maturity 275,544 287,725 299,050 309,042 324,949
Loans receivable 7,112,291 7,022,156 6,852,212 6,641,571 6,005,589
Allowance for loan losses (76,370) (74,341) (72,306) (69,224) (63,659)
Loans receivable, net 7,035,921 6,947,815 6,779,906 6,572,347 5,941,930
Bank premises and equipment, net 208,137 207,932 210,764 212,163 205,505
Foreclosed assets held for sale 17,053 17,778 20,202 19,140 20,816
Cash value of life insurance 86,230 85,889 85,538 85,146 75,281
Accrued interest receivable 29,398 28,548 28,833 29,132 26,977
Deferred tax asset, net 56,435 61,613 69,564 71,565 63,075
Goodwill 377,983 377,983 377,983 377,983 322,728
Core deposit and other intangibles 19,073 19,835 20,597 21,443 18,828
Other assets 127,185 139,311 132,119 127,208 145,403
Total assets $ 9,764,238 $ 9,582,126 $ 9,397,451 $ 9,289,122 $ 8,515,553
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Demand and non-interest-bearing$ 1,717,467 $ 1,645,472 $ 1,562,565 $ 1,456,624 $ 1,409,949
Savings and interest-bearing transaction accounts 3,792,229 3,678,546 3,602,868 3,551,684 3,230,722
Time deposits 1,330,597 1,388,930 1,412,086 1,430,201 1,312,343
Total deposits 6,840,293 6,712,948 6,577,519 6,438,509 5,953,014
Federal funds purchased - - - - -
Securities sold under agreements to repurchase 109,350 111,072 121,906 128,389 134,142
FHLB and other borrowed funds 1,420,369 1,380,889 1,336,233 1,405,945 1,216,152
Accrued interest payable and other liabilities 37,382 51,476 73,185 55,696 60,141
Subordinated debentures 60,826 60,826 60,826 60,826 60,826
Total liabilities 8,468,220 8,317,211 8,169,669 8,089,365 7,424,275
Stockholders' equity
Common stock 1,405 1,404 702 701 680
Capital surplus 866,310 863,560 862,827 867,981 782,500
Retained earnings 419,999 389,014 357,788 326,898 299,984
Accumulated other comprehensive income 8,304 10,937 6,465 4,177 8,114
Total stockholders' equity 1,296,018 1,264,915 1,227,782 1,199,757 1,091,278
Total liabilities and stockholders' equity $ 9,764,238 $ 9,582,126 $ 9,397,451 $ 9,289,122 $ 8,515,553

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) 2016 2016 2015 2015 2015 2016 2015
Interest income
Loans$102,953 $100,415 $96,913 $97,772 $88,671 $300,281 $246,518
Investment securities
Taxable 5,583 5,145 5,450 5,865 5,157 16,178 15,830
Tax-exempt 2,720 2,823 2,815 2,879 2,789 8,358 8,315
Deposits - other banks 117 106 102 66 32 325 167
Federal funds sold 2 1 4 9 4 7 15
Total interest income 111,375 108,490 105,284 106,591 96,653 325,149 270,845
Interest expense
Interest on deposits 4,040 3,854 3,634 3,357 3,045 11,528 9,614
Federal funds purchased - 1 1 1 1 2 3
FHLB borrowed funds 3,139 3,074 3,070 2,641 2,030 9,283 4,133
Securities sold under agreements to repurchase 142 134 145 140 146 421 481
Subordinated debentures 401 386 377 351 340 1,164 1,003
Total interest expense 7,722 7,449 7,227 6,490 5,562 22,398 15,234
Net interest income 103,653 101,041 98,057 100,101 91,091 302,751 255,611
Provision for loan losses 5,536 5,692 5,677 8,890 7,106 16,905 16,274
Net interest income after
provision for loan losses 98,117 95,349 92,380 91,211 83,985 285,846 239,337
Non-interest income
Service charges on deposit accounts 6,527 6,151 5,929 6,528 6,250 18,607 17,724
Other service charges and fees 7,504 7,968 7,117 6,827 6,644 22,589 19,359
Trust fees 365 359 404 365 398 1,128 2,016
Mortgage lending income 3,932 3,481 2,863 2,404 3,132 10,276 8,019
Insurance commissions 534 617 657 513 548 1,808 1,755
Increase in cash value of life insurance 344 353 395 328 268 1,092 871
Dividends from FHLB, FRB, Bankers' bank & other 808 719 620 431 433 2,147 1,267
Gain on acquisitions - - - - - - 1,635
Gain on sale of SBA loans 364 79 - 390 151 443 151
Gain (loss) on sale of branches, equipment and other assets, net (86) 840 (53) 23 (266) 701 (237)
Gain (loss) on OREO, net 132 (941) 96 (507) (40) (713) 190
Gain (loss) on securities, net - 15 10 - - 25 4
FDIC indemnification accretion/(amortization), net - (410) (362) (1,239) (1,994) (772) (8,152)
Other income 1,590 2,541 1,761 1,193 1,021 5,892 3,640
Total non-interest income 22,014 21,772 19,437 17,256 16,545 63,223 48,242
Non-interest expense
Salaries and employee benefits 25,623 25,437 23,958 23,841 22,225 75,018 63,671
Occupancy and equipment 6,668 6,509 6,671 6,700 6,540 19,848 19,267
Data processing expense 2,791 2,766 2,664 2,673 2,619 8,221 8,101
Other operating expenses 15,944 12,875 12,355 15,785 13,209 41,174 37,517
Total non-interest expense 51,026 47,587 45,648 48,999 44,593 144,261 128,556
Income before income taxes 69,105 69,534 66,169 59,468 55,937 204,808 159,023
Income tax expense 25,485 26,025 24,742 22,035 20,196 76,252 58,257
Net income $43,620 $43,509 $41,427 $37,433 $35,741 $128,556 $100,766

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) 2016 2016 2015 2015 2015 2016 2015
PER SHARE DATA
Diluted earnings per common share$0.31 $0.31 $0.29 $0.27 $0.26 $0.91 $0.74
Diluted earnings per common share excluding merger expenses & FDIC loss share buy-out expense 0.33 0.31 0.29 0.28 0.26 0.93 0.75
Diluted earnings per common share excluding intangible amortization 0.31 0.31 0.30 0.27 0.27 0.92 0.76
Basic earnings per common share 0.31 0.31 0.30 0.27 0.26 0.92 0.74
Dividends per share - common 0.0900 0.0875 0.0750 0.0750 0.0750 0.2525 0.2000
Book value per common share 9.22 9.01 8.75 8.55 8.02 9.22 8.02
Tangible book value per common share 6.40 6.18 5.91 5.71 5.51 6.40 5.51
STOCK INFORMATION
Average common shares outstanding 140,436 140,382 140,390 140,234 135,738 140,403 135,396
Average diluted shares outstanding 140,703 140,608 140,687 140,617 136,162 140,685 135,999
End of period common shares outstanding 140,490 140,382 140,380 140,241 136,001 140,490 136,001
ANNUALIZED PERFORMANCE METRICS
Return on average assets 1.81% 1.83% 1.79% 1.62% 1.72% 1.81% 1.71%
Return on average assets excluding intangible amortization 1.91% 1.93% 1.89% 1.72% 1.83% 1.91% 1.82%
Return on average assets excluding intangible amortization, provision for loan losses, merger expenses, gain on acquisitions, loss on FDIC loss share buyout and income taxes (Core ROA) 3.43% 3.33% 3.27% 3.27% 3.24% 3.35% 3.17%
Return on average common equity 13.62% 14.11% 13.77% 12.53% 13.23% 13.83% 12.86%
Return on average tangible common equity excluding intangible amortization 20.01% 21.01% 20.79% 19.07% 19.76% 20.59% 19.49%
Efficiency ratio 39.41% 37.52% 37.50% 40.32% 39.79% 38.16% 40.49%
Core efficiency ratio 36.51% 36.84% 36.92% 37.86% 39.30% 36.75% 40.11%
Net interest margin - FTE 4.86% 4.83% 4.81% 4.95% 5.03% 4.83% 4.99%
Fully taxable equivalent adjustment$1,869 $1,974 $1,973 $2,025 $1,951 $5,816 $5,685
Total revenue 133,389 130,262 124,721 123,847 113,198 388,372 319,087
EARNINGS EXCLUDING
INTANGIBLE AMORTIZATION
GAAP net income available to common shareholders$43,620 $43,509 $41,427 $37,433 $35,741 $128,556 $100,766
Intangible amortization after-tax 463 463 514 524 600 1,440 1,955
Earnings excluding intangible amortization$44,083 $43,972 $41,941 $37,957 $36,341 $129,996 $102,721
GAAP diluted earnings per share$0.31 $0.31 $0.29 $0.27 $0.26 $0.91 $0.74
Intangible amortization after-tax - - 0.01 - 0.01 0.01 0.02
Diluted earnings per share excluding intangible amortization$0.31 $0.31 $0.30 $0.27 $0.27 $0.92 $0.76
OTHER OPERATING EXPENSES
Advertising$866 $733 $823 $644 $906 $2,422 $2,342
Merger and acquisition expenses - - - 2,909 474 - 1,891
FDIC loss share buy-out expense 3,849 - - - - 3,849 -
Amortization of intangibles 762 763 845 862 988 2,370 3,217
Electronic banking expense 1,428 1,237 1,456 1,283 1,352 4,121 3,883
Directors' fees 292 289 275 262 233 856 809
Due from bank service charges 319 337 305 304 291 961 792
FDIC and state assessment 1,502 1,446 1,446 1,443 1,276 4,394 3,844
Insurance 553 544 533 642 617 1,630 1,900
Legal and accounting 583 658 523 537 338 1,764 1,491
Other professional fees 1,137 1,044 925 1,231 947 3,106 1,995
Operating supplies 437 419 436 473 464 1,292 1,407
Postage 269 260 286 299 293 815 897
Telephone 449 455 487 499 444 1,391 1,418
Other expense 3,498 4,690 4,015 4,397 4,586 12,203 11,631
Total other operating expenses$ 15,944 $ 12,875 $ 12,355 $ 15,785 $ 13,209 $ 41,174 $ 37,517

Home BancShares, Inc.
Selected Financial Information
(Unaudited)
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
(Dollars in thousands) 2016 2016 2016 2015 2015
BALANCE SHEET RATIOS
Total loans to total deposits 103.98% 104.61% 104.18% 103.15% 100.88%
Common equity to assets 13.27% 13.20% 13.07% 12.92% 12.82%
Tangible common equity to tangible assets 9.60% 9.44% 9.21% 9.00% 9.17%
LOANS RECEIVABLE
Real estate
Commercial real estate loans
Non-farm/non-residential$2,954,618 $2,884,162 $2,889,927 $2,968,335 $2,681,785
Construction/land development 1,065,204 1,068,544 977,800 944,787 812,839
Agricultural 77,556 78,535 75,763 75,027 75,968
Residential real estate loans
Residential 1-4 family 1,264,384 1,262,416 1,202,323 1,190,279 1,121,951
Multifamily residential 328,089 395,352 438,100 430,256 393,683
Total real estate 5,689,851 5,689,009 5,583,913 5,608,684 5,086,226
Consumer 42,487 48,933 50,090 52,258 46,687
Commercial and industrial 1,225,043 1,130,776 1,070,553 850,587 752,528
Agricultural 73,413 69,666 63,482 67,109 78,217
Other 81,497 83,772 84,174 62,933 41,931
Loans receivable$7,112,291 $7,022,156 $6,852,212 $6,641,571 $6,005,589
ALLOWANCE FOR LOAN LOSSES
Balance, beginning of period$ 74,341 $ 72,306 $ 69,224 $ 63,659 $ 60,258
Loans charged off 4,351 4,367 3,947 4,474 4,217
Recoveries of loans previously charged off 844 710 1,352 1,149 217
Net loans (recovered)/charged off 3,507 3,657 2,595 3,325 4,000
Provision for loan losses 5,536 5,692 5,677 8,890 7,401
Balance, end of period$76,370 $74,341 $72,306 $69,224 $63,659
- - - - -
Discount for credit losses on purchased loans 108,017 120,910 142,223 149,394 148,850
Net (recoveries) charge-offs to average total loans 0.20% 0.21% 0.16% 0.20% 0.27%
Allowance for loan losses to total loans 1.07% 1.06% 1.06% 1.04% 1.06%
Allowance for loan losses plus discount for credit losses on purchased loans to total loans plus discount for credit losses on purchased loans 2.55% 2.73% 3.07% 3.22% 3.45%
NON-PERFORMING ASSETS
Non-performing loans
Non-accrual loans$ 39,353 $ 36,660 $ 33,409 $ 36,374 $ 37,405
Loans past due 90 days or more 20,737 22,998 25,144 27,137 16,560
Total non-performing loans 60,090 59,658 58,553 63,511 53,965
Other non-performing assets
Foreclosed assets held for sale, net 17,053 17,778 20,202 19,140 20,816
Other non-performing assets - - - 38 14
Total other non-performing assets 17,053 17,778 20,202 19,178 20,830
Total non-performing assets$ 77,143 $ 77,436 $ 78,755 $ 82,689 $ 74,795
Allowance for loan losses for loans to non-performing loans 127.09% 124.61% 123.49% 109.00% 117.96%
Non-performing loans to total loans 0.84% 0.85% 0.85% 0.96% 0.90%
Non-performing assets to total assets 0.79% 0.81% 0.84% 0.89% 0.88%

Home BancShares, Inc.
Consolidated Net Interest Margin
(Unaudited)
Three Months Ended
September 30, 2016 June 30, 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$ 110,993 $ 117 0.42% $ 112,537 $ 106 0.38%
Federal funds sold 1,136 2 0.70% 1,509 1 0.27%
Investment securities - taxable 1,177,284 5,583 1.89% 1,170,091 5,145 1.77%
Investment securities - non-taxable - FTE 328,979 4,407 5.33% 332,091 4,611 5.58%
Loans receivable - FTE 7,027,634 103,135 5.84% 6,969,727 100,601 5.81%
Total interest-earning assets 8,646,026 113,244 5.21% 8,585,955 110,464 5.17%
Non-earning assets 956,337 976,669
Total assets$ 9,602,363 $ 9,562,624
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts$ 3,721,019 $ 2,268 0.24% $ 3,677,650 $ 2,141 0.23%
Time deposits 1,361,589 1,772 0.52% 1,393,023 1,713 0.49%
Total interest-bearing deposits 5,082,608 4,040 0.32% 5,070,673 3,854 0.31%
Federal funds purchased - - 0.00% 330 1 1.22%
Securities sold under agreement to repurchase 118,183 142 0.48% 115,849 134 0.47%
FHLB borrowed funds 1,357,716 3,139 0.92% 1,402,465 3,074 0.88%
Subordinated debentures 60,826 401 2.62% 60,826 386 2.55%
Total interest-bearing liabilities 6,619,333 7,722 0.46% 6,650,143 7,449 0.45%
Non-interest bearing liabilities
Non-interest bearing deposits 1,663,621 1,611,282
Other liabilities 45,332 61,119
Total liabilities 8,328,286 8,322,544
Shareholders' equity 1,274,077 1,240,080
Total liabilities and shareholders' equity$ 9,602,363 $ 9,562,624
Net interest spread 4.75% 4.72%
Net interest income and margin - FTE $ 105,522 4.86% $ 103,015 4.83%

Home BancShares, Inc.
Consolidated Net Interest Margin
(Unaudited)
Nine Months Ended
September 30, 2016 September 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$ 110,893 $ 325 0.39% $ 104,764 $ 167 0.21%
Federal funds sold 1,895 7 0.49% 8,276 15 0.24%
Investment securities - taxable 1,174,998 16,178 1.84% 1,097,901 15,830 1.93%
Investment securities - non-taxable - FTE 333,336 13,616 5.46% 327,040 13,604 5.56%
Loans receivable - FTE 6,909,240 300,839 5.82% 5,461,573 246,914 6.04%
Total interest-earning assets 8,530,362 330,965 5.18% 6,999,554 276,530 5.28%
Non-earning assets 968,553 894,092
Total assets$ 9,498,915 $ 7,893,646
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts$ 3,664,401 $ 6,426 0.23% $ 3,116,308 $ 4,564 0.20%
Time deposits 1,382,657 5,102 0.49% 1,358,539 5,050 0.50%
Total interest-bearing deposits 5,047,058 11,528 0.31% 4,474,847 9,614 0.29%
Federal funds purchased 312 2 0.86% 863 3 0.46%
Securities sold under agreement to repurchase 120,966 421 0.46% 163,718 481 0.39%
FHLB borrowed funds 1,376,145 9,283 0.90% 788,393 4,133 0.70%
Subordinated debentures 60,826 1,164 2.56% 60,826 1,003 2.20%
Total interest-bearing liabilities 6,605,307 22,398 0.45% 5,488,647 15,234 0.37%
Non-interest bearing liabilities
Non-interest bearing deposits 1,596,603 1,315,160
Other liabilities 55,411 41,982
Total liabilities 8,257,321 6,845,789
Shareholders' equity 1,241,594 1,047,857
Total liabilities and shareholders' equity$ 9,498,915 $ 7,893,646
Net interest spread 4.73% 4.91%
Net interest income and margin - FTE $ 308,567 4.83% $ 261,296 4.99%

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

Source:Home BancShares, Inc.