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Home BancShares, Inc. Announces a 28.2% Increase in 2016 Earnings

CONWAY, Ark., Jan. 19, 2017 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (NASDAQ:HOMB), parent company of Centennial Bank, today announced net income for the year ended December 31, 2016 of $177.1 million compared to $138.2 million for the year ended 2015 for a 28.2% increase. Diluted earnings per share for the year ended 2016 was $1.26 per share compared to $1.01 per share (split adjusted) for 2015, representing an increase of $0.25 per share or 24.8% for the year ended 2016 when compared to the previous year.

For the fourth quarter of 2016, the Company recorded a 29.8% increase in quarterly profit to $48.6 million, for the fourth quarter of 2016 compared to $37.4 million, for the same quarter in 2015. Diluted earnings per share for the fourth quarter of 2016 was $0.35 per share compared to $0.27 per share (split adjusted) for 2015, representing an increase of $0.08 per share or 29.6% for the fourth quarter of 2016 when compared to the same quarter in the prior year. Excluding a $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 upcoming acquisitions, diluted earnings per share for the fourth quarter of 2016 was $0.33 per share. The Company also announced $275.4 million in quarterly organic loan growth and a 35.97% core efficiency ratio during the fourth quarter of 2016.

“The annual and quarterly earnings performance for 2016 exceeded expectations,” said John Allison, Chairman. “At the beginning of 2016, we had what we considered an aggressive goal in place to reach annual diluted earnings per share of $1.25. While it took both discipline and hard work, the Company exceeded this goal for the year by reporting exceptional results for diluted earnings per share of $1.26 per share.”

“We are proud to report the fourth quarter of 2016 as the twenty-third consecutive quarter reporting the most profitable quarter in the Company’s history,” said Randy Sims, Home BancShares, Inc. Chief Executive Officer. “Not only did the Company report an outstanding $5.0 million or 11.4% increase from our previously reported record earnings, but we also reported record results for diluted earnings per share of $0.35 per share and core efficiency ratio of 35.97%.”

“As the fourth quarter organic loan growth and financial results show, the efforts made by our team of associates are rewarding. We are pleased with the strong finish for 2016, and look forward to the opportunities that 2017 will create,” added Tracy French, Centennial Bank President and Chief Executive Officer. “We aim to continue growing loans and cutting expenses to improve earnings, while continuing to look for acquisition opportunities in attractive markets to increase our return to our shareholders.”

Operating Highlights

Each quarter we perform credit impairment tests on the loans acquired in our acquisitions. During our fourth 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 and reduction of pay-offs in the acquired loan portfolios, resulted in a net decline of recognized accretion income when compared to the third quarter of 2016. Accretion yield decreased approximately $3.3 million from $11.9 million for the third quarter of 2016 to $8.6 million for fourth quarter of 2016. This $3.3 million decline is primarily the result of reduced accretion income from acquired loan pay-offs, which were $4.3 million during the third quarter of 2016 compared to $1.9 million in the fourth quarter of 2016.

Net interest margin, on a fully taxable equivalent basis, was 4.75% for the quarter just ended compared to 4.95% for the same quarter in 2015 and compared to 4.86% for the third quarter of 2016. The net interest margin, excluding accretion yield increased slightly from the third quarter of 2016 to the fourth quarter of 2016 at 4.25% and 4.31%, respectively.

During the fourth quarter of 2016, the Company recorded a provision for loan loss of $1.7 million compared to $8.9 million in the fourth quarter of 2015. The Company was able to reduce fourth quarter 2016 provision for loan losses as a result of a significant loan recovery from a borrower which was charged-off in 2010. The Company estimates that the fourth quarter 2016 provision for loan losses was reduced by $4.5 million as a result of this loan recovery. For the fourth quarter of 2016, net recoveries were $1.9 million compared to net charge-offs of $3.3 million for the fourth quarter of 2015.

The Company reported $23.8 million of non-interest income for the fourth quarter of 2016, compared to $17.3 million for the fourth quarter of 2015. The most important components of the fourth quarter non-interest income were $7.6 million from other service charges and fees, $6.4 million from service charges on deposits accounts, $4.1 million from mortgage lending income and $2.1 million from other income.

Non-interest expense for the fourth quarter of 2016 was $47.5 million compared to $49.0 million for the fourth quarter of 2015. Non-interest expense excluding merger expenses for the fourth quarter of 2016 was $47.1 million compared to $46.1 million for the fourth quarter of 2015. This increase excluding merger expenses is primarily the result of $1.4 million growth in non-interest expense related to the Centennial Commercial Finance Group (“Centennial CFG”) offset by efficiencies achieved throughout the Company including the Bay Cities acquisition in the fourth quarter of 2015. The fourth quarter of 2016 includes $231,000 of write-downs on vacant properties from closed facilities. For the fourth quarter of 2016, our core efficiency ratio was 35.97% which is improved from the 37.86% reported for fourth quarter of 2015.

Financial Condition

Total loans receivable were $7.39 billion at December 31, 2016 compared to $6.64 billion at December 31, 2015. Total deposits were $6.94 billion at December 31, 2016 compared to $6.44 billion at December 31, 2015. Total assets were $9.81 billion at December 31, 2016 compared to $9.29 billion at December 31, 2015.

From December 31, 2015 to December 31, 2016, the Company produced approximately $746.1 million of organic loan growth, of which $353.4 million is associated with loan originations in the legacy footprint with the remaining $392.7 million being associated with Centennial CFG. Centennial CFG had loans of $1.11 billion at December 31, 2016.

From September 30, 2016 to December 31, 2016, the Company produced approximately $275.4 million of organic loan growth, of which $130.8 million is associated with loan originations in the legacy footprint with the remaining $144.6 million being associated with Centennial CFG.

Non-performing loans at December 31, 2016 are $28.5 million, $34.0 million, $656,000 and zero in the Arkansas, Florida, Alabama and Centennial CFG markets, respectively, for a total of $63.1 million. Non-performing loans as a percent of total loans were 0.85% as of December 31, 2016 compared to 0.96% as of December 31, 2015. Non-performing assets at December 31, 2016 are $41.0 million, $36.8 million, $1.2 million and zero in the Arkansas, Florida and Alabama and Centennial CFG markets, respectively, for a total of $79.1 million. Non-performing assets as a percent of total assets were 0.81% as of December 31, 2016 compared to 0.89% as of December 31, 2015.

The Company’s allowance for loan losses was $80.0 million at December 31, 2016, or 1.08% of total loans, compared to $69.2 million, or 1.04% of total loans, at December 31, 2015. As of December 31, 2016 and 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 2.41% 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 December 31, 2016 and 2015, the Company’s allowance for loan losses was 127% and 109% of its total non-performing loans, respectively.

Stockholders’ equity was $1.32 billion at December 31, 2016 compared to $1.20 billion at December 31, 2015, an increase of $125.1 million. Book value per common share was $9.43 at December 31, 2016 compared to $8.55 (split adjusted) at December 31, 2015. Tangible book value per common share was $6.61 at December 31, 2016 compared to $5.71 (split adjusted) at December 31, 2015 for an increase of 15.8%.

Branches

In an effort to achieve efficiencies primarily from our acquisitions, during the fourth quarter the Company closed one branch in Mountain Home, Arkansas. During the first 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, 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, January 19, 2017. We encourage all participants to pre-register for the conference call using the following link: http://dpregister.com/10098283. 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: 10098283, which will be available until January 26, 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.

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)
Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
(In thousands) 2016 2016 2016 2016 2015
ASSETS
Cash and due from banks $123,758 $123,126 $136,632 $115,206 $111,258
Interest-bearing deposits with other banks 92,891 173,034 48,762 42,866 144,565
Cash and cash equivalents 216,649 296,160 185,394 158,072 255,823
Federal funds sold 1,550 1,850 525 7,050 1,550
Investment securities - available-for-sale 1,072,920 1,233,269 1,221,778 1,207,773 1,206,580
Investment securities - held-to-maturity 284,176 275,544 287,725 299,050 309,042
Loans receivable 7,387,699 7,112,291 7,022,156 6,852,212 6,641,571
Allowance for loan losses (80,002) (76,370) (74,341) (72,306) (69,224)
Loans receivable, net 7,307,697 7,035,921 6,947,815 6,779,906 6,572,347
Bank premises and equipment, net 205,301 208,137 207,932 210,764 212,163
Foreclosed assets held for sale 15,951 17,053 17,778 20,202 19,140
Cash value of life insurance 86,491 86,230 85,889 85,538 85,146
Accrued interest receivable 30,838 29,398 28,548 28,833 29,132
Deferred tax asset, net 61,298 56,435 61,613 69,564 71,565
Goodwill 377,983 377,983 377,983 377,983 377,983
Core deposit and other intangibles 18,311 19,073 19,835 20,597 21,443
Other assets 129,300 127,185 139,311 132,119 127,208
Total assets $9,808,465 $9,764,238 $9,582,126 $9,397,451 $9,289,122
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Demand and non-interest-bearing $1,695,184 $1,717,467 $1,645,472 $1,562,565 $1,456,624
Savings and interest-bearing transaction accounts 3,963,241 3,792,229 3,678,546 3,602,868 3,551,684
Time deposits 1,284,002 1,330,597 1,388,930 1,412,086 1,430,201
Total deposits 6,942,427 6,840,293 6,712,948 6,577,519 6,438,509
Federal funds purchased - - - - -
Securities sold under agreements to repurchase 121,290 109,350 111,072 121,906 128,389
FHLB and other borrowed funds 1,305,198 1,420,369 1,380,889 1,336,233 1,405,945
Accrued interest payable and other liabilities 53,891 37,382 51,476 73,185 55,696
Subordinated debentures 60,826 60,826 60,826 60,826 60,826
Total liabilities 8,483,632 8,468,220 8,317,211 8,169,669 8,089,365
Stockholders' equity
Common stock 1,405 1,405 1,404 702 701
Capital surplus 867,080 866,310 863,560 862,827 867,981
Retained earnings 455,948 419,999 389,014 357,788 326,898
Accumulated other comprehensive income 400 8,304 10,937 6,465 4,177
Total stockholders' equity 1,324,833 1,296,018 1,264,915 1,227,782 1,199,757
Total liabilities and stockholders' equity $9,808,465 $9,764,238 $9,582,126 $9,397,451 $9,289,122

Home BancShares, Inc.
Consolidated Statements of Income
(Unaudited)
Quarter Ended Year Ended
Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31, Dec. 31, Dec. 31,
(In thousands) 2016 2016 2016 2015 2015 2016 2015
Interest income
Loans $103,113 $102,953 $100,415 $96,913 $97,772 $403,394 $344,290
Investment securities
Taxable 5,068 5,583 5,145 5,450 5,865 21,246 21,695
Tax-exempt 3,059 2,720 2,823 2,815 2,879 11,417 11,194
Deposits - other banks 146 117 106 102 66 471 233
Federal funds sold 2 2 1 4 9 9 24
Total interest income 111,388 111,375 108,490 105,284 106,591 436,537 377,436
Interest expense
Interest on deposits 4,398 4,040 3,854 3,634 3,357 15,926 12,971
Federal funds purchased - - 1 1 1 2 4
FHLB borrowed funds 3,201 3,139 3,074 3,070 2,641 12,484 6,774
Securities sold under agreements to repurchase 153 142 134 145 140 574 621
Subordinated debentures 429 401 386 377 351 1,593 1,354
Total interest expense 8,181 7,722 7,449 7,227 6,490 30,579 21,724
Net interest income 103,207 103,653 101,041 98,057 100,101 405,958 355,712
Provision for loan losses 1,703 5,536 5,692 5,677 8,890 18,608 25,164
Net interest income after
provision for loan losses 101,504 98,117 95,349 92,380 91,211 387,350 330,548
Non-interest income
Service charges on deposit accounts 6,442 6,527 6,151 5,929 6,528 25,049 24,252
Other service charges and fees 7,611 7,504 7,968 7,117 6,827 30,200 26,186
Trust fees 329 365 359 404 365 1,457 2,381
Mortgage lending income 4,123 3,932 3,481 2,863 2,404 14,399 10,423
Insurance commissions 488 534 617 657 513 2,296 2,268
Increase in cash value of life insurance 320 344 353 395 328 1,412 1,199
Dividends from FHLB, FRB, Bankers' bank & other 944 808 719 620 431 3,091 1,698
Gain on acquisitions - - - - - - 1,635
Gain on sale of SBA loans 645 364 79 - 390 1,088 541
Gain (loss) on sale of branches, equipment and other assets, net (1) (86) 840 (53) 23 700 (214)
Gain (loss) on OREO, net 159 132 (941) 96 (507) (554) (317)
Gain (loss) on securities, net 644 - 15 10 - 669 4
FDIC indemnification accretion/(amortization), net - - (410) (362) (1,239) (772) (9,391)
Other income 2,124 1,590 2,541 1,761 1,193 8,016 4,833
Total non-interest income 23,828 22,014 21,772 19,437 17,256 87,051 65,498
Non-interest expense
Salaries and employee benefits 26,944 25,623 25,437 23,958 23,841 101,962 87,512
Occupancy and equipment 6,281 6,668 6,509 6,671 6,700 26,129 25,967
Data processing expense 2,278 2,791 2,766 2,664 2,673 10,499 10,774
Other operating expenses 11,991 15,944 12,875 12,355 15,785 53,165 53,302
Total non-interest expense 47,494 51,026 47,587 45,648 48,999 191,755 177,555
Income before income taxes 77,838 69,105 69,534 66,169 59,468 282,646 218,491
Income tax expense 29,248 25,485 26,025 24,742 22,035 105,500 80,292
Net income $48,590 $43,620 $43,509 $41,427 $37,433 $177,146 $138,199

Home BancShares, Inc.
Selected Financial Information
(Unaudited)
Quarter Ended Year Ended
(Dollars and shares in thousands, Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31, Dec. 31, Dec. 31,
except per share data) 2016 2016 2016 2015 2015 2016 2015
PER SHARE DATA
Diluted earnings per common share $0.35 $0.31 $0.31 $0.29 $0.27 $1.26 $1.01
Diluted earnings per common share excluding merger expenses & FDIC loss share buy-out expense 0.35 0.33 0.31 0.29 0.28 1.28 1.03
Diluted earnings per common share excluding intangible amortization 0.35 0.31 0.31 0.30 0.27 1.27 1.03
Basic earnings per common share 0.35 0.31 0.31 0.30 0.27 1.26 1.01
Dividends per share - common 0.0900 0.0900 0.0875 0.0750 0.0750 0.3425 0.2750
Book value per common share 9.43 9.22 9.01 8.75 8.55 9.43 8.55
Tangible book value per common share 6.61 6.40 6.18 5.91 5.71 6.61 5.71
STOCK INFORMATION
Average common shares outstanding 140,465 140,436 140,382 140,390 140,234 140,418 136,615
Average diluted shares outstanding 140,781 140,703 140,608 140,687 140,617 140,713 137,130
End of period common shares outstanding 140,472 140,490 140,382 140,380 140,241 140,472 140,241
ANNUALIZED PERFORMANCE METRICS
Return on average assets 1.98% 1.81% 1.83% 1.79% 1.62% 1.85% 1.68%
Return on average assets excluding intangible amortization 2.08% 1.91% 1.93% 1.89% 1.72% 1.95% 1.79%
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) 3.42% 3.43% 3.33% 3.27% 3.27% 3.37% 3.20%
Return on average common equity 14.79% 13.62% 14.11% 13.77% 12.53% 14.08% 12.77%
Return on average tangible common equity excluding intangible amortization 21.45% 20.01% 21.01% 20.79% 19.07% 20.82% 19.37%
Efficiency ratio 36.19% 39.41% 37.52% 37.50% 40.32% 37.65% 40.44%
Core efficiency ratio 35.97% 36.51% 36.84% 36.92% 37.86% 36.55% 39.48%
Net interest margin - FTE 4.75% 4.86% 4.83% 4.81% 4.95% 4.81% 4.98%
Fully taxable equivalent adjustment $2,108 $1,869 $1,974 $1,973 $2,025 $7,924 $7,710
Total revenue 135,216 133,389 130,262 124,721 123,847 523,588 442,934
EARNINGS EXCLUDING
INTANGIBLE AMORTIZATION
GAAP net income available to common shareholders $48,590 $43,620 $43,509 $41,427 $37,433 $177,146 $138,199
Intangible amortization after-tax 463 463 463 514 524 1,903 2,479
Earnings excluding intangible amortization $49,053 $44,083 $43,972 $41,941 $37,957 $179,049 $140,678
GAAP diluted earnings per share $0.35 $0.31 $0.31 $0.29 $0.27 $1.26 $1.01
Intangible amortization after-tax - - - 0.01 - 0.01 0.02
Diluted earnings per share excluding intangible amortization $0.35 $0.31 $0.31 $0.30 $0.27 $1.27 $1.03
OTHER OPERATING EXPENSES
Advertising $910 $866 $733 $823 $644 $3,332 $2,986
Merger and acquisition expenses 433 - - - 2,909 433 4,800
FDIC loss share buy-out expense - 3,849 - - - 3,849 -
Amortization of intangibles 762 762 763 845 862 3,132 4,079
Electronic banking expense 1,621 1,428 1,237 1,456 1,283 5,742 5,166
Directors' fees 294 292 289 275 262 1,150 1,071
Due from bank service charges 393 319 337 305 304 1,354 1,096
FDIC and state assessment 1,097 1,502 1,446 1,446 1,443 5,491 5,287
Insurance 563 553 544 533 642 2,193 2,542
Legal and accounting 442 583 658 523 537 2,206 2,028
Other professional fees 943 1,137 1,044 925 1,231 4,049 3,226
Operating supplies 466 437 419 436 473 1,758 1,880
Postage 269 269 260 286 299 1,084 1,196
Telephone 360 449 455 487 499 1,751 1,917
Other expense 3,438 3,498 4,690 4,015 4,397 15,641 16,028
Total other operating expenses $11,991 $15,944 $12,875 $12,355 $15,785 $53,165 $53,302

Home BancShares, Inc.
Selected Financial Information
(Unaudited)
Dec. 31,
Sep. 30,
Jun. 30,
Mar. 31,
Dec. 31,
(Dollars in thousands) 2016
2016
2016
2016
2015
BALANCE SHEET RATIOS
Total loans to total deposits 106.41% 103.98% 104.61% 104.18% 103.15%
Common equity to assets 13.51% 13.27% 13.20% 13.07% 12.92%
Tangible common equity to tangible assets 9.87% 9.60% 9.44% 9.21% 9.00%
LOANS RECEIVABLE
Real estate
Commercial real estate loans
Non-farm/non-residential $3,153,121 $2,954,618 $2,884,162 $2,889,927 $2,968,335
Construction/land development 1,135,843 1,065,204 1,068,544 977,800 944,787
Agricultural 77,736 77,556 78,535 75,763 75,027
Residential real estate loans
Residential 1-4 family 1,356,136 1,264,384 1,262,416 1,202,323 1,190,279
Multifamily residential 340,926 328,089 395,352 438,100 430,256
Total real estate 6,063,762 5,689,851 5,689,009 5,583,913 5,608,684
Consumer 41,745 42,487 48,933 50,090 52,258
Commercial and industrial 1,123,213 1,225,043 1,130,776 1,070,553 850,587
Agricultural 74,673 73,413 69,666 63,482 67,109
Other 84,306 81,497 83,772 84,174 62,933
Loans receivable $7,387,699 $7,112,291 $7,022,156 $6,852,212 $6,641,571
ALLOWANCE FOR LOAN LOSSES
Balance, beginning of period $76,370 $74,341 $72,306 $69,224 $63,659
Loans charged off 4,836 4,351 4,367 3,947 4,474
Recoveries of loans previously charged off 6,765 844 710 1,352 1,149
Net loans (recovered)/charged off (1,929) 3,507 3,657 2,595 3,325
Provision for loan losses 1,703 5,536 5,692 5,677 8,890
Balance, end of period $80,002 $76,370 $74,341 $72,306 $69,224
Discount for credit losses on purchased loans 100,148 108,017 120,910 142,223 149,394
Net (recoveries) charge-offs to average total loans -0.11% 0.20% 0.21% 0.16% 0.20%
Allowance for loan losses to total loans 1.08% 1.07% 1.06% 1.06% 1.04%
Allowance for loan losses plus discount for credit losses on purchased loans to total loans plus discount for credit losses on purchased loans 2.41% 2.55% 2.73% 3.07% 3.22%
NON-PERFORMING ASSETS
Non-performing loans
Non-accrual loans $47,182 $39,353 $36,660 $33,409 $36,374
Loans past due 90 days or more 15,942 20,737 22,998 25,144 27,137
Total non-performing loans 63,124 60,090 59,658 58,553 63,511
Other non-performing assets
Foreclosed assets held for sale, net 15,951 17,053 17,778 20,202 19,140
Other non-performing assets 3 - - - 38
Total other non-performing assets 15,954 17,053 17,778 20,202 19,178
Total non-performing assets $79,078 $77,143 $77,436 $78,755 $82,689
Allowance for loan losses for loans to non-performing loans 126.74% 127.09% 124.61% 123.49% 109.00%
Non-performing loans to total loans 0.85% 0.84% 0.85% 0.85% 0.96%
Non-performing assets to total assets 0.81% 0.79% 0.81% 0.84% 0.89%

Home BancShares, Inc.
Consolidated Net Interest Margin
(Unaudited)
Three Months Ended
December 31, 2016 September 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 $135,276 $146 0.43% $110,993 $117 0.42%
Federal funds sold 1,374 2 0.58% 1,136 2 0.70%
Investment securities - taxable 1,121,012 5,068 1.80% 1,177,284 5,583 1.89%
Investment securities - non-taxable - FTE 349,175 4,982 5.68% 328,979 4,407 5.33%
Loans receivable - FTE 7,217,631 103,298 5.69% 7,027,634 103,135 5.84%
Total interest-earning assets 8,824,468 113,496 5.12% 8,646,026 113,244 5.21%
Non-earning assets 952,680 956,337
Total assets $9,777,148 $9,602,363
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts $3,877,152 $2,551 0.26% $3,721,019 $2,268 0.24%
Time deposits 1,303,182 1,847 0.56% 1,361,589 1,772 0.52%
Total interest-bearing deposits 5,180,334 4,398 0.34% 5,082,608 4,040 0.32%
Federal funds purchased 86 - 0.00% - - 0.00%
Securities sold under agreement to repurchase 119,413 153 0.51% 118,183 142 0.48%
FHLB borrowed funds 1,377,017 3,201 0.92% 1,357,716 3,139 0.92%
Subordinated debentures 60,826 429 2.81% 60,826 401 2.62%
Total interest-bearing liabilities 6,737,676 8,181 0.48% 6,619,333 7,722 0.46%
Non-interest bearing liabilities
Non-interest bearing deposits 1,686,214 1,663,621
Other liabilities 46,687 45,332
Total liabilities 8,470,577 8,328,286
Shareholders' equity 1,306,571 1,274,077
Total liabilities and shareholders' equity $9,777,148 $9,602,363
Net interest spread 4.64% 4.75%
Net interest income and margin - FTE $105,315 4.75% $105,522 4.86%

Home BancShares, Inc.
Consolidated Net Interest Margin
(Unaudited)
Year Ended
December 31, 2016 December 31, 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 $117,022 $471 0.40% $108,315 $233 0.22%
Federal funds sold 1,764 9 0.51% 9,250 24 0.26%
Investment securities - taxable 1,161,428 21,246 1.83% 1,114,829 21,695 1.95%
Investment securities - non-taxable - FTE 337,318 18,598 5.51% 332,048 18,309 5.51%
Loans receivable - FTE 6,986,759 404,137 5.78% 5,732,315 344,885 6.02%
Total interest-earning assets 8,604,291 444,461 5.17% 7,296,757 385,146 5.28%
Non-earning assets 964,562 914,225
Total assets $9,568,853 $8,210,982
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts $3,717,880 $8,978 0.24% $3,218,745 $6,306 0.20%
Time deposits 1,362,680 6,948 0.51% 1,381,562 6,665 0.48%
Total interest-bearing deposits 5,080,560 15,926 0.31% 4,600,307 12,971 0.28%
Federal funds purchased 255 2 0.78% 824 4 0.49%
Securities sold under agreement to repurchase 120,576 574 0.48% 156,513 621 0.40%
FHLB borrowed funds 1,376,364 12,484 0.91% 902,852 6,774 0.75%
Subordinated debentures 60,826 1,593 2.62% 60,826 1,354 2.23%
Total interest-bearing liabilities 6,638,581 30,579 0.46% 5,721,322 21,724 0.38%
Non-interest bearing liabilities
Non-interest bearing deposits 1,619,128 1,358,905
Other liabilities 53,218 48,170
Total liabilities 8,310,927 7,128,397
Shareholders' equity 1,257,926 1,082,585
Total liabilities and shareholders' equity $9,568,853 $8,210,982
Net interest spread 4.71% 4.90%
Net interest income and margin - FTE $413,882 4.81% $363,422 4.98%

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

Source:Home BancShares, Inc.