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Home BancShares, Inc. Announces Third Quarter Earnings

CONWAY, Ark., Oct. 19, 2017 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (NASDAQ:HOMB), parent company of Centennial Bank, today announced a quarterly profit of $14.8 million for the third quarter of 2017 compared to $43.6 million, for the same quarter in 2016. Diluted earnings per share for the third quarter of 2017 was $0.10 per share compared to $0.31 per share for the same period in 2016.

The Company’s third quarter earnings were significantly impacted by Hurricane Irma which made initial landfall in the Florida Keys and a second landfall just south of Naples, Florida, as a Category 4 hurricane on September 10, 2017. While the total impact of this hurricane on Home BancShares’s financial condition and results of operation may not be known for some time, the Company has included in third quarter earnings, certain charges, including the establishment of reserves, related to the hurricane. Based on initial assessments of the potential credit impact and damage, the Company has accrued $33.4 million of pre-tax hurricane expenses. The $33.4 million of hurricane expenses include the following items: $32.9 million to establish a storm-related provision for loan losses and a $556,000 charge related to direct expenses incurred through September 30, 2017.

Excluding the previously mentioned impact of Hurricane Irma and the $18.2 million of merger expenses associated with the Stonegate acquisition, third quarter 2017 after-tax non-fundamental earnings were $46.4 million, an increase of 1.1%, from third quarter 2016 after-tax non-fundamental earnings.

“We are pleased with the successful completion of our substantial acquisition of Stonegate Bank during the third quarter of 2017,” said John Allison, Chairman. “Throughout the remainder of the year, we will remain extremely focused on gaining efficiencies from our merger, while strategically investing for growth and building a quality franchise. Despite the challenges that came with the recent hurricane and completing a major acquisition, we achieved diluted earnings per share excluding merger and hurricane expenses of $0.32 per share for the third quarter of 2017.”

“A significant portion of Home BancShares’s South Florida market area and customer base have been adversely impacted by Hurricane Irma,” stated Tracy French, Centennial Bank President and Chief Executive Officer. “Our sincere sympathy goes out to all affected by this storm. Home BancShares has been deeply impacted by the storm with many of our customers and employees losing homes and several of our banking facilities damaged or destroyed. Immediately after the storms passed, we secured our people and their families, ensured a safe working environment for our associates and focused our entire organization on serving our customers’ needs. Home BancShares is working diligently to assist our customers and communities in the rebuilding process. We are proud of our associates in the outstanding teamwork and care they have shown during this challenging time.”

Randy Sims, President and CEO of Home BancShares, remarked, “The actions the Company has demonstrated so far this year, especially surrounding the recent hurricane, reflect critical elements of our mission statement and community banking philosophy: a strong sense of community, exceptional customer service, shareholder focus, and high performing growth.”

Operating Highlights

Accretion yield decreased approximately $1.3 million from $8.5 million for the second quarter of 2017 to $7.2 million for third quarter of 2017. Each quarter we perform credit impairment tests on the loans acquired in our acquisitions. During our third 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 second quarter of 2017. The net decline of recognized accretion income when compared to the second quarter of 2017 is primarily due to pay-off accretion decreasing from $2.6 million to $1.7 million.

Net interest margin, on a fully taxable equivalent basis, was 4.40% for the quarter just ended compared to 4.86% for the same quarter in 2016 and compared to 4.50% for the second quarter of 2017. The net interest margin, excluding accretion yield, decreased when comparing the second quarter of 2017 to the third quarter of 2017 at 4.11% and 4.07%, respectively. The decrease in net interest margin is primarily the result of reduced net interest income.

During the third quarter of 2017, the Company recorded a provision for loan loss of $35.0 million compared to $5.5 million in the third quarter of 2016. Of the $35.0 million provision for loan loss, $32.9 million is from the previously mentioned storm-related provision for loan losses.

The Company reported $21.5 million of non-interest income for the third quarter of 2017, compared to $22.0 million for the third quarter of 2016. The most important components of the third quarter non-interest income were $8.5 million from other service charges and fees, $6.4 million from service charges on deposits accounts, $3.2 million from mortgage lending income, $1.9 million from other income and $1.3 million loss on branches, equipment, and other assets, net.

Non-interest expense for the third quarter of 2017 was $70.8 million compared to $51.0 million for the third quarter of 2016. Non-interest expense excluding merger expenses and FDIC loss share buy-out expense for the third quarter of 2017 was $52.6 million compared to $47.2 million for the third quarter of 2016, an increase of $5.4 million. This increase excluding merger expenses and FDIC loss share buy-out expense is primarily the result of an increase in the costs associated with asset growth from the acquisitions in the first quarter of 2017 combined with approximately $1.1 million of growth in non-interest expense related to the Centennial Commercial Finance Group (“Centennial CFG”) and $556,000 of hurricane damage expense when compared to the third quarter of 2016. For the third quarter of 2017, our core efficiency ratio was 39.12% which has increased from the 36.51% reported for third quarter of 2016.

Financial Condition

Total loans receivable were $10.29 billion at September 30, 2017 compared to $7.39 billion at December 31, 2016. Total deposits were $10.45 billion at September 30, 2017 compared to $6.94 billion at December 31, 2016. Total assets were $14.26 billion at September 30, 2017 compared to $9.81 billion at December 31, 2016.

During the first nine months of 2017, the Company acquired $2.82 billion of loans, net of purchase accounting discounts. From December 31, 2016 to September 30, 2017, the Company produced approximately $73.8 million of organic loan growth. Centennial CFG produced $113.7 million of net organic loan growth during the first nine months of 2017 while the legacy footprint experienced significant net payoffs during the first nine months of 2017, resulting in a decline of $39.9 million.

During the third quarter of 2017, the Company acquired $2.37 billion of loans, net of purchase accounting discounts. From June 30, 2017 to September 30, 2017, the Company experienced organic growth in loans receivable of approximately $73.2 million. During the third quarter of 2017, Centennial CFG produced $73.4 million of organic loan growth, while the legacy footprint remained relatively unchanged. Centennial CFG had loans of $1.22 billion at September 30, 2017.

Non-performing loans at September 30, 2017 were $24.3 million, $39.6 million, $83,000 and zero in the Arkansas, Florida, Alabama and Centennial CFG markets, respectively, for a total of $64.0 million. Non-performing loans as a percent of total loans were 0.62% as of September 30, 2017 compared to 0.85% as of December 31, 2016. Non-performing assets at September 30, 2017 were $36.4 million, $48.6 million, $724,000 and zero in the Arkansas, Florida and Alabama and Centennial CFG markets, respectively, for a total of $85.7 million. Non-performing assets as a percent of total assets were 0.60% as of September 30, 2017 compared to 0.81% as of December 31, 2016.

The Company’s allowance for loan losses was $111.6 million at September 30, 2017, or 1.09% of total loans, compared to $80.0 million, or 1.08% of total loans, at December 31, 2016. This increase is primarily the result of the $32.9 million storm-related provision for loan loss recorded during the third quarter of 2017 offset by acquiring $2.82 billion of loans during 2017 which do not have an associated allowance for loan losses as a result of purchase accounting. As of September 30, 2017 and December 31, 2016, the Company’s allowance for loan losses was 174% and 127% of its total non-performing loans, respectively.

During the third quarter of 2017, the Company acquired $2.53 billion of deposits, net of purchase accounting discounts. From June 30, 2017 to September 30, 2017, the Company experienced organic growth in deposits of approximately $155.7 million.

Stockholders’ equity was $2.21 billion at September 30, 2017 compared to $1.33 billion at December 31, 2016, an increase of $879.2 million. The increase in stockholders’ equity is primarily associated with the $77.5 million and $742.3 million of common stock issued to the GHI and Stonegate shareholders, respectively, plus the $70.5 million increase in retained earnings combined with $3.5 million of comprehensive income offset by the repurchase of $19.5 million of our common stock during the first nine months of 2017. The annualized improvement in stockholders’ equity for the first nine months of 2017 excluding the $819.8 million of common stock issued to both the GHI and Stonegate shareholders was 6.0%. Book value per common share was $12.71 at September 30, 2017 compared to $9.45 at December 31, 2016 for an annualized increase of 46.1%. Tangible book value per common share was $7.06 at September 30, 2017 compared to $6.63 at December 31, 2016 for an annualized increase of 8.7%.

Due to the short time period between the completion of the Stonegate acquisition and September 30, 2017, the purchase price allocation and certain fair value measurements remain preliminary. The Company will continue to review the estimated fair values of loans, deposits, property and equipment, intangible assets, and other assets and liabilities, and to evaluate the assumed tax positions and contingencies.

Branches

During the fourth quarter of 2017, the Company has plans to close a branch location in Daphne, Alabama. The Company currently has 76 branches in Arkansas, 89 branches in Florida, 6 branches in Alabama and one branch in New York City. As a result of Hurricane Irma, our Naples, Florida branch location will remain closed until further notice.

Conference Call

Management will conduct a conference call to review this information at 1:00 p.m. CT (2:00 ET) on Thursday, October 19, 2017. We encourage all participants to pre-register for the conference call using the following link: http://dpregister.com/10112266. 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: 10112266, which will be available until October 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.

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 could cause actual results to differ materially from those contemplated by the forward-looking statements. These factors include, but are not limited to, the following: the effects of future local, regional, national and international economic conditions, including inflation or a decrease in commercial real estate and residential housing values; changes in the level of nonperforming assets and charge-offs, and credit risk generally; the risks of changes in interest rates or the level and composition of deposits, loan demand and the values of loan collateral, securities and interest-sensitive assets and liabilities; the effect of any mergers, acquisitions or other transactions to which we or our bank subsidiary may from time to time be a party, including our ability to successfully integrate any businesses that we acquire; the risk that expected cost savings and other benefits from acquisitions may not be fully realized or may take longer to realize than expected; the possibility that an acquisition does not close when expected or at all because required regulatory, shareholder or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all; the reaction to a proposed acquisition transaction of the respective companies’ customers, employees and counterparties; diversion of management time on acquisition-related issues; the ability to enter into and/or close additional acquisitions; the availability of and access to capital on terms acceptable to us; increased regulatory requirements and supervision that will apply as a result of our exceeding $10 billion in total assets; legislation and regulation affecting the financial services industry as a whole, and the Company and its subsidiaries in particular, including the effects resulting from the reforms enacted by the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the adoption of regulations by regulatory bodies under the Dodd-Frank Act; governmental monetary and fiscal policies, as well as legislative and regulatory changes, including as a result of initiatives of the newly elected administration of President Donald J. Trump; the effects of terrorism and efforts to combat it; political instability; the ability to keep pace with technological changes, including changes regarding cybersecurity; an increase in the incidence or severity of fraud, illegal payments, security breaches or other illegal acts impacting our bank subsidiary or our customers; the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market area and elsewhere, including institutions operating regionally, nationally and internationally, together with competitors offering banking products and services by mail, telephone and the Internet; the effect of changes in accounting policies and practices and auditing requirements, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters; higher defaults on our loan portfolio than we expect; and the failure of assumptions underlying the establishment of our allowance for loan losses or changes in our estimate of the adequacy of the allowance for loan losses. 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.”

FOR MORE INFORMATION CONTACT:

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

Home BancShares, Inc.
Consolidated End of Period Balance Sheets
(Unaudited)
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
(In thousands) 2017 2017 2017 2016 2016
ASSETS
Cash and due from banks $ 197,953 $ 147,041 $ 163,662 $ 123,758 $ 123,126
Interest-bearing deposits with other banks 354,367 313,447 253,427 92,891 173,034
Cash and cash equivalents 552,320 460,488 417,089 216,649 296,160
Federal funds sold 4,545 - 1,700 1,550 1,850
Investment securities - available-for-sale 1,575,685 1,400,431 1,250,590 1,072,920 1,233,269
Investment securities - held-to-maturity 234,945 254,161 276,599 284,176 275,544
Loans receivable 10,286,193 7,834,475 7,849,645 7,387,699 7,112,291
Allowance for loan losses (111,620) (80,138) (80,311) (80,002) (76,370)
Loans receivable, net 10,174,573 7,754,337 7,769,334 7,307,697 7,035,921
Bank premises and equipment, net 239,990 207,071 212,813 205,301 208,137
Foreclosed assets held for sale 21,701 18,789 17,315 15,951 17,053
Cash value of life insurance 146,158 97,684 97,223 86,491 86,230
Accrued interest receivable 41,071 32,445 32,413 30,838 29,398
Deferred tax asset, net 121,787 68,368 67,063 61,298 56,435
Goodwill 929,129 420,941 420,941 377,983 377,983
Core deposit and other intangibles 50,982 21,019 21,885 18,311 19,073
Other assets 163,081 136,494 132,503 129,300 127,185
Total assets $ 14,255,967 $ 10,872,228 $ 10,717,468 $ 9,808,465 $ 9,764,238
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits:
Demand and non-interest-bearing $ 2,555,465 $ 1,957,677 $ 1,862,996 $ 1,695,184 $ 1,717,467
Savings and interest-bearing transaction accounts 6,341,883 4,335,456 4,274,194 3,963,241 3,792,229
Time deposits 1,551,422 1,474,255 1,430,017 1,284,002 1,330,597
Total deposits 10,448,770 7,767,388 7,567,207 6,942,427 6,840,293
Federal funds purchased - - - - -
Securities sold under agreements to repurchase 149,531 133,741 123,793 121,290 109,350
FHLB and other borrowed funds 1,044,333 1,099,478 1,455,040 1,305,198 1,420,369
Accrued interest payable and other liabilities 38,782 37,751 69,125 51,234 37,382
Subordinated debentures 367,835 357,838 60,735 60,826 60,826
Total liabilities 12,049,251 9,396,196 9,275,900 8,480,975 8,468,220
Stockholders' equity
Common stock 1,737 1,431 1,434 1,405 1,405
Capital surplus 1,674,642 940,821 948,982 869,737 866,310
Retained earnings 526,448 527,338 490,142 455,948 419,999
Accumulated other comprehensive income 3,889 6,442 1,010 400 8,304
Total stockholders' equity 2,206,716 1,476,032 1,441,568 1,327,490 1,296,018
Total liabilities and stockholders' equity $ 14,255,967 $ 10,872,228 $ 10,717,468 $ 9,808,465 $ 9,764,238

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) 2017 2017 2017 2016 2016 2017 2016
Interest income
Loans $ 113,269 $ 112,732 $ 105,762 $ 103,113 $ 102,953 $ 331,763 $ 300,281
Investment securities
Taxable 7,071 6,434 5,478 5,068 5,583 18,983 16,178
Tax-exempt 3,032 2,966 2,944 3,059 2,720 8,942 8,358��
Deposits - other banks 538 727 308 146 117 1,573 325
Federal funds sold 3 4 2 2 2 9 7
Total interest income 123,913 122,863 114,494 111,388 111,375 361,270 325,149
Interest expense
Interest on deposits 8,535 6,810 5,486 4,398 4,040 20,831 11,528
Federal funds purchased - - - - - - 2
FHLB borrowed funds 3,408 3,710 3,589 3,201 3,139 10,707 9,283
Securities sold under agreements to repurchase 232 196 165 153 142 593 421
Subordinated debentures 4,969 4,795 439 429 401 10,203 1,164
Total interest expense 17,144 15,511 9,679 8,181 7,722 42,334 22,398
Net interest income 106,769 107,352 104,815 103,207 103,653 318,936 302,751
Provision for loan losses 35,023 387 3,914 1,703 5,536 39,324 16,905
Net interest income after
provision for loan losses 71,746 106,965 100,901 101,504 98,117 279,612 285,846
Non-interest income
Service charges on deposit accounts 6,408 5,966 5,982 6,442 6,527 18,356 18,607
Other service charges and fees 8,490 8,576 8,917 7,611 7,504 25,983 22,589
Trust fees 365 309 456 329 365 1,130 1,128
Mortgage lending income 3,172 3,750 2,791 4,123 3,932 9,713 10,276
Insurance commissions 472 465 545 488 534 1,482 1,808
Increase in cash value of life insurance 478 463 310 320 344 1,251 1,092
Dividends from FHLB, FRB, Bankers' Bank & other 834 472 1,149 944 808 2,455 2,147
Gain on acquisitions - - 3,807 - - 3,807 -
Gain (loss) on SBA loans 163 387 188 645 364 738 443
Gain (loss) on branches, equipment and
other assets, net
(1,337) 431 (56) (1) (86) (962) 701
Gain (loss) on OREO, net 335 393 121 159 132 849 (713)
Gain (loss) on securities, net 136 380 423 644 - 939 25
FDIC indemnification accretion/(amortization), net - - - - - - (772)
Other income 1,941 2,825 1,837 2,124 1,590 6,603 5,892
Total non-interest income 21,457 24,417 26,470 23,828 22,014 72,344 63,223
Non-interest expense
Salaries and employee benefits 28,510 28,034 27,421 26,944 25,623 83,965 75,018
Occupancy and equipment 7,887 7,034 6,681 6,281 6,668 21,602 19,848
Data processing expense 2,853 2,863 2,723 2,278 2,791 8,439 8,221
Other operating expenses 31,596 13,072 18,316 11,991 15,944 62,984 41,174
Total non-interest expense 70,846 51,003 55,141 47,494 51,026 176,990 144,261
Income before income taxes 22,357 80,379 72,230 77,838 69,105 174,966 204,808
Income tax expense 7,536 30,282 25,374 29,248 25,485 63,192 76,252
Net income $ 14,821 $ 50,097 $ 46,856 $ 48,590 $ 43,620 $ 111,774 $ 128,556

Home BancShares, Inc.
Selected Financial Information
(Unaudited)
Quarter Ended Nine Months Ended
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30, Sep. 30, Sep. 30,
(Dollars and shares in thousands, except per share data) 2017 2017 2017 2016 2016 2017 2016
PER SHARE DATA
Diluted earnings per common share $ 0.10 $ 0.35 $ 0.33 $ 0.35 $ 0.31 $ 0.78 $ 0.91
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)
0.32 0.35 0.33 0.33 0.33 1.00 0.93
Basic earnings per common share 0.10 0.35 0.33 0.35 0.31 0.78 0.92
Dividends per share - common 0.1100 0.0900 0.0900 0.0900 0.0900 0.2900 0.2525
Book value per common share 12.71 10.32 10.05 9.45 9.22 12.71 9.22
Tangible book value per common share (non-GAAP)(1) 7.06 7.23 6.96 6.63 6.40 7.06 6.40
STOCK INFORMATION
Average common shares outstanding 144,238 143,282 141,785 140,465 140,436 143,111 140,403
Average diluted shares outstanding 144,987 144,116 142,492 140,781 140,703 143,839 140,685
End of period common shares outstanding 173,666 143,071 143,442 140,472 140,490 173,666 140,490
ANNUALIZED PERFORMANCE METRICS
Return on average assets 0.54% 1.86% 1.86% 1.98% 1.81% 1.41% 1.81%
Return on average assets excluding 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
hurricane expenses (non-GAAP)(1)
1.70% 1.88% 1.88% 1.88% 1.90% 1.82% 1.84%
Return on average assets excluding intangible
amortization (non-GAAP)(1)
0.59% 1.96% 1.96% 2.08% 1.91% 1.49% 1.91%
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)
2.94% 3.19% 3.31% 3.23% 3.43% 3.14% 3.35%
Return on average common equity 3.88% 13.83% 13.85% 14.79% 13.62% 10.33% 13.83%
Return on average tangible common equity excluding
intangible amortization (non-GAAP)(1)
5.80% 20.09% 20.08% 21.45% 20.01% 15.06% 20.59%
Efficiency ratio 53.77% 37.48% 40.76% 36.19% 39.41% 43.92% 38.16%
Core efficiency ratio (non-GAAP)(1) 39.12% 37.29% 36.96% 35.97% 36.51% 37.79% 36.75%
Net interest margin - FTE 4.40% 4.50% 4.70% 4.75% 4.86% 4.53% 4.83%
Fully taxable equivalent adjustment $ 1,846 $ 2,016 $2,011 $ 2,108 $ 1,869 $ 5,873 $ 5,816
Total revenue 145,370 147,280 140,964 135,216 133,389 433,614 388,372
OTHER OPERATING EXPENSES
Advertising $ 795 $ 812 $ 698 $ 910 $ 866 $ 2,305 $ 2,422
Merger and acquisition expenses 18,227 789 6,727 433 - 25,743 -
FDIC loss share buy-out expense - - - - 3,849 - 3,849
Amortization of intangibles 906 866 804 762 762 2,576 2,370
Electronic banking expense 1,712 1,654 1,519 1,621 1,428 4,885 4,121
Directors' fees 309 324 313 294 292 946 856
Due from bank service charges 472 456 420 393 319 1,348 961
FDIC and state assessment 1,293 1,182 1,288 1,097 1,502 3,763 4,394
Insurance 577 543 578 563 553 1,698 1,630
Legal and accounting 698 474 627 442 583 1,799 1,764
Other professional fees 1,436 1,233 1,153 943 1,137 3,822 3,106
Operating supplies 432 477 467 466 437 1,376 1,292
Postage 280 295 286 269 269 861 815
Telephone 305 398 324 360 449 1,027 1,391
Other expense 4,154 3,569 3,112 3,438 3,498 10,835 12,203
Total other operating expenses $ 31,596 $ 13,072 $ 18,316 $ 11,991 $ 15,944 $ 62,984 $ 41,174
(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)
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
(Dollars in thousands) 2017 2017 2017 2016 2016
BALANCE SHEET RATIOS
Total loans to total deposits 98.44% 100.86% 103.73% 106.41% 103.98%
Common equity to assets 15.48% 13.58% 13.45% 13.53% 13.27%
Tangible common equity to tangible assets (non-GAAP)(1) 9.24% 9.91% 9.72% 9.89% 9.60%
LOANS RECEIVABLE
Real estate
Commercial real estate loans
Non-farm/non-residential $ 4,532,402 $ 3,368,663 $ 3,462,773 $ 3,153,121 $ 2,954,618
Construction/land development 1,648,923 1,315,309 1,217,519 1,135,843 1,065,204
Agricultural 88,295 78,260 79,940 77,736 77,556
Residential real estate loans
Residential 1-4 family 1,968,688 1,513,888 1,493,133 1,356,136 1,264,384
Multifamily residential 497,910 398,781 404,815 340,926 328,089
Total real estate 8,736,218 6,674,901 6,658,180 6,063,762 5,689,851
Consumer 51,515 38,424 41,893 41,745 42,487
Commercial and industrial 1,296,485 994,827 1,013,403 1,123,213 1,225,043
Agricultural 57,489 69,697 69,307 74,673 73,413
Other 144,486 56,626 66,862 84,306 81,497
Loans receivable $ 10,286,193 $ 7,834,475 $ 7,849,645 $ 7,387,699 $ 7,112,291
Discount for credit losses on purchased loans $ 158,001 $ 95,627 $ 104,464 $ 100,148 $ 108,017
Purchased loans, net of discount for credit losses
on purchased loans
3,653,079 1,355,922 1,375,210 1,125,599 1,368,305
ALLOWANCE FOR LOAN LOSSES
Balance, beginning of period $ 80,138 $ 80,311 $ 80,002 $ 76,370 $ 74,341
Loans charged off 4,424 1,405 4,706 4,836 4,351
Recoveries of loans previously charged off 883 845 1,101 6,765 844
Net loans (recovered)/charged off 3,541 560 3,605 (1,929) 3,507
Provision for loan losses 35,023 387 3,914 1,703 5,536
Balance, end of period $ 111,620 $ 80,138 $ 80,311 $ 80,002 $ 76,370
Net (recoveries) charge-offs to average total loans 0.18% 0.03% 0.19% -0.11% 0.20%
Allowance for loan losses to total loans 1.09% 1.02% 1.02% 1.08% 1.07%
NON-PERFORMING ASSETS
Non-performing loans
Non-accrual loans $ 34,794 $ 32,426 $ 43,810 $ 47,182 $ 39,353
Loans past due 90 days or more 29,183 14,442 15,388 15,942 20,737
Total non-performing loans 63,977 46,868 59,198 63,124 60,090
Other non-performing assets
Foreclosed assets held for sale, net 21,701 18,789 17,315 15,951 17,053
Other non-performing assets 3 3 3 3 -
Total other non-performing assets 21,704 18,792 17,318 15,954 17,053
Total non-performing assets $ 85,681 $ 65,660 $ 76,516 $ 79,078 $ 77,143
Allowance for loan losses for loans to non-performing loans 174.47% 170.99% 135.67% 126.74% 127.09%
Non-performing loans to total loans 0.62% 0.60% 0.75% 0.85% 0.84%
Non-performing assets to total assets 0.60% 0.60% 0.71% 0.81% 0.79%
(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
September 30, 2017 June 30, 2017
Average Income/ Yield/ Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate Balance Expense Rate
ASSETS
Earning assets
Interest-bearing balances due from banks $ 180,368 $ 538 1.18% $ 303,997 $ 727 0.96%
Federal funds sold 878 3 1.36% 1,427 4 1.12%
Investment securities - taxable 1,326,117 7,071 2.12% 1,256,202 6,434 2.05%
Investment securities - non-taxable - FTE 348,920 4,908 5.58% 346,708 4,812 5.57%
Loans receivable - FTE 7,938,716 113,239 5.66% 7,829,615 112,902 5.78%
Total interest-earning assets 9,794,999 125,759 5.09% 9,737,949 124,879 5.14%
Non-earning assets 1,058,560 1,055,821
Total assets $ 10,853,559 $ 10,793,770
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts $ 4,512,785 $ 5,755 0.51% $ 4,292,389 $ 4,313 0.40%
Time deposits 1,444,662 2,780 0.76% 1,443,228 2,497 0.69%
Total interest-bearing deposits 5,957,447 8,535 0.57% 5,735,617 6,810 0.48%
Federal funds purchased - - 0.00% - - 0.00%
Securities sold under agreement to repurchase 135,855 232 0.68% 128,661 196 0.61%
FHLB borrowed funds 920,754 3,408 1.47% 1,177,510 3,710 1.26%
Subordinated debentures 358,347 4,969 5.50% 351,659 4,795 5.47%
Total interest-bearing liabilities 7,372,403 17,144 0.92% 7,393,447 15,511 0.84%
Non-interest bearing liabilities
Non-interest bearing deposits 1,924,933 1,899,865
Other liabilities 42,394 47,359
Total liabilities 9,339,730 9,340,671
Shareholders' equity 1,513,829 1,453,099
Total liabilities and shareholders' equity $ 10,853,559 $ 10,793,770
Net interest spread 4.17% 4.30%
Net interest income and margin - FTE $ 108,615 4.40% $ 109,368 4.50%

Home BancShares, Inc.
Consolidated Net Interest Margin
(Unaudited)
Nine Months Ended
September 30, 2017 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 $ 218,324 $ 1,573 0.96% $ 110,893 $ 325 0.39%
Federal funds sold 1,161 9 1.04% 1,895 7 0.49%
Investment securities - taxable 1,231,619 18,983 2.06% 1,174,998 16,178 1.84%
Investment securities - non-taxable - FTE 347,578 14,506 5.58% 333,336 13,616 5.46%
Loans receivable - FTE 7,785,925 332,072 5.70% 6,909,240 300,839 5.82%
Total interest-earning assets 9,584,607 367,143 5.12% 8,530,362 330,965 5.18%
Non-earning assets 1,033,310 968,553
Total assets $ 10,617,917 $ 9,498,915
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts $ 4,316,032 $ 13,445 0.42% $ 3,664,401 $ 6,426 0.23%
Time deposits 1,415,383 7,386 0.70% 1,382,657 5,102 0.49%
Total interest-bearing deposits 5,731,415 20,831 0.49% 5,047,058 11,528 0.31%
Federal funds purchased - - 0.00% 312 2 0.86%
Securities sold under agreement to repurchase 129,580 593 0.61% 120,966 421 0.46%
FHLB borrowed funds 1,155,503 10,707 1.24% 1,376,145 9,283 0.90%
Subordinated debentures 258,032 10,203 5.29% 60,826 1,164 2.56%
Total interest-bearing liabilities 7,274,530 42,334 0.78% 6,605,307 22,398 0.45%
Non-interest bearing liabilities
Non-interest bearing deposits 1,847,843 1,596,603
Other liabilities 48,804 55,411
Total liabilities 9,171,177 8,257,321
Shareholders' equity 1,446,740 1,241,594
Total liabilities and shareholders' equity $ 10,617,917 $ 9,498,915
Net interest spread 4.34% 4.73%
Net interest income and margin - FTE $ 324,809 4.53% $ 308,567 4.83%

Home BancShares, Inc.
Non-GAAP Reconciliations
(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) 2017 2017 2017 2016 2016 2017 2016
EARNINGS EXCLUDING NON-FUNDAMENTAL ITEMS
GAAP net income available to common shareholders (A) $ 14,821 $ 50,097 $ 46,856 $ 48,590 $ 43,620 $ 111,774 $ 128,556
Non-fundamental items
Gain on acquisitions - - (3,807) - - (3,807) -
Merger and acquisition expenses 18,227 789 6,727 433 - 25,743 -
FDIC loss share buy-out expense - - - - 3,849 - 3,849
Reduced provision for loan losses as a result of a
significant loan recovery
- - (4,457) - - -
Hurricane expenses(2) 33,445 - - - - 33,445 -
Total non-fundamental items 51,672 789 2,920 (4,024) 3,849 55,381 3,849
Tax-effect of non-fundamental items(3) 20,045 199 2,382 (1,578) 1,510 22,626 1,510
Non-fundamental items after-tax (B) 31,627 590 538 (2,446) 2,339 32,755 2,339
Earnings excluding non-fundamental items (C) $ 46,448 $ 50,687 $ 47,394 $ 46,144 $ 45,959 $ 144,529 $ 130,895
Average diluted shares outstanding (D) 144,987 144,116 142,492 140,781 140,703 143,839 140,685
GAAP diluted earnings per share: A/D $ 0.10 $ 0.35 $ 0.33 $ 0.35 $ 0.31 $ 0.78 $ 0.91
Non-fundamental items after-tax: B/D 0.22 - - (0.02) 0.02 0.22 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 & hurricane expenses: C/D
$ 0.32 $ 0.35 $ 0.33 $ 0.33 $ 0.33 $ 1.00 $ 0.93
ANNUALIZED RETURN ON AVERAGE ASSETS
Return on average assets: A/H 0.54% 1.86% 1.86% 1.98% 1.81% 1.41% 1.81%
Return on average assets excluding 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
hurricane expenses: (A+F)/H
1.70% 1.88% 1.88% 1.88% 1.90% 1.82% 1.84%
Return on average assets excluding intangible
amortization: (A+C)/(H-I)
0.59% 1.96% 1.96% 2.08% 1.91% 1.49% 1.91%
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,
hurricane expenses and income taxes (Core ROA):
(A+B+D+E+G)/(H-I)
2.94% 3.19% 3.31% 3.23% 3.43% 3.14% 3.35%
GAAP net income available to common shareholders (A) $ 14,821 $ 50,097 $ 46,856 $ 48,590 $ 43,620 $ 111,774 $ 128,556
Amortization of intangibles (B) 906 866 804 762 762 2,576 2,370
Amortization of intangibles after-tax (C) 551 526 489 463 463 1,566 1,440
Provision for loan losses excluding hurricane provision (D) 2,134 387 3,914 1,703 5,536 6,435 16,905
Total non-fundamental items (E) 51,672 789 2,920 (4,024) 3,849 55,381 3,849
Non-fundamental items after-tax (F) 31,627 590 538 (2,446) 2,339 32,755 2,339
Income tax expense (G) 7,536 30,282 25,374 29,248 25,485 63,192 76,252
Average assets (H) 10,853,559 10,793,770 10,198,844 9,777,148 9,602,363 10,617,917 9,498,915
Average goodwill, core deposits & other intangible assets (I) 462,799 442,380 415,699 396,662 397,429 440,465 398,195
ANNUALIZED RETURN ON AVERAGE COMMON EQUITY
Return on average common equity: A/C 3.88% 13.83% 13.85% 14.79% 13.62% 10.33% 13.83%
Return on average tangible common equity
excluding intangible amortization: (A+B)/(C-D)
5.80% 20.09% 20.08% 21.45% 20.01% 15.06% 20.59%
GAAP net income available to common shareholders (A) $ 14,821 $ 50,097 $ 46,856 $ 48,590 $ 43,620 $ 111,774 $ 128,556
Amortization of intangibles after-tax (B) 551 526 489 463 463 1,566 1,440
Average common equity (C) 1,513,829 1,453,099 1,371,730 1,306,571 1,274,077 1,446,740 1,241,594
Average goodwill, core deposits & other intangible assets (D) 462,799 442,380 415,699 396,662 397,429 440,465 398,195
(2) Hurricane expenses includes $32,889 of provision for loan losses and $556 of damage expense related to Hurricane Irma.
(3) 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 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) 2017 2017 2017 2016 2016 2017 2016
EFFICIENCY RATIO
Efficiency ratio: ((C-E)/(A+B+D)) 53.77% 37.48% 40.76% 36.19% 39.41% 43.92% 38.16%
Core efficiency ratio: ((C-E-G)/(A+B+D-F)) 39.12% 37.29% 36.96% 35.97% 36.51% 37.79% 36.75%
Net interest income (A) $ 106,769 $ 107,352 $ 104,815 $ 103,207 $ 103,653 $ 318,936 $ 302,751
Non-interest income (B) 21,457 24,417 26,470 23,828 22,014 72,344 63,223
Non-interest expense (C) 70,846 51,003 55,141 47,494 51,026 176,990 144,261
Fully taxable equivalent adjustment (D) 1,846 2,016 2,011 2,108 1,869 5,873 5,816
Amortization of intangibles (E) 906 866 804 762 762 2,576 2,370
Non-fundamental items:
Non-interest income:
Gain on acquisition $- $- $3,807 $- $- $3,807 $-
Gain (loss) on OREO 335 393 121 159 132 849 (713)
Gain (loss) on SBA loans 163 387 188 645 364 738 443
Gain (loss) on branches, equipment and other assets, net (1,337) 431 (56) (1) (86) (962) 701
Gain (loss) on securities 136 380 423 644 - 939 25
Recoveries on historic losses - - - - - - 925
Total non-fundamental non-interest income (F) $ (703) $ 1,591 $ 4,483 $ 1,447 $ 410 $ 5,371 $ 1,381
Non-interest expense:
Merger Expenses $ 18,227 $ 789 $ 6,727 $ 433 $- $ 25,743 $-
FDIC loss share buy-out - - - - 3,849 - 3,849
Hurricane damage expense 556 - - - - 556 -
Vacant properties write-downs - 47 - 369 - 47 1,914
Total non-fundamental non-interest expense (G) $ 18,783 $ 836 $ 6,727 $ 802 $ 3,849 $ 26,346 $ 5,763
ANNUALIZED NET INTEREST MARGIN
Net interest margin: A/C 4.40% 4.50% 4.70% 4.75% 4.86% 4.53% 4.83%
Net interest margin (non-GAAP): B/D 4.07% 4.11% 4.32% 4.31% 4.25% 4.16% 4.24%
Net interest income - FTE (A) $ 108,615 $ 109,368 $ 106,826 $ 105,315 $ 105,522 $ 324,809 $ 308,567
Total purchase accounting accretion 7,174 8,497 7,652 8,659 11,937 23,319 33,684
Net interest income - FTE (non-GAAP) (B) $ 101,441 $ 100,871 $ 99,174 $ 96,656 $ 93,585 $ 301,490 $ 274,883
Average interest-earning assets (C) $ 9,794,999 $ 9,737,949 $ 9,214,498 $ 8,824,468 $ 8,646,026 $ 9,584,607 $ 8,530,362
Average purchase accounting loan discounts 97,978 104,384 102,906 104,783 115,766 97,158 131,506
Average interest-earning assets (non-GAAP) (D) $ 9,892,977 $ 9,842,333 $ 9,317,404 $ 8,929,251 $ 8,761,792 $ 9,681,765 $ 8,661,868

Home BancShares, Inc.
Non-GAAP Reconciliations
(Unaudited)
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
(Dollars in thousands) 2017 2017 2017 2016 2016
TANGIBLE BOOK VALUE PER COMMON SHARE
Book value per common share: A/B $ 12.71 $ 10.32 $ 10.05 $ 9.45 $ 9.22
Tangible book value per common share: (A-C-D)/B 7.06 7.23 6.96 6.63 6.40
Total stockholders' equity (A) $ 2,206,716 $ 1,476,032 $ 1,441,568 $ 1,327,490 $ 1,296,018
End of period common shares outstanding (B) 173,666 143,071 143,442 140,472 140,490
Goodwill (C) $ 929,129 $ 420,941 $ 420,941 $ 377,983 $ 377,983
Core deposit and other intangibles (D) 50,982 21,019 21,885 18,311 19,073
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS
Equity to assets: B/A 15.48% 13.58% 13.45% 13.53% 13.27%
Tangible common equity to tangible assets: (B-C-D)/(A-C-D) 9.24% 9.91% 9.72% 9.89% 9.60%
Total assets (A) $ 14,255,967 $ 10,872,228 $ 10,717,468 $ 9,808,465 $ 9,764,238
Total stockholders' equity (B) 2,206,716 1,476,032 1,441,568 1,327,490 1,296,018
Goodwill (C) 929,129 420,941 420,941 377,983 377,983
Core deposit and other intangibles (D) 50,982 21,019 21,885 18,311 19,073



Source:Home BancShares, Inc.