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CST: 23/08/2019 14:33:42   

Home BancShares, Inc. Again Reports Strong and Stable Performance Metrics in All Areas During Turbulent Interest Rate Environment

36 Days ago

CONWAY, Ark., July 18, 2019 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (NASDAQ GS: HOMB), parent company of Centennial Bank, released solid second quarter earnings today that included over $1 billion in loan production at an average interest rate of 6.1% and a strong net interest margin that was relatively flat at 4.28%.

Highlights of the Second Quarter of 2019:

Consolidated
Metric Q2 2019 Q1 2019 Q4 2018
Net Income $72.2 million $71.4 million $71.0 million
Total Revenue $204.4 million $203.2 million $201.3 million
ROA   1.92%     1.92%     1.90%  
NIM   4.28%     4.30%     4.30%  
Accretion $9.2 million $9.1 million $9.4 million
ROE   12.18%     12.34%     12.05%  
ROTCE (non-GAAP)(1)   21.01%     21.53%     21.08%  
Diluted Earnings Per Share   $0.43     $0.42     $0.41  


Centennial Community Banking   Centennial CFG
Metric Q2 2019 Q1 2019 Q4 2018   Metric Q2 2019 Q1 2019 Q4 2018
Net Income $59.5 million $58.1 million $57.7 million   Net Income $11.2 million $12.0 million $12.2 million
Total Revenue $166.5 million $166.9 million $165.9 million   Total Revenue $32.4 million $31.1 million $30.6 million
ROA 1.83%   1.80%   1.77%     ROA   2.77%     3.08%     3.33%  
NIM 4.20%   4.20%   4.18%     NIM   5.25%     5.34%     5.50%  
Accretion $8.4 million $8.3 million $8.6 million   Accretion   $146,000     $33,000     $33,000  


Shore Premier Finance
Metric Q2 2019 Q1 2019 Q4 2018
Net Income $1.4 million $1.3 million $1.1 million
Total Revenue $5.4 million $5.2 million $4.8 million
ROA   1.27%     1.15%     1.06%  
NIM   3.02%     3.04%     3.29%  
Accretion   $705,000     $741,000     $812,000  

 (1) Calculation of this metric and the reconciliation to GAAP are included in the schedules accompanying this release.

“The last three quarters show a strong trend of stability and growth in all our key metrics,” said John Allison, Chairman. “We continue to produce solid results with a positive growth trend,” Allison continued.

“Loan production was very strong during the second quarter,” said Tracy French, Centennial Bank President and Chief Executive Officer. “We saw loan production of over $1 billion dollars at an average interest rate of 6.1% and were able to increase the yield on the loan portfolio by 3 basis points,” added French.

“Our return on assets remains strong and steady at 1.92% as it was in the first quarter,” stated Randy Sims, Chief Executive Officer of Home BancShares. “Diluted earnings per share of $0.43 as compared to $0.42 from last quarter and an impressive efficiency ratio of 39.93% are just a few of the powerful numbers that contributed to another successful quarter for our shareholders,” added Sims.

Operating Highlights

Our net interest margin was 4.28% for the three-month period ended June 30, 2019 compared to 4.30% for the three-month period ended March 31, 2019. The yield on loans was 6.06% and 6.03% for the three months ended June 30, 2019 and March 31, 2019, respectively, as average loans decreased from $11.04 billion to $11.00 billion. Additionally, the rate on interest bearing deposits increased to 1.38% as of June 30, 2019 from 1.34% as of March 31, 2019, with average balances of $8.62 billion and $8.50 billion, respectively. 

During the second quarter of 2019, we experienced a $515,000 increase in investment premium amortization resulting from increased prepayment speeds on investment securities due to the declining interest rate environment. This increased investment premium amortization negatively impacted the net interest margin for the quarter ended June 30, 2019 by two basis points.

For the three months ended June 30, 2019 and March 31, 2019, we recognized $9.2 million and $9.1 million, respectively, in total net accretion for acquired loans and deposits.  Purchase accounting accretion on acquired loans was $9.2 million and $9.0 million and average purchase accounting loan discounts were $122.2 million and $131.6 million for the three-month periods ended June 30, 2019 and March 31, 2019, respectively.  Net accretion of time deposit premiums was $30,000 for the quarters ended June 30, 2019 and March 30, 2019, and net average remaining CD premiums were $327,000 and $357,000 for the three-month periods ended June 30, 2019 and March 31, 2019, respectively. 

Net interest income on a fully taxable equivalent basis increased $1.5 million, or 1.04%, to $142.3 million for the three-month period ended June 30, 2019, from $140.8 million for the three-month period ended March 31, 2019.  This increase in net interest income for the three-month period ended June 30, 2019 was the result of a $1.8 million increase in interest income, which was partially offset by a $283,000 increase in interest expense.  The $1.8 million increase in interest income was primarily the result of a $2.0 million increase in loan interest income. The $283,000 increase in interest expense was primarily the result of a $1.7 million increase in interest expense on deposits which was offset by a $1.4 million decrease in interest expense on FHLB and other borrowed funds resulting from the average balance of FHLB and other borrowings decreasing by $227.3 million or 19.60%.

Centennial Commercial Finance Group (“Centennial CFG”) net interest margin was 5.25% for the quarter just ended compared to 5.34% for the quarter ended March 31, 2019. Centennial CFG net interest margin for the second quarter of 2019 includes average interest earning assets of $1.59 billion and net interest income of $20.9 million, compared to average interest earning assets of $1.55 billion and net interest income of $20.4 million for the quarter ended March 31, 2019.

Centennial Community Banking (excluding Centennial CFG and Shore Premier Finance) net interest margin was 4.20% for the quarter just ended as well as for the quarter ended March 31, 2019. The net interest margin for the second quarter of 2019 includes average interest earning assets of $11.29 billion and net interest income of $118.1 million, compared to average interest earning assets of $11.31 billion and net interest income of $117.2 million for the first quarter of 2019. 

During the second quarter of 2019, the Company recorded a $1.3 million provision for loan loss, but no provision was recorded during the first quarter of 2019.  The Company continues to see strong asset quality.  Non-performing loans to total loans was 0.57% as of June 30, 2019 compared to 0.58% as of March 31, 2019. Non-performing assets to total assets was 0.51% as of June 30, 2019 compared to 0.52% as of March 31, 2019. For the second quarter of 2019, net charge-offs were $1.6 million compared to net charge-offs of $2.4 million for the first quarter of 2019.

The Company reported $23.1 million of non-interest income for the second quarter of 2019, compared to $23.7 million for the first quarter of 2019. The most important components of the second quarter non-interest income were $8.2 million from other service charges and fees, $6.3 million from service charges on deposits accounts, $3.5 million from mortgage lending income, $2.1 million from other income and $1.1 million from dividends from the FHLB, FRB, FNBB & other equity investments.  The Company exceeded $10 billion in assets during the first quarter of 2017 and became subject to the Durbin Amendment to the Dodd-Frank Act interchange fee restrictions beginning in the third quarter of 2018. The Durbin Amendment negatively impacted debit card and ATM fees beginning in the second half of 2018. The Company estimates quarterly interchange fees are approximately $3.0 million dollars lower as a result of the Durbin Amendment.

Non-interest expense for the second quarter of 2019 was $67.6 million compared to $69.1 million for the first quarter of 2019.  The most important components of the second quarter non-interest expense were $38.0 million from salaries and employee benefits, $17.0 million in other expense and $8.9 million in occupancy and equipment expenses.  Non-interest expense for the first quarter of 2019 included $900,000 related to an outsourced special project and $897,000 in hurricane expense associated with Hurricane Michael which made landfall in Mexico Beach, Florida on October 10, 2018.  For the second quarter of 2019, our efficiency ratio improved to 39.93% compared to 41.01% reported for the first quarter of 2019. 

Financial Condition

Total loans receivable were $11.05 billion at June 30, 2019 compared to $11.07 billion at December 31, 2018.  Total deposits were $11.35 billion at June 30, 2019 compared to $10.90 billion at December 31, 2018.  Total assets were $15.29 billion at June 30, 2019 compared to $15.30 billion at December 31, 2018.

During the second quarter 2019, the Company experienced approximately $74.2 million in organic loan growth. Centennial CFG experienced $146.1 million of organic loan growth and had loans of $1.67 billion at June 30, 2019.  Centennial Community Banking experienced approximately $77.8 million in organic loan decline.   Additionally, Shore Premier Finance experienced $5.8 million of organic loan growth and had loans of $442.1 million at June 30, 2019.

Non-performing loans at June 30, 2019 were $20.0 million, $37.1 million, $3.3 million, $2.4 million and zero in the Arkansas, Florida, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $62.8 million.  Non-performing assets at June 30, 2019 were $26.6 million, $45.3 million, $3.3 million, $2.4 million and zero in the Arkansas, Florida, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $77.5 million. 

The Company’s allowance for loan losses was $106.1 million at June 30, 2019, or 0.96% of total loans, compared to $108.8 million, or 0.98% of total loans, at December 31, 2018. As of June 30, 2019, and December 31, 2018, the Company’s allowance for loan losses was 168.9% and 169.4% of its total non-performing loans, respectively.

Stockholders’ equity was $2.42 billion at June 30, 2019 compared to $2.35 billion at December 31, 2018, an increase of $71.5 million. The increase in stockholders’ equity is primarily associated with the $101.8 million increase in retained earnings and the $28.6 million increase in comprehensive income which were partially offset by the repurchase of $64.4 million of our common stock during 2019.  Book value per common share was $14.46 at June 30, 2019 compared to $13.76 at December 31, 2018.  Tangible book value per common share (non-GAAP) was $8.50 at June 30, 2019 compared to $7.90 at December 31, 2018, an annualized increase of 15.3%. 

Branches

The Company currently has 77 branches in Arkansas, 76 branches in Florida, 5 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, July 18, 2019.  We encourage all participants to pre-register for the conference call using the following link:  http://dpregister.com/10132572.  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: 10132572, which will be available until July 25, 2019 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 net income (earnings), as adjusted; diluted earnings per common share, as adjusted; return on average assets, as adjusted; return on average common equity, as adjusted; return on average tangible common equity; return on average tangible common equity, as adjusted; efficiency ratio, as adjusted, tangible book value per common share and tangible common equity to tangible assets--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 items or 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 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:  economic conditions, credit quality, interest rates, loan demand, the ability to successfully integrate new acquisitions, increased regulatory requirements as a result of our exceeding $10 billion in total assets, legislative and regulatory changes, technological changes and cybersecurity risks, competition from other financial institutions, changes in the assumptions used in making the forward-looking statements, and other factors described in reports we file with the Securities and Exchange Commission (the “SEC”), including those factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on February 26, 2019.

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:
Donna Townsell
Director of Investor Relations
Home BancShares, Inc.
(501) 328-4625

  Home BancShares, Inc.  
  Consolidated End of Period Balance Sheets  
  (Unaudited)  
             
      Jun. 30,     Mar. 31,     Dec. 31,     Sep. 30,     Jun. 30,  
  (In thousands)         2019           2019           2018           2018           2018    
                                         
ASSETS                                        
                                         
Cash and due from banks   $ 183,745     $ 141,027     $ 175,024     $ 208,681     $ 197,658  
Interest-bearing deposits with other banks     373,557       421,443       482,915       323,376       298,085  
Cash and cash equivalents     557,302       562,470       657,939       532,057       495,743  
Federal funds sold     1,075       1,700       325       500       500  
Investment securities - available-for-sale     2,053,939       2,013,123       1,785,862       1,744,430       1,718,704  
Investment securities - held-to-maturity     -       -       192,776       199,266       204,401  
Loans receivable     11,053,129       10,978,935       11,071,879       10,832,815       10,897,970  
Allowance for loan losses     (106,066 )     (106,357 )     (108,791 )     (110,191 )     (111,516 )
Loans receivable, net     10,947,063       10,872,578       10,963,088       10,722,624       10,786,454  
Bank premises and equipment, net     278,821       279,012       233,261       233,652       234,634  
Foreclosed assets held for sale     13,734       14,466       13,236       13,507       17,853  
Cash value of life insurance     149,708       149,353       148,621       148,014       147,281  
Accrued interest receivable     48,992       50,288       48,945       48,909       45,682  
Deferred tax asset, net     58,517       64,061       73,275       79,548       78,435  
Goodwill     958,408       958,408       958,408       958,408       956,418  
Core deposit and other intangibles     39,723       41,310       42,896       44,484       46,101  
Other assets     180,293       172,732       183,806       187,339       191,914  
Total assets     $ 15,287,575     $ 15,179,501     $ 15,302,438     $ 14,912,738     $ 14,924,120  
                                         
LIABILITIES AND STOCKHOLDERS' EQUITY                                        
                                         
Liabilities                                        
Deposits:                                        
Demand and non-interest-bearing   $ 2,575,696     $ 2,519,175     $ 2,401,232     $ 2,482,857     $ 2,523,553  
Savings and interest-bearing transaction accounts     6,774,162       6,650,181       6,624,407       6,420,951       6,573,902  
Time deposits     1,997,458       1,898,096       1,874,139       1,720,930       1,638,578  
Total deposits     11,347,316       11,067,452       10,899,778       10,624,738       10,736,033  
Securities sold under agreements to repurchase     142,541       152,239       143,679       142,146       139,750  
FHLB and other borrowed funds     899,447       1,105,175       1,472,393       1,363,851       1,309,950  
Accrued interest payable and other liabilities     107,695       124,172       67,912       72,381       55,971  
Subordinated debentures     369,170       368,979       368,790       368,596       368,403  
Total liabilities       12,866,169       12,818,017       12,952,552       12,571,712       12,610,107  
                                         
  Stockholders' equity                                          
Common stock     1,675       1,682       1,707       1,741       1,745  
Capital surplus     1,550,999       1,560,994       1,609,810       1,668,106       1,693,337  
Retained earnings     853,964       803,629       752,184       701,900       642,540  
Accumulated other comprehensive (loss) income     14,768       (4,821 )     (13,815 )     (30,721 )     (23,609 )
Total stockholders' equity       2,421,406       2,361,484       2,349,886       2,341,026       2,314,013  
Total liabilities and stockholders' equity     $ 15,287,575     $ 15,179,501     $ 15,302,438     $ 14,912,738     $ 14,924,120  
                                         

 

  Home BancShares, Inc.    
  Consolidated Statements of Income    
  (Unaudited)    
                     
      Quarter Ended       Six Months Ended    
      Jun. 30,     Mar. 31,     Dec. 31,     Sep. 30,     Jun. 30,       Jun. 30,     Jun. 30,    
  (In thousands)         2019           2019         2018           2018         2018         2019         2018    
                                                     
Interest income                                                      
Loans   $ 165,816     $ 163,848   $ 163,201     $ 166,334     $ 152,996   $ 329,664     $ 301,061  
Investment securities                                                    
Taxable     10,650       10,706     9,873       9,011       8,979     21,356       17,949  
Tax-exempt     3,183       3,379     3,456       3,427       3,368     6,562       6,374  
Deposits - other banks     1,628       1,543     1,241       1,273       1,206     3,171       2,135  
Federal funds sold     10       11     9       6       12     21       18  
                                                     
Total interest income     181,287       179,487     177,780       180,051       166,561     360,774       327,537  
                                                     
Interest expense                                                      
Interest on deposits     29,709       28,006     25,207       21,412       18,164     57,715       32,970  
Federal funds purchased     -       -     -       -       -     -       1  
FHLB borrowed funds     4,722       6,118     6,474       7,055       4,245     10,840       8,825  
Securities sold under agreements to repurchase     630       634     602       472       372     1,264       748  
Subordinated debentures     5,239       5,259     5,215       5,202       5,168     10,498       10,172  
                                                     
Total interest expense     40,300       40,017     37,498       34,141       27,949     80,317       52,716  
                                                     
  Net interest income       140,987       139,470     140,282       145,910       138,612     280,457       274,821  
Provision for loan losses     1,325       -     -       -       2,722     1,325       4,322  
  Net interest income after                                                      
provision for loan losses       139,662       139,470     140,282       145,910       135,890     279,132       270,499  
                                                     
Non-interest income                                                      
Service charges on deposit accounts     6,259       6,401     7,004       6,992       6,780     12,660       12,855  
Other service charges and fees     8,177       6,563     7,598       9,041       9,797     14,740       19,952  
Trust fees     391       403     290       437       379     794       825  
Mortgage lending income     3,457       2,435     2,554       3,691       3,477     5,892       6,134  
Insurance commissions     515       609     442       463       526     1,124       1,205  
Increase in cash value of life insurance     740       736     737       735       730     1,476       1,384  
Dividends from FHLB, FRB, FNBB & other     1,149       3,505     1,992       1,288       1,600     4,654       2,477  
Gain (loss) on SBA loans     355       241     75       47       262     596       444  
Gain (loss) on branches, equipment and
  other assets, net
    (129 )     79     (25 )     (102 )     -     (50 )     7  
Gain (loss) on OREO, net     58       206     114       836       1,046     264       1,451  
Other income     2,094       2,494     2,726       2,419       3,076     4,588       6,744  
                                                     
Total non-interest income     23,066       23,672     23,507       25,847       27,673     46,738       53,478  
                                                     
Non-interest expense                                                      
Salaries and employee benefits     37,976       37,836     36,230       37,825       34,476     75,812       69,490  
Occupancy and equipment     8,853       8,823     8,310       8,148       8,519     17,676       17,502  
Data processing expense     3,838       3,970     3,642       3,461       3,339     7,808       7,325  
Other operating expenses     16,957       18,428     23,090       16,689       16,894     35,385       32,291  
                                                     
Total non-interest expense     67,624       69,057     71,272       66,123       63,228     136,681       126,608  
                                                     
Income before income taxes       95,104       94,085     92,517       105,634       100,335     189,189       197,369  
Income tax expense     22,940       22,735     21,487       25,350       24,310     45,675       48,280  
Net income     $ 72,164     $ 71,350   $ 71,030     $ 80,284     $ 76,025   $ 143,514     $ 149,089  
                                                     

 

  Home BancShares, Inc.    
  Selected Financial Information    
  (Unaudited)    
                   
     Quarter Ended 
    Six Months Ended    
    Jun. 30,     Mar. 31,     Dec. 31,     Sep. 30,     Jun. 30,       Jun. 30,     Jun. 30,    
  (Dollars and shares in thousands, except per share data)       2019      2019     2018      2018      2018       2019      2018    
                                                 
PER SHARE DATA                                                
                                                 
Diluted earnings per common share   $   0.43   $   0.42   $   0.41   $   0.46   $   0.44     $   0.85   $   0.86    
Diluted earnings per common share, as adjusted, excluding
  special dividend from equity investment, merger expenses,
  hurricane expenses & outsourced special project expense
  (non-GAAP)(1)
      0.43       0.42       0.44       0.46       0.44         0.85       0.86    
Basic earnings per common share       0.43       0.42       0.41       0.46       0.44         0.85       0.86    
Dividends per share - common       0.1300       0.1200       0.1200       0.1200       0.1100         0.2500       0.2200    
Book value per common share       14.46       14.04       13.76       13.44       13.26         14.46       13.26    
Tangible book value per common share (non-GAAP)(1)       8.50       8.10       7.90       7.68       7.52         8.50       7.52    
                   
                   
STOCK INFORMATION                  
                   
Average common shares outstanding       167,791       169,592       173,023       174,440       173,403         168,686       173,581    
Average diluted shares outstanding       167,791       169,592       173,311       174,867       173,936         168,686       174,168    
End of period common shares outstanding       167,466       168,173       170,720       174,135       174,511         167,466       174,511    
                   
                   
ANNUALIZED PERFORMANCE METRICS                  
                   
Return on average assets     1.92%     1.92%     1.90%     2.14%     2.13%       1.92%     2.11%    
Return on average assets excluding special dividend from
  equity investment, merger expenses, hurricane expenses &
  outsourced special project expense (ROA, as adjusted)
  (non-GAAP)(1)
    1.92%     1.91%     2.03%     2.14%     2.13%       1.91%     2.11%    
Return on average assets excluding intangible
  amortization (non-GAAP)(1)
    2.09%     2.09%     2.07%     2.33%     2.32%       2.09%     2.30%    
Return on average common equity     12.18%     12.34%     12.05%     13.74%     13.54%       12.26%     13.46%    
Return on average common equity excluding special dividend from
  equity investment, merger expenses, hurricane expenses &
  outsourced special project expense: (ROE, as adjusted)
  (non-GAAP)(1)
    12.18%     12.30%     12.86%     13.74%     13.54%       12.24%     13.46%    
Return on average tangible common equity (non-GAAP)(1)     21.01%     21.53%     21.08%     24.20%     23.90%       21.26%     23.92%    
Return on average tangible common equity excluding intangible
  amortization (non-GAAP)(1)
    21.35%     21.88%     21.43%     24.56%     24.27%       21.61%     24.30%    
Return on average tangible common equity excluding special
  dividend from equity investment, merger expenses, hurricane
  expenses & outsourced special project expense:
  (ROTCE, as adjusted) (non-GAAP)(1)
    21.01%     21.45%     22.50%     24.20%     23.90%       21.23%     23.92%    
Efficiency ratio     39.93%     41.01%     42.18%     37.23%     36.74%       40.47%     37.28%    
Efficiency ratio, as adjusted (non-GAAP)(1)     39.92%     40.52%     38.28%     37.39%     36.97%       40.21%     37.44%    
Net interest margin - FTE     4.28%     4.30%     4.30%     4.46%     4.47%       4.29%     4.47%    
Fully taxable equivalent adjustment   $   1,319   $   1,367   $   1,412   $   1,489   $   1,403     $   2,686   $   2,612    
Total revenue       204,353       203,159       201,287       205,898       194,234         407,512       381,015    
Total purchase accounting accretion       9,240       9,055       9,432       10,744       10,669         18,295       21,276    
Average purchase accounting loan discounts       122,197       131,596       141,244       151,377       153,624         126,871       159,443    
                   
                   
OTHER OPERATING EXPENSES                  
                   
Advertising   $   1,095   $   1,051   $   1,214   $   1,154   $   1,142     $   2,146   $   2,104    
Merger and acquisition expenses       -        -        6,013       -        -          -        -     
Amortization of intangibles       1,587       1,586       1,587       1,617       1,624         3,173       3,250    
Electronic banking expense       1,851       1,903       1,969       1,947       1,828         3,754       3,706    
Directors' fees       392       434       319       314       318         826       648    
Due from bank service charges       282       238       289       253       242         520       461    
FDIC and state assessment       1,655       1,710       1,869       2,293       2,788         3,365       4,396    
Hurricane expense       -        897       470       -        -          897       -     
Insurance       661       697       737       762       714         1,358       1,601    
Legal and accounting       989       981       1,151       761       858         1,970       1,636    
Other professional fees       2,306       2,812       1,465       1,748       1,601         5,118       3,240    
Operating supplies       505       536       510       510       602         1,041       1,202    
Postage       293       326       325       311       323         619       667    
Telephone       306       303       324       337       371         609       744    
Other expense     5,035     4,954     4,848     4,682     4,483       9,989     8,636    
                                                 
Total other operating expenses   $ 16,957   $ 18,428   $ 23,090   $ 16,689   $ 16,894     $ 35,385   $ 32,291    
                                                 
                   
 (1)  Calculation of this metric and the reconciliation to GAAP are included in the schedules accompanying this release.   

 

  Home BancShares, Inc.      
  Selected Financial Information      
  (Unaudited)      
                 
      Jun. 30,  
    Mar. 31,  
    Dec. 31,  
    Sep. 30,  
    Jun. 30,  
     
  (Dollars in thousands)     2019       2019       2018       2018       2018        
                                     
BALANCE SHEET RATIOS                                    
                                     
Total loans to total deposits     97.41%     99.20%     101.58%     101.96%     101.51%      
Common equity to assets     15.84%     15.56%     15.36%     15.70%     15.51%      
Tangible common equity to tangible assets (non-GAAP)(1)     9.96%     9.60%     9.43%     9.62%     9.42%      
                                     
                                     
LOANS RECEIVABLE                                    
                                     
Real estate                                    
Commercial real estate loans                                    
Non-farm/non-residential   $ 4,495,558   $ 4,623,174   $ 4,806,684   $ 4,685,827   $ 4,734,315      
Construction/land development     1,930,838     1,649,303     1,546,035     1,550,910     1,662,199      
Agricultural     85,045     76,092     76,433     72,930     77,053      
Residential real estate loans                                    
Residential 1-4 family     1,852,784     1,947,119     1,975,586     1,982,666     1,960,841      
Multifamily residential     523,789     538,098     560,475     608,608     540,526      
Total real estate     8,888,014     8,833,786     8,965,213     8,900,941     8,974,934      
Consumer     455,554     448,093     443,105     428,192     417,499      
Commercial and industrial     1,515,357     1,505,773     1,476,331     1,303,841     1,287,637      
Agricultural     80,621     58,966     48,562     58,644     55,768      
Other     113,583     132,317     138,668     141,197     162,132      
Loans receivable   $ 11,053,129   $ 10,978,935   $ 11,071,879   $ 10,832,815   $ 10,897,970      
                                     
Discount for credit losses on purchased loans   $ 98,672   $ 106,617   $ 113,648   $ 120,849   $ 129,903      
Purchased loans, net of discount for credit losses
  on purchased loans
    2,469,579     2,712,315     2,900,284     3,081,695     3,522,753      
                                     
                                     
ALLOWANCE FOR LOAN LOSSES                                    
                                     
Balance, beginning of period   $ 106,357   $ 108,791   $ 110,191   $ 111,516   $ 110,212      
Loans charged off     2,279     3,391     1,814     2,501     2,132      
Recoveries of loans previously charged off     663     957     414     1,176     714      
Net loans (recovered)/charged off     1,616     2,434     1,400     1,325     1,418      
Provision for loan losses     1,325     -     -     -     2,722      
Balance, end of period   $ 106,066   $ 106,357   $ 108,791   $ 110,191   $ 111,516      
                                     
Net (recoveries) charge-offs to average total loans     0.06%     0.09%     0.05%     0.05%     0.05%      
Allowance for loan losses to total loans     0.96%     0.97%     0.98%     1.02%     1.02%      
                                     
                                     
NON-PERFORMING ASSETS                                    
                                     
Non-performing loans                                    
Non-accrual loans   $ 52,841   $ 49,616   $ 47,083   $ 36,198   $ 37,082      
Loans past due 90 days or more     9,961     14,577     17,159     20,267     19,696      
Total non-performing loans     62,802     64,193     64,242     56,465     56,778      
Other non-performing assets                                    
Foreclosed assets held for sale, net     13,734     14,466     13,236     13,507     17,853      
Other non-performing assets     947     947     497     405     3      
Total other non-performing assets     14,681     15,413     13,733     13,912     17,856      
Total non-performing assets   $ 77,483   $ 79,606   $ 77,975   $ 70,377   $ 74,634      
                                     
Allowance for loan losses for loans to non-performing loans     168.89%     165.68%     169.35%     195.15%     196.41%      
Non-performing loans to total loans     0.57%     0.58%     0.58%     0.52%     0.52%      
Non-performing assets to total assets     0.51%     0.52%     0.51%     0.47%     0.50%      
                                     
                                     
(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    
      June 30, 2019
      March 31, 2019
   
      Average  
    Income/  
    Yield/         Average  
    Income/  
    Yield/      
  (Dollars in thousands)       Balance  
    Expense  
    Rate         Balance  
    Expense  
    Rate      
                                       
ASSETS                                      
Earning assets                                      
Interest-bearing balances due from banks   $ 298,821   $ 1,628   2.19%     $ 272,410   $ 1,543   2.30%    
Federal funds sold     1,596     10   2.51%       1,491     11   2.99%    
Investment securities - taxable     1,640,883     10,650   2.60%       1,595,605     10,706   2.72%    
Investment securities - non-taxable - FTE     379,437     4,177   4.42%       390,754     4,424   4.59%    
Loans receivable - FTE     11,000,926     166,141   6.06%       11,036,503     164,170   6.03%    
Total interest-earning assets     13,321,663     182,606   5.50%       13,296,763     180,854   5.52%    
Non-earning assets     1,776,937                 1,782,909              
Total assets   $ 15,098,600               $ 15,079,672              
                                       
LIABILITIES AND SHAREHOLDERS' EQUITY                                      
Liabilities                                      
Interest-bearing liabilities                                      
Savings and interest-bearing transaction accounts   $ 6,677,683   $ 20,637   1.24%     $ 6,596,895   $ 19,537   1.20%    
Time deposits     1,943,320     9,072   1.87%       1,903,373     8,469   1.80%    
Total interest-bearing deposits     8,621,003     29,709   1.38%       8,500,268     28,006   1.34%    
Securities sold under agreement to repurchase     144,478     630   1.75%       150,803     634   1.71%    
FHLB borrowed funds     932,365     4,722   2.03%       1,159,629     6,118   2.14%    
Subordinated debentures     369,076     5,239   5.69%       368,884     5,259   5.78%    
Total interest-bearing liabilities     10,066,922     40,300   1.61%       10,179,584     40,017   1.59%    
Non-interest bearing liabilities                                      
Non-interest bearing deposits     2,553,060                 2,439,520              
Other liabilities     101,900                 115,911              
Total liabilities     12,721,882                 12,735,015              
Shareholders' equity     2,376,718                 2,344,657              
Total liabilities and shareholders' equity   $ 15,098,600               $ 15,079,672              
Net interest spread               3.89%                 3.93%    
Net interest income and margin - FTE         $ 142,306   4.28%           $ 140,837   4.30%    
                                       

 

  Home BancShares, Inc.    
  Consolidated Net Interest Margin    
  (Unaudited)    
                   
      Six Months Ended    
      June 30, 2019       June 30, 2018    
      Average  
    Income/  
    Yield/         Average  
    Income/  
    Yield/      
  (Dollars in thousands)       Balance  
    Expense  
    Rate         Balance  
    Expense  
    Rate      
                                       
ASSETS                                      
Earning assets                                      
Interest-bearing balances due from banks   $ 285,688   $ 3,171   2.24%     $ 267,347   $ 2,135   1.61%    
Federal funds sold     1,544     21   2.74%       5,156     18   0.70%    
Investment securities - taxable     1,618,369     21,356   2.66%       1,544,451     17,949   2.34%    
Investment securities - non-taxable - FTE     385,064     8,602   4.50%       371,788     8,473   4.60%    
Loans receivable - FTE     11,018,616     330,310   6.05%       10,335,699     301,574   5.88%    
Total interest-earning assets     13,309,281     363,460   5.51%       12,524,441     330,149   5.32%    
Non-earning assets     1,779,908               1,745,179            
Total assets   $ 15,089,189         $ 14,269,620        
                                       
LIABILITIES AND SHAREHOLDERS' EQUITY                                      
Liabilities                                      
Interest-bearing liabilities                                      
Savings and interest-bearing transaction accounts   $ 6,637,512   $ 40,174   1.22%     $ 6,430,509   $ 24,731   0.78%    
Time deposits     1,923,457     17,541   1.84%       1,562,873     8,239   1.06%    
Total interest-bearing deposits     8,560,969     57,715   1.36%       7,993,382     32,970   0.83%    
Federal funds purchased     -     -   0.00%       62     1   3.25%    
Securities sold under agreement to repurchase     147,623     1,264   1.73%       148,310     748   1.02%    
FHLB borrowed funds     1,045,370     10,840   2.09%       1,038,612     8,825   1.71%    
Subordinated debentures     368,981     10,498   5.74%       368,217     10,172   5.57%    
Total interest-bearing liabilities     10,122,943     80,317   1.60%       9,548,583     52,716   1.11%    
Non-interest bearing liabilities                                
Non-interest bearing deposits     2,496,604           2,439,299              
Other liabilities     108,866           48,779              
Total liabilities     12,728,413           12,036,661              
Shareholders' equity     2,360,776           2,232,959              
Total liabilities and shareholders' equity   $ 15,089,189         $ 14,269,620              
Net interest spread           3.91%             4.21%    
Net interest income and margin - FTE         $ 283,143   4.29%           $ 277,433   4.47%    
                                       

 

  Home BancShares, Inc.      
  Non-GAAP Reconciliations      
  (Unaudited)      
                     
    Quarter Ended  
    Six Months Ended
     
(Dollars and shares in thousands,     Jun. 30,     Mar. 31,     Dec. 31,     Sep. 30,     Jun. 30,  
      Jun. 30,     Jun. 30,  
     
  except per share data)       2019         2019         2018         2018         2018           2019         2018        
                                                 
EARNINGS, AS ADJUSTED                                                
                                                 
GAAP net income available to common shareholders (A) $ 72,164   $ 71,350   $ 71,030   $ 80,284   $ 76,025     $ 143,514   $ 149,089      
Adjustments                                                
Special dividend from equity investment   -     (2,134 )   -     -     -       (2,134 )   -      
Merger and acquisition expenses   -     -     6,013     -     -       -     -      
Hurricane expenses   -     897     470     -     -       897     -      
Outsourced special project expense   -     900     -     -     -       900      -      
Total adjustments   -     (337 )   6,483     -     -       (337 )   -      
Tax-effect of adjustments   -     (88 )   1,694     -     -       (88 )   -      
Adjustments after-tax (B)   -     (249 )   4,789     -     -       (249 )   -      
Earnings, as adjusted (C) $ 72,164   $ 71,101   $ 75,819   $ 80,284   $ 76,025     $ 143,265   $ 149,089      
                                                 
Average diluted shares outstanding (D)   167,791     169,592     173,311     174,867     173,936       168,686     174,168      
                                                 
GAAP diluted earnings per share: (A/D) $ 0.43   $ 0.42   $ 0.41   $ 0.46   $ 0.44     $ 0.85   $ 0.86      
Adjustments after-tax: (B/D)   -     -     0.03     -     -       -     -      
Diluted earnings per common share excluding special dividend from
  equity investment, merger expenses, hurricane expenses &
  outsourced special project expense: (C/D)
$ 0.43   $ 0.42   $ 0.44   $ 0.46   $ 0.44     $ 0.85   $ 0.86      
                                             
                     
ANNUALIZED RETURN ON AVERAGE ASSETS                    
                     
Return on average assets: (A/F)   1.92%     1.92%     1.90%     2.14%     2.13%       1.92%     2.11%      
Return on average assets excluding special dividend from
  equity investment, merger expenses, hurricane expenses &
  outsourced special project expense: (ROA, as adjusted)
  ((A+E)/F)
  1.92%     1.91%     2.03%     2.14%     2.13%       1.91%     2.11%      
Return on average assets excluding intangible
  amortization: ((A+C)/(F-G))
  2.09%     2.09%     2.07%     2.33%     2.32%       2.09%     2.30%      
                     
GAAP net income available to common shareholders (A) $ 72,164   $ 71,350   $ 71,030   $ 80,284   $ 76,025     $ 143,514   $ 149,089      
Amortization of intangibles (B)   1,587     1,586     1,587     1,617     1,624       3,173     3,250      
Amortization of intangibles after-tax (C)   1,172     1,172     1,172     1,194     1,200       2,344     2,401      
Total adjustments (D)   -     (337 )   6,483     -     -       (337 )   -      
Adjustments after-tax (E)   -     (249 )   4,789     -     -       (249 )   -      
Average assets (F)   15,098,600     15,079,672     14,838,979     14,880,931     14,304,483       15,089,189     14,269,620      
Average goodwill, core deposits & other intangible assets (G)   998,898     1,000,494     1,002,070     1,001,843     975,345       999,692     975,895      
                                                 

 

  Home BancShares, Inc.      
  Non-GAAP Reconciliations      
  (Unaudited)      
                       
      Quarter Ended  
      Six Months Ended  
     
  (Dollars and shares in thousands,       Jun. 30,  
    Mar. 31,  
    Dec. 31,  
    Sep. 30,  
    Jun. 30,  
      Jun. 30,  
    Jun. 30,  
     
  except per share data)         2019         2019         2018         2018         2018           2019         2018        
                                                   
ANNUALIZED RETURN ON AVERAGE COMMON EQUITY                                                  
                                                   
Return on average common equity: (A/D)     12.18%     12.34%     12.05%     13.74%     13.54%       12.26%     13.46%      
Return on average common equity excluding special dividend
  from equity investment, merger expenses, hurricane
  expenses & outsourced special project expense:
  (ROE, as adjusted) ((A+C)/D)
    12.18%     12.30%     12.86%     13.74%     13.54%       12.24%     13.46%      
Return on average tangible common equity: (A/(D-E))     21.01%     21.53%     21.08%     24.20%     23.90%       21.26%     23.92%      
Return on average tangible common equity excluding intangible
  amortization: (B/(D-E))
    21.35%     21.88%     21.43%     24.56%     24.27%       21.61%     24.30%      
Return on average tangible common equity excluding special
  dividend from equity investment, merger expenses, hurricane
  expenses & outsourced special project expense:
  (ROTCE, as adjusted) ((A+C)/(D-E))
    21.01%     21.45%     22.50%     24.20%     23.90%       21.23%     23.92%      
                                                   
GAAP net income available to common shareholders (A)   $ 72,164   $ 71,350   $ 71,030   $ 80,284   $ 76,025     $ 143,514   $ 149,089      
Earnings excluding intagible amortization (B)     73,336     72,522     72,202     81,478     77,225       145,858     151,490      
Adjustments after-tax (C)     -     (249 )   4,789     -     -       (249 )   -      
Average common equity (D)     2,376,718     2,344,657     2,338,802     2,317,930     2,251,412       2,360,776     2,232,959      
Average goodwill, core deposits & other intangible assets (E)     998,898     1,000,494     1,002,070     1,001,843     975,345       999,692     975,895      
                                                   
                                                   
EFFICIENCY RATIO                                                  
                                                   
Efficiency ratio:  ((C-E)/(A+B+D))     39.93%     41.01%     42.18%     37.23%     36.74%       40.47%     37.28%      
Efficiency ratio, as adjusted:  ((C-E-G)/(A+B+D-F))     39.92%     40.52%     38.28%     37.39%     36.97%       40.21%     37.44%      
                                                   
Net interest income (A)   $ 140,987   $ 139,470   $ 140,282   $ 145,910   $ 138,612     $ 280,457   $ 274,821      
Non-interest income (B)     23,066     23,672     23,507     25,847     27,673       46,738     53,478      
Non-interest expense (C)     67,624     69,057     71,272     66,123     63,228       136,681     126,608      
Fully taxable equivalent adjustment (D)     1,319