CONWAY, Ark., July 21, 2016 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (NASDAQ: HOMB ), parent company of Centennial Bank, today announced a record quarterly profit of $43.5 million, or $0.31 diluted earnings per share for the second quarter of 2016 compared to $33.9 million or $0.25 diluted earnings per share (split adjusted) for the same quarter in 2015. The Company increased its second quarter earnings by $9.6 million or 28.3% for the three months ended June 30, 2016 compared to the same period of the previous year. The Company also announced $172.5 million in quarterly organic loan growth during the second quarter of 2016, a core efficiency ratio of 36.84% and a quarterly return on assets of 1.83%.
“During the second quarter of 2016, we continued our momentum growing both earnings and organic loans,” said John Allison, Chairman. “Organic loans grew by $172.5 million for the quarter, while the core efficiency ratio improved again to an impressive 36.84%. Additionally, we are pleased to have crossed another milestone by reporting a quarterly return on assets greater than 1.80% for the second quarter of 2016 at 1.83%.”
“The second quarter of 2016 marked the twenty-first consecutive quarter we have successively reported the most profitable quarter in the Company's history,” said Randy Sims, Home BancShares, Inc. Chief Executive Officer. “Our second quarter earnings are $43.5 million, which is 5.0%, higher than the previous record quarterly earnings reported for Home BancShares. The Company’s diluted earnings per share reached a new high of $0.31 per share for the quarter just ended.”
“The Company’s second quarter financial results and organic loan growth are excellent considering the amount of loan payoffs during the quarter. This gives us the momentum to seek opportunities to expand our existing footprint or enter new markets,” added Tracy French, Centennial Bank President and Chief Executive Officer. “Because we have the ability to both generate and retain a substantial amount of capital each quarter, this puts us in the enviable position to self-fund the capital we need for organic growth opportunities as they arise.”
Operating Highlights
Each quarter we perform credit impairment tests on the loans acquired in our FDIC loss sharing and non-loss sharing acquisitions. During our second quarter 2016 impairment testing, several non-loss share pools were determined to have a material projected credit improvement. This projected credit improvement offset by the expected decline in accretion income from the maturing of acquired loan portfolios, resulted in a net improvement of recognized accretion income when compared to the first quarter of 2016. Consequently, yields on loans and net interest margin for the quarter just ended are slightly increased when compared to the first quarter of 2016.
Net interest margin, on a fully taxable equivalent basis, was 4.83% for the quarter just ended compared to 5.00% for the same quarter in 2015 and compared to 4.81% for the first quarter of 2016. Accretion yield on purchased loans increased $300,000 from $10.7 million for the first quarter of 2016 to $11.0 million for second quarter of 2016. The net interest margin, excluding accretion yield on purchased loans increased slightly from the first quarter of 2016 to the second quarter of 2016 at 4.22% and 4.24%, respectively.
During the second quarter of 2016, the Company recorded a provision for loan loss of $5.7 million compared to $5.4 million in the second quarter of 2015. The $5.7 million of provision for loan loss is a reflection of the organic loan growth and net charge-offs for the second quarter of 2016.
The Company reported $21.8 million of non-interest income for the second quarter of 2016, compared to $17.0 million for the second quarter of 2015. The most important components of the second quarter non-interest income were $8.0 million from other service charges and fees, $6.2 million from service charges on deposits accounts, $3.5 million from mortgage lending income, $2.5 million from other income, $840,000 from gain on sale of branches, equipment and other assets, net and $617,000 from insurance commissions offset by the $941,000 of loss on OREO and $410,000 of net amortization on the FDIC indemnification asset. Other income includes $241,000 of loan recoveries on our FDIC covered transactions and a $925,000 recovery on other historical losses.
As a result of the recognized credit improvements in prior years, the Company has been decreasing the base of the indemnification asset to be recognized as FDIC amortization over the weighted average life of the loss-share agreements. The recognition of this amortization has begun to slow down as the five-year loss-share has expired and only the ten-year loss-share remains. Consequently, there was a $1.8 million decline of FDIC indemnification amortization from the second quarter of 2015 to the second quarter of 2016.
Non-interest expense for the second quarter of 2016 was $47.6 million compared to $43.3 million for the second quarter of 2015. This increase is primarily associated with the establishment of the Centennial Commercial Finance Group (“Centennial CFG”) in New York City during the second quarter of 2015, the acquisition of FBBI during the fourth quarter of 2015 and $1.2 million of write-downs on vacant properties from closed branches during the second quarter of 2016. For the second quarter of 2016, our core efficiency ratio was 36.84% which is improved from the 40.30% reported for second quarter of 2015.
Financial Condition
Total non-covered loans were $6.96 billion at June 30, 2016 compared to $6.58 billion at December 31, 2015. Total covered loans were $57.4 million at June 30, 2016 compared to $62.2 million at December 31, 2015. Total deposits were $6.71 billion at June 30, 2016 compared to $6.44 billion at December 31, 2015. Total assets were $9.58 billion at June 30, 2016 compared to $9.29 billion at December 31, 2015.
From December 31, 2015 to June 30, 2016, the Company produced approximately $385.3 million of organic non-covered loan growth, of which $209.7 million is associated with loan originations in the legacy footprint with the remaining $175.6 million being associated with Centennial CFG. Centennial CFG had loans of $891.3 million at June 30, 2016.
From March 31, 2016 to June 30, 2016, the Company produced approximately $172.5 million of organic non-covered loan growth, of which $132.6 million is associated with loan originations in the legacy footprint with the remaining $39.9 million being associated with Centennial CFG.
Non-performing non-covered loans at June 30, 2016 are $27.3 million, $28.3 million, $397,000 and zero in the Arkansas, Florida, Alabama and Centennial CFG markets, respectively, for a total of $56.0 million. Non-performing non-covered loans as a percent of total non-covered loans were 0.80% as of June 30, 2016 compared to 0.92% as of December 31, 2015. Non-performing non-covered assets at June 30, 2016 are $40.6 million, $31.9 million, $998,000 and zero in the Arkansas, Florida and Alabama and Centennial CFG markets, respectively, for a total of $73.5 million. Non-performing non-covered assets as a percent of total non-covered assets were 0.77% as of June 30, 2016 compared to 0.85% as of December 31, 2015.
The Company’s allowance for loan losses for non-covered loans was $71.8 million at June 30, 2016, or 1.03% of total non-covered loans, compared to $66.6 million, or 1.01% of total non-covered loans, at December 31, 2015. As of June 30, 2016 and December 31, 2015, the allowance for loan losses for non-covered loans plus discount for credit losses on non-covered loans acquired to total non-covered loans plus discount for credit losses on non-covered loans acquired was 2.56% and 3.07%, respectively. This decrease is primarily the result of organic loan growth in 2016 plus projected credit improvement from previous periods on the acquired impaired loans and write-downs on purchased credit impaired loans. As of June 30, 2016 and December 31, 2015, the Company’s allowance for loan losses for non-covered loans was 128% and 111% of its total non-performing non-covered loans, respectively.
Stockholders’ equity was $1.26 billion at June 30, 2016 compared to $1.20 billion at December 31, 2015, an increase of $65.2 million. Book value per common share was $9.01 at June 30, 2016 compared to $8.55 (split adjusted) at December 31, 2015. Tangible book value per common share was $6.18 at June 30, 2016 compared to $5.71 (split adjusted) at December 31, 2015 for an annualized increase of 16.6%.
Branches
In an effort to achieve efficiencies primarily from the acquisitions, the Company closed and sold its Clermont, Florida location during the second quarter of 2016 for a gain of $738,000. During the third quarter of 2016, the Company has plans to add deposit operations to its loan production office in New York City and close one Arkansas location. The Company currently has 77 branches in Arkansas, 58 branches in Florida, 6 branches in Alabama plus one branch and one loan production office in New York City.
Conference Call
Management will conduct a conference call to review this information at 1:00 p.m. CT (2:00 ET) on Thursday, July 21, 2016. We encourage all participants to pre-register for the conference call using the following link: http://dpregister.com/10087841 . Callers who pre-register will be given dial-in instructions and a unique PIN to gain immediate access to the live call. Participants may pre-register at any time prior to the call and will immediately receive simple instructions via email. The Home BancShares conference call will also be automatically scheduled as an event in your Outlook calendar.
Those without internet access or unable to pre-register may dial in and listen to the live call by calling 1-877-508-9586 and asking for the Home BancShares conference call. A replay of the call will be available by calling 1-877-344-7529, Passcode: 10087841, which will be available until July 28, 2016 at 10:59 p.m. CT (11:59 ET). Internet access to the call will be available live or in recorded version on the Company's website at www.homebancshares.com under “Investor Relations” for 12 months.
General
This release contains forward-looking statements regarding the Company's plans, expectations, goals and outlook for the future. Statements in this press release that are not historical facts should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements of this type speak only as of the date of this news release. By nature, forward-looking statements involve inherent risk and uncertainties. Various factors, including, but not limited to, economic conditions, credit quality, interest rates, loan demand, the ability to successfully integrate new acquisitions and changes in the assumptions used in making the forward-looking statements, could cause actual results to differ materially from those contemplated by the forward-looking statements. Additional information on factors that might affect Home BancShares, Inc.'s financial results is included in its Annual Report on Form 10-K for the year ended December 31, 2015 filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2016.
Home BancShares, Inc. is a bank holding company, headquartered in Conway, Arkansas. Our wholly-owned subsidiary, Centennial Bank, provides a broad range of commercial and retail banking plus related financial services to businesses, real estate developers, investors, individuals and municipalities. Centennial Bank has branch locations in Arkansas, Florida, South Alabama and a loan production office in New York City. The Company's common stock is traded through the NASDAQ Global Select Market under the symbol “HOMB.”
| Home BancShares, Inc. | ||||||||||||||||
| Consolidated End of Period Balance Sheets | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | ||||||||||||
| (In thousands) | 2016 | 2016 | 2015 | 2015 | 2015 | |||||||||||
| ASSETS | ||||||||||||||||
| Cash and due from banks | $ | 136,632 | $ | 115,206 | $ | 111,258 | $ | 120,262 | $ | 116,682 | ||||||
| Interest-bearing deposits with other banks | 48,762 | 42,866 | 144,565 | 108,394 | 87,729 | |||||||||||
| Cash and cash equivalents | 185,394 | 158,072 | 255,823 | 228,656 | 204,411 | |||||||||||
| Federal funds sold | 525 | 7,050 | 1,550 | - | - | |||||||||||
| Investment securities - available-for-sale | 1,221,778 | 1,207,773 | 1,206,580 | 1,141,405 | 1,080,000 | |||||||||||
| Investment securities - held-to-maturity | 287,725 | 299,050 | 309,042 | 324,949 | 336,993 | |||||||||||
| Loans receivable not covered by loss share | 6,964,716 | 6,792,170 | 6,579,401 | 5,900,175 | 5,499,028 | |||||||||||
| Loans receivable covered by FDIC loss share | 57,440 | 60,042 | 62,170 | 105,414 | 159,891 | |||||||||||
| Allowance for loan losses | (74,341 | ) | (72,306 | ) | (69,224 | ) | (63,659 | ) | (60,258 | ) | ||||||
| Loans receivable, net | 6,947,815 | 6,779,906 | 6,572,347 | 5,941,930 | 5,598,661 | |||||||||||
| Bank premises and equipment, net | 207,932 | 210,764 | 212,163 | 205,505 | 209,425 | |||||||||||
| Foreclosed assets held for sale not covered by loss share | 17,573 | 19,657 | 18,526 | 18,204 | 16,539 | |||||||||||
| Foreclosed assets held for sale covered by FDIC loss share | 205 | 545 | 614 | 2,612 | 4,472 | |||||||||||
| FDIC indemnification asset | 8,130 | 8,656 | 9,284 | 11,290 | 15,874 | |||||||||||
| Cash value of life insurance | 85,889 | 85,538 | 85,146 | 75,281 | 75,015 | |||||||||||
| Accrued interest receivable | 28,548 | 28,833 | 29,132 | 26,977 | 24,447 | |||||||||||
| Deferred tax asset, net | 61,613 | 69,564 | 71,565 | 63,075 | 62,088 | |||||||||||
| Goodwill | 377,983 | 377,983 | 377,983 | 322,728 | 322,728 | |||||||||||
| Core deposit and other intangibles | 19,835 | 20,597 | 21,443 | 18,828 | 19,816 | |||||||||||
| Other assets | 131,181 | 123,463 | 117,924 | 134,113 | 103,913 | |||||||||||
| Total assets | $ | 9,582,126 | $ | 9,397,451 | $ | 9,289,122 | $ | 8,515,553 | $ | 8,074,382 | ||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||
| Liabilities | ||||||||||||||||
| Deposits: | ||||||||||||||||
| Demand and non-interest-bearing | $ | 1,645,472 | $ | 1,562,565 | $ | 1,456,624 | $ | 1,409,949 | $ | 1,406,051 | ||||||
| Savings and interest-bearing transaction accounts | 3,678,546 | 3,602,868 | 3,551,684 | 3,230,722 | 3,099,522 | |||||||||||
| Time deposits | 1,388,930 | 1,412,086 | 1,430,201 | 1,312,343 | 1,372,463 | |||||||||||
| Total deposits | 6,712,948 | 6,577,519 | 6,438,509 | 5,953,014 | 5,878,036 | |||||||||||
| Federal funds purchased | - | - | - | - | - | |||||||||||
| Securities sold under agreements to repurchase | 111,072 | 121,906 | 128,389 | 134,142 | 150,746 | |||||||||||
| FHLB and other borrowed funds | 1,380,889 | 1,336,233 | 1,405,945 | 1,216,152 | 866,907 | |||||||||||
| Accrued interest payable and other liabilities | 51,476 | 73,185 | 55,696 | 60,141 | 56,166 | |||||||||||
| Subordinated debentures | 60,826 | 60,826 | 60,826 | 60,826 | 60,826 | |||||||||||
| Total liabilities | 8,317,211 | 8,169,669 | 8,089,365 | 7,424,275 | 7,012,681 | |||||||||||
| Stockholders' equity | ||||||||||||||||
| Common stock | 1,404 | 702 | 701 | 680 | 677 | |||||||||||
| Capital surplus | 863,560 | 862,827 | 867,981 | 782,500 | 780,731 | |||||||||||
| Retained earnings | 389,014 | 357,788 | 326,898 | 299,984 | 274,409 | |||||||||||
| Accumulated other comprehensive income | 10,937 | 6,465 | 4,177 | 8,114 | 5,884 | |||||||||||
| Total stockholders' equity | 1,264,915 | 1,227,782 | 1,199,757 | 1,091,278 | 1,061,701 | |||||||||||
| Total liabilities and stockholders' equity | $ | 9,582,126 | $ | 9,397,451 | $ | 9,289,122 | $ | 8,515,553 | $ | 8,074,382 | ||||||
| Home BancShares, Inc. | |||||||||||||||||||||||
| Consolidated Statements of Income | |||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||
| Quarter Ended | Six Months Ended | ||||||||||||||||||||||
| Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Jun. 30, | Jun. 30, | |||||||||||||||||
| (In thousands) | 2016 | 2016 | 2015 | 2015 | 2015 | 2016 | 2015 | ||||||||||||||||
| Interest income | |||||||||||||||||||||||
| Loans | $ | 100,415 | $ | 96,913 | $ | 97,772 | $ | 88,671 | $ | 82,360 | $ | 197,328 | $ | 157,847 | |||||||||
| Investment securities | |||||||||||||||||||||||
| Taxable | 5,145 | 5,450 | 5,865 | 5,157 | 5,130 | 10,595 | 10,673 | ||||||||||||||||
| Tax-exempt | 2,823 | 2,815 | 2,879 | 2,789 | 2,774 | 5,638 | 5,526 | ||||||||||||||||
| Deposits - other banks | 106 | 102 | 66 | 32 | 44 | 208 | 135 | ||||||||||||||||
| Federal funds sold | 1 | 4 | 9 | 4 | 3 | 5 | 11 | ||||||||||||||||
| Total interest income | 108,490 | 105,284 | 106,591 | 96,653 | 90,311 | 213,774 | 174,192 | ||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Interest on deposits | 3,854 | 3,634 | 3,357 | 3,045 | 3,311 | 7,488 | 6,569 | ||||||||||||||||
| Federal funds purchased | 1 | 1 | 1 | 1 | 1 | 2 | 2 | ||||||||||||||||
| FHLB borrowed funds | 3,074 | 3,070 | 2,641 | 2,030 | 1,053 | 6,144 | 2,103 | ||||||||||||||||
| Securities sold under agreements to repurchase | 134 | 145 | 140 | 146 | 163 | 279 | 335 | ||||||||||||||||
| Subordinated debentures | 386 | 377 | 351 | 340 | 334 | 763 | 663 | ||||||||||||||||
| Total interest expense | 7,449 | 7,227 | 6,490 | 5,562 | 4,862 | 14,676 | 9,672 | ||||||||||||||||
| Net interest income | 101,041 | 98,057 | 100,101 | 91,091 | 85,449 | 199,098 | 164,520 | ||||||||||||||||
| Provision for loan losses | 5,692 | 5,677 | 8,890 | 7,106 | 5,381 | 11,369 | 9,168 | ||||||||||||||||
| Net interest income after | |||||||||||||||||||||||
| provision for loan losses | 95,349 | 92,380 | 91,211 | 83,985 | 80,068 | 187,729 | 155,352 | ||||||||||||||||
| Non-interest income | |||||||||||||||||||||||
| Service charges on deposit accounts | 6,151 | 5,929 | 6,528 | 6,250 | 6,056 | 12,080 | 11,474 | ||||||||||||||||
| Other service charges and fees | 7,968 | 7,117 | 6,827 | 6,644 | 6,499 | 15,085 | 12,715 | ||||||||||||||||
| Trust fees | 359 | 404 | 365 | 398 | 1,186 | 763 | 1,618 | ||||||||||||||||
| Mortgage lending income | 3,481 | 2,863 | 2,404 | 3,132 | 2,955 | 6,344 | 4,887 | ||||||||||||||||
| Insurance commissions | 617 | 657 | 513 | 548 | 640 | 1,274 | 1,207 | ||||||||||||||||
| Income from title services | 3 | 4 | 54 | 28 | 36 | 7 | 70 | ||||||||||||||||
| Increase in cash value of life insurance | 353 | 395 | 328 | 268 | 295 | 748 | 603 | ||||||||||||||||
| Dividends from FHLB, FRB, Bankers' bank & other | 719 | 620 | 431 | 433 | 419 | 1,339 | 834 | ||||||||||||||||
| Gain on acquisitions | - | - | - | - | - | - | 1,635 | ||||||||||||||||
| Gain on sale of SBA loans | 79 | - | 390 | 151 | - | 79 | - | ||||||||||||||||
| Gain (loss) on sale of branches, equipment and other assets, net | 840 | (53 | ) | 23 | (266 | ) | 21 | 787 | 29 | ||||||||||||||
| Gain (loss) on OREO, net | (941 | ) | 96 | (507 | ) | (40 | ) | (263 | ) | (845 | ) | 230 | |||||||||||
| Gain (loss) on securities, net | 15 | 10 | - | - | - | 25 | 4 | ||||||||||||||||
| FDIC indemnification accretion/(amortization), net | (410 | ) | (362 | ) | (1,239 | ) | (1,994 | ) | (2,202 | ) | (772 | ) | (6,158 | ) | |||||||||
| Other income | 2,538 | 1,757 | 1,139 | 993 | 1,385 | 4,295 | 2,549 | ||||||||||||||||
| Total non-interest income | 21,772 | 19,437 | 17,256 | 16,545 | 17,027 | 41,209 | 31,697 | ||||||||||||||||
| Non-interest expense | |||||||||||||||||||||||
| Salaries and employee benefits | 25,437 | 23,958 | 23,841 | 22,225 | 22,056 | 49,395 | 41,446 | ||||||||||||||||
| Occupancy and equipment | 6,509 | 6,671 | 6,700 | 6,540 | 6,678 | 13,180 | 12,727 | ||||||||||||||||
| Data processing expense | 2,766 | 2,664 | 2,673 | 2,619 | 3,063 | 5,430 | 5,482 | ||||||||||||||||
| Other operating expenses | 12,875 | 12,355 | 15,785 | 13,209 | 11,453 | 25,230 | 24,308 | ||||||||||||||||
| Total non-interest expense | 47,587 | 45,648 | 48,999 | 44,593 | 43,250 | 93,235 | 83,963 | ||||||||||||||||
| Income before income taxes | 69,534 | 66,169 | 59,468 | 55,937 | 53,845 | 135,703 | 103,086 | ||||||||||||||||
| Income tax expense | 26,025 | 24,742 | 22,035 | 20,196 | 19,939 | 50,767 | 38,061 | ||||||||||||||||
| Net income | $ | 43,509 | $ | 41,427 | $ | 37,433 | $ | 35,741 | $ | 33,906 | $ | 84,936 | $ | 65,025 | |||||||||
| Home BancShares, Inc. | ||||||||||||||||||||||
| Selected Financial Information | ||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||||
| (Dollars and shares in thousands, | Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | Jun. 30, | Jun. 30, | |||||||||||||||
| except per share data) | 2016 | 2016 | 2015 | 2015 | 2015 | 2016 | 2015 | |||||||||||||||
| PER SHARE DATA | ||||||||||||||||||||||
| Diluted earnings per common share | $ | 0.31 | $ | 0.29 | $ | 0.27 | $ | 0.26 | $ | 0.25 | $ | 0.60 | $ | 0.48 | ||||||||
| Diluted earnings per common share excluding merger expenses | 0.31 | 0.29 | 0.28 | 0.26 | 0.25 | 0.60 | 0.49 | |||||||||||||||
| Diluted earnings per common share excluding intangible amortization | 0.31 | 0.30 | 0.27 | 0.27 | 0.25 | 0.61 | 0.49 | |||||||||||||||
| Basic earnings per common share | 0.31 | 0.30 | 0.27 | 0.26 | 0.25 | 0.61 | 0.48 | |||||||||||||||
| Dividends per share - common | 0.0875 | 0.0750 | 0.0750 | 0.0750 | 0.0625 | 0.1625 | 0.1250 | |||||||||||||||
| Book value per common share | 9.01 | 8.75 | 8.55 | 8.02 | 7.83 | 9.01 | 7.83 | |||||||||||||||
| Tangible book value per common share | 6.18 | 5.91 | 5.71 | 5.51 | 5.31 | 6.18 | 5.31 | |||||||||||||||
| STOCK INFORMATION | ||||||||||||||||||||||
| Average common shares outstanding | 140,382 | 140,390 | 140,234 | 135,738 | 135,265 | 140,386 | 135,222 | |||||||||||||||
| Average diluted shares outstanding | 140,608 | 140,687 | 140,617 | 136,162 | 135,832 | 140,667 | 135,825 | |||||||||||||||
| End of period common shares outstanding | 140,382 | 140,380 | 140,241 | 136,001 | 135,549 | 140,382 | 135,549 | |||||||||||||||
| ANNUALIZED PERFORMANCE METRICS | ||||||||||||||||||||||
| Return on average assets | 1.83 | % | 1.79 | % | 1.62 | % | 1.72 | % | 1.72 | % | 1.81 | % | 1.70 | % | ||||||||
| Return on average assets excluding intangible amortization | 1.93 | % | 1.89 | % | 1.72 | % | 1.83 | % | 1.83 | % | 1.91 | % | 1.81 | % | ||||||||
| Return on average assets excluding intangible amortization, provision for loan losses, merger expenses, bargain purchase gain, gain on life insurance proceeds and income taxes (Core ROA) | 3.33 | % | 3.27 | % | 3.27 | % | 3.24 | % | 3.20 | % | 3.30 | % | 3.12 | % | ||||||||
| Return on average common equity | 14.11 | % | 13.77 | % | 12.53 | % | 13.23 | % | 12.98 | % | 13.94 | % | 12.66 | % | ||||||||
| Return on average tangible common equity excluding intangible amortization | 21.01 | % | 20.79 | % | 19.07 | % | 19.76 | % | 19.68 | % | 20.90 | % | 19.34 | % | ||||||||
| Efficiency ratio | 37.52 | % | 37.50 | % | 40.32 | % | 39.79 | % | 40.39 | % | 37.51 | % | 40.88 | % | ||||||||
| Core efficiency ratio | 36.84 | % | 36.92 | % | 37.86 | % | 39.30 | % | 40.30 | % | 36.88 | % | 40.55 | % | ||||||||
| Net interest margin - FTE | 4.83 | % | 4.81 | % | 4.95 | % | 5.03 | % | 5.00 | % | 4.82 | % | 4.97 | % | ||||||||
| Fully taxable equivalent adjustment | $ | 1,974 | $ | 1,973 | $ | 2,025 | $ | 1,951 | $ | 1,879 | $ | 3,947 | $ | 3,734 | ||||||||
| Total revenue | 130,262 | 124,721 | 123,847 | 113,198 | 107,338 | 254,983 | 205,889 | |||||||||||||||
| EARNINGS EXCLUDING | ||||||||||||||||||||||
| INTANGIBLE AMORTIZATION | ||||||||||||||||||||||
| GAAP net income available to common shareholders | $ | 43,509 | $ | 41,427 | $ | 37,433 | $ | 35,741 | $ | 33,906 | $ | 84,936 | $ | 65,025 | ||||||||
| Intangible amortization after-tax | 463 | 514 | 524 | 600 | 669 | 977 | 1,355 | |||||||||||||||
| Earnings excluding intangible amortization | $ | 43,972 | $ | 41,941 | $ | 37,957 | $ | 36,341 | $ | 34,575 | $ | 85,913 | $ | 66,380 | ||||||||
| GAAP diluted earnings per share | $ | 0.31 | $ | 0.29 | $ | 0.27 | $ | 0.26 | $ | 0.25 | $ | 0.60 | $ | 0.48 | ||||||||
| Intangible amortization after-tax | - | 0.01 | - | 0.01 | - | 0.01 | 0.01 | |||||||||||||||
| Diluted earnings per share excluding intangible amortization | $ | 0.31 | $ | 0.30 | $ | 0.27 | $ | 0.27 | $ | 0.25 | $ | 0.61 | $ | 0.49 | ||||||||
| OTHER OPERATING EXPENSES | ||||||||||||||||||||||
| Advertising | $ | 733 | $ | 823 | $ | 644 | $ | 906 | $ | 657 | $ | 1,556 | $ | 1,436 | ||||||||
| Merger and acquisition expenses | - | - | 2,909 | 474 | - | - | 1,417 | |||||||||||||||
| Amortization of intangibles | 763 | 845 | 862 | 988 | 1,100 | 1,608 | 2,229 | |||||||||||||||
| Electronic banking expense | 1,237 | 1,456 | 1,283 | 1,352 | 1,299 | 2,693 | 2,531 | |||||||||||||||
| Directors' fees | 289 | 275 | 262 | 233 | 281 | 564 | 576 | |||||||||||||||
| Due from bank service charges | 337 | 305 | 304 | 291 | 286 | 642 | 501 | |||||||||||||||
| FDIC and state assessment | 1,446 | 1,446 | 1,443 | 1,276 | 1,172 | 2,892 | 2,568 | |||||||||||||||
| Insurance | 544 | 533 | 642 | 617 | 617 | 1,077 | 1,283 | |||||||||||||||
| Legal and accounting | 658 | 523 | 537 | 338 | 706 | 1,181 | 1,153 | |||||||||||||||
| Other professional fees | 1,044 | 925 | 1,231 | 947 | 560 | 1,969 | 1,048 | |||||||||||||||
| Operating supplies | 419 | 436 | 473 | 464 | 509 | 855 | 943 | |||||||||||||||
| Postage | 260 | 286 | 299 | 293 | 295 | 546 | 604 | |||||||||||||||
| Telephone | 455 | 487 | 499 | 444 | 470 | 942 | 974 | |||||||||||||||
| Other expense | 4,690 | 4,015 | 4,397 | 4,586 | 3,501 | 8,705 | 7,045 | |||||||||||||||
| Total other operating expenses | $ | 12,875 | $ | 12,355 | $ | 15,785 | $ | 13,209 | $ | 11,453 | $ | 25,230 | $ | 24,308 | ||||||||
| Home BancShares, Inc. | |||||||||||||||
| Selected Financial Information | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | |||||||||||
| (Dollars in thousands) | 2016 | 2016 | 2015 | 2015 | 2015 | ||||||||||
| BALANCE SHEET RATIOS | |||||||||||||||
| Total loans to total deposits | 104.61 | % | 104.18 | % | 103.15 | % | 100.88 | % | 96.27 | % | |||||
| Common equity to assets | 13.20 | % | 13.07 | % | 12.92 | % | 12.82 | % | 13.15 | % | |||||
| Tangible common equity to tangible assets | 9.44 | % | 9.21 | % | 9.00 | % | 9.17 | % | 9.30 | % | |||||
| ALLOWANCE FOR LOAN LOSSES | |||||||||||||||
| Non-Covered | |||||||||||||||
| Balance, beginning of period | $ | 69,780 | $ | 66,636 | $ | 60,581 | $ | 55,877 | $ | 52,731 | |||||
| Loans charged off | 4,367 | 3,876 | 4,316 | 3,966 | 3,339 | ||||||||||
| Recoveries of loans previously charged off | 709 | 1,343 | 1,188 | 535 | 1,184 | ||||||||||
| Net loans (recovered)/charged off | 3,658 | 2,533 | 3,128 | 3,431 | 2,155 | ||||||||||
| Provision for loan losses | 5,692 | 5,677 | 8,890 | 7,106 | 5,301 | ||||||||||
| Reclass of provision for loan losses attributable to FDIC loss share agreements | - | - | 293 | 1,029 | - | ||||||||||
| Balance, end of period | $ | 71,814 | $ | 69,780 | $ | 66,636 | $ | 60,581 | $ | 55,877 | |||||
| Discount for credit losses on non-covered loans acquired | 109,485 | 129,837 | 139,498 | 134,131 | 131,746 | ||||||||||
| Net (recoveries) charge-offs on loans not covered by loss share to average non-covered loans | 0.21 | % | 0.15 | % | 0.19 | % | 0.24 | % | 0.16 | % | |||||
| Allowance for loan losses for non-covered loans to total non-covered loans | 1.03 | % | 1.03 | % | 1.01 | % | 1.03 | % | 1.02 | % | |||||
| Allowance for loan losses for non-covered loans plus discount for credit losses on non-covered loans acquired to total non-covered loans plus discount for credit losses on non-covered loans acquired | 2.56 | % | 2.88 | % | 3.07 | % | 3.23 | % | 3.33 | % | |||||
| Covered | |||||||||||||||
| Balance, beginning of period | $ | 2,526 | $ | 2,588 | $ | 3,078 | $ | 4,381 | $ | 3,795 | |||||
| Loans charged off | - | 71 | 158 | 251 | - | ||||||||||
| Recoveries of loans previously charged off | 1 | 9 | (39 | ) | (318 | ) | 186 | ||||||||
| Net loans charged off/(recovered) | (1 | ) | 62 | 197 | 569 | (186 | ) | ||||||||
| Provision for loan losses forecasted outside of loss share | - | - | - | 295 | - | ||||||||||
| Provision for loan losses before benefit attributable to FDIC loss share agreements | - | - | - | - | 400 | ||||||||||
| Benefit attributable to FDIC loss share agreements | - | - | - | (295 | ) | (320 | ) | ||||||||
| Net provision for loan losses | - | - | - | - | 80 | ||||||||||
| Reclass of provision for loan losses attributable to FDIC loss share agreements | - | - | (293 | ) | (1,029 | ) | - | ||||||||
| Increase (decrease) in FDIC indemnification asset | - | - | - | 295 | 320 | ||||||||||
| Balance, end of period | $ | 2,527 | $ | 2,526 | $ | 2,588 | $ | 3,078 | $ | 4,381 | |||||
| Total allowance for loan losses | $ | 74,341 | $ | 72,306 | $ | 69,224 | $ | 63,659 | $ | 60,258 | |||||
| NON-PERFORMING ASSETS | |||||||||||||||
| NOT COVERED BY LOSS SHARE | |||||||||||||||
| Non-performing non-covered loans | |||||||||||||||
| Non-accrual non-covered loans | $ | 36,660 | $ | 33,409 | $ | 36,374 | $ | 37,405 | $ | 29,033 | |||||
| Non-covered loans past due 90 days or more | 19,302 | 22,008 | 23,845 | 11,390 | 10,847 | ||||||||||
| Total non-performing non-covered loans | 55,962 | 55,417 | 60,219 | 48,795 | 39,880 | ||||||||||
| Other non-performing non-covered assets | |||||||||||||||
| Non-covered foreclosed assets held for sale, net | 17,573 | 19,657 | 18,526 | 18,204 | 16,539 | ||||||||||
| Other non-performing non-covered assets | - | - | 38 | 14 | 12 | ||||||||||
| Total other non-performing non-covered assets | 17,573 | 19,657 | 18,564 | 18,218 | 16,551 | ||||||||||
| Total non-performing non-covered assets | $ | 73,535 | $ | 75,074 | $ | 78,783 | $ | 67,013 | $ | 56,431 | |||||
| Allowance for loan losses for non-covered loans to non-performing non-covered loans | 128.33 | % | 125.92 | % | 110.66 | % | 124.15 | % | 140.11 | % | |||||
| Non-performing non-covered loans to total non-covered loans | 0.80 | % | 0.82 | % | 0.92 | % | 0.83 | % | 0.73 | % | |||||
| Non-performing non-covered assets to total non-covered assets | 0.77 | % | 0.80 | % | 0.85 | % | 0.80 | % | 0.71 | % | |||||
| Home BancShares, Inc. | |||||||||||||||
| Loan Information | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Jun. 30, | |||||||||||
| (Dollars in thousands) | 2016 | 2016 | 2015 | 2015 | 2015 | ||||||||||
| LOANS NOT COVERED BY LOSS SHARE | |||||||||||||||
| Real estate | |||||||||||||||
| Commercial real estate loans | |||||||||||||||
| Non-farm/non-residential | $ | 2,883,970 | $ | 2,889,735 | $ | 2,968,147 | $ | 2,655,882 | $ | 2,477,688 | |||||
| Construction/land development | 1,066,844 | 976,098 | 943,095 | 805,003 | 796,589 | ||||||||||
| Agricultural | 78,535 | 75,763 | 75,027 | 75,233 | 81,633 | ||||||||||
| Residential real estate loans | |||||||||||||||
| Residential 1-4 family | 1,207,756 | 1,145,080 | 1,130,714 | 1,055,504 | 997,952 | ||||||||||
| Multifamily residential | 394,980 | 437,721 | 429,872 | 392,483 | 321,593 | ||||||||||
| Total real estate | 5,632,085 | 5,524,397 | 5,546,855 | 4,984,105 | 4,675,455 | ||||||||||
| Consumer | 48,933 | 50,090 | 52,258 | 46,677 | 48,320 | ||||||||||
| Commercial and industrial | 1,130,372 | 1,070,139 | 850,357 | 749,846 | 658,501 | ||||||||||
| Agricultural | 69,666 | 63,482 | 67,109 | 78,217 | 72,766 | ||||||||||
| Other | 83,660 | 84,062 | 62,822 | 41,330 | 43,986 | ||||||||||
| Loans receivable not covered by loss share | $ | 6,964,716 | $ | 6,792,170 | $ | 6,579,401 | $ | 5,900,175 | $ | 5,499,028 | |||||
| LOANS COVERED BY LOSS SHARE | |||||||||||||||
| Real estate | |||||||||||||||
| Commercial real estate loans | |||||||||||||||
| Non-farm/non-residential | $ | 192 | $ | 192 | $ | 188 | $ | 25,903 | $ | 54,777 | |||||
| Construction/land development | 1,700 | 1,702 | 1,692 | 7,836 | 24,003 | ||||||||||
| Agricultural | - | - | - | 735 | 848 | ||||||||||
| Residential real estate loans | |||||||||||||||
| Residential 1-4 family | 54,660 | 57,243 | 59,565 | 66,447 | 72,002 | ||||||||||
| Multifamily residential | 372 | 379 | 384 | 1,200 | 1,394 | ||||||||||
| Total real estate | 56,924 | 59,516 | 61,829 | 102,121 | 153,024 | ||||||||||
| Consumer | - | - | - | 10 | 17 | ||||||||||
| Commercial and industrial | 404 | 414 | 230 | 2,682 | 6,118 | ||||||||||
| Agricultural | - | - | - | - | - | ||||||||||
| Other | 112 | 112 | 111 | 601 | 732 | ||||||||||
| Loans receivable covered by loss share | $ | 57,440 | $ | 60,042 | $ | 62,170 | $ | 105,414 | $ | 159,891 | |||||
| Home BancShares, Inc. | |||||||||||||||||||
| Consolidated Net Interest Margin | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| June 30, 2016 | March 31, 2016 | ||||||||||||||||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||
| (Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||
| ASSETS | |||||||||||||||||||
| Earning assets | |||||||||||||||||||
| Interest-bearing balances due from banks | $ | 112,537 | $ | 106 | 0.38 | % | $ | 113,831 | $ | 102 | 0.36 | % | |||||||
| Federal funds sold | 1,509 | 1 | 0.27 | % | 3,049 | 4 | 0.53 | % | |||||||||||
| Investment securities - taxable | 1,170,091 | 5,145 | 1.77 | % | 1,177,595 | 5,450 | 1.86 | % | |||||||||||
| Investment securities - non-taxable - FTE | 332,091 | 4,611 | 5.58 | % | 338,988 | 4,598 | 5.46 | % | |||||||||||
| Loans receivable - FTE | 6,969,727 | 100,601 | 5.81 | % | 6,729,060 | 97,103 | 5.80 | % | |||||||||||
| Total interest-earning assets | 8,585,955 | 110,464 | 5.17 | % | 8,362,523 | 107,257 | 5.16 | % | |||||||||||
| Non-earning assets | 976,669 | 968,099 | |||||||||||||||||
| Total assets | $ | 9,562,624 | $ | 9,330,622 | |||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
| Liabilities | |||||||||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||
| Savings and interest-bearing transaction accounts | $ | 3,677,650 | $ | 2,141 | 0.23 | % | $ | 3,593,914 | $ | 2,018 | 0.23 | % | |||||||
| Time deposits | 1,393,023 | 1,713 | 0.49 | % | 1,393,591 | 1,616 | 0.47 | % | |||||||||||
| Total interest-bearing deposits | 5,070,673 | 3,854 | 0.31 | % | 4,987,505 | 3,634 | 0.29 | % | |||||||||||
| Federal funds purchased | 330 | 1 | 1.22 | % | 610 | 1 | 0.66 | % | |||||||||||
| Securities sold under agreement to repurchase | 115,849 | 134 | 0.47 | % | 128,897 | 145 | 0.45 | % | |||||||||||
| FHLB borrowed funds | 1,402,465 | 3,074 | 0.88 | % | 1,368,457 | 3,070 | 0.90 | % | |||||||||||
| Subordinated debentures | 60,826 | 386 | 2.55 | % | 60,826 | 377 | 2.49 | % | |||||||||||
| Total interest-bearing liabilities | 6,650,143 | 7,449 | 0.45 | % | 6,546,295 | 7,227 | 0.44 | % | |||||||||||
| Non-interest bearing liabilities | |||||||||||||||||||
| Non-interest bearing deposits | 1,611,282 | 1,514,169 | |||||||||||||||||
| Other liabilities | 61,119 | 59,891 | |||||||||||||||||
| Total liabilities | 8,322,544 | 8,120,355 | |||||||||||||||||
| Shareholders' equity | 1,240,080 | 1,210,267 | |||||||||||||||||
| Total liabilities and shareholders' equity | $ | 9,562,624 | $ | 9,330,622 | |||||||||||||||
| Net interest spread | 4.72 | % | 4.72 | % | |||||||||||||||
| Net interest income and margin - FTE | $ | 103,015 | 4.83 | % | $ | 100,030 | 4.81 | % | |||||||||||
| Home BancShares, Inc. | |||||||||||||||||||
| Consolidated Net Interest Margin | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Six Months Ended | |||||||||||||||||||
| June 30, 2016 | June 30, 2015 | ||||||||||||||||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||
| (Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||
| ASSETS | |||||||||||||||||||
| Earning assets | |||||||||||||||||||
| Interest-bearing balances due from banks | $ | 110,842 | $ | 208 | 0.38 | % | $ | 117,883 | $ | 135 | 0.23 | % | |||||||
| Federal funds sold | 2,279 | 5 | 0.44 | % | 9,792 | 11 | 0.23 | % | |||||||||||
| Investment securities - taxable | 1,173,843 | 10,595 | 1.82 | % | 1,081,864 | 10,673 | 1.99 | % | |||||||||||
| Investment securities - non-taxable - FTE | 335,539 | 9,209 | 5.52 | % | 327,534 | 9,047 | 5.57 | % | |||||||||||
| Loans receivable - FTE | 6,849,394 | 197,704 | 5.80 | % | 5,289,205 | 158,060 | 6.03 | % | |||||||||||
| Total interest-earning assets | 8,471,897 | 217,721 | 5.17 | % | 6,826,278 | 177,926 | 5.26 | % | |||||||||||
| Non-earning assets | 974,726 | 895,978 | |||||||||||||||||
| Total assets | $ | 9,446,623 | $ | 7,722,256 | |||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||||
| Liabilities | |||||||||||||||||||
| Interest-bearing liabilities | |||||||||||||||||||
| Savings and interest-bearing transaction accounts | $ | 3,635,782 | $ | 4,159 | 0.23 | % | $ | 3,095,483 | $ | 3,050 | 0.20 | % | |||||||
| Time deposits | 1,393,307 | 3,329 | 0.48 | % | 1,377,623 | 3,519 | 0.52 | % | |||||||||||
| Total interest-bearing deposits | 5,029,089 | 7,488 | 0.30 | % | 4,473,106 | 6,569 | 0.30 | % | |||||||||||
| Federal funds purchased | 470 | 2 | 0.86 | % | 666 | 2 | 0.61 | % | |||||||||||
| Securities sold under agreement to repurchase | 122,373 | 279 | 0.46 | % | 173,906 | 335 | 0.39 | % | |||||||||||
| FHLB borrowed funds | 1,385,461 | 6,144 | 0.89 | % | 658,284 | 2,103 | 0.64 | % | |||||||||||
| Subordinated debentures | 60,826 | 763 | 2.52 | % | 60,826 | 663 | 2.20 | % | |||||||||||
| Total interest-bearing liabilities | 6,598,219 | 14,676 | 0.45 | % | 5,366,788 | 9,672 | 0.36 | % | |||||||||||
| Non-interest bearing liabilities | |||||||||||||||||||
| Non-interest bearing deposits | 1,562,725 | 1,286,275 | |||||||||||||||||
| Other liabilities | 60,505 | 33,502 | |||||||||||||||||
| Total liabilities | 8,221,449 | 6,686,565 | |||||||||||||||||
| Shareholders' equity | 1,225,174 | 1,035,691 | |||||||||||||||||
| Total liabilities and shareholders' equity | $ | 9,446,623 | $ | 7,722,256 | |||||||||||||||
| Net interest spread | 4.72 | % | 4.90 | % | |||||||||||||||
| Net interest income and margin - FTE | $ | 203,045 | 4.82 | % | $ | 168,254 | 4.97 | % | |||||||||||
FOR MORE INFORMATION CONTACT: Jennifer C. Floyd Chief Accounting Officer & Investor Relations Officer Home BancShares, Inc. (501) 339-2929
