Happy at HOMB: Third Quarter 2021 Beats on Net Income and EPS With New Nine-Month Record on Both, While Tacking on September Loan Growth

Company Release - 10/21/2021

CONWAY, Ark., Oct. 21, 2021 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (NASDAQ GS: HOMB) (“Home” or the “Company”), parent company of Centennial Bank, released quarterly earnings today.

Highlights of the Third Quarter of 2021:

Metric Q3 2021 Q2 2021 Q1 2021 Q4 2020 Q3 2020
Net Income $75.0 million $79.1 million $91.6 million $81.8 million $69.3 million
Total Revenue (net) $173.8 million $172.4 million $193.4 million $181.9 million $176.1 million
Income (loss) before income taxes $98.2 million $104.1 million $120.5 million $107.7 million $90.4 million
Pre-tax, pre-provision, net income (PPNR) (non-GAAP)(1) $98.2 million $99.4 million $120.5 million $107.7 million $104.4 million
Pre-tax net income to total revenue (net) 56.50% 60.42% 62.32% 59.19% 51.32%
P5NR (Pre-tax, pre-provision, profit percentage) (PPNR to total revenue (net)) (non-GAAP)(1) 56.50% 57.66% 62.32% 59.19% 59.28%
ROA 1.68% 1.81% 2.22% 1.97% 1.66%
NIM 3.60% 3.61% 4.02% 4.00% 3.92%
NIM, excluding PPP loans (non-GAAP)(1) 3.43% 3.54% 3.87% 3.97% 3.98%
Purchase Accounting Accretion $4.9 million $5.8 million $5.5 million $5.7 million $7.0 million
ROE 10.97% 11.92% 14.15% 12.72% 10.97%
ROTCE (non-GAAP)(1) 17.39% 19.12% 22.90% 20.96% 18.29%
Diluted Earnings Per Share $0.46 $0.48 $0.55 $0.50 $0.42
Non-Performing Assets to Total Assets 0.29% 0.35% 0.38% 0.48% 0.47%
Common Equity Tier 1 Capital 15.2% 15.0% 14.3% 13.4% 12.6%
Leverage 11.0% 10.9% 11.1% 10.8% 10.4%
Tier 1 Capital 15.8% 15.6% 14.9% 14.0% 13.2%
Total Risk-Based Capital 19.6% 19.5% 18.8% 17.8% 16.9%
Allowance for Credit Losses to Total Loans 2.41% 2.36% 2.25% 2.19% 2.12%
Allowance for Credit Losses to Total Loans, excluding PPP loans (non-GAAP)(1) 2.47% 2.47% 2.40% 2.33% 2.28%

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

“We had a great third quarter and a great first nine months as our company is continuing on to another $300 million plus year for the fourth year in a row. On the Happy HOMB front, there may not have been a better deal done in the last several years, unless it was an MOE or a complete franchise overlap that eliminated almost all of the branches. As a well-known analyst said, ‘HOMB threaded the needle perfectly on this deal.’ The market reaction has been favorable and a nod to the work we put into the structure of a triple accretive deal,” said John Allison, Chairman.

“September saw the first quality loan growth we have seen in some time. Loans recorded an increase of $55 million ex-PPP for the month - couple that with a $250 million increase in unfunded commitments for the quarter, and we are optimistic that quality loans will continue to build. I am personally excited about our partnership with Happy State Bank and am looking forward to working with their team in 2022 and beyond. I could not be happier with this deal as it works for both Happy and HOMB employees and shareholders,” said Tracy French, Centennial Bank President and Chief Executive Officer.

Operating Highlights

Net income for the three-month period ended September 30, 2021 was $75.0 million, or $0.46 earnings per share. Net income for the nine-month period ended September 30, 2021 was $245.7 million, or $1.49 earnings per share, both of which are records for the Company.

During the third quarter of 2021, the Company did not record any credit loss expense. The Company’s provisioning model is closely tied to unemployment rate projections which have continued to improve since the fourth quarter of 2020. The Company determined that an additional provision for credit losses on loans was not necessary as the current level of the allowance for credit losses was considered adequate as of September 30, 2021. In addition, the Company determined that the current level of the unfunded commitment reserve was adequate and no additional provision for unfunded commitments was necessary.

Our net interest margin was 3.60% for the three-month period ended September 30, 2021 compared to 3.61% for the three-month period ended June 30, 2021. The yield on loans was 5.64% and 5.40% for the three months ended September 30, 2021 and June 30, 2021, respectively, as average loans decreased from $10.54 billion to $10.04 billion. Additionally, the rate on interest bearing deposits decreased to 0.23% as of September 30, 2021 from 0.26% as of June 30, 2021, with average balances of $9.86 billion and $9.81 billion, respectively.

As of September 30, 2021, we had $241.5 million of Paycheck Protection Program (PPP) loans outstanding. These loans are at 1.00% plus the accretion of the origination fee. Excluding PPP loans, our net interest margin (non-GAAP) for the three-month period ended September 30, 2021 was 3.43%.(1) The PPP loans were accretive to the net interest margin by 17 basis points for the three-month period ended September 30, 2021 compared to 7 basis points for the three-month period ended June 30, 2021. This was primarily due to approximately $232.4 million of the Company’s PPP loans being forgiven during the third quarter of 2021 as well as the acceleration of deferred fees for the loans that were forgiven. The deferred fee income increased from $6.3 million to $9.3 million for the three-month periods ended June 30, 2021 and September 30, 2021, respectively.

The effects of the COVID-19 pandemic continued to create a significant amount of excess liquidity in the market. As a result of this excess liquidity, we had an increase of $337.7 million of average interest-bearing cash balances in the third quarter of 2021 compared to the second quarter of 2021. This excess liquidity diluted the net interest margin by 8 basis points for the three-month period ended September 30, 2021.

During the third quarter of 2021, there was $3.5 million of event interest income compared to event interest income of $942,000 for the second quarter of 2021. This increased the net interest margin by 6 basis points.

Purchase accounting accretion on acquired loans was $4.9 million and $5.8 million and average purchase accounting loan discounts were $36.5 million and $38.6 million for the three-month periods ended September 30, 2021 and June 30, 2021, respectively. The reduction in accretion income reduced the net interest margin by 2 basis points for the three-month period ended September 30, 2021.

Net interest income on a fully taxable equivalent basis was $146.4 million for the three-month period ended September 30, 2021 and $143.0 million for the three-month period ended June 30, 2021. This increase in net interest income for the three-month period ended September 30, 2021 was the result of a $2.6 million increase in interest income and a $780,000 decrease in interest expense. The $2.6 million increase in interest income was primarily the result of a $1.2 million net increase in investment income, a $911,000 increase in loan interest income, and a $410,000 increase in interest-bearing balances due from banks. The $780,000 decrease in interest expense was primarily the result of a decrease in interest expense on deposits.

The Company reported $29.2 million of non-interest income for the third quarter of 2021. The most important components of the second quarter non-interest income were $8.1 million from other service charges and fees, $5.9 million in mortgage lending income, $5.9 million from service charges on deposit accounts, $4.3 million from other income and $2.7 million from dividends from FHLB, FRB, FNBB and other. Included in the $2.7 million in dividends from FHLB, FRB, FNBB and other were $2.2 million in special dividends from equity investments. The Company is still currently involved in these investments; however, past performance does not guarantee future performance.

Non-interest expense for the third quarter of 2021 was $75.6 million. The most important components of the second quarter non-interest expense were $42.5 million from salaries and employee benefits, $16.8 million in other expense, $9.3 million in occupancy and equipment expenses and $6.0 million in data processing expenses. Also included within non-interest expense was $1.0 million in merger and acquisition expenses, the majority of which is non-deductible for tax purposes. For the third quarter of 2021, our efficiency ratio was 42.26%.

Financial Condition

Total loans receivable were $9.90 billion at September 30, 2021 compared to $10.20 billion at June 30, 2021. Total deposits were $14.00 billion at September 30, 2021 compared to $13.89 billion at June 30, 2021. Total assets were $17.77 billion at September 30, 2021 compared to $17.63 billion at June 30, 2021.

During the third quarter 2021, the Company experienced approximately $298.1 million in loan decline. Centennial CFG experienced $76.1 million of organic loan growth and had loans of $1.64 billion at September 30, 2021. Our legacy footprint experienced $141.8 million in organic loan decline and $232.4 million in PPP loan decline during the quarter.

Non-performing loans to total loans was 0.51% as of September 30, 2021 compared to 0.58% as of June 30, 2021. Non-performing assets to total assets decreased from 0.35% as of June 30, 2021 to 0.29% as of September 30, 2021. Net charge-offs were $1.8 million and $2.5 million for the three months ended September 30, 2021 and June 30, 2021, respectively.

Non-performing loans at September 30, 2021 were $15.5 million, $25.2 million, $523,000, $1.9 million and $7.8 million in the Arkansas, Florida, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $50.9 million. Non-performing assets at September 30, 2021 were $16.1 million, $25.8 million, $523,000, $1.9 million and $7.8 million in the Arkansas, Florida, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $52.1 million.

The Company’s allowance for credit losses on loans was $238.7 million at September 30, 2021, or 2.41% of total loans, compared to the allowance for credit losses of $240.5 million, or 2.36% of total loans, at June 30, 2021. The Company’s allowance for credit losses on loans to total loans, excluding PPP loans (non-GAAP), was 2.47%(1) at both September 30, 2021 and June 30, 2021. As of September 30, 2021 and June 30, 2021, the Company’s allowance for credit losses on loans was 468.77% and 407.99% of its total non-performing loans, respectively.

Stockholders’ equity was $2.74 billion at September 30, 2021 compared to $2.70 billion at June 30, 2021, an increase of approximately $39.9 million. The increase in stockholders’ equity was primarily associated with the $52.0 million increase in retained earnings, which was partially offset by a $3.1 million decrease in accumulated other comprehensive income and net stock repurchases and share-based compensation activity of $9.0 million. Book value per common share was $16.68 at September 30, 2021 compared to $16.39 at June 30, 2021. Tangible book value per common share (non-GAAP) was $10.59(1) at September 30, 2021 compared to $10.31(1) at June 30, 2021, an increase of 10.77% on an annualized basis.   

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

Branches

The Company currently has 76 branches in Arkansas, 78 branches in Florida, 5 branches in Alabama and one branch in New York City.

Acquisition

The Company’s previously announced acquisition of Happy Bancshares, Inc. (“Happy”) and its bank subsidiary, Happy State Bank, is currently expected to close during the first quarter of 2022 and is subject to the approval of the shareholders of each company, regulatory approvals and other customary closing conditions.

Conference Call

Management will conduct a conference call to review this information at 1:00 p.m. CT (2:00 ET) on Thursday, October 21, 2021. We encourage all participants to pre-register for the conference call using the following link: https://dpregister.com/sreg/10160407/ed8432fe7e. 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: 10160407, which will be available until October 28, 2021 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.

About Home BancShares

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.” The company was founded in 1998 and is headquartered in Conway, Arkansas. Visit www.homebancshares.com or www.my100bank.com for more information.

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; pre-tax, pre-provision, net income (PPNR); pre-tax, pre-provision, profit percentage; diluted earnings per common share, as adjusted; return on average assets, as adjusted; return on average assets excluding intangible amortization; return on average assets excluding excess liquidity; return on average common equity, as adjusted; return on average tangible common equity; return on average tangible common equity excluding intangible amortization; return on average tangible common equity, as adjusted; efficiency ratio, as adjusted; net interest margin, excluding PPP loans; allowance for credit losses to total loans, excluding PPP loans; 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 (including the effect of the PPP loans) that management believes are not indicative of the Company’s primary business operating results. 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 may contain forward-looking statements regarding the Company’s plans, expectations, goals and outlook for the future, as well as statements about the benefits of the business combination transaction involving Home and Happy. 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, real estate values and unemployment; disruptions, uncertainties and related effects on our business and operations as a result of the ongoing coronavirus (COVID-19) pandemic and measures that have been or may be implemented or imposed in response to the pandemic, including the impact on, among other things, credit quality and liquidity; the possibility that the proposed acquisition of Happy 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 possibility that such transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; the risk that the benefits from the transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in general economic and market conditions, ongoing or future effects of the COVID-19 pandemic, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which Home and Happy operate; the ability to promptly and effectively integrate the businesses of Home and Happy; the reaction to the transaction of the companies’ customers, employees and counterparties; diversion of management time on acquisition-related issues; the effect of any future mergers, acquisitions or other transactions to which we or our bank subsidiary may from time to time be a party, including as a result of one or more of the factors described above as they would relate to such transaction; the ability to identify, enter into and/or close additional acquisitions; legislative and regulatory changes and risks and expenses associated with current and future legislation and regulations, including those in response to the COVID-19 pandemic; technological changes and cybersecurity risks; the effects of changes in accounting policies and practices; changes in governmental monetary and fiscal policies; political instability; competition from other financial institutions; potential claims, expenses and other adverse effects related to current or future litigation, regulatory examinations or other government actions; 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, 2020, filed with the SEC on February 26, 2021.

Additional Important Information and Where to Find It

This press release may be deemed to be solicitation material in respect of the proposed transaction by Home and Happy. In connection with the proposed acquisition, Home intends to file with the Securities and Exchange Commission (the “SEC”) a Registration Statement on Form S-4 (the “Registration Statement”) to register the shares of Home common stock to be issued to shareholders of Happy in connection with the transaction. The Registration Statement will include a joint proxy statement of Home and Happy and a prospectus of Home (the “Joint Proxy Statement/Prospectus”), as well as other relevant materials regarding the proposed merger transaction involving Home and Happy. The definitive Joint Proxy Statement/Prospectus will be mailed to shareholders of Home and Happy. INVESTORS AND SECURITY HOLDERS OF HOME AND HAPPY ARE ADVISED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE MERGER OR INCORPORATED BY REFERENCE IN THE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION REGARDING THE PROPOSED MERGER TRANSACTION. Investors and security holders may obtain free copies of these documents, once they are filed, and other documents filed with the SEC on the SEC’s website at http://www.sec.gov. Investors and security holders may also obtain free copies of the documents filed with the SEC by Home at Home’s website at http://www.homebancshares.com, Investor Relations, or by contacting Donna Townsell, by telephone at (501) 328-4625.

Participants in Solicitation

Home and Happy and certain of their directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Home and Happy in connection with the merger transaction. Information about the directors and executive officers of Home and their ownership of Home common stock is set forth in the proxy statement for Home’s 2021 Annual Meeting of Shareholders, as filed with the SEC on Schedule 14A on March 2, 2021. Information about the directors and executive officers of Happy and their ownership of Happy common stock will be set forth in the Joint Proxy Statement/Prospectus to be included in the Registration Statement. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Joint Proxy Statement/Prospectus regarding the merger transaction. Free copies of this document may be obtained as described in the preceding paragraph when it becomes available.

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)

                                 
    Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31,   Sep. 30,  
(In thousands)   2021   2021   2021   2020   2020  
                                 
ASSETS                                
                                 
Cash and due from banks   $ 146,378   $ 182,226   $ 218,814   $ 242,173   $ 144,197  
Interest-bearing deposits with other banks     3,133,878     2,759,027     2,259,734     1,021,615     899,140  
Cash and cash equivalents     3,280,256     2,941,253     2,478,548     1,263,788     1,043,337  
Investment securities - available-for-sale, net of
allowance for credit losses
    3,150,608     3,053,712     2,539,123     2,473,781     2,361,900  
Loans receivable     9,901,100     10,199,175     10,778,493     11,220,721     11,691,470  
Allowance for credit losses     (238,673 )   (240,451 )   (242,932 )   (245,473 )   (248,224 )
Loans receivable, net     9,662,427     9,958,724     10,535,561     10,975,248     11,443,246  
Bank premises and equipment, net     276,972     278,502     278,620     278,614     280,364  
Foreclosed assets held for sale     1,171     1,969     3,004     4,420     4,322  
Cash value of life insurance     104,638     104,132     103,599     103,519     102,989  
Accrued interest receivable     48,577     48,725     55,495     60,528     72,599  
Deferred tax asset, net     69,724     72,273     77,145     70,249     75,167  
Goodwill     973,025     973,025     973,025     973,025     973,025  
Core deposit and other intangibles     26,466     27,886     29,307     30,728     32,149  
Other assets     171,192     166,991     166,814     164,904     160,660  
Total assets   $ 17,765,056   $ 17,627,192   $ 17,240,241   $ 16,398,804   $ 16,549,758  
                                 
LIABILITIES AND STOCKHOLDERS' EQUITY                                
                                 
Liabilities                                
Deposits:                                
Demand and non-interest-bearing   $ 4,139,149   $ 4,076,570   $ 3,859,722   $ 3,266,753   $ 3,207,967  
Savings and interest-bearing transaction accounts     8,813,326     8,744,900     8,477,208     8,212,240     8,011,200  
Time deposits     1,050,896     1,069,871     1,175,664     1,246,797     1,718,299  
Total deposits     14,003,371     13,891,341     13,512,594     12,725,790     12,937,466  
Securities sold under agreements to repurchase     141,002     150,540     162,929     168,931     158,447  
FHLB and other borrowed funds     400,000     400,000     400,000     400,000     403,428  
Accrued interest payable and other liabilities     113,721     118,415     148,999     127,999     139,485  
Subordinated debentures     370,900     370,707     370,515     370,326     370,133  
Total liabilities     15,028,994     14,931,003     14,595,037     13,793,046     14,008,959  
                                 
Stockholders' equity                                
Common stock     1,640     1,645     1,651     1,651     1,652  
Capital surplus     1,492,588     1,501,615     1,516,286     1,520,617     1,520,103  
Retained earnings     1,215,831     1,163,810     1,107,818     1,039,370     980,699  
Accumulated other comprehensive income     26,003     29,119     19,449     44,120     38,345  
Total stockholders' equity     2,736,062     2,696,189     2,645,204     2,605,758     2,540,799  
Total liabilities and stockholders' equity   $ 17,765,056   $ 17,627,192   $ 17,240,241   $ 16,398,804   $ 16,549,758  

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)   2021   2021   2021   2020   2020     2021   2020  
                                               
Interest income                                              
Loans   $ 142,609   $ 141,684   $ 150,917   $ 153,407   $ 154,787     $ 435,210   $ 471,931  
Investment securities                                              
Taxable     8,495     7,185     6,253     6,900     7,227       21,933     25,696  
Tax-exempt     4,839     4,905     5,071     4,979     4,367       14,815     11,179  
Deposits - other banks     1,117     707     410     270     252       2,234     1,579  
Federal funds sold     -     -     -     -     -       -     21  
Total interest income     157,060     154,481     162,651     165,556     166,633       474,192     510,406  
                                               
Interest expense                                              
Interest on deposits     5,642     6,434     7,705     10,596     13,200       19,781     52,514  
Federal funds purchased     -     -     -     -     -       -     13  
FHLB borrowed funds     1,917     1,896     1,875     1,917     2,235       5,688     7,589  
Securities sold under agreements to repurchase     102     107     190     208     237       399     959  
Subordinated debentures     4,788     4,792     4,793     4,810     4,823       14,373     14,801  
Total interest expense     12,449     13,229     14,563     17,531     20,495       40,241     75,876  
                                               
Net interest income     144,611     141,252     148,088     148,025     146,138       433,951     434,530  
                                               
Provision for credit losses     -     -     -     -     14,000       -     112,264  
Provision for credit loss - unfunded commitments     -     (4,752 )   -     -     -       (4,752 )   16,989  
Total credit loss expense     -     (4,752 )   -     -     14,000       (4,752 )   129,253  
                                               
Net interest income after provision for credit
losses
    144,611     146,004     148,088     148,025     132,138       438,703     305,277  
                                               
Non-interest income                                              
Service charges on deposit accounts     5,941     5,116     5,002     5,544     4,910       16,059     15,837  
Other service charges and fees     8,051     9,659     7,608     8,425     8,539       25,318     22,261  
Trust fees     479     444     522     420     378       1,445     1,213  
Mortgage lending income     5,948     6,202     8,167     10,071     10,177       20,317     18,994  
Insurance commissions     586     478     492     366     271       1,556     1,482  
Increase in cash value of life insurance     509     537     502     534     548       1,548     1,666  
Dividends from FHLB, FRB, FNBB & other     2,661     2,646     8,609     967     3,433       13,916     11,505  
Gain on SBA loans     439     1,149     -     304     -       1,588     341  
(Loss) gain on branches, equipment and
other assets, net
    (34 )   (23 )   (29 )   217     (27 )     (86 )   109  
Gain on OREO, net     246     619     401     150     470       1,266     982  
Gain on securities, net     -     -     219     -     -       219     -  
Fair value adjustment for marketable securities     61     1,250     5,782     4,271     (1,350 )     7,093     (6,249 )
Other income     4,322     3,043     8,001     2,616     2,602       15,366     9,760  
Total non-interest income     29,209     31,120     45,276     33,885     29,951       105,605     77,901  
                                               
Non-interest expense                                              
Salaries and employee benefits     42,469     42,462     42,059     43,022     41,511       126,990     120,928  
Occupancy and equipment     9,305     9,042     9,237     9,801     9,566       27,584     28,611  
Data processing expense     6,024     5,893     5,870     5,171     4,921       17,787     13,861  
Merger and acquisition expenses     1,006     -     -     -     -       1,006     711  
Other operating expenses     16,815     15,585     15,700     16,247     15,714       48,100     49,033  
Total non-interest expense     75,619     72,982     72,866     74,241     71,712       221,467     213,144  
                                               
Income (loss) before income taxes     98,201     104,142     120,498     107,669     90,377       322,841     170,034  
Income tax expense (benefit)     23,209     25,072     28,896     25,875     21,057       77,177     37,380  
Net income   $ 74,992   $ 79,070   $ 91,602   $ 81,794   $ 69,320     $ 245,664   $ 132,654  

Home BancShares, Inc.
Selected Financial Information
(Unaudited)

    Quarter Ended     Nine Months Ended  
(Dollars and shares in thousands,   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31,   Sep. 30,     Sep. 30,   Sep. 30,  
except per share data)   2021   2021   2021   2020   2020     2021   2020  
                                               
PER SHARE DATA                                              
                                               
Diluted earnings per common share   $ 0.46   $ 0.48   $ 0.55   $ 0.50   $ 0.42     $ 1.49   $ 0.80  
Diluted earnings per common share, as adjusted, excluding fair value adjustment for marketable securities, special dividend from equity investment, gain on securities, recoveries on historic losses, branch write-off expense, outsourced special project expense & merger and acquisition expenses (non-GAAP)(1)     0.45     0.46     0.47     0.48     0.41       1.38     0.80  
Basic earnings per common share     0.46     0.48     0.55     0.50     0.42       1.49     0.80  
Dividends per share - common     0.14     0.14     0.14     0.14     0.13       0.42     0.39  
Book value per common share     16.68     16.39     16.02     15.78     15.38       16.68     15.38  
Tangible book value per common share (non-GAAP)(1)     10.59     10.31     9.95     9.70     9.30       10.59     9.30  
                                               
STOCK INFORMATION                                              
                                               
Average common shares outstanding     164,126     164,781     165,257     165,119     165,200       164,717     165,458  
Average diluted shares outstanding     164,603     165,226     165,446     165,119     165,200       165,050     165,458  
End of period common shares outstanding     164,008     164,488     165,141     165,095     165,163       164,008     165,163  
                                               
ANNUALIZED PERFORMANCE METRICS                                              
                                               
Return on average assets     1.68 %   1.81 %   2.22 %   1.97 %   1.66 %     1.90 %   1.11 %
Return on average assets excluding fair value adjustment for marketable securities, special dividend from equity investment, gain on securities, recoveries on historic losses, branch write-off expense, outsourced special
project expense & merger and acquisition expenses: (ROA, as adjusted) (non-GAAP)(1)
    1.67 %   1.75 %   1.88 %   1.90 %   1.63 %     1.76 %   1.10 %
Return on average assets excluding intangible amortization (non-GAAP)(1)     1.81 %   1.95 %   2.39 %   2.13 %   1.80 %     2.04 %   1.21 %
Return on average assets excluding excess liquidity (non-GAAP)(1)     1.98 %   2.09 %   2.42 %   2.07 %   1.74 %     2.17 %   1.14 %
Return on average common equity     10.97 %   11.92 %   14.15 %   12.72 %   10.97 %     12.32 %   7.13 %
Return on average common equity excluding fair value adjustment for marketable securities, special dividend from equity investment, gain on securities, recoveries
on historic losses, branch write-off expense, outsourced special project expense & merger and acquisition expenses: (ROE, as adjusted) (non-GAAP)(1)
    10.87 %   11.54 %   11.95 %   12.23 %   10.76 %     11.44 %   7.08 %
Return on average tangible common equity
(non-GAAP)(1)
    17.39 %   19.12 %   22.90 %   20.96 %   18.29 %     19.74 %   11.96 %
Return on average tangible common equity excluding intangible amortization (non-GAAP)(1)     17.64 %   19.38 %   23.16 %   21.22 %   18.56 %     19.99 %   12.26 %
Return on average tangible common equity excluding fair value adjustment for marketable securities, special dividend from equity investment, gain on securities, recoveries on historic losses, branch write-off expense, outsourced special project expense & merger and acquisition expenses: (ROTCE, as adjusted)
(non-GAAP)(1)
    17.23 %   18.50 %   19.33 %   20.15 %   17.93 %     18.33 %   11.89 %

(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)

    Quarter Ended     Nine Months Ended  
    Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31,   Sep. 30,     Sep. 30,   Sep. 30,  
(Dollars in thousands)   2021   2021   2021   2020   2020     2021   2020  
                                               
                                               
Efficiency ratio     42.26 %   41.09 %   36.60 %   39.64 %   39.56 %     39.86 %   40.40 %
Efficiency ratio, as adjusted (non-GAAP)(1)     42.29 %   42.07 %   40.68 %   40.67 %   40.08 %     41.67 %   40.25 %
Net interest margin - FTE     3.60 %   3.61 %   4.02 %   4.00 %   3.92 %     3.74 %   4.08 %
Net interest margin - FTE, excluding PPP loans
(non-GAAP)(1)
    3.43 %   3.54 %   3.87 %   3.97 %   3.98 %     3.61 %   4.12 %
Fully taxable equivalent adjustment   $ 1,748   $ 1,774   $ 1,821   $ 1,778   $ 1,576     $ 5,343   $ 4,237  
Total revenue (net)     173,820     172,372     193,364     181,910     176,089       539,556     512,431  
Pre-tax, pre-provision, net income (PPNR) (non-GAAP)(1)     98,201     99,390     120,498     107,669     104,377       318,089     299,287  
Pre-tax net income to total revenue (net)     56.50 %   60.42 %   62.32 %   59.19 %   51.32 %     59.83 %   33.18 %
P5NR (Pre-tax, pre-provision, profit percentage)
(PPNR to total revenue (net)) (non-GAAP)(1)
    56.50 %   57.66 %   62.32 %   59.19 %   59.28 %     58.95 %   58.41 %
Total purchase accounting accretion     4,868     5,797     5,485     5,736     6,957       16,150     21,640  
Average purchase accounting loan discounts     36,456     38,568     43,940     49,563     55,835       38,587     62,662  
                                               
                                               
OTHER OPERATING EXPENSES                                              
                                               
Advertising   $ 1,204   $ 1,194   $ 1,046   $ 1,076   $ 902     $ 3,444   $ 2,923  
Amortization of intangibles     1,421     1,421     1,421     1,421     1,420       4,263     4,423  
Electronic banking expense     2,521     2,616     2,238     2,282     2,426       7,375     6,195  
Directors' fees     395     414     383     359     429       1,192     1,265  
Due from bank service charges     265     273     249     254     259       787     721  
FDIC and state assessment     1,648     1,108     1,363     1,493     1,607       4,119     5,001  
Insurance     749     787     781     795     766       2,317     2,223  
Legal and accounting     1,050     1,058     846     790     1,235       2,954     3,432  
Other professional fees     1,787     1,796     1,613     1,528     1,661       5,196     6,622  
Operating supplies     474     465     487     440     460       1,426     1,548  
Postage     301     292     338     315     328       931     968  
Telephone     371     365     346     347     321       1,082     955  
Other expense     4,629     3,796     4,589     5,147     3,900       13,014     12,757  
                                               
Total other operating expenses   $ 16,815   $ 15,585   $ 15,700   $ 16,247   $ 15,714     $ 48,100   $ 49,033  

(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)

    Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31,   Sep. 30,  
(Dollars in thousands)   2021   2021   2021   2020   2020  
                                 
BALANCE SHEET RATIOS                                
                                 
Total loans to total deposits     70.71 %   73.42 %   79.77 %   88.17 %   90.37 %
Common equity to assets     15.40 %   15.30 %   15.34 %   15.89 %   15.35 %
Tangible common equity to tangible assets (non-GAAP)(1)     10.36 %   10.20 %   10.12 %   10.41 %   9.88 %
                                 
LOANS RECEIVABLE                                
                                 
Real estate                                
Commercial real estate loans                                
Non-farm/non-residential   $ 4,005,841   $ 4,144,375   $ 4,289,142   $ 4,429,060   $ 4,342,141  
Construction/land development     1,742,687     1,541,482     1,612,973     1,562,298     1,748,928  
Agricultural     138,881     126,293     113,382     114,431     89,476  
Residential real estate loans                                
Residential 1-4 family     1,273,988     1,316,485     1,437,546     1,536,257     1,665,628  
Multifamily residential     274,131     332,256     377,661     536,538     491,380  
Total real estate     7,435,528     7,460,891     7,830,704     8,178,584     8,337,553  
Consumer     814,732     824,938     839,819     864,690     883,568  
Commercial and industrial     1,414,079     1,612,826     1,794,787     1,896,442     2,161,818  
Agricultural     68,272     69,152     65,017     66,869     85,365  
Other     168,489     231,368     248,166     214,136     223,166  
Loans receivable   $ 9,901,100   $ 10,199,175   $ 10,778,493   $ 11,220,721   $ 11,691,470  
                                 
Paycheck Protection Program (PPP) loans (net of discounts)
(included in total loans receivable)
    241,476     473,894     646,382     675,225     825,362  
                                 
ALLOWANCE FOR CREDIT LOSSES                                
                                 
Balance, beginning of period   $ 240,451   $ 242,932   $ 245,473   $ 248,224   $ 238,340  
Loans charged off     2,469     3,023     3,047     3,040     4,599  
Recoveries of loans previously charged off     691     542     506     289     483  
Net loans charged off     1,778     2,481     2,541     2,751     4,116  
Provision for credit losses - loans     -     -     -     -     14,000  
Balance, end of period   $ 238,673   $ 240,451   $ 242,932   $ 245,473   $ 248,224  
                                 
Net charge-offs to average total loans     0.07 %   0.09 %   0.09 %   0.10 %   0.14 %
Allowance for credit losses to total loans     2.41 %   2.36 %   2.25 %   2.19 %   2.12 %
Allowance for credit losses to total loans, excluding PPP loans     2.47 %   2.47 %   2.40 %   2.33 %   2.28 %
                                 
NON-PERFORMING ASSETS                                
                                 
Non-performing loans                                
Non-accrual loans   $ 47,604   $ 55,269   $ 59,142   $ 64,528   $ 65,148  
Loans past due 90 days or more     3,311     3,667     4,209     9,610     8,635  
Total non-performing loans     50,915     58,936     63,351     74,138     73,783  
Other non-performing assets                                
Foreclosed assets held for sale, net     1,171     1,969     3,004     4,420     4,322  
Other non-performing assets     -     -     -     -     247  
Total other non-performing assets     1,171     1,969     3,004     4,420     4,569  
Total non-performing assets   $ 52,086   $ 60,905   $ 66,355   $ 78,558   $ 78,352  
                                 
Allowance for credit losses for loans to non-performing loans     468.77 %   407.99 %   383.47 %   331.10 %   336.42 %
Non-performing loans to total loans     0.51 %   0.58 %   0.59 %   0.66 %   0.63 %
Non-performing assets to total assets     0.29 %   0.35 %   0.38 %   0.48 %   0.47 %

(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, 2021   June 30, 2021  
    Average   Income/   Yield/   Average   Income/   Yield/  
(Dollars in thousands)   Balance   Expense   Rate   Balance   Expense   Rate  
                                       
ASSETS                                      
Earning assets                                      
Interest-bearing balances due from banks   $ 2,914,785   $ 1,117     0.15 % $ 2,577,101   $ 707     0.11 %
Federal funds sold     82     -     0.00 %   51     -     0.00 %
Investment securities - taxable     2,289,680     8,495     1.47 %   1,909,485     7,185     1.51 %
Investment securities - non-taxable - FTE     862,586     6,416     2.95 %   864,416     6,494     3.01 %
Loans receivable - FTE     10,043,393     142,780     5.64 %   10,541,466     141,869     5.40 %
Total interest-earning assets     16,110,526     158,808     3.91 %   15,892,519     156,255     3.94 %
Non-earning assets     1,584,700                 1,598,840              
Total assets   $ 17,695,226               $ 17,491,359              
                                       
LIABILITIES AND SHAREHOLDERS' EQUITY                                      
Liabilities                                      
Interest-bearing liabilities                                      
Savings and interest-bearing transaction
accounts
  $ 8,794,657   $ 3,613     0.16 % $ 8,684,726   $ 3,960     0.18 %
Time deposits     1,063,500     2,029     0.76 %   1,123,287     2,474     0.88 %
Total interest-bearing deposits     9,858,157     5,642     0.23 %   9,808,013     6,434     0.26 %
Securities sold under agreement to repurchase     143,937     102     0.28 %   157,570     107     0.27 %
FHLB borrowed funds     400,000     1,917     1.90 %   400,000     1,896     1.90 %
Subordinated debentures     370,805     4,788     5.12 %   370,613     4,792     5.19 %
Total interest-bearing liabilities     10,772,899     12,449     0.46 %   10,736,196     13,229     0.49 %
Non-interest bearing liabilities                                      
Non-interest bearing deposits     4,091,174                 3,966,968              
Other liabilities     120,200                 128,048              
Total liabilities     14,984,273                 14,831,212              
Shareholders' equity     2,710,953                 2,660,147              
Total liabilities and shareholders' equity   $ 17,695,226               $ 17,491,359              
Net interest spread                 3.45 %               3.45 %
Net interest income and margin - FTE         $ 146,359     3.60 %       $ 143,026     3.61 %

Home BancShares, Inc.
Consolidated Net Interest Margin
(Unaudited)

    Nine Months Ended  
    September 30, 2021     September 30, 2020  
    Average   Income/   Yield/     Average   Income/   Yield/  
(Dollars in thousands)   Balance   Expense   Rate     Balance   Expense   Rate  
                                         
ASSETS                                        
Earning assets                                        
Interest-bearing balances due from banks   $ 2,372,227   $ 2,234     0.13 %   $ 671,231   $ 1,579     0.31 %
Federal funds sold     83     -     0.00 %     1,775     21     1.58 %
Investment securities - taxable     1,947,799     21,933     1.51 %     1,665,900     25,696     2.06 %
Investment securities - non-taxable - FTE     858,440     19,610     3.05 %     503,253     14,712     3.90 %
Loans receivable - FTE     10,532,411     435,758     5.53 %     11,519,706     472,635     5.48 %
Total interest-earning assets     15,710,960     479,535     4.08 %     14,361,865     514,643     4.79 %
Non-earning assets     1,594,442                   1,655,973              
Total assets   $ 17,305,402                 $ 16,017,838              
                                         
LIABILITIES AND SHAREHOLDERS' EQUITY                                        
Liabilities                                        
Interest-bearing liabilities                                        
Savings and interest-bearing transaction
accounts
  $ 8,607,728   $ 12,289     0.19 %   $ 7,544,763   $ 30,272     0.54 %
Time deposits     1,131,538     7,492     0.89 %     1,847,833     22,242     1.61 %
Total interest-bearing deposits     9,739,266     19,781     0.27 %     9,392,596     52,514     0.75 %
Federal funds purchased     -     -     0.00 %     2,080     13     0.83 %
Securities sold under agreement to repurchase     153,677     399     0.35 %     150,020     959     0.85 %
FHLB borrowed funds     400,000     5,688     1.90 %     579,805     7,589     1.75 %
Subordinated debentures     370,615     14,373     5.19 %     369,846     14,801     5.35 %
Total interest-bearing liabilities     10,663,558     40,241     0.50 %     10,494,347     75,876     0.97 %
Non-interest bearing liabilities                                        
Non-interest bearing deposits     3,848,302                   2,904,159              
Other liabilities     127,656                   134,281              
Total liabilities     14,639,516                   13,532,787              
Shareholders' equity     2,665,886                   2,485,051              
Total liabilities and shareholders' equity   $ 17,305,402                 $ 16,017,838              
Net interest spread                 3.58 %                 3.82 %
Net interest income and margin - FTE         $ 439,294     3.74 %         $ 438,767     4.08 %

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)   2021   2021   2021   2020   2020   2021   2020  
                                             
EARNINGS, AS ADJUSTED                                            
                                             
GAAP net income available to common shareholders (A)   $ 74,992   $ 79,070   $ 91,602   $ 81,794   $ 69,320   $ 245,664   $ 132,654  
Pre-tax adjustments                                            
Fair value adjustment for marketable securities     (61 )   (1,250 )   (5,782 )   (4,271 )   1,350     (7,093 )   6,249  
Special dividend from equity investment     (2,227 )   (2,200 )   (8,073 )   -     (3,181 )   (12,500 )   (10,185 )
Gain on securities     -     -     (219 )   -     -     (219 )   -  
Recoveries on historic losses     -     -     (5,107 )   -     -     (5,107 )   -  
Branch write-off expense     -     -     -     -     -     -     981  
Outsourced special project expense     -     -     -     -     -     -     1,092  
Merger and acquisition expenses     1,006     -     -     -     -     1,006     711  
Total pre-tax adjustments     (1,282 )   (3,450 )   (19,181 )   (4,271 )   (1,831 )   (23,913 )   (1,152 )
Tax-effect of adjustments     (587 )   (888 )   (4,937 )   (1,116 )   (479 )   (6,412 )   (301 )
Total adjustments after-tax (B)     (695 )   (2,562 )   (14,244 )   (3,155 )   (1,352 )   (17,501 )   (851 )
Earnings, as adjusted (C)   $ 74,297   $ 76,508   $ 77,358   $ 78,639   $ 67,968   $ 228,163   $ 131,803  
                                             
Average diluted shares outstanding (D)     164,603     165,226     165,446     165,119     165,200     165,050     165,458  
                                             
GAAP diluted earnings per share: (A/D)   $ 0.46   $ 0.48   $ 0.55   $ 0.50   $ 0.42   $ 1.49   $ 0.80  
Adjustments after-tax: (B/D)     (0.01 )   (0.02 )   (0.08 )   (0.02 )   (0.01 )   (0.11 )   -  
Diluted earnings per common share, as adjusted, excluding fair value adjustment for marketable securities, special dividend from equity investment, gain on securities, recoveries on historic losses, branch write-off expense, outsourced special project expense & merger and acquisition
expenses: (C/D)
  $ 0.45   $ 0.46   $ 0.47   $ 0.48   $ 0.41   $ 1.38   $ 0.80  
                                             
ANNUALIZED RETURN ON AVERAGE ASSETS                                            
                                             
Return on average assets: (A/G)     1.68 %   1.81 %   2.22 %   1.97 %   1.66 %   1.90 %   1.11 %
Return on average assets excluding fair value adjustment for marketable
securities, special dividend from equity investment, gain on securities, recoveries on historic losses, branch write-off expense, outsourced special project expense & merger and acquisition expenses: (ROA, as adjusted) ((A+F)/G)
    1.67 %   1.75 %   1.88 %   1.90 %   1.63 %   1.76 %   1.10 %
Return on average assets excluding intangible amortization: ((A+E)/(G-H))     1.81 %   1.95 %   2.39 %   2.13 %   1.80 %   2.04 %   1.21 %
Return on average assets excluding excess liquidity: (A/(G-I))     1.98 %   2.09 %   2.42 %   2.07 %   1.74 %   2.17 %   1.14 %
                                             
GAAP net income available to common shareholders (A)   $ 74,992   $ 79,070   $ 91,602   $ 81,794   $ 69,320   $ 245,664   $ 132,654  
Amortization of intangibles (D)     1,421     1,421     1,421     1,421     1,420     4,263     4,423  
Amortization of intangibles after-tax (E)     1,055     1,055     1,055     1,049     1,049     3,165     3,268  
Adjustments after-tax (F)     (695 )   (2,562 )   (14,244 )   (3,155 )   (1,352 )   (17,501 )   (851 )
Average assets (G)     17,695,226     17,491,359     16,718,890     16,493,066     16,594,495     17,305,402     16,017,838  
Average goodwill, core deposits & other intangible assets (H)     1,000,175     1,001,598     1,003,011     1,004,432     1,005,864     1,001,585     1,004,065  
                                             
Average interest bearing cash balance     2,914,785     2,577,101     1,610,463     1,029,047     926,754     2,372,227     671,231  
Average historical interest bearing cash balance     225,000     225,000     225,000     225,000     225,000     225,000     225,000  
Average excess cash balance (I)     2,689,785     2,352,101     1,385,463     804,047     701,754     2,147,227     446,231  

Home BancShares, Inc.
Non-GAAP Reconciliations
(Unaudited)

    Quarter Ended   Nine Months Ended  
    Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31,     Sep. 30,   Sep. 30,   Sep. 30,  
(Dollars in thousands)   2021   2021   2021   2020     2020   2021   2020  
                                               
ANNUALIZED RETURN ON AVERAGE COMMON EQUITY                                              
                                               
Return on average common equity: (A/D)     10.97 %   11.92 %   14.15 %   12.72 %     10.97 %   12.32 %   7.13 %
Return on average common equity excluding fair value adjustment for marketable securities, special dividend from equity investment, gain on securities, recoveries on historic losses, branch write-off expense, outsourced special project expense
& merger and acquisition expenses: (ROE, as adjusted)
((A+C)/D)
    10.87 %   11.54 %   11.95 %   12.23 %     10.76 %   11.44 %   7.08 %
Return on average tangible common equity: (A/(D-E))     17.39 %   19.12 %   22.90 %   20.96 %     18.29 %   19.74 %   11.96 %
Return on average tangible common equity excluding intangible amortization: (B/(D-E))     17.64 %   19.38 %   23.16 %   21.22 %     18.56 %   19.99 %   12.26 %
Return on average tangible common equity excluding fair value adjustment for marketable securities, special dividend from equity investment, gain on securities, recoveries on historic losses, branch write-off expense, outsourced special project expense & merger and acquisition expenses: (ROTCE, as adjusted) ((A+C)/(D-E))     17.23 %   18.50 %   19.33 %   20.15 %     17.93 %   18.33 %   11.89 %
                                               
GAAP net income available to common shareholders (A)   $ 74,992   $ 79,070   $ 91,602   $ 81,794     $ 69,320   $ 245,664   $ 132,654  
Earnings excluding intangible amortization (B)     76,047     80,125     92,657     82,843       70,369     248,829     135,922  
Adjustments after-tax (C)     (695 )   (2,562 )   (14,244 )   (3,155 )     (1,352 )   (17,501 )   (851 )
Average common equity (D)     2,710,953     2,660,147     2,625,618     2,557,251       2,513,792     2,665,886     2,485,051  
Average goodwill, core deposits & other intangible assets (E)     1,000,175     1,001,598     1,003,011     1,004,432       1,005,864     1,001,585     1,004,065  
                                               
EFFICIENCY RATIO & P5NR                                              
                                               
Efficiency ratio: ((D-F)/(B+C+E))     42.26 %   41.09 %   36.60 %   39.64 %     39.56 %   39.86 %   40.40 %
Efficiency ratio, as adjusted: ((D-F-H)/(B+C+E-G))     42.29 %   42.07 %   40.68 %   40.67 %     40.08 %   41.67 %   40.25 %
Pre-tax net income to total revenue (net) (A/(B+C))     56.50 %   60.42 %   62.32 %   59.19 %     51.32 %   59.83 %   33.18 %
Pre-tax, pre-provision, net income (PPNR) (B+C-D)   $ 98,201   $ 99,390   $ 120,498   $ 107,669     $ 104,377   $ 318,089   $ 299,287  
P5NR (Pre-tax, pre-provision, profit
percentage) PPNR to total revenue (net)) (B+C-D)/(B+C)
    56.50 %   57.66 %   62.32 %   59.19 %     59.28 %   58.95 %   58.41 %
                                               
Pre-tax net income (A)   $ 98,201   $ 104,142   $ 120,498   $ 107,669     $ 90,377   $ 322,841   $ 170,034  
Net interest income (B)     144,611     141,252     148,088     148,025       146,138     433,951     434,530  
Non-interest income (C)     29,209     31,120     45,276     33,885       29,951     105,605     77,901  
Non-interest expense (D)     75,619     72,982     72,866     74,241       71,712     221,467     213,144  
Fully taxable equivalent adjustment (E)     1,748     1,774     1,821     1,778       1,576     5,343     4,237  
Amortization of intangibles (F)     1,421     1,421     1,421     1,421       1,420     4,263     4,423  
                                               
Adjustments:                                              
Non-interest income:                                              
Fair value adjustment for marketable securities   $ 61   $ 1,250   $ 5,782   $ 4,271     $ (1,350 ) $ 7,093   $ (6,249 )
Gain (loss) on OREO     246     619     401     150       470     1,266     982  
Gain (loss) on branches, equipment and other assets, net     (34 )   (23 )   (29 )   217       (27 )   (86 )   109  
Special dividend from equity investment     2,227     2,200     8,073     -       3,181     12,500     10,185  
Gain (loss) on securities     -     -     219     -       -     219     -  
Recoveries on historic losses     -     -     5,107     -       -     5,107     -  
Total non-interest income adjustments (G)   $ 2,500   $ 4,046   $ 19,553   $ 4,638     $ 2,274   $ 26,099   $ 5,027  
                                               
Non-interest expense:                                              
Branch write-off expense   $ -   $ -   $ -   $ -     $ -   $ -   $ 981  
Merger and acquisition expenses     1,006     -     -     -       -     1,006     711  
Outsourced special project expense     -     -     -     -       -     -     1,092  
Total non-interest expense adjustments (H)   $ 1,006   $ -   $ -   $ -     $ -   $ 1,006   $ 2,784  

Home BancShares, Inc.
Non-GAAP Reconciliations
(Unaudited)

    Quarter Ended     Nine Months Ended  
    Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31,   Sep. 30,     Sep. 30,   Sep. 30,  
(Dollars in thousands)   2021   2021   2021   2020   2020     2021   2020  
                                               
ANNUALIZED NET INTEREST MARGIN                                              
                                               
Net interest margin: (A/C)     3.60 %   3.61 %   4.02 %   4.00 %   3.92 %     3.74 %   4.08 %
Net interest margin, excluding PPP loans:
(B/D)
    3.43 %   3.54 %   3.87 %   3.97 %   3.98 %     3.61 %   4.12 %
                                               
Net interest income - FTE (A)   $ 146,359   $ 143,062   $ 149,945   $ 149,803   $ 147,714     $ 439,294   $ 438,767  
PPP loan interest & discount accretion
income
    10,162     7,802     11,878     8,841     5,943       29,842     10,393  
Net interest income - FTE, excluding
PPP loans (B)
  $ 136,197   $ 135,260   $ 138,067   $ 140,962   $ 141,771     $ 409,452   $ 428,374  
                                               
Average interest-earning assets (C)   $ 16,110,526   $ 15,892,519   $ 15,118,940   $ 14,900,381   $ 14,975,146     $ 15,710,960   $ 14,361,865  
Average PPP loans     371,523     581,371     633,790     775,861     821,977       525,941     470,595  
Average interest-earning assets, excluding
PPP loans (D)
  $ 15,739,003   $ 15,311,148   $ 14,485,150   $ 14,124,520   $ 14,153,169     $ 15,185,019   $ 13,891,270  
                                               
                                               
    Quarter Ended                
    Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31,   Sep. 30,                
    2021   2021   2021   2020   2020                
                                               
TANGIBLE BOOK VALUE PER
COMMON SHARE
                                             
                                               
Book value per common share: (A/B)   $ 16.68   $ 16.39   $ 16.02   $ 15.78   $ 15.38                
Tangible book value per common share:
((A-C-D)/B)
    10.59     10.31     9.95     9.70     9.30                
                                               
Total stockholders' equity (A)   $ 2,736,062   $ 2,696,189   $ 2,645,204   $ 2,605,758   $ 2,540,799                
End of period common shares outstanding
(B)
    164,008     164,488     165,141     165,095     165,163                
Goodwill (C)     973,025     973,025     973,025     973,025     973,025                
Core deposit and other intangibles (D)     26,466     27,886     29,307     30,728     32,149                
                                               
                                               
TANGIBLE COMMON EQUITY
TO TANGIBLE ASSETS
                                             
                                               
Equity to assets: (B/A)     15.40 %   15.30 %   15.34 %   15.89 %   15.35 %              
Tangible common equity to tangible assets:
((B-C-D)/(A-C-D))
    10.36 %   10.20 %   10.12 %   10.41 %   9.88 %              
                                               
Total assets (A)   $ 17,765,056   $ 17,627,192   $ 17,240,241   $ 16,398,804   $ 16,549,758                
Total stockholders' equity (B)     2,736,062     2,696,189     2,645,204     2,605,758     2,540,799                
Goodwill (C)     973,025     973,025     973,025     973,025     973,025                
Core deposit and other intangibles (D)     26,466     27,886     29,307     30,728     32,149                

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Source: Home BancShares, Inc.