Home BancShares Ends 2021 with Record Annual Profits and a Fortress Balance Sheet

Company Release - 1/20/2022

CONWAY, Ark., Jan. 20, 2022 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (NYSE: HOMB) (“Home” or the “Company”), parent company of Centennial Bank, released quarterly earnings today.

Highlights of the Fourth Quarter of 2021:

Metric Q4 2021 Q3 2021 Q2 2021 Q1 2021 Q4 2020
Net Income $73.4 million $75.0 million $79.1 million $91.6 million $81.8 million
Total Revenue (net) $171.0 million $173.8 million $172.4 million $193.4 million $181.9 million
Income before income taxes $93.9 million $98.2 million $104.1 million $120.5 million $107.7 million
Pre-tax, pre-provision, net income (PPNR) (non-GAAP)(1) $93.9 million $98.2 million $99.4 million $120.5 million $107.7 million
Pre-tax net income to total revenue (net)   54.94 %   56.50 %   60.42 %   62.32 %   59.19 %
P5NR (Pre-tax, pre-provision, profit percentage) (PPNR to total revenue (net)) (non-GAAP)(1)   54.94 %   56.50 %   57.66 %   62.32 %   59.19 %
ROA   1.62 %   1.68 %   1.81 %   2.22 %   1.97 %
NIM   3.42 %   3.60 %   3.61 %   4.02 %   4.00 %
NIM, excluding PPP loans (non-GAAP)(1)   3.32 %   3.43 %   3.54 %   3.86 %   3.97 %
Purchase Accounting Accretion $4.0 million $4.9 million $5.8 million $5.5 million $5.7 million
ROE   10.63 %   10.97 %   11.92 %   14.15 %   12.72 %
ROTCE (non-GAAP)(1)   16.73 %   17.39 %   19.12 %   22.90 %   20.96 %
Diluted Earnings Per Share $0.45   $0.46   $0.48   $0.55   $0.50  
Non-Performing Assets to Total Assets   0.29 %   0.29 %   0.35 %   0.38 %   0.48 %
Common Equity Tier 1 Capital   15.4 %   15.2 %   15.0 %   14.3 %   13.4 %
Leverage   11.1 %   11.0 %   10.9 %   11.1 %   10.8 %
Tier 1 Capital   16.0 %   15.8 %   15.6 %   14.9 %   14.0 %
Total Risk-Based Capital   19.8 %   19.6 %   19.5 %   18.8 %   17.8 %
Allowance for Credit Losses to Total Loans   2.41 %   2.41 %   2.36 %   2.25 %   2.19 %
Allowance for Credit Losses to Total Loans, excluding PPP loans (non-GAAP)(1)   2.43 %   2.47 %   2.47 %   2.40 %   2.33 %
(1) Calculation of this metric and the reconciliation to GAAP are included in the schedules accompanying this release.

“The year 2021 delivered numerous exceptional results for HOMB including several record setting metrics. As we end 2021 with record profits and peer leading asset quality, combined with our recent sub-debt note issuance, HOMB is starting out 2022 with a fortress balance sheet and poised to pivot in any direction where opportunities arise,” said John Allison, Chairman.

“A strong fourth quarter assisted HOMB in reaching records for both net income and earnings per share for the year ended December 31, 2021. The fourth quarter also saw continued strong asset quality as the Company determined an additional provision for credit loss was not necessary. Another year where our solid offense and defense have played well for us,” said Tracy French, Centennial Bank President and Chief Executive Officer.

Operating Highlights

Net income for the three-month period ended December 31, 2021 was $73.4 million, or $0.45 earnings per share. Net income for the year ended December 31, 2021 was $319.0 million, or $1.94 earnings per share. Net income and earnings per share for the year ended December 31, 2021 were both records for the Company.

During the fourth quarter of 2021, the Company did not record any credit loss expense.  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 December 31, 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 3.42% for the three-month period ended December 31, 2021 compared to 3.60% for the three-month period ended September 30, 2021. The yield on loans was 5.48% and 5.64% for the three months ended December 31, 2021 and September 30, 2021, respectively, as average loans decreased from $10.04 billion to $9.91 billion. Additionally, the rate on interest bearing deposits decreased to 0.20% as of December 31, 2021 from 0.23% as of September 30, 2021, with average balances of $10.00 billion and $9.86 billion, respectively.

As of December 31, 2021, we had $112.8 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 December 31, 2021 was 3.32%(1). The PPP loans were accretive to the net interest margin by 10 basis points for the three-month period ended December 31, 2021 compared to 17 basis points for the three-month period ended September 30, 2021. This was primarily due to approximately $128.7 million of the Company’s PPP loans being forgiven during the fourth quarter of 2021 as well as the acceleration of deferred fees for the loans that were forgiven. The deferred fee income decreased from $9.3 million to $5.4 million for the three-month periods ended September 30, 2021 and December 31, 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 $347.1 million of average interest-bearing cash balances in the fourth quarter of 2021 compared to the third quarter of 2021. This excess liquidity diluted the net interest margin by 7 basis points for the three-month period ended December 31, 2021.

During the fourth quarter of 2021, there was $1.2 million of event interest income compared to event interest income of $3.5 million for the third quarter of 2021. The reduction in event income led to a 6 basis point decrease to the net interest margin.

Purchase accounting accretion on acquired loans was $4.0 million and $4.9 million and average purchase accounting loan discounts were $34.6 million and $36.5 million for the three-month periods ended December 31, 2021 and September 30, 2021, respectively. The reduction in accretion income reduced the net interest margin by 2 basis points for the three-month period ended December 31, 2021.

Net interest income on a fully taxable equivalent basis was $140.8 million for the three-month period ended December 31, 2021 and $146.4 million for the three-month period ended September 30, 2021. This decrease in net interest income for the three-month period ended December 31, 2021 was the result of a $6.1 million decrease in interest income which was partially offset by a $490,000 decrease in interest expense. The $6.1 million decrease in interest income was primarily the result of  a $5.9 million decrease in loan interest income and a $382,000 net decrease in investment income, which was partially offset by a $164,000 increase in interest-bearing balances due from banks. The $490,000 decrease in interest expense was primarily the result of a decrease in interest expense on deposits.

The Company reported $32.0 million of non-interest income for the fourth quarter of 2021. The most important components of the fourth quarter non-interest income were $11.1 million from other service charges and fees, $6.2 million from service charges on deposit accounts, $5.4 million in mortgage lending income, $5.3 million from other income, $919,000 million from dividends from FHLB, FRB, FNBB and other, $792,000 from gain on sales of SBA loans and $737,000 from gain on OREO. 

Non-interest expense for the fourth quarter of 2021 was $77.1 million. The most important components of the fourth quarter non-interest expense were $43.8 million from salaries and employee benefits, $16.9 million in other expense, $9.0 million in occupancy and equipment expenses and $6.5 million in data processing expenses. Also included within non-interest expense was $880,000 in merger and acquisition expenses. For the fourth quarter of 2021, our efficiency ratio was 43.79%.

Financial Condition

Total loans receivable were $9.84 billion at December 31, 2021 compared to $9.90 billion at September 30, 2021. Total deposits were $14.26 billion at December 31, 2021 compared to $14.00 billion at September 30, 2021. Total assets were $18.05 billion at December 31, 2021 compared to $17.77 billion at September 30, 2021.

During the fourth quarter 2021, the Company experienced approximately $65.0 million in loan decline. Centennial CFG experienced $285.7 million of organic loan growth and had loans of $1.92 billion at December 31, 2021. Our legacy footprint experienced $222.0 million in organic loan decline and $128.7 million in PPP loan decline during the quarter.

Non-performing loans to total loans was 0.51% as of September 30, 2021 and December 31, 2021. Non-performing assets to total assets was 0.29% as of September 30, 2021 and December 31, 2021. Net charge-offs were $2.0 million and $1.8 million for the three months ended December 31, 2021 and September 30, 2021, respectively.

Non-performing loans at December 31, 2021 were $13.9 million, $26.8 million, $470,000, $1.5 million and $7.5 million in the Arkansas, Florida, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $50.2 million. Non-performing assets at December 31, 2021 were $14.4 million, $27.9 million, $470,000, $1.5 million and $7.5 million in the Arkansas, Florida, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $51.8 million.

The Company’s allowance for credit losses on loans was $236.7 million at December 31, 2021, or 2.41% of total loans, compared to the allowance for credit losses of $238.7 million, or 2.41% of total loans, at September 30, 2021. The Company’s allowance for credit losses on loans to total loans, excluding PPP loans (non-GAAP), was 2.43%(1) and 2.47%(1) for the three months ended  December 31, 2021 and September 30, 2021, respectively. As of December 31, 2021 and September 30, 2021, the Company’s allowance for credit losses on loans was 471.61% and 468.77% of its total non-performing loans, respectively.

Stockholders’ equity was $2.77 billion at December 31, 2021 compared to $2.74 billion at September 30, 2021, an increase of approximately $29.7 million. The increase in stockholders’ equity was primarily associated with the $50.4 million increase in retained earnings, which was partially offset by a $15.5 million decrease in accumulated other comprehensive income and net stock repurchases and share-based compensation activity of $5.2 million. Book value per common share was $16.90 at December 31, 2021 compared to $16.68 at September 30, 2021. Tangible book value per common share (non-GAAP) was $10.80(1) at December 31, 2021 compared to $10.59(1) at September 30, 2021, an increase of 7.86% 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, subject to Federal Reserve Board approval. The Company received approval for the merger from the Arkansas State Banking Board and the Arkansas State Bank Commissioner as well as the approval of the shareholders of each company in December of 2021.

Conference Call

Management will conduct a conference call to review this information at 1:00 p.m. CT (2:00 ET) on Thursday, January 20, 2022. We encourage all participants to pre-register for the conference call using the following link: https://events.q4inc.com/attendee/357760552. 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 1-844-200-6205, Passcode: 865838.  A replay of the call will be available by calling 1-866-813-9403, Passcode: 153312, which will be available until February 3, 2022 at 10:59 p.m. CT (11:59 p.m. 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 New York Stock Exchange under the symbol “HOMB.” The Company was founded in 1998. 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

In connection with the proposed acquisition of Happy, the Company has filed with the SEC a Registration Statement on Form S-4 (the “Registration Statement”) to register the shares of the Company’s common stock to be issued to shareholders of Happy in connection with the transaction. The Registration Statement includes a Joint Proxy Statement of the Company and Happy and a Prospectus of the Company, as well as other relevant materials regarding the proposed merger transaction involving the Company and Happy. INVESTORS AND SECURITY HOLDERS OF THE COMPANY AND HAPPY ARE ADVISED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS 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 CONTAIN IMPORTANT INFORMATION REGARDING THE PROPOSED MERGER TRANSACTION. Investors and security holders may obtain free copies of these documents 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 the Company at the Company’s website at http://www.homebancshares.com, Investor Relations, or by contacting Donna Townsell, by telephone at (501) 328-4625.

 

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)
                     
 (In thousands)   Dec. 31,
2021
  Sep. 30,
2021
  Jun. 30,
2021
  Mar. 31,
2021
  Dec. 31,
2020
                     
ASSETS                    
                     
 Cash and due from banks   $ 119,908     $ 146,378     $ 182,226     $ 218,814     $ 242,173  
 Interest-bearing deposits with other banks     3,530,407       3,133,878       2,759,027       2,259,734       1,021,615  
    Cash and cash equivalents     3,650,315       3,280,256       2,941,253       2,478,548       1,263,788  
Investment securities - available-for sale, net of allowance for credit losses     3,119,807       3,150,608       3,053,712       2,539,123       2,473,781  
 Loans receivable     9,836,089       9,901,100       10,199,175       10,778,493       11,220,721  
 Allowance for credit losses     (236,714 )     (238,673 )     (240,451 )     (242,932 )     (245,473 )
    Loans receivable, net     9,599,375       9,662,427       9,958,724       10,535,561       10,975,248  
 Bank premises and equipment, net     275,760       276,972       278,502       278,620       278,614  
 Foreclosed assets held for sale     1,630       1,171       1,969       3,004       4,420  
 Cash value of life insurance     105,135       104,638       104,132       103,599       103,519  
 Accrued interest receivable     46,736       48,577       48,725       55,495       60,528  
 Deferred tax asset, net     78,290       69,724       72,273       77,145       70,249  
 Goodwill     973,025       973,025       973,025       973,025       973,025  
 Core deposit and other intangibles     25,045       26,466       27,886       29,307       30,728  
 Other assets     177,020       171,192       166,991       166,814       164,904  
    Total assets   $ 18,052,138     $ 17,765,056     $ 17,627,192     $ 17,240,241     $ 16,398,804  
                     
LIABILITIES AND STOCKHOLDERS' EQUITY                    
                     
Liabilities                    
 Deposits:                    
    Demand and non-interest-bearing   $ 4,127,878     $ 4,139,149     $ 4,076,570     $ 3,859,722     $ 3,266,753  
    Savings and interest-bearing transaction accounts     9,251,805       8,813,326       8,744,900       8,477,208       8,212,240  
    Time deposits     880,887       1,050,896       1,069,871       1,175,664       1,246,797  
       Total deposits     14,260,570       14,003,371       13,891,341       13,512,594       12,725,790  
 Securities sold under agreements to repurchase     140,886       141,002       150,540       162,929       168,931  
 FHLB and other borrowed funds     400,000       400,000       400,000       400,000       400,000  
 Accrued interest payable and other liabilities     113,868       113,721       118,415       148,999       127,999  
 Subordinated debentures     371,093       370,900       370,707       370,515       370,326  
    Total liabilities     15,286,417       15,028,994       14,931,003       14,595,037       13,793,046  
                     
 Stockholders' equity                    
 Common stock     1,637       1,640       1,645       1,651       1,651  
 Capital surplus     1,487,373       1,492,588       1,501,615       1,516,286       1,520,617  
 Retained earnings     1,266,249       1,215,831       1,163,810       1,107,818       1,039,370  
 Accumulated other comprehensive income     10,462       26,003       29,119       19,449       44,120  
    Total stockholders' equity     2,765,721       2,736,062       2,696,189       2,645,204       2,605,758  
    Total liabilities and stockholders' equity   $ 18,052,138     $ 17,765,056     $ 17,627,192     $ 17,240,241     $ 16,398,804  
                     



 Home BancShares, Inc.  
 Consolidated Statements of Income  
 (Unaudited)  
                               
     Quarter Ended   Year Ended  
(In thousands)   Dec. 31, 2021   Sep. 30, 2021   Jun. 30, 2021   Mar. 31, 2021   Dec. 31, 2020   Dec. 31, 2021   Dec. 31, 2020  
                               
 Interest income                              
   Loans   $ 136,750     $ 142,609     $ 141,684     $ 150,917     $ 153,407   $ 571,960     $ 625,338    
   Investment securities                              
       Taxable     8,121       8,495       7,185       6,253       6,900     30,054       32,596    
       Tax-exempt     4,827       4,839       4,905       5,071       4,979     19,642       16,158    
   Deposits - other banks     1,281       1,117       707       410       270     3,515       1,849    
   Federal funds sold     -       -       -       -       -     -       21    
 Total interest income     150,979       157,060       154,481       162,651       165,556     625,171       675,962    
                               
 Interest expense                              
    Interest on deposits     5,155       5,642       6,434       7,705       10,596     24,936       63,110    
    Federal funds purchased     -       -       -       -       -     -       13    
    FHLB borrowed funds     1,916       1,917       1,896       1,875       1,917     7,604       9,506    
    Securities sold under agreements to repurchase     98       102       107       190       208     497       1,167    
    Subordinated debentures     4,790       4,788       4,792       4,793       4,810     19,163       19,611    
 Total interest expense     11,959       12,449       13,229       14,563       17,531     52,200       93,407    
                               
 Net interest income     139,020       144,611       141,252       148,088       148,025     572,971       582,555    
                               
    Provision for credit losses     -       -       -       -       -     -       112,264    
    Provision for credit loss - unfunded commitments     -       -       (4,752 )     -       -     (4,752 )     16,989    
 Total credit loss expense     -       -       (4,752 )     -       -     (4,752 )     129,253    
                               
 Net interest income after provision for credit losses     139,020       144,611       146,004       148,088       148,025     577,723       453,302    
                               
 Non-interest income                              
    Service charges on deposit accounts     6,217       5,941       5,116       5,002       5,544     22,276       21,381    
    Other service charges and fees     11,133       8,051       9,659       7,608       8,425     36,451       30,686    
    Trust fees     515       479       444       522       420     1,960       1,633    
    Mortgage lending income     5,359       5,948       6,202       8,167       10,071     25,676       29,065    
    Insurance commissions     387       586       478       492       366     1,943       1,848    
    Increase in cash value of life insurance     501       509       537       502       534     2,049       2,200    
    Dividends from FHLB, FRB, FNBB & other     919       2,661       2,646       8,609       967     14,835       12,472    
    Gain on SBA loans     792       439       1,149       -       304     2,380       645    
    (Loss) gain on branches, equipment and other assets, net     (19 )     (34 )     (23 )     (29 )     217     (105 )     326    
    Gain on OREO, net     737       246       619       401       150     2,003       1,132    
    Gain on securities, net     -       -       -       219       -     219       -    
    Fair value adjustment for marketable securities     85       61       1,250       5,782       4,271     7,178       (1,978 )  
    Other income     5,338       4,322       3,043       8,001       2,616     20,704       12,376    
 Total non-interest income     31,964       29,209       31,120       45,276       33,885     137,569       111,786    
                               
 Non-interest expense                              
    Salaries and employee benefits     43,765       42,469       42,462       42,059       43,022     170,755       163,950    
    Occupancy and equipment     9,047       9,305       9,042       9,237       9,801     36,631       38,412    
    Data processing expense     6,493       6,024       5,893       5,870       5,171     24,280       19,032    
    Merger and acquisition expenses     880       1,006       -       -       -     1,886       711    
    Other operating expenses     16,865       16,815       15,585       15,700       16,247     64,965       65,280    
 Total non-interest expense     77,050       75,619       72,982       72,866       74,241     298,517       287,385    
                               
 Income before income taxes     93,934       98,201       104,142       120,498       107,669     416,775       277,703    
    Income tax expense     20,577       23,209       25,072       28,896       25,875     97,754       63,255    
 Net income   $ 73,357     $ 74,992     $ 79,070     $ 91,602     $ 81,794   $ 319,021     $ 214,448    
                               



Home BancShares, Inc.
Selected Financial Information
(Unaudited)
                             
    Quarter Ended   Year Ended
(Dollars and shares in thousands, except per share data)   Dec. 31,
2021
  Sep. 30,
2021
  Jun. 30,
2021
  Mar. 31,
2021
  Dec. 31,
2020
  Dec. 31,
2021
  Dec. 31,
2020
                             
PER SHARE DATA                            
                             
Diluted earnings per common share   $ 0.45     $ 0.46     $ 0.48     $ 0.55     $ 0.50     $ 1.94     $ 1.30  
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       0.45       0.46       0.47       0.48       1.83       1.27  
Basic earnings per common share     0.45       0.46       0.48       0.55       0.50       1.94       1.30  
Dividends per share - common     0.14       0.14       0.14       0.14       0.14       0.56       0.53  
Book value per common share     16.90       16.68       16.39       16.02       15.78       16.90       15.78  
Tangible book value per common share (non-GAAP)(1)     10.80       10.59       10.31       9.95       9.70       10.80       9.70  
                             
STOCK INFORMATION                            
                             
Average common shares outstanding     163,859       164,126       164,781       165,257       165,119       164,501       165,373  
Average diluted shares outstanding     164,306       164,603       165,226       165,446       165,119       164,858       165,373  
End of period common shares outstanding     163,699       164,008       164,488       165,141       165,095       163,699       165,095  
                             
ANNUALIZED PERFORMANCE METRICS                            
                             
Return on average assets (ROA)     1.62 %     1.68 %     1.81 %     2.22 %     1.97 %     1.83 %     1.33 %
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)     1.64 %     1.67 %     1.75 %     1.88 %     1.90 %     1.73 %     1.30 %
Return on average assets excluding intangible amortization (non-GAAP)(1)     1.75 %     1.81 %     1.95 %     2.39 %     2.13 %     1.96 %     1.45 %
Return on average assets excluding excess liquidity (non-GAAP)(1)     1.96 %     1.98 %     2.09 %     2.42 %     2.07 %     2.11 %     1.37 %
Return on average common equity (ROE)     10.63 %     10.97 %     11.92 %     14.15 %     12.72 %     11.89 %     8.57 %
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)     10.72 %     10.87 %     11.54 %     11.95 %     12.23 %     11.26 %     8.41 %
Return on average tangible common equity (ROTCE) (non-GAAP)(1)     16.73 %     17.39 %     19.12 %     22.90 %     20.96 %     18.95 %     14.31 %
Return on average tangible common equity excluding intangible amortization (non-GAAP)(1)     16.97 %     17.64 %     19.38 %     23.16 %     21.22 %     19.20 %     14.59 %
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)     16.87 %     17.23 %     18.50 %     19.33 %     20.15 %     17.95 %     14.04 %
                             
(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   Year Ended  
(Dollars in thousands)   Dec. 31,
2021
  Sep. 30,
2021
  Jun. 30,
2021
  Mar. 31,
2021
  Dec. 31,
2020
  Dec. 31,
2021
  Dec. 31,
2020
 
                               
Efficiency ratio     43.79 %     42.26 %     41.09 %     36.60 %     39.64 %     40.81 %     40.20 %  
Efficiency ratio, as adjusted (non-GAAP)(1)     43.48 %     42.29 %     42.07 %     40.68 %     40.67 %     42.12 %     40.36 %  
Net interest margin - FTE (NIM)     3.42 %     3.60 %     3.61 %     4.02 %     4.00 %     3.66 %     4.06 %  
Net interest margin - FTE, excluding PPP loans (non-GAAP)(1)     3.32 %     3.43 %     3.54 %     3.86 %     3.97 %     3.53 %     4.08 %  
Fully taxable equivalent adjustment   $ 1,736     $ 1,748     $ 1,774     $ 1,821     $ 1,778     $ 7,079     $ 6,015    
Total revenue (net)     170,984       173,820       172,372       193,364       181,910       710,540       694,341    
Pre-tax, pre-provision, net income (PPNR) (non-GAAP)(1)     93,934       98,201       99,390       120,498       107,669       412,023       406,956    
Pre-tax net income to total revenue (net)     54.94 %     56.50 %     60.42 %     62.32 %     59.19 %     58.66 %     40.00 %  
P5NR (Pre-tax, pre-provision, profit percentage) (PPNR to total revenue (net)) (non-GAAP)(1)     54.94 %     56.50 %     57.66 %     62.32 %     59.19 %     57.99 %     58.61 %  
Total purchase accounting accretion   $ 4,001     $ 4,868     $ 5,797     $ 5,485     $ 5,736     $ 20,151     $ 27,376    
Average purchase accounting loan discounts     34,641       36,456       38,568       43,940       49,563       36,178       59,406    
                               
                               
OTHER OPERATING EXPENSES                              
                               
Advertising   $ 1,411     $ 1,204     $ 1,194     $ 1,046     $ 1,076     $ 4,855     $ 3,999    
Amortization of intangibles     1,420       1,421       1,421       1,421       1,421       5,683       5,844    
Electronic banking expense     2,442       2,521       2,616       2,238       2,282       9,817       8,477    
Directors' fees     422       395       414       383       359       1,614       1,624    
Due from bank service charges     257       265       273       249       254       1,044       975    
FDIC and state assessment     1,353       1,648       1,108       1,363       1,493       5,472       6,494    
Insurance     801       749       787       781       795       3,118       3,018    
Legal and accounting     749       1,050       1,058       846       790       3,703       4,222    
Other professional fees     1,754       1,787       1,796       1,613       1,528       6,950       8,150    
Operating supplies     489       474       465       487       440       1,915       1,988    
Postage     352       301       292       338       315       1,283       1,283    
Telephone     343       371       365       346       347       1,425       1,302    
Other expense     5,072       4,629       3,796       4,589       5,147       18,086       17,904    
                               
Total other operating expenses   $ 16,865     $ 16,815     $ 15,585     $ 15,700     $ 16,247     $ 64,965     $ 65,280    
                               
(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)
                     
(Dollars in thousands)   Dec. 31,
2021
  Sep. 30,
2021
  Jun. 30,
2021
  Mar. 31,
2021
  Dec. 31,
2020
                     
BALANCE SHEET RATIOS                    
                     
Total loans to total deposits     68.97 %     70.71 %     73.42 %     79.77 %     88.17 %
Common equity to assets     15.32 %     15.40 %     15.30 %     15.34 %     15.89 %
Tangible common equity to tangible assets (non-GAAP)(1)     10.36 %     10.36 %     10.20 %     10.12 %     10.41 %
            .        
LOANS RECEIVABLE                    
                     
Real estate                    
    Commercial real estate loans                    
        Non-farm/non-residential   $ 3,889,284     $ 4,005,841     $ 4,144,375     $ 4,289,142     $ 4,429,060  
        Construction/land development     1,850,050       1,742,687       1,541,482       1,612,973       1,562,298  
        Agricultural     130,674       138,881       126,293       113,382       114,431  
    Residential real estate loans                    
        Residential 1-4 family     1,274,953       1,273,988       1,316,485       1,437,546       1,536,257  
        Multifamily residential     280,837       274,131       332,256       377,661       536,538  
Total real estate     7,425,798       7,435,528       7,460,891       7,830,704       8,178,584  
Consumer     825,519       814,732       824,938       839,819       864,690  
Commercial and industrial     1,386,747       1,414,079       1,612,826       1,794,787       1,896,442  
Agricultural     43,920       68,272       69,152       65,017       66,869  
Other     154,105       168,489       231,368       248,166       214,136  
Loans receivable   $ 9,836,089     $ 9,901,100     $ 10,199,175     $ 10,778,493     $ 11,220,721  
                     
Paycheck Protection Program (PPP) loans (net of discounts) (included in total loans receivable)     112,814       241,476       473,894       646,382       675,225  
                     
ALLOWANCE FOR CREDIT LOSSES                    
                     
Balance, beginning of period   $ 238,673     $ 240,451     $ 242,932     $ 245,473     $ 248,224  
Loans charged off     3,125       2,469       3,023       3,047       3,040  
Recoveries of loans previously charged off     1,166       691       542       506       289  
Net loans charged off     1,959       1,778       2,481       2,541       2,751  
Provision for credit losses - loans     -       -       -       -       -  
Balance, end of period   $ 236,714     $ 238,673     $ 240,451     $ 242,932     $ 245,473  
                     
Net charge-offs to average total loans     0.08 %     0.07 %     0.09 %     0.09 %     0.10 %
Allowance for credit losses to total loans     2.41 %     2.41 %     2.36 %     2.25 %     2.19 %
Allowance for credit losses to total loans, excluding PPP loans     2.43 %     2.47 %     2.47 %     2.40 %     2.33 %
                     
NON-PERFORMING ASSETS                    
                     
Non-performing loans                    
Non-accrual loans   $ 47,158     $ 47,604     $ 55,269     $ 59,142     $ 64,528  
Loans past due 90 days or more     3,035       3,311       3,667       4,209       9,610  
Total non-performing loans     50,193       50,915       58,936       63,351       74,138  
Other non-performing assets                    
Foreclosed assets held for sale, net     1,630       1,171       1,969       3,004       4,420  
Other non-performing assets     -       -       -       -       -  
Total other non-performing assets     1,630       1,171       1,969       3,004       4,420  
Total non-performing assets   $ 51,823     $ 52,086     $ 60,905     $ 66,355     $ 78,558  
                     
Allowance for credit losses for loans to non-performing loans     471.61 %     468.77 %     407.99 %     383.47 %     331.10 %
Non-performing loans to total loans     0.51 %     0.51 %     0.58 %     0.59 %     0.66 %
Non-performing assets to total assets     0.29 %     0.29 %     0.35 %     0.38 %     0.48 %
                     
(1) Calculation of this metric and the reconciliation to GAAP are included in the schedules accompanying this release.



Home BancShares, Inc.
Consolidated Net Interest Margin
(Unaudited)
                         
    Three Months Ended
    December 31, 2021   September 30, 2021
(Dollars in thousands)   Average Balance   Income/ Expense   Yield/ Rate   Average Balance   Income/ Expense   Yield/ Rate
                         
ASSETS                        
Earning assets                        
Interest-bearing balances due from banks   $ 3,261,846   $ 1,281   0.16 %   $ 2,914,785   $ 1,117   0.15 %
Federal funds sold     33     -   0.00 %     82     -   0.00 %
Investment securities - taxable     2,278,440     8,121   1.41 %     2,289,680     8,495   1.47 %
Investment securities - non-taxable - FTE     858,692     6,408   2.96 %     862,586     6,416   2.95 %
Loans receivable - FTE     9,909,711     136,905   5.48 %     10,043,393     142,780   5.64 %
Total interest-earning assets     16,308,722     152,715   3.72 %     16,110,526     158,808   3.91 %
Non-earning assets     1,606,005             1,584,700        
Total assets   $ 17,914,727           $ 17,695,226        
                         
LIABILITIES AND SHAREHOLDERS' EQUITY                        
Liabilities                        
Interest-bearing liabilities                        
Savings and interest-bearing transaction accounts   $ 9,037,302   $ 3,667   0.16 %   $ 8,794,657   $ 3,613   0.16 %
Time deposits     958,309     1,488   0.62 %     1,063,500     2,029   0.76 %
Total interest-bearing deposits     9,995,611     5,155   0.20 %     9,858,157     5,642   0.23 %
Securities sold under agreement to repurchase     143,811     98   0.27 %     143,937     102   0.28 %
FHLB borrowed funds     400,000     1,916   1.90 %     400,000     1,917   1.90 %
Subordinated debentures     370,999     4,790   5.12 %     370,805     4,788   5.12 %
Total interest-bearing liabilities     10,910,421     11,959   0.43 %     10,772,899     12,449   0.46 %
Non-interest bearing liabilities                        
Non-interest bearing deposits     4,149,978             4,091,174        
Other liabilities     116,023             120,200        
Total liabilities     15,176,422             14,984,273        
Shareholders' equity     2,738,305             2,710,953        
Total liabilities and shareholders' equity   $ 17,914,727           $ 17,695,226        
Net interest spread           3.29 %           3.45 %
Net interest income and margin - FTE       $ 140,756   3.42 %       $ 146,359   3.60 %
                         



Home BancShares, Inc.
Consolidated Net Interest Margin
(Unaudited)
                         
    Year Ended
    December 31, 2021   December 31, 2020
(Dollars in thousands)   Average Balance   Income/ Expense   Yield/ Rate   Average Balance   Income/ Expense   Yield/ Rate
                         
ASSETS                        
Earning assets                        
Interest-bearing balances due from banks   $ 2,596,460   $ 3,515   0.14 %   $ 761,174   $ 1,849   0.24 %
Federal funds sold     71     -   0.00 %     1,330     21   1.58 %
Investment securities - taxable     2,031,139     30,054   1.48 %     1,653,159     32,596   1.97 %
Investment securities - non-taxable - FTE     858,503     26,017   3.03 %     577,444     21,262   3.68 %
Loans receivable - FTE     10,375,457     572,664   5.52 %     11,504,123     626,249   5.44 %
Total interest-earning assets     15,861,630     632,250   3.99 %     14,497,230     681,977   4.70 %
Non-earning assets     1,597,355             1,640,064        
Total assets   $ 17,458,985           $ 16,137,294        
                         
LIABILITIES AND SHAREHOLDERS' EQUITY                        
Liabilities                        
Interest-bearing liabilities                        
Savings and interest-bearing transaction accounts   $ 8,716,004   $ 15,956   0.18 %   $ 7,686,621   $ 36,084   0.47 %
Time deposits     1,087,875     8,980   0.83 %     1,756,138     27,026   1.54 %
    Total interest-bearing deposits     9,803,879     24,936   0.25 %     9,442,759     63,110   0.67 %
Federal funds purchased     -     -   0.00 %     1,557     13   0.83 %
Securities sold under agreement to repurchase     151,190     497   0.33 %     151,573     1,167   0.77 %
FHLB borrowed funds     400,000     7,604   1.90 %     534,608     9,506   1.78 %
Subordinated debentures     370,712     19,163   5.17 %     369,943     19,611   5.30 %
Total interest-bearing liabilities     10,725,781     52,200   0.49 %     10,500,440     93,407   0.89 %
Non-interest bearing liabilities                        
Non-interest bearing deposits     3,924,341             2,998,560        
Other liabilities     124,724             135,094        
Total liabilities     14,774,846             13,634,094        
Shareholders' equity     2,684,139             2,503,200        
Total liabilities and shareholders' equity   $ 17,458,985           $ 16,137,294        
Net interest spread           3.50 %           3.81 %
Net interest income and margin - FTE       $ 580,050   3.66 %       $ 588,570   4.06 %
                         



Home BancShares, Inc.  
Non-GAAP Reconciliations  
(Unaudited)  
                               
    Quarter Ended   Year Ended  
(Dollars and shares in thousands, except per share data)   Dec. 31,
2021
  Sep. 30,
2021
  Jun. 30,
2021
  Mar. 31,
2021
  Dec. 31,
2020
  Dec. 31,
2021
  Dec. 31,
2020
 
                               
EARNINGS, AS ADJUSTED                              
                               
GAAP net income available to common shareholders (A)   $ 73,357     $ 74,992     $ 79,070     $ 91,602     $ 81,794     $ 319,021     $ 214,448    
Pre-tax adjustments                              
Fair value adjustment for marketable securities     (85 )     (61 )     (1,250 )     (5,782 )     (4,271 )     (7,178 )     1,978    
Special dividend from equity investment     -       (2,227 )     (2,200 )     (8,073 )     -       (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     880       1,006       -       -       -       1,886       711    
Total pre-tax adjustments     795       (1,282 )     (3,450 )     (19,181 )     (4,271 )     (23,118 )     (5,423 )  
Tax-effect of adjustments     188       (587 )     (888 )     (4,937 )     (1,116 )     (6,225 )     (1,417 )  
Total adjustments after-tax (B)     607       (695 )     (2,562 )     (14,244 )     (3,155 )     (16,893 )     (4,006 )  
Earnings, as adjusted (C)   $ 73,964     $ 74,297     $ 76,508     $ 77,358     $ 78,639     $ 302,128     $ 210,442    
                               
Average diluted shares outstanding (D)     164,306       164,603       165,226       165,446       165,119       164,858       165,373    
                               
GAAP diluted earnings per share: (A/D)   $ 0.45     $ 0.46     $ 0.48     $ 0.55     $ 0.50     $ 1.94     $ 1.30    
Adjustments after-tax: (B/D)     0.00       (0.01 )     (0.02 )     (0.08 )     (0.02 )     (0.11 )     (0.03 )  
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     $ 0.45     $ 0.46     $ 0.47     $ 0.48     $ 1.83     $ 1.27    
                               
ANNUALIZED RETURN ON AVERAGE ASSETS                              
                               
Return on average assets: (A/G)     1.62 %     1.68 %     1.81 %     2.22 %     1.97 %     1.83 %     1.33 %  
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)     1.64 %     1.67 %     1.75 %     1.88 %     1.90 %     1.73 %     1.30 %  
Return on average assets excluding intangible amortization: ((A+E)/(G-H))     1.75 %     1.81 %     1.95 %     2.39 %     2.13 %     1.96 %     1.45 %  
Return on average assets excluding excess liquidity: (A/(G-I))     1.96 %     1.98 %     2.09 %     2.42 %     2.07 %     2.11 %     1.37 %  
                               
GAAP net income available to common shareholders (A)   $ 73,357     $ 74,992     $ 79,070     $ 91,602     $ 81,794     $ 319,021     $ 214,448    
Amortization of intangibles (D)     1,420       1,421       1,421       1,421       1,421       5,683       5,844    
Amortization of intangibles after-tax (E)     1,054       1,055       1,055       1,055       1,049       4,220       4,317    
Adjustments after-tax (F)     607       (695 )     (2,562 )     (14,244 )     (3,155 )     (16,893 )     (4,006 )  
Average assets (G)     17,914,727       17,695,226       17,491,359       16,718,890       16,493,066       17,458,985       16,137,294    
Average goodwill, core deposits & other intangible assets (H)     998,760       1,000,175       1,001,598       1,003,011       1,004,432       1,000,872       1,004,157    
                               
Average interest bearing cash balance     3,261,846       2,914,785       2,577,101       1,610,463       1,029,047       2,596,460       761,174    
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)     3,036,846       2,689,785       2,352,101       1,385,463       804,047       2,371,460       536,174    
                               



 Home BancShares, Inc.  
 Non-GAAP Reconciliations  
 (Unaudited)  
                               
    Quarter Ended   Year Ended  
(Dollars in thousands)   Dec. 31,
2021
  Sep. 30,
2021
  Jun. 30,
2021
  Mar. 31,
2021
  Dec. 31,
2020
  Dec. 31,
2021
  Dec. 31,
2020
 
                               
ANNUALIZED RETURN ON AVERAGE COMMON EQUITY                              
                               
Return on average common equity: (A/D)     10.63 %     10.97 %     11.92 %     14.15 %     12.72 %     11.89 %     8.57 %  
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)     10.72 %     10.87 %     11.54 %     11.95 %     12.23 %     11.26 %     8.41 %  
Return on average tangible common equity: (A/(D-E))     16.73 %     17.39 %     19.12 %     22.90 %     20.96 %     18.95 %     14.31 %  
Return on average tangible common equity excluding intangible amortization: (B/(D-E))     16.97 %     17.64 %     19.38 %     23.16 %     21.22 %     19.20 %     14.59 %  
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))     16.87 %     17.23 %     18.50 %     19.33 %     20.15 %     17.95 %     14.04 %  
                               
GAAP net income available to common shareholders (A)   $ 73,357     $ 74,992     $ 79,070     $ 91,602     $ 81,794     $ 319,021     $ 214,448    
Earnings excluding intangible amortization (B)     74,411       76,047       80,125       92,657       82,843       323,241       218,765    
Adjustments after-tax (C)     607       (695 )     (2,562 )     (14,244 )     (3,155 )     (16,893 )     (4,006 )  
Average common equity (D)     2,738,305       2,710,953       2,660,147       2,625,618       2,557,251       2,684,139       2,503,200    
Average goodwill, core deposits & other intangible assets (E)     998,760       1,000,175       1,001,598       1,003,011       1,004,432       1,000,872       1,004,157    
                               
EFFICIENCY RATIO & P5NR                              
                               
Efficiency ratio: ((D-F)/(B+C+E))     43.79 %     42.26 %     41.09 %     36.60 %     39.64 %     40.81 %     40.20 %  
Efficiency ratio, as adjusted: ((D-F-H)/(B+C+E-G))     43.48 %     42.29 %     42.07 %     40.68 %     40.67 %     42.12 %     40.36 %  
Pre-tax net income to total revenue (net) (A/(B+C))     54.94 %     56.50 %     60.42 %     62.32 %     59.19 %     58.66 %     40.00 %  
Pre-tax, pre-provision, net income (PPNR) (B+C-D)   $ 93,934     $ 98,201     $ 99,390     $ 120,498     $ 107,669     $ 412,023     $ 406,956    
P5NR (Pre-tax, pre-provision, profit percentage) PPNR to total revenue (net)) (B+C-D)/(B+C)     54.94 %     56.50 %     57.66 %     62.32 %     59.19 %     57.99 %     58.61 %  
                               
Pre-tax net income (A)   $ 93,934     $ 98,201     $ 104,142     $ 120,498     $ 107,669     $ 416,775     $ 277,703    
Net interest income (B)     139,020       144,611       141,252       148,088       148,025