HOMB’s Disciplined Strategy Leads to a Beat of Management Expectations Despite Continued West Texas Headwinds


CONWAY, Ark., Jan. 19, 2023 (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 2022:

MetricQ4 2022Q3 2022Q2 2022Q1 2022Q4 2021
Net income$115.7 million$108.7 million$16.0 million$64.9 million$73.4 million
Total revenue (net)$272.3 million$256.3 million$243.3 million$161.8 million$171.0 million
Income before income taxes$148.4 million$142.0 million$19.3 million$84.9 million$93.9 million
Pre-tax, pre-provision, net income (PPNR)
(non-GAAP)(1)
$153.4 million$142.0 million$77.9 million$84.9 million$93.9 million
Pre-tax net income to total revenue (net)54.50%55.39%7.92%52.48%54.94%
P5NR (Pre-tax, pre-provision, profit percentage) (PPNR to total revenue (net)) (non-GAAP)(1)56.34%55.39%32.00%52.48%54.94%
ROA1.98%1.81%0.26%1.43%1.62%
NIM4.21%4.05%3.64%3.21%3.42%
Purchase accounting accretion$3.5 million$4.6 million$5.2 million$3.1 million$4.0 million
ROE13.29%12.25%1.78%9.58%10.63%
ROTCE (non-GAAP)(1)22.96%20.93%2.96%15.03%16.73%
Diluted earnings per share$0.57$0.53$0.08$0.40$0.45
Non-performing assets to total assets0.27%0.27%0.25%0.25%0.29%
Common equity tier 1 capital12.9%13.0%12.8%14.9%15.4%
Leverage10.9%10.4%9.8%10.8%11.1%
Tier 1 capital12.9%13.0%12.9%15.5%16.0%
Total risk-based capital16.5%16.7%16.6%21.6%19.8%
Allowance for credit losses to total loans2.01%2.09%2.11%2.34%2.41%

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


“It’s obvious all banks are not created equal. HOMB continues to try and separate ourselves from the pack. Financial strength is paramount, and I’m proud that Home BancShares is able to provide strength to our customers, especially during tough economic times. Despite the headwinds that arose out of West Texas, HOMB was able to rely on the patience and strength of the full franchise to deliver strong performance for the year,” said John Allison, Chairman.

“As a result of the discipline, patience and liquidity maintained by HOMB, we were able to profitably grow loans by $580 million in the fourth quarter, increasing loan yield to 6.23% from 5.63%, which is impressive by any standard in a rising rate environment,” said Tracy French, Centennial Bank President and Chief Executive Officer.

Operating Highlights

Net income for the three-month period ended December 31, 2022 was $115.7 million, or $0.57 earnings per share. Net income for the year ended December 31, 2022 was $305.3 million, or $1.57 earnings per share. When adjusting for merger-related and other non-fundamental items, net income and earnings per share on an as-adjusted basis (non-GAAP), were $107.5 million(1), or $0.53 per share(1), and $375.9 million(1), or $1.93 per share(1), for the three months and year ended December 31, 2022, respectively.

Our net interest margin was 4.21% for the three-month period ended December 31, 2022, compared to 4.05% for the three-month period ended September 30, 2022. The yield on loans was 6.23% and 5.63% for the three months ended December 31, 2022 and September 30, 2022, respectively, as average loans increased from $13.82 billion to $14.11 billion. Additionally, the rate on interest bearing deposits increased to 1.45% as of December 31, 2022, from 0.70% as of September 30, 2022, while average balances decreased from $13.31 billion to $12.85 billion.

During the fourth quarter of 2022, there was $871,000 of event interest income compared to event interest income of $943,000 for the third quarter of 2022.

Purchase accounting accretion on acquired loans was $3.5 million and $4.6 million and average purchase accounting loan discounts were $38.6 million and $42.1 million for the three-month periods ended December 31, 2022 and September 30, 2022, respectively. The reduction in accretion income lowered the net interest margin by two basis points for the three-month period ended December 31, 2022.

Net interest income on a fully taxable equivalent basis was $217.7 million for the three-month period ended December 31, 2022, and $215.5 million for the three-month period ended September 30, 2022. This increase in net interest income for the three-month period ended December 31, 2022, was the result of a $29.5 million increase in interest income, partially offset by a $27.4 million increase in interest expense. The $29.5 million increase in interest income was primarily the result of a $25.5 million increase in loan interest income and a $4.6 million increase in investment income. The increase in interest income is a result of the rising interest rate environment as well as loan growth during the quarter. The $27.4 million increase in interest expense was due to a $23.7 million increase in interest expense on deposits and a $3.5 million increase in interest expense on FHLB borrowed funds. The increase in interest expense on deposits and FHLB borrowed funds is a result of the rising interest rate environment as well as an increase in FHLB borrowed funds during the quarter.

The Company reported $56.7 million of non-interest income for the fourth quarter of 2022. The most important components of fourth quarter non-interest income were $23.2 million from other income, $10.4 million from other service charges and fees, $10.1 million from service charges on deposit accounts, $4.0 million from trust fees, $3.6 million in mortgage lending income, $2.8 million from dividends from FHLB, FRB, FNBB and other, a $1.1 million increase in cash value of life insurance, a $1.0 million loss from the fair value adjustment for marketable securities, and $453,000 from insurance commissions. The $23.2 million in other income includes $15.0 million income from the settlement of a lawsuit brought by the Company.

Non-interest expense for the fourth quarter of 2022 was $118.9 million. The most important components of the fourth quarter non-interest expense were $64.2 million from salaries and employee benefits, $30.7 million in other operating expense, $14.9 million in occupancy and equipment expenses and $9.1 million in data processing expenses. Other operating expense includes $5.0 million in legal expense from a lawsuit brought by the Company. There were no merger and acquisition expenses during the fourth quarter of 2022. For the fourth quarter of 2022, our efficiency ratio was 42.44%; and, our efficiency ratio, as adjusted (non-GAAP), was 43.07%(1).

Financial Condition

Total loans receivable were $14.41 billion at December 31, 2022, compared to $13.83 billion at September 30, 2022. Total deposits were $17.94 billion at December 31, 2022, compared to $18.54 billion at September 30, 2022. Total assets were $22.88 billion at December 31, 2022, compared to $23.16 billion at September 30, 2022.

During the fourth quarter of 2022, the Company experienced approximately $580.2 million in loan growth. Centennial CFG experienced $196.0 million of organic loan growth and had loans of $2.27 billion at December 31, 2022. Our remaining footprint experienced $387.6 million in organic loan growth and $3.4 million in PPP loan decline during the quarter.

Non-performing loans to total loans was 0.42% and 0.45% at December 31, 2022 and September 30, 2022, respectively. Non-performing assets to total assets was 0.27% at both December 31, 2022 and September 30, 2022. Net charge-offs were $4.5 million and $5.1 million for the three months ended December 31, 2022 and September 30, 2022, respectively.

Non-performing loans at December 31, 2022, were $8.4 million, $20.5 million, $22.2 million, $404,000, $2.3 million and $7.1 million in the Arkansas, Florida, Texas, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $60.9 million. Non-performing assets at December 31, 2022, were $8.5 million, $20.8 million, $22.4 million, $404,000, $2.3 million and $7.1 million in the Arkansas, Florida, Texas, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $61.5 million.

The Company’s allowance for credit losses on loans was $289.7 million at December 31, 2022, or 2.01% of total loans, compared to the allowance for credit losses on loans of $289.2 million, or 2.09% of total loans, at September 30, 2022. As of December 31, 2022 and September 30, 2022, the Company’s allowance for credit losses on loans was 475.99% and 468.77% of its total non-performing loans, respectively.

Stockholders’ equity was $3.53 billion at December 31, 2022, compared to $3.46 billion at September 30, 2022, an increase of approximately $66.3 million. The increase in stockholders’ equity is primarily associated with the $82.0 million increase in retained earnings and the $2.0 million decrease in accumulated other comprehensive loss, which were partially offset by $20.0 million in stock repurchases. Book value per common share was $17.33 at December 31, 2022, compared to $16.94 at September 30, 2022. Tangible book value per common share (non-GAAP) was $10.17(1) at December 31, 2022, compared to $9.82(1) at September 30, 2022.

Branches

The Company currently has 76 branches in Arkansas, 78 branches in Florida, 63 branches in Texas, 5 branches in Alabama and one branch in New York City.

Conference Call

Management will conduct a conference call to review this information at 1:00 p.m. CT (2:00 p.m. ET) on Thursday, January 19, 2023. We strongly encourage all participants to pre-register for the conference call webcast or the live call using one of the following links. First, participants can pre-register for the conference call webcast using the following link: https://events.q4inc.com/attendee/223948707. Participants who pre-register will be given a unique webcast link to gain immediate access to the conference call webcast. Second, participants can pre-register for the live call using the following link: https://www.netroadshow.com/events/login?show=863c0014&confId=45606. Participants who pre-register will be given the phone number and unique access codes 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: 794589. A replay of the call will be available by calling 1-866-813-9403, Passcode: 384771, which will be available until January 26, 2023, 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.

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, Texas, 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.

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

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); PPNR, as adjusted; pre-tax net income, as adjusted, to total revenue (net); pre-tax, pre-provision, profit percentage; pre-tax, pre-provision, profit percentage, as adjusted; diluted earnings per common share, as adjusted; return on average assets, as adjusted; return on average assets excluding intangible amortization; return on average assets, as adjusted, excluding intangible amortization; return on average common equity, as adjusted; return on average tangible common equity; return on average tangible common equity, as adjusted; return on average tangible common equity excluding intangible amortization; return on average tangible common equity, as adjusted, excluding intangible amortization; efficiency ratio, as adjusted; tangible book value per common share and tangible common equity to tangible assets--to provide meaningful supplemental information regarding our performance. These measures typically adjust GAAP performance measures to include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant items or transactions 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. 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 are not guarantees of future events, performance or results. When we use words like “may,” “plan,” “propose,” “contemplate,” “anticipate,” “believe,” “intend,” “continue,” “expect,” “project,” “predict,” “estimate,” “could,” “should,” “would,” and similar expressions, you should consider them as identifying forward-looking statements, although we may use other phrasing. Forward-looking statements of this type speak only as of the date of this news release. By nature, forward-looking statements involve inherent risks 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, including the ongoing impacts of inflation; 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 risk that the benefits from the acquisition of Happy Bancshares, Inc. (“Happy”) 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 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; technological changes and cybersecurity risks; the effects of changes in accounting policies and practices; changes in governmental monetary and fiscal policies; political instability, military conflicts and other major domestic or international events; adverse weather events, including hurricanes, and other natural disasters; 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, 2021, filed with the SEC on February 24, 2022.

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, 2022 Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021
ASSETS          
Cash and due from banks $263,893  $268,929  $287,451  $173,134  $119,908 
Interest-bearing deposits with other banks  460,897   1,311,492   2,528,925   3,446,324   3,530,407 
Cash and cash equivalents  724,790   1,580,421   2,816,376   3,619,458   3,650,315 
Federal funds sold     2,700          
Investment securities - available-for sale, net of allowance for credit losses  4,041,590   4,085,102   3,791,509   2,957,322   3,119,807 
Investment securities - held-to-maturity, net of allowance for credit losses  1,287,705   1,251,007   1,366,781   499,265    
Total investment securities  5,329,295   5,336,109   5,158,290   3,456,587   3,119,807 
Loans receivable  14,409,480   13,829,311   13,923,873   10,052,714   9,836,089 
Allowance for credit losses  (289,669)  (289,203)  (294,267)  (234,768)  (236,714)
Loans receivable, net  14,119,811   13,540,108   13,629,606   9,817,946   9,599,375 
Bank premises and equipment, net  405,073   411,479   415,056   274,503   275,760 
Foreclosed assets held for sale  546   365   373   1,144   1,630 
Cash value of life insurance  213,693   212,619   211,811   105,623   105,135 
Accrued interest receivable  103,199   88,671   80,274   46,934   46,736 
Deferred tax asset, net  209,321   228,979   208,585   116,605   78,290 
Goodwill  1,398,253   1,394,353   1,398,400   973,025   973,025 
Core deposit intangible  58,455   60,932   63,410   23,624   25,045 
Other assets  321,152   300,634   270,987   182,546   177,020 
    Total assets  $22,883,588  $23,157,370  $24,253,168  $18,617,995  $18,052,138 
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
           
Liabilities          
Deposits:          
Demand and non-interest-bearing $5,164,997  $5,540,539  $6,036,583  $4,311,400  $4,127,878 
Savings and interest-bearing transaction accounts  11,730,552   11,968,519   12,424,192   9,461,393   9,251,805 
Time deposits  1,043,234   1,033,266   1,119,297   808,141   880,887 
Total deposits  17,938,783   18,542,324   19,580,072   14,580,934   14,260,570 
Securities sold under agreements to repurchase  131,146   121,555   118,573   151,151   140,886 
FHLB and other borrowed funds  650,000   400,000   400,000   400,000   400,000 
Accrued interest payable and other liabilities  196,877   192,908   197,503   131,339   113,868 
Subordinated debentures  440,420   440,568   458,455   667,868   371,093 
Total liabilities  19,357,226   19,697,355   20,754,603   15,931,292   15,286,417 
           
 Stockholders' equity           
Common stock  2,034   2,042   2,053   1,638   1,637 
Capital surplus  2,386,699   2,404,388   2,426,271   1,485,524   1,487,373 
Retained earnings  1,443,087   1,361,040   1,286,146   1,304,098   1,266,249 
Accumulated other comprehensive (loss) income  (305,458)  (307,455)  (215,905)  (104,557)  10,462 
Total stockholders' equity  3,526,362   3,460,015   3,498,565   2,686,703   2,765,721 
Total liabilities and stockholders' equity $22,883,588  $23,157,370  $24,253,168  $18,617,995  $18,052,138 
           


 Home BancShares, Inc.
 Consolidated Statements of Income
 (Unaudited)
               
   Quarter Ended  Year Ended
(In thousands) Dec. 31, 2022 Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2021
Interest income:              
Loans $221,280  $195,841  $181,779  $129,442  $136,750  $728,342  $571,960 
Investment securities              
Taxable  33,639   28,273   20,941   9,080   8,121   91,933   30,054 
Tax-exempt  7,855   8,069   7,725   4,707   4,827   28,356   19,642 
Deposits - other banks  10,109   10,763   6,565   1,673   1,281   29,110   3,515 
Federal funds sold  12   9   3   1      25    
Total interest income  272,895   242,955   217,013   144,903   150,979   877,766   625,171 
Interest expense:              
Interest on deposits  47,019   23,347   10,729   4,894   5,155   85,989   24,936 
Federal funds purchased        2         2    
FHLB borrowed funds  5,388   1,917   1,896   1,875   1,916   11,076   7,604 
Securities sold under agreements to repurchase  701   434   187   108   98   1,430   497 
Subordinated debentures  4,121   4,153   5,441   6,878   4,790   20,593   19,163 
Total interest expense  57,229   29,851   18,255   13,755   11,959   119,090   52,200 
Net interest income  215,666   213,104   198,758   131,148   139,020   758,676   572,971 
Provision for credit losses on loans  5,000               5,000    
Provision for credit losses on acquired loans        45,170         45,170    
Provision for credit losses on acquired unfunded commitments        11,410         11,410    
Provision for credit losses on unfunded commitments                    (4,752)
Provision for credit losses on acquired investment securities        2,005         2,005    
Total credit loss expense (benefit)  5,000      58,585         63,585   (4,752)
Net interest income after credit loss expense (benefit)  210,666   213,104   140,173   131,148   139,020   695,091   577,723 
Non-interest income:              
Service charges on deposit accounts  10,134   10,756   10,084   6,140   6,217   37,114   22,276 
Other service charges and fees  10,363   13,951   12,541   7,733   11,133   44,588   36,451 
Trust fees  3,981   3,980   4,320   574   515   12,855   1,960 
Mortgage lending income  3,566   4,179   5,996   3,916   5,359   17,657   25,676 
Insurance commissions  453   601   658   480   387   2,192   1,943 
Increase in cash value of life insurance  1,079   1,089   1,140   492   501   3,800   2,049 
Dividends from FHLB, FRB, FNBB & other  2,814   1,741   3,945   698   919   9,198   14,835 
Gain on SBA loans  30   58      95   792   183   2,380 
Gain (loss) on branches, equipment and other assets, net  10   (13)  2   16   (19)  15   (105)
Gain on OREO, net  13      9   478   737   500   2,003 
Gain on securities, net                    219 
Fair value adjustment for marketable securities  1,032   (2,628)  (1,801)  2,125   85   (1,272)  7,178 
Other income  23,185   9,487   7,687   7,922   5,338   48,281   20,704 
Total non-interest income  56,660   43,201   44,581   30,669   31,964   175,111   137,569 
Non-interest expense:              
Salaries and employee benefits  64,249   65,290   65,795   43,551   43,765   238,885   170,755 
Occupancy and equipment  14,884   15,133   14,256   9,144   9,047   53,417   36,631 
Data processing expense  9,062   8,747   10,094   7,039   6,493   34,942   24,280 
Merger and acquisition expenses        48,731   863   880   49,594   1,886 
Other operating expenses  30,708   25,176   26,606   16,299   16,865   98,789   64,965 
Total non-interest expense  118,903   114,346   165,482   76,896   77,050   475,627   298,517 
Income before income taxes  148,423   141,959   19,272   84,921   93,934   394,575   416,775 
Income tax expense  32,736   33,254   3,294   20,029   20,577   89,313   97,754 
Net income $115,687  $108,705  $15,978  $64,892  $73,357  $305,262  $319,021 
               


Home BancShares, Inc.
Selected Financial Information
(Unaudited)
               
  Quarter Ended Year Ended
(Dollars and shares in thousands, except per share data) Dec. 31, 2022 Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2021
PER SHARE DATA              
Diluted earnings per common share $0.57  $0.53  $0.08  $0.40  $0.45  $1.57  $1.94 
Diluted earnings per common share, as adjusted (non-GAAP)(1)   0.53   0.54   0.47   0.37   0.45   1.93   1.83 
Basic earnings per common share  0.57   0.53   0.08   0.40   0.45   1.57   1.94 
Dividends per share - common  0.165   0.165   0.165   0.165   0.14   0.66   0.56 
Book value per common share  17.33   16.94   17.04   16.41   16.90   17.33   16.90 
Tangible book value per common share (non-GAAP)(1)  10.17   9.82   9.92   10.32   10.80   10.17   10.80 
               
STOCK INFORMATION              
Average common shares outstanding  203,924   204,829   205,683   163,787   163,859   194,694   164,501 
Average diluted shares outstanding  204,179   205,135   206,015   164,196   164,306   195,019   164,858 
End of period common shares outstanding  203,434   204,219   205,291   163,758   163,699   203,434   163,699 
               
ANNUALIZED PERFORMANCE METRICS              
Return on average assets (ROA)  1.98%  1.81%  0.26%  1.43%  1.62%  1.35%  1.83%
Return on average assets, as adjusted: (ROA, as adjusted) (non-GAAP)(1)  1.84%  1.83%  1.57%  1.36%  1.64%  1.67%  1.73%
Return on average assets excluding intangible amortization (non-GAAP)(1)  2.15%  1.97%  0.31%  1.54%  1.75%  1.47%  1.96%
Return on average assets, as adjusted, excluding intangible amortization (non-GAAP)(1)  2.00%  1.99%  1.70%  1.46%  1.76%  1.80%  1.86%
Return on average common equity (ROE)  13.29%  12.25%  1.78%  9.58%  10.63%  9.17%  11.89%
Return on average common equity, as adjusted: (ROE, as adjusted) (non-GAAP)(1)  12.35%  12.39%  10.83%  9.09%  10.72%  11.29%  11.26%
Return on average tangible common equity (ROTCE) (non-GAAP)(1)  22.96%  20.93%  2.96%  15.03%  16.73%  15.30%  18.95%
Return on average tangible common equity, as adjusted: (ROTCE, as adjusted) (non-GAAP)(1)  21.33%  21.16%  17.94%  14.26%  16.87%  18.84%  17.95%
Return on average tangible common equity excluding intangible amortization (non-GAAP)(1)  23.33%  21.29%  3.30%  15.28%  16.97%  15.63%  19.20%
Return on average tangible common equity, as adjusted, excluding intangible amortization (non-GAAP)(1)  21.70%  21.52%  18.29%  14.50%  17.11%  19.17%  18.20%
               
(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, 2022 Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2021
Efficiency ratio  42.44%  43.24%  66.31%  46.15%  43.79%  49.53%  40.81%
Efficiency ratio, as adjusted (non-GAAP)(1)  43.07%  42.97%  46.02%  47.33%  43.48%  44.55%  42.12%
Net interest margin - FTE (NIM)  4.21%  4.05%  3.64%  3.21%  3.42%  3.81%  3.66%
Fully taxable equivalent adjustment $2,017  $2,437  $2,471  $1,738  $1,736  $8,663  $7,079 
Total revenue (net)  272,326   256,305   243,339   161,817   170,984   933,787   710,540 
Pre-tax, pre-provision, net income (PPNR) (non-GAAP)(1)  153,423   141,959   77,857   84,921   93,934   458,160   412,023 
PPNR, as adjusted (non-GAAP)(1)  142,567   143,522   126,683   80,371   94,729   493,143   388,905 
Pre-tax net income to total revenue (net)  54.50%  55.39%  7.92%  52.48%  54.94%  42.26%  58.66%
Pre-tax net income, as adjusted, to total revenue (net) (non-GAAP)(1)  50.52%  56.00%  52.06%  49.67%  55.40%  52.28%  55.40%
P5NR (Pre-tax, pre-provision, profit percentage) (PPNR to total revenue (net)) (non-GAAP)(1)  56.34%  55.39%  32.00%  52.48%  54.94%  49.06%  57.99%
P5NR, as adjusted (non-GAAP)(1)  52.35%  56.00%  52.06%  49.67%  55.40%  52.81%  54.73%
Total purchase accounting accretion $3,497  $4,578  $5,177  $3,089  $4,001  $16,341  $20,151 
Average purchase accounting loan discounts  38,552   42,050   46,258   25,359   28,882   38,055   36,178 
               
OTHER OPERATING EXPENSES              
               
Hurricane expense $176  $  $  $  $  $176  $ 
Advertising  2,567   2,024   2,117   1,266   1,411   7,974   4,855 
Amortization of intangibles  2,478   2,477   2,477   1,421   1,420   8,853   5,683 
Electronic banking expense  3,914   3,828   3,352   2,538   2,442   13,632   9,817 
Directors' fees  358   354   375   404   422   1,491   1,614 
Due from bank service charges  273   316   396   270   257   1,255   1,044 
FDIC and state assessment  2,224   2,146   2,390   1,668   1,353   8,428   5,472 
Insurance  1,003   959   973   770   801   3,705   3,118 
Legal and accounting  5,962   1,581   1,061   797   749   9,401   3,703 
Other professional fees  2,552   2,466   2,254   1,609   1,754   8,881   6,950 
Operating supplies  690   681   995   754   489   3,120   1,915 
Postage  602   614   556   306   352   2,078   1,283 
Telephone  576   593   384   337   343   1,890   1,425 
Other expense  7,333   7,137   9,276   4,159   5,072   27,905   18,086 
Total other operating expenses $30,708  $25,176  $26,606  $16,299  $16,865  $98,789  $64,965 
               
(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, 2022 Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021
BALANCE SHEET RATIOS          
Total loans to total deposits  80.33%  74.58%  71.11%  68.94%  68.97%
Common equity to assets  15.41%  14.94%  14.43%  14.43%  15.32%
Tangible common equity to tangible assets (non-GAAP)(1)  9.66%  9.24%  8.94%  9.59%  10.36%
LOANS RECEIVABLE          
Real estate          
Commercial real estate loans          
Non-farm/non-residential $5,632,063  $5,156,438  $5,092,539  $3,810,383  $3,889,284 
Construction/land development  2,135,266   2,232,906   2,595,384   1,856,096   1,850,050 
Agricultural  346,811   330,748   329,106   142,920   130,674 
Residential real estate loans          
Residential 1-4 family  1,748,551   1,704,850   1,708,221   1,223,890   1,274,953 
Multifamily residential  578,052   525,110   389,633   248,650   280,837 
Total real estate  10,440,743   9,950,052   10,114,883   7,281,939   7,425,798 
Consumer  1,149,896   1,120,250   1,106,343   1,059,342   825,519 
Commercial and industrial  2,349,263   2,268,750   2,187,771   1,510,205   1,386,747 
Agricultural  285,235   313,693   324,630   48,095   43,920 
Other  184,343   176,566   190,246   153,133   154,105 
Loans receivable $14,409,480  $13,829,311  $13,923,873  $10,052,714  $9,836,089 
Paycheck Protection Program (PPP) loans (net of discounts) (included in total loans receivable)  7,332   10,771   37,204   59,609   112,814 
ALLOWANCE FOR CREDIT LOSSES          
Balance, beginning of period $289,203  $294,267  $234,768  $236,714  $238,673 
Allowance for credit losses on PCD loans - Happy acquisition        16,816       
Loans charged off  5,379   6,313   3,265   2,310   3,125 
Recoveries of loans previously charged off  845   1,249   778   364   1,166 
Net loans charged off  4,534   5,064   2,487   1,946   1,959 
Provision for credit losses - Happy acquisition        45,170       
Provision for credit losses - loans  5,000             
Balance, end of period $289,669  $289,203  $294,267  $234,768  $236,714 
Net charge-offs to average total loans  0.13%  0.15%  0.07%  0.08%  0.08%
Allowance for credit losses to total loans  2.01%  2.09%  2.11%  2.34%  2.41%
NON-PERFORMING ASSETS          
Non-performing loans          
Non-accrual loans $51,011  $56,796  $44,170  $44,629  $47,158 
Loans past due 90 days or more  9,845   4,898   16,432   46   3,035 
Total non-performing loans  60,856   61,694   60,602   44,675   50,193 
Other non-performing assets          
Foreclosed assets held for sale, net  546   365   373   1,144   1,630 
Other non-performing assets  74   104   104       
Total other non-performing assets  620   469   477   1,144   1,630 
Total non-performing assets $61,476  $62,163  $61,079  $45,819  $51,823 
Allowance for credit losses for loans to non-performing loans  475.99%  468.77%  485.57%  525.50%  471.61%
Non-performing loans to total loans  0.42%  0.45%  0.44%  0.44%  0.51%
Non-performing assets to total assets  0.27%  0.27%  0.25%  0.25%  0.29%
           
(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, 2022 September 30, 2022
(Dollars in thousands) Average
Balance
 Income/
Expense
 Yield/
Rate
 Average
Balance
 Income/
Expense
 Yield/
Rate
ASSETS            
Earning assets            
Interest-bearing balances due from banks $1,094,144  $10,109  3.67% $1,965,136  $10,763  2.17%
Federal funds sold  1,300   12  3.66%  1,176   9  3.04%
Investment securities - taxable  4,002,678   33,639  3.33%  4,008,230   28,273  2.80%
Investment securities - non-taxable - FTE  1,294,096   9,653  2.96%  1,292,702   10,370  3.18%
Loans receivable - FTE  14,109,329   221,499  6.23%  13,822,459   195,977  5.63%
Total interest-earning assets  20,501,547   274,912  5.32%  21,089,703   245,392  4.62%
Non-earning assets  2,685,458       2,689,066     
Total assets $23,187,005      $23,778,769     
LIABILITIES AND SHAREHOLDERS' EQUITY           
Liabilities            
Interest-bearing liabilities            
Savings and interest-bearing transaction accounts $11,818,158  $45,029  1.51% $12,233,755  $22,388  0.73%
Time deposits  1,027,765   1,990  0.77%  1,078,112   959  0.35%
Total interest-bearing deposits  12,845,923   47,019  1.45%  13,311,867   23,347  0.70%
Federal funds purchased       %  14     %
Securities sold under agreement to repurchase  128,798   701  2.16%  126,770   434  1.36%
FHLB borrowed funds  692,935   5,388  3.08%  400,012   1,917  1.90%
Subordinated debentures  440,492   4,121  3.71%  442,312   4,153  3.73%
Total interest-bearing liabilities  14,108,148   57,229  1.61%  14,280,975   29,851  0.83%
Non-interest bearing liabilities            
Non-interest bearing deposits  5,423,821       5,779,082     
Other liabilities  201,031       199,416     
  Total liabilities  19,733,000       20,259,473     
Shareholders' equity  3,454,005       3,519,296     
  Total liabilities and shareholders' equity $23,187,005      $23,778,769     
Net interest spread     3.71%     3.79%
Net interest income and margin - FTE   $217,683  4.21%   $215,541  4.05%
             


Home BancShares, Inc.
Consolidated Net Interest Margin
(Unaudited)
             
  Year Ended
  December 31, 2022 December 31, 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 $2,444,541  $29,110  1.19% $2,596,460  $3,515  0.14%
Federal funds sold  1,519   25  1.65%  71     %
Investment securities - taxable  3,582,664   91,933  2.57%  2,031,139   30,054  1.48%
Investment securities - non-taxable - FTE  1,178,561   36,363  3.09%  858,503   26,017  3.03%
Loans receivable - FTE  12,940,998   728,998  5.63%  10,375,457   572,664  5.52%
Total interest-earning assets  20,148,283   886,429  4.40%  15,861,630   632,250  3.99%
Non-earning assets  2,405,057       1,597,355     
Total assets $22,553,340      $17,458,985     
LIABILITIES AND SHAREHOLDERS' EQUITY          
Liabilities            
Interest-bearing liabilities            
Savings and interest-bearing transaction accounts $11,520,781  $81,061  0.70% $8,716,004  $15,956  0.18%
Time deposits  1,033,431   4,928  0.48%  1,087,875   8,980  0.83%
Total interest-bearing deposits  12,554,212   85,989  0.68%  9,803,879   24,936  0.25%
Federal funds purchased  220   2  0.91%       %
Securities sold under agreement to repurchase  129,006   1,430  1.11%  151,190   497  0.33%
FHLB borrowed funds  473,839   11,076  2.34%  400,000   7,604  1.90%
Subordinated debentures  515,049   20,593  4.00%  370,712   19,163  5.17%
Total interest-bearing liabilities  13,672,326   119,090  0.87%  10,725,781   52,200  0.49%
Non-interest bearing liabilities            
Non-interest bearing deposits  5,378,906       3,924,341     
Other liabilities  171,390       124,724     
  Total liabilities  19,222,622       14,774,846     
Shareholders' equity  3,330,718       2,684,139     
  Total liabilities and shareholders' equity $22,553,340      $17,458,985     
Net interest spread     3.53%     3.50%
Net interest income and margin - FTE   $767,339  3.81%   $580,050  3.66%
             


Non-GAAP Reconciliations
(Unaudited)
               
  Quarter Ended Year Ended
(Dollars and shares in thousands, except per share data) Dec. 31, 2022 Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2021
EARNINGS, AS ADJUSTED              
GAAP net income available to common shareholders (A) $115,687  $108,705  $15,978  $64,892  $73,357  $305,262  $319,021 
Pre-tax adjustments              
Merger and acquisition expenses        48,731   863   880   49,594   1,886 
Initial provision for credit losses - acquisition        58,585         58,585    
Fair value adjustment for marketable securities  (1,032)  2,628   1,801   (2,125)  (85)  1,272   (7,178)
Special dividend from equity investment        (1,434)        (1,434)  (12,500)
TRUPS redemption fees        2,081         2,081    
Special lawsuit settlement, net of expense  (10,000)              (10,000)   
Recoveries on historic losses     (1,065)  (2,353)  (3,288)     (6,706)  (5,107)
Hurricane expense  176               176    
Gain on securities                    (219)
Total pre-tax adjustments  (10,856)  1,563   107,411   (4,550)  795   93,568   (23,118)
Tax-effect of adjustments  (2,679)  393   26,396   (1,220)  188   22,890   (6,225)
Total adjustments after-tax (B)  (8,177)  1,170   81,015   (3,330)  607   70,678   (16,893)
Earnings, as adjusted (C) $107,510  $109,875  $96,993  $61,562  $73,964  $375,940  $302,128 
               
Average diluted shares outstanding (D)  204,179   205,135   206,015   164,196   164,306   195,019   164,858 
               
GAAP diluted earnings per share: (A/D) $0.57  $0.53  $0.08  $0.40  $0.45  $1.57  $1.94 
Adjustments after-tax: (B/D)  (0.04)  0.01   0.39   (0.03)  0.00   0.36   (0.11)
Diluted earnings per common share, as adjusted: (C/D) $0.53  $0.54  $0.47  $0.37  $0.45  $1.93  $1.83 
               
ANNUALIZED RETURN ON AVERAGE ASSETS              
               
Return on average assets: (A/E)  1.98%  1.81%  0.26%  1.43%  1.62%  1.35%  1.83%
Return on average assets, as adjusted: (ROA, as adjusted) ((A+D)/E)  1.84%  1.83%  1.57%  1.36%  1.64%  1.67%  1.73%
Return on average assets excluding intangible amortization: ((A+C)/(E-F))  2.15%  1.97%  0.31%  1.54%  1.75%  1.47%  1.96%
Return on average assets, as adjusted, excluding intangible amortization: ((A+C+D)/(E-F))  2.00%  1.99%  1.70%  1.46%  1.76%  1.80%  1.86%
               
GAAP net income available to common shareholders (A) $115,687  $108,705  $15,978  $64,892  $73,357  $305,262  $319,021 
Amortization of intangibles (B)  2,478   2,477   2,477   1,421   1,420   8,853   5,683 
Amortization of intangibles after-tax (C)  1,867   1,854   1,854   1,049   1,054   6,624   4,220 
Adjustments after-tax (D)  (8,177)  1,170   81,015   (3,330)  607   70,678   (16,893)
Average assets (E)  23,187,005   23,778,769   24,788,365   18,393,075   17,914,727   22,553,340   17,458,985 
Average goodwill, core deposits & other intangible assets (F)  1,454,639   1,459,034   1,423,466   997,338   998,760   1,335,216   1,000,872 
               


 Home BancShares, Inc.
 Non-GAAP Reconciliations
 (Unaudited)
               
  Quarter Ended Year Ended
(Dollars in thousands) Dec. 31, 2022 Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Dec. 31, 2022 Dec. 31, 2021
ANNUALIZED RETURN ON AVERAGE COMMON EQUITY              
Return on average common equity: (A/D)  13.29%  12.25%  1.78%  9.58%  10.63%  9.17%  11.89%
Return on average common equity, as adjusted: (ROE, as adjusted) ((A+C)/D)  12.35%  12.39%  10.83%  9.09%  10.72%  11.29%  11.26%
Return on average tangible common equity: (A/(D-E))  22.96%  20.93%  2.96%  15.03%  16.73%  15.30%  18.95%
Return on average tangible common equity, as adjusted: (ROTCE, as adjusted) ((A+C)/(D-E))  21.33%  21.16%  17.94%  14.26%  16.87%  18.84%  17.95%
Return on average tangible common equity excluding intangible amortization: (B/(D-E))  23.33%  21.29%  3.30%  15.28%  16.97%  15.63%  19.20%
Return on average tangible common equity, as adjusted, excluding intangible amortization: ((B+C)/(D-E))  21.70%  21.52%  18.29%  14.50%  17.11%  19.17%  18.20%
               
GAAP net income available to common shareholders (A) $115,687  $108,705  $15,978  $64,892  $73,357  $305,262  $319,021 
Earnings excluding intangible amortization (B)  117,554   110,559   17,832   65,941   74,411   311,886   323,241 
Adjustments after-tax (C)  (8,177)  1,170   81,015   (3,330)  607   70,678   (16,893)
Average common equity (D)  3,454,005   3,519,296   3,591,758   2,747,980   2,738,305   3,330,718   2,684,139 
Average goodwill, core deposits & other intangible assets (E)  1,454,639   1,459,034   1,423,466   997,338   998,760   1,335,216   1,000,872 
               
EFFICIENCY RATIO & P5NR              
               
Efficiency ratio: ((D-H)/(B+C+E))  42.44%  43.24%  66.31%  46.15%  43.79%  49.53%  40.81%
Efficiency ratio, as adjusted: ((D-H-J)/(B+C+E-I))  43.07%  42.97%  46.02%  47.33%  43.48%  44.55%  42.12%
Pre-tax net income to total revenue (net) (A/(B+C))  54.50%  55.39%  7.92%  52.48%  54.94%  42.26%  58.66%
Pre-tax net income, as adjusted, to total revenue (net) ((A+F)/(B+C))  50.52%  56.00%  52.06%  49.67%  55.40%  52.28%  55.40%
Pre-tax, pre-provision, net income (PPNR) (B+C-D) $153,423  $141,959  $77,857  $84,921  $93,934  $458,160  $412,023 
Pre-tax, pre-provision, net income, as adjusted (B+C-D+F-G) $142,567  $143,522  $126,683  $80,371  $94,729  $493,143  $388,905 
P5NR (Pre-tax, pre-provision, profit percentage) PPNR to total revenue (net)) (B+C-D)/(B+C)  56.34%  55.39%  32.00%  52.48%  54.94%  49.06%  57.99%
P5NR, as adjusted (B+C-D+F-G)/(B+C)  52.35%  56.00%  52.06%  49.67%  55.40%  52.81%  54.73%
               
Pre-tax net income (A) $148,423  $141,959  $19,272  $84,921  $93,934  $394,575  $416,775 
Net interest income (B)  215,666   213,104   198,758   131,148   139,020   758,676   572,971 
Non-interest income (C)  56,660   43,201   44,581   30,669   31,964   175,111   137,569 
Non-interest expense (D)  118,903   114,346   165,482   76,896   77,050   475,627   298,517 
Fully taxable equivalent adjustment (E)  2,017   2,437   2,471   1,738   1,736   8,663   7,079 
Total pre-tax adjustments (F)  (10,856)  1,563   107,411   (4,550)  795   93,568   (23,118)
Initial provision for credit losses - acquisition (G)        58,585         58,585    
Amortization of intangibles (H)  2,478   2,477   2,477   1,421   1,420   8,853   5,683 
               
Adjustments:              
Non-interest income:              
Fair value adjustment for marketable securities $1,032  $(2,628) $(1,801) $2,125  $85  $(1,272) $7,178 
Gain on OREO  13      9   478   737   500   2,003 
Gain (loss) on branches, equipment and other assets, net  10   (13)  2   16   (19)  15   (105)
Special dividend from equity investment        1,434         1,434   12,500 
Gain on securities                    219 
Lawsuit settlement - special lawsuit  15,000               15,000    
Recoveries on historic losses     1,065   2,353   3,288      6,706   5,107 
Total non-interest income adjustments (I) $16,055  $(1,576) $1,997  $5,907  $803  $22,383  $26,902 
               
Non-interest expense:              
Merger and acquisition expenses        48,731   863   880   49,594   1,886 
Hurricane expense  176               176    
Legal expense - special lawsuit  5,000               5,000    
TRUPS redemption fees        2,081         2,081    
Total non-interest expense adjustments (J) $5,176  $  $50,812  $863  $880  $56,851  $1,886 
               


 Home BancShares, Inc.
 Non-GAAP Reconciliations
 (Unaudited)
           
  Quarter Ended
  Dec. 31, 2022 Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021
TANGIBLE BOOK VALUE PER COMMON SHARE          
Book value per common share: (A/B) $17.33  $16.94  $17.04  $16.41  $16.90 
Tangible book value per common share: ((A-C-D)/B)  10.17   9.82   9.92   10.32   10.80 
           
Total stockholders' equity (A) $3,526,362  $3,460,015  $3,498,565  $2,686,703  $2,765,721 
End of period common shares outstanding (B)  203,434   204,219   205,291   163,758   163,699 
Goodwill (C)  1,398,253   1,394,353   1,398,400   973,025   973,025 
Core deposit and other intangibles (D)  58,455   60,932   63,410   23,624   25,045 
TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS          
Equity to assets: (B/A)  15.41%  14.94%  14.43%  14.43%  15.32%
Tangible common equity to tangible assets: ((B-C-D)/(A-C-D))  9.66%  9.24%  8.94%  9.59%  10.36%
           
Total assets (A) $22,883,588  $23,157,370  $24,253,168  $18,617,995  $18,052,138 
Total stockholders' equity (B)  3,526,362   3,460,015   3,498,565   2,686,703   2,765,721 
Goodwill (C)  1,398,253   1,394,353   1,398,400   973,025   973,025 
Core deposit and other intangibles (D)  58,455   60,932   63,410   23,624   25,045