CONWAY, Ark., Oct. 15, 2015 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (NASDAQ:HOMB), parent company of Centennial Bank, today announced a 30.6% increase in quarterly profit to $35.7 million, or $0.52 diluted earnings per share, for the third quarter of 2015 compared to $27.4 million, or $0.41 diluted earnings per share, for the same quarter in 2014. Excluding the $474,000 of merger expenses associated with the recently completed acquisition of Florida Business BancGroup, Inc., diluted earnings per share for the third quarter of 2015 was $0.53 per share. The Company also announced $350.8 million in quarterly organic non-covered loan growth during the third quarter of 2015 and a core efficiency ratio of 39.30%.
Because acquisitions are growth and capital management strategies, earnings excluding amortization of intangibles after-tax are useful in evaluating the Company. Diluted earnings per share excluding intangible amortization for the third quarter of 2015 was $0.53 compared to $0.42 diluted earnings per share excluding intangible amortization for the same period in 2014.
"In the last six months, there has been a $906.1 million increase in our total loan portfolio," said John Allison, Chairman. "By maintaining a strong capital position, Home BancShares was adequately prepared to support loan growth when the opportunities presented themselves. We will continue seeking growth opportunities in areas within and surrounding our existing footprint while supporting additional loan growth in our legacy organization so we can enhance the franchise value of HOMB and maximize returns to our shareholders."
Tracy French, Centennial Bank President and Chief Executive Officer, added, "We are pleased with the third quarter's strong financial results and another active quarter of loan growth. We are busy maintaining this growth momentum with our recently closed acquisition of Bay Cities on October 1, 2015, which is due to have its systems conversion on November 6, 2015."
"In the last several quarters our Chairman has made it known that his goal for us was to reach a 39.99% core efficiency ratio," said Donna Townsell, Centennial Bank Vice President of Corporate Efficiencies. "Since we started tracking the core efficiency in 2008, we have dropped from 59.25% to 39.30% while acquiring fifteen banks. This group of bankers worked hard to get us there and know it will be hard work to stay there, but measuring revenue versus expense has become part of the culture at Home BancShares."
Operating Highlights
Each quarter we perform credit impairment tests on the loans acquired in our FDIC loss sharing and non-loss sharing acquisitions. During our third quarter 2015 impairment testing, several non-loss share pools were determined to have a material projected credit improvement. This projected credit improvement offset by the expected decline in accretion income from the other purchase accounting loans, resulted in a net improvement of $2.1 million of recognized accretion income when compared to the second quarter of 2015. Consequently, yields on loans and net interest margin for the quarter just ended are slightly increased when compared to the second quarter of 2015.
Net interest income for the third quarter of 2015 increased 15.9% to $91.1 million from $78.6 million during the third quarter of 2014. For the third quarter of 2015, the effective yield on non-covered loans and covered loans was 5.77% and 19.04%, respectively. Net interest margin, on a fully taxable equivalent basis, was 5.03% for the quarter just ended.
During the third quarter of 2015, the Company recorded a provision for loan loss of $7.1 million compared to $4.2 million in the third quarter of 2014. This expected increase of $2.9 million is primarily a reflection of the organic loan growth generated during 2015.
The Company reported $16.5 million of non-interest income for the third quarter of 2015, compared to $10.8 million for the third quarter of 2014. The most important components of the third quarter non-interest income were $6.6 million from other service charges and fees, $6.3 million from service charges on deposits accounts, $3.1 million from mortgage lending income, $993,000 from other income, $548,000 from insurance commissions, and $398,000 from trust fees offset by the $2.0 million of net amortization on the FDIC indemnification asset.
As a result of the recognized credit improvements in prior years, the Company has been decreasing the base of the indemnification asset to be recognized as FDIC amortization over the weighted average life of the loss-share agreements. The recognition of this amortization has begun to slow down as the five-year loss-share is beginning to expire. Consequently, there was a $5.0 million decline of FDIC indemnification amortization from the third quarter of 2014 to the third quarter of 2015.
Non-interest expense for the third quarter of 2015 was $44.6 million compared to $42.8 million for the third quarter of 2014. This increase is primarily associated with the establishment of the Centennial Commercial Finance Group (Centennial CFG) in New York City during the second quarter of 2015. For the third quarter of 2015, our core efficiency ratio was 39.30% which is improved from the 41.88% reported for third quarter of 2014.
Financial Condition
Total non-covered loans were $5.90 billion at September 30, 2015 compared to $4.82 billion at December 31, 2014. Total covered loans were $105.4 million at September 30, 2015 compared to $240.2 million at December 31, 2014. Total deposits were $5.95 billion at September 30, 2015 compared to $5.42 billion at December 31, 2014. Total assets were $8.52 billion at September 30, 2015 compared to $7.40 billion at December 31, 2014.
Since the second quarter of 2015, non-covered loans increased $401.1 million. During the third quarter of 2015, the five-year loss share agreements on the commercial real estate and commercial and industrial loans acquired through the FDIC-assisted acquisitions of Coastal and Bayside concluded. As a result, $50.3 million of these loans including their associated discounts previously classified as covered loans have migrated to non-covered loans status. As a result, the Company produced approximately $350.8 million of organic non-covered loan growth since June 30, 2015, of which $169.5 million is associated with loan originations in the legacy footprint with the remaining $181.3 million being associated with Centennial CFG.
Non-performing non-covered loans were $48.8 million as of September 30, 2015, of which $29.4 million, $18.4 million and $985,000 were located in Arkansas, Florida and Alabama, respectively. Non-performing non-covered loans as a percent of total non-covered loans were 0.83% as of September 30, 2015 compared to 0.82% as of December 31, 2014. Non-performing non-covered assets were $67.0 million as of September 30, 2015, of which $41.4 million, $24.7 million and $985,000 were located in Arkansas, Florida and Alabama, respectively. Non-performing non-covered assets as a percent of total non-covered assets were 0.80% as of September 30, 2015 compared to 0.79% as of December 31, 2014.
The Company's allowance for loan losses for non-covered loans was $60.6 million at September 30, 2015, or 1.03% of total non-covered loans, compared to $52.5 million, or 1.09% of total non-covered loans, at December 31, 2014. As of September 30, 2015 and December 31, 2014, the allowance for loan losses for non-covered loans plus discount for credit losses on non-covered loans acquired to total non-covered loans plus discount for credit losses on non-covered loans acquired was 3.23% and 3.88%, respectively. This decrease is primarily the result of the increase in non-covered loans during 2015 plus projected credit improvement on the acquired impaired loans. As of September 30, 2015 and December 31, 2014, the Company's allowance for loan losses for non-covered loans was 124% and 133% of its total non-performing non-covered loans, respectively.
Stockholders' equity was $1.09 billion at September 30, 2015 compared to $1.02 billion at December 31, 2014, an increase of $76.0 million. Book value per common share was $16.05 at September 30, 2015 compared to $15.03 at December 31, 2014. Tangible book value per common share was $11.03 at September 30, 2015 compared to $9.90 at December 31, 2014 for an annualized increase of 15.3%.
Branches
In an effort to achieve efficiencies primarily from the acquisitions, the Company closed two Arkansas, one Alabama and two Florida locations during the third quarter of 2015 and has plans to close one Arkansas and three Florida locations during the fourth quarter of 2015. The Company currently has 80 branches in Arkansas, 58 branches in Florida, 6 branches in Alabama and a loan production office in New York City.
Conference Call
Management will conduct a conference call to review this information at 1:00 p.m. CT (2:00 ET) on Thursday, October 15, 2015. Interested parties can listen to this call by calling 1-877-508-9586 and asking for the Home BancShares conference call. A replay of the call will be available by calling 1-877-344-7529, Passcode: 10072538, which will be available until October 22, 2015 at 10:59 p.m. CT (11:59 ET). Internet access to the call will be available live or in recorded version on the Company's website at www.homebancshares.com under "Investor Relations" for 12 months.
General
This release contains forward-looking statements regarding the Company's plans, expectations, goals and outlook for the future. Statements in this press release that are not historical facts should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements of this type speak only as of the date of this news release. By nature, forward-looking statements involve inherent risk and uncertainties. Various factors, including, but not limited to, economic conditions, credit quality, interest rates, loan demand, the ability to successfully integrate new acquisitions and changes in the assumptions used in making the forward-looking statements, could cause actual results to differ materially from those contemplated by the forward-looking statements. Additional information on factors that might affect Home BancShares, Inc.'s financial results is included in its Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission (the "SEC") on February 27, 2015, and in its Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 filed with the SEC on August 6, 2015.
Home BancShares, Inc. is a bank holding company, headquartered in Conway, Arkansas. Our wholly-owned subsidiary, Centennial Bank, provides a broad range of commercial and retail banking plus related financial services to businesses, real estate developers, investors, individuals and municipalities. Centennial Bank has branch locations in Arkansas, Florida, South Alabama and a loan production office in New York City. The Company's common stock is traded through the NASDAQ Global Select Market under the symbol "HOMB."
| Home BancShares, Inc. | |||||
| Consolidated End of Period Balance Sheets | |||||
| (Unaudited) | |||||
| Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | |
| (In thousands) | 2015 | 2015 | 2015 | 2014 | 2014 |
| ASSETS | |||||
| Cash and due from banks | $ 120,262 | $ 116,682 | $ 115,448 | $ 105,438 | $ 109,067 |
| Interest-bearing deposits with other banks | 108,394 | 87,729 | 82,123 | 7,090 | 28,416 |
| Cash and cash equivalents | 228,656 | 204,411 | 197,571 | 112,528 | 137,483 |
| Federal funds sold | -- | -- | 6,100 | 250 | 44,275 |
| Investment securities - available-for-sale | 1,141,405 | 1,080,000 | 1,069,745 | 1,067,287 | 1,067,617 |
| Investment securities - held-to-maturity | 324,949 | 336,993 | 344,518 | 356,790 | 296,036 |
| Loans receivable not covered by loss share | 5,900,175 | 5,499,028 | 4,929,989 | 4,817,314 | 4,583,015 |
| Loans receivable covered by FDIC loss share | 105,414 | 159,891 | 169,460 | 240,188 | 250,970 |
| Allowance for loan losses | (63,659) | (60,258) | (56,526) | (55,011) | (52,844) |
| Loans receivable, net | 5,941,930 | 5,598,661 | 5,042,923 | 5,002,491 | 4,781,141 |
| Bank premises and equipment, net | 205,505 | 209,425 | 209,326 | 206,912 | 211,726 |
| Foreclosed assets held for sale not covered by loss share | 18,204 | 16,539 | 17,402 | 16,951 | 19,367 |
| Foreclosed assets held for sale covered by FDIC loss share | 2,612 | 4,472 | 6,309 | 7,871 | 13,513 |
| FDIC indemnification asset | 11,290 | 15,874 | 19,435 | 28,409 | 42,104 |
| Cash value of life insurance | 75,281 | 75,015 | 74,722 | 74,444 | 70,913 |
| Accrued interest receivable | 26,977 | 24,447 | 23,542 | 24,075 | 23,366 |
| Deferred tax asset, net | 63,075 | 62,088 | 59,594 | 65,227 | 68,070 |
| Goodwill | 322,728 | 322,728 | 322,728 | 325,423 | 313,320 |
| Core deposit and other intangibles | 18,828 | 19,816 | 20,916 | 20,925 | 21,004 |
| Other assets | 134,113 | 103,913 | 99,143 | 93,689 | 86,436 |
| Total assets | $ 8,515,553 | $ 8,074,382 | $ 7,513,974 | $ 7,403,272 | $ 7,196,371 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
| Liabilities | |||||
| Deposits: | |||||
| Demand and non-interest-bearing | $ 1,409,949 | $ 1,406,051 | $ 1,328,689 | $ 1,203,306 | $ 1,170,441 |
| Savings and interest-bearing transaction accounts | 3,230,722 | 3,099,522 | 3,120,803 | 2,974,850 | 2,830,829 |
| Time deposits | 1,312,343 | 1,372,463 | 1,452,733 | 1,245,815 | 1,276,001 |
| Total deposits | 5,953,014 | 5,878,036 | 5,902,225 | 5,423,971 | 5,277,271 |
| Federal funds purchased | -- | -- | -- | -- | -- |
| Securities sold under agreements to repurchase | 134,142 | 150,746 | 178,615 | 176,465 | 160,895 |
| FHLB borrowed funds | 1,216,152 | 866,907 | 277,477 | 697,957 | 713,553 |
| Accrued interest payable and other liabilities | 60,141 | 56,166 | 55,268 | 28,761 | 25,145 |
| Subordinated debentures | 60,826 | 60,826 | 60,826 | 60,826 | 60,826 |
| Total liabilities | 7,424,275 | 7,012,681 | 6,474,411 | 6,387,980 | 6,237,690 |
| Stockholders' equity | |||||
| Common stock | 680 | 677 | 676 | 676 | 665 |
| Capital surplus | 782,500 | 780,731 | 779,856 | 781,328 | 749,573 |
| Retained earnings | 299,984 | 274,409 | 248,951 | 226,279 | 203,107 |
| Accumulated other comprehensive income | 8,114 | 5,884 | 10,080 | 7,009 | 5,336 |
| Total stockholders' equity | 1,091,278 | 1,061,701 | 1,039,563 | 1,015,292 | 958,681 |
| Total liabilities and stockholders' equity | $ 8,515,553 | $ 8,074,382 | $ 7,513,974 | $ 7,403,272 | $ 7,196,371 |
| Home BancShares, Inc. | |||||||
| Consolidated Statements of Income | |||||||
| (Unaudited) | |||||||
| Quarter Ended | Nine Months Ended | ||||||
| Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Sep. 30, | Sep. 30, | |
| (In thousands) | 2015 | 2015 | 2015 | 2014 | 2014 | 2015 | 2014 |
| Interest income | |||||||
| Loans | $ 88,671 | $ 82,360 | $ 75,487 | $ 80,011 | $ 75,917 | $ 246,518 | $ 226,334 |
| Investment securities | |||||||
| Taxable | 5,157 | 5,130 | 5,543 | 5,168 | 4,905 | 15,830 | 14,137 |
| Tax-exempt | 2,789 | 2,774 | 2,752 | 2,843 | 2,552 | 8,315 | 7,248 |
| Deposits - other banks | 32 | 44 | 91 | 24 | 20 | 167 | 73 |
| Federal funds sold | 4 | 3 | 8 | 15 | 7 | 15 | 35 |
| Total interest income | 96,653 | 90,311 | 83,881 | 88,061 | 83,401 | 270,845 | 247,827 |
| Interest expense | |||||||
| Interest on deposits | 3,045 | 3,311 | 3,258 | 3,074 | 3,243 | 9,614 | 9,722 |
| Federal funds purchased | 1 | 1 | 1 | 1 | 2 | 3 | 2 |
| FHLB borrowed funds | 2,030 | 1,053 | 1,050 | 1,108 | 1,035 | 4,133 | 2,933 |
| Securities sold under agreements to repurchase | 146 | 163 | 172 | 181 | 186 | 481 | 536 |
| Subordinated debentures | 340 | 334 | 329 | 327 | 330 | 1,003 | 986 |
| Total interest expense | 5,562 | 4,862 | 4,810 | 4,691 | 4,796 | 15,234 | 14,179 |
| Net interest income | 91,091 | 85,449 | 79,071 | 83,370 | 78,605 | 255,611 | 233,648 |
| Provision for loan losses | 7,106 | 5,381 | 3,787 | 5,370 | 4,241 | 16,274 | 17,294 |
| Net interest income after provision for loan losses | 83,985 | 80,068 | 75,284 | 78,000 | 74,364 | 239,337 | 216,354 |
| Non-interest income | |||||||
| Service charges on deposit accounts | 6,250 | 6,056 | 5,418 | 6,143 | 6,275 | 17,724 | 18,379 |
| Other service charges and fees | 6,644 | 6,499 | 6,216 | 6,273 | 5,977 | 19,359 | 17,641 |
| Trust fees | 398 | 1,186 | 432 | 313 | 306 | 2,016 | 1,065 |
| Mortgage lending income | 3,132 | 2,955 | 1,932 | 2,341 | 1,901 | 8,019 | 5,215 |
| Insurance commissions | 548 | 640 | 567 | 977 | 984 | 1,755 | 3,334 |
| Income from title services | 28 | 36 | 34 | 60 | 59 | 98 | 162 |
| Increase in cash value of life insurance | 268 | 295 | 308 | 319 | 322 | 871 | 891 |
| Dividends from FHLB, FRB, Bankers' bank & other | 433 | 419 | 415 | 405 | 389 | 1,267 | 1,206 |
| Gain on acquisitions | -- | -- | 1,635 | -- | -- | 1,635 | -- |
| Gain on sale of SBA loans | 151 | -- | -- | -- | 183 | 151 | 183 |
| Gain (loss) on sale of premises & equipment, net | (266) | 21 | 8 | (97) | (35) | (237) | 419 |
| Gain (loss) on OREO, net | (40) | (263) | 493 | 264 | 529 | 190 | 1,927 |
| Gain (loss) on securities, net | -- | -- | 4 | -- | -- | 4 | -- |
| FDIC indemnification accretion/(amortization), net | (1,994) | (2,202) | (3,956) | (7,439) | (6,947) | (8,152) | (18,313) |
| Other income | 993 | 1,385 | 1,164 | 652 | 888 | 3,542 | 2,442 |
| Total non-interest income | 16,545 | 17,027 | 14,670 | 10,211 | 10,831 | 48,242 | 34,551 |
| Non-interest expense | |||||||
| Salaries and employee benefits | 22,225 | 22,056 | 19,390 | 19,911 | 19,368 | 63,671 | 57,114 |
| Occupancy and equipment | 6,540 | 6,678 | 6,049 | 6,320 | 6,234 | 19,267 | 18,711 |
| Data processing expense | 2,619 | 3,063 | 2,419 | 1,842 | 1,801 | 8,101 | 5,387 |
| Other operating expenses | 13,209 | 11,453 | 12,855 | 13,076 | 15,414 | 37,517 | 39,582 |
| Total non-interest expense | 44,593 | 43,250 | 40,713 | 41,149 | 42,817 | 128,556 | 120,794 |
| Income before income taxes | 55,937 | 53,845 | 49,241 | 47,062 | 42,378 | 159,023 | 130,111 |
| Income tax expense | 20,196 | 19,939 | 18,122 | 17,136 | 15,007 | 58,257 | 46,974 |
| Net income | $ 35,741 | $ 33,906 | $ 31,119 | $ 29,926 | $ 27,371 | $ 100,766 | $ 83,137 |
| Home BancShares, Inc. | |||||||
| Selected Financial Information | |||||||
| (Unaudited) | |||||||
| Quarter Ended | Nine Months Ended | ||||||
| (Dollars and shares in thousands, | Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | Sep. 30, | Sep. 30, |
| except per share data) | 2015 | 2015 | 2015 | 2014 | 2014 | 2015 | 2014 |
| PER SHARE DATA | |||||||
| Diluted earnings per common share | $ 0.52 | $ 0.50 | $ 0.46 | $ 0.44 | $ 0.41 | $ 1.48 | $ 1.26 |
| Diluted earnings per common share excluding merger expenses | 0.53 | 0.50 | 0.47 | 0.46 | 0.45 | 1.50 | 1.31 |
| Diluted earnings per common share excluding intangible amortization | 0.53 | 0.51 | 0.47 | 0.46 | 0.42 | 1.51 | 1.29 |
| Basic earnings per common share | 0.53 | 0.50 | 0.46 | 0.44 | 0.41 | 1.49 | 1.27 |
| Dividends per share - common | 0.150 | 0.125 | 0.125 | 0.100 | 0.100 | 0.400 | 0.250 |
| Book value per common share | 16.05 | 15.67 | 15.38 | 15.03 | 14.42 | 16.05 | 14.42 |
| Tangible book value per common share | 11.03 | 10.61 | 10.30 | 9.90 | 9.39 | 11.03 | 9.39 |
| STOCK INFORMATION | |||||||
| Average common shares outstanding | 67,869 | 67,632 | 67,589 | 67,291 | 66,223 | 67,698 | 65,499 |
| Average diluted shares outstanding | 68,081 | 67,915 | 67,923 | 67,653 | 66,616 | 67,971 | 65,889 |
| End of period common shares outstanding | 68,000 | 67,774 | 67,577 | 67,571 | 66,483 | 68,000 | 66,483 |
| ANNUALIZED PERFORMANCE METRICS | |||||||
| Return on average assets | 1.72% | 1.72% | 1.67% | 1.62% | 1.56% | 1.71% | 1.63% |
| Return on average assets excluding intangible amortization | 1.83% | 1.83% | 1.79% | 1.74% | 1.68% | 1.82% | 1.76% |
| Return on average assets excluding intangible amortization, provision for loan losses, merger expenses, bargain purchase gain, gain on life insurance proceeds and income taxes (Core ROA) | 3.24% | 3.20% | 3.04% | 3.13% | 3.08% | 3.17% | 3.20% |
| Return on average common equity | 13.23% | 12.98% | 12.33% | 11.96% | 11.58% | 12.86% | 12.48% |
| Return on average tangible common equity excluding intangible amortization | 19.76% | 19.68% | 18.99% | 18.72% | 18.46% | 19.49% | 20.21% |
| Efficiency ratio | 39.79% | 40.39% | 41.41% | 41.87% | 45.70% | 40.49% | 42.95% |
| Core efficiency ratio | 39.30% | 40.30% | 40.84% | 40.15% | 41.88% | 40.11% | 41.61% |
| Net interest margin - FTE | 5.03% | 5.00% | 4.94% | 5.26% | 5.26% | 4.99% | 5.41% |
| Fully taxable equivalent adjustment | $ 1,951 | $ 1,879 | $ 1,855 | $ 1,911 | $ 1,728 | $ 5,685 | $ 4,943 |
| Total revenue | 113,198 | 107,338 | 98,551 | 98,272 | 94,232 | 319,087 | 282,378 |
| EARNINGS EXCLUDING | |||||||
| INTANGIBLE AMORTIZATION | |||||||
| GAAP net income available to common shareholders | $ 35,741 | $ 33,906 | $ 31,119 | $ 29,926 | $ 27,371 | $ 100,766 | $ 83,137 |
| Intangible amortization after-tax | 600 | 669 | 686 | 707 | 701 | 1,955 | 2,107 |
| Earnings excluding intangible amortization | $ 36,341 | $ 34,575 | $ 31,805 | $ 30,633 | $ 28,072 | $ 102,721 | $ 85,244 |
| GAAP diluted earnings per share | $ 0.52 | $ 0.50 | $ 0.46 | $ 0.44 | $ 0.41 | $ 1.48 | $ 1.26 |
| Intangible amortization after-tax | 0.01 | 0.01 | 0.01 | 0.02 | 0.01 | 0.03 | 0.03 |
| Diluted earnings per share excluding intangible amortization | $ 0.53 | $ 0.51 | $ 0.47 | $ 0.46 | $ 0.42 | $ 1.51 | $ 1.29 |
| OTHER OPERATING EXPENSES | |||||||
| Advertising | $ 906 | $ 657 | $ 779 | $ 792 | $ 673 | $ 2,342 | $ 1,776 |
| Merger and acquisition expenses | 474 | -- | 1,417 | 1,711 | 3,772 | 1,891 | 4,727 |
| Amortization of intangibles | 988 | 1,100 | 1,129 | 1,163 | 1,153 | 3,217 | 3,467 |
| Electronic banking expense | 1,352 | 1,299 | 1,232 | 1,351 | 1,307 | 3,883 | 3,957 |
| Directors' fees | 233 | 281 | 295 | 243 | 236 | 809 | 669 |
| Due from bank service charges | 291 | 286 | 215 | 199 | 200 | 792 | 604 |
| FDIC and state assessment | 1,276 | 1,172 | 1,396 | 1,144 | 972 | 3,844 | 3,144 |
| Insurance | 617 | 617 | 666 | 685 | 657 | 1,900 | 1,853 |
| Legal and accounting | 338 | 706 | 447 | 666 | 510 | 1,491 | 1,346 |
| Other professional fees | 947 | 560 | 488 | 394 | 716 | 1,995 | 1,806 |
| Operating supplies | 464 | 509 | 434 | 473 | 468 | 1,407 | 1,455 |
| Postage | 293 | 295 | 309 | 329 | 323 | 897 | 1,002 |
| Telephone | 444 | 470 | 504 | 503 | 548 | 1,418 | 1,465 |
| Other expense | 4,586 | 3,501 | 3,544 | 3,423 | 3,879 | 11,631 | 12,311 |
| Total other operating expenses | $ 13,209 | $ 11,453 | $ 12,855 | $ 13,076 | $ 15,414 | $ 37,517 | $ 39,582 |
| Home BancShares, Inc. | |||||
| Selected Financial Information | |||||
| (Unaudited) | |||||
| Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | |
| (Dollars in thousands) | 2015 | 2015 | 2015 | 2014 | 2014 |
| BALANCE SHEET RATIOS | |||||
| Total loans to total deposits | 100.88% | 96.27% | 86.40% | 93.24% | 91.60% |
| Common equity to assets | 12.8% | 13.1% | 13.8% | 13.7% | 13.3% |
| Tangible common equity to tangible assets | 9.2% | 9.3% | 9.7% | 9.5% | 9.1% |
| ALLOWANCE FOR LOAN LOSSES | |||||
| Non-Covered | |||||
| Balance, beginning of period | $ 55,877 | $ 52,731 | $ 52,471 | $ 50,695 | $ 48,248 |
| Loans charged off | 3,966 | 3,339 | 3,150 | 3,811 | 2,544 |
| Recoveries of loans previously charged off | 535 | 1,184 | 541 | 1,121 | 750 |
| Net loans (recovered)/charged off | 3,431 | 2,155 | 2,609 | 2,690 | 1,794 |
| Provision for loan losses | 7,106 | 5,301 | 2,869 | 4,466 | 4,241 |
| Reclass of provision for loan losses attributable to FDIC loss share agreements | 1,029 | -- | -- | -- | -- |
| Balance, end of period | $ 60,581 | $ 55,877 | $ 52,731 | $ 52,471 | $ 50,695 |
| Discount for credit losses on non-covered loans acquired | 134,131 | 131,746 | 134,699 | 139,720 | 148,172 |
| Net (recoveries) charge-offs on loans not covered by loss share to average non-covered loans | 0.24% | 0.16% | 0.22% | 0.23% | 0.16% |
| Allowance for loan losses for non-covered loans to total non-covered loans | 1.03% | 1.02% | 1.07% | 1.09% | 1.11% |
| Allowance for loan losses for non-covered loans plus discount for credit losses on non-covered loans acquired to total non-covered loans plus discount for credit losses on non-covered loans acquired | 3.23% | 3.33% | 3.70% | 3.88% | 4.20% |
| Covered | |||||
| Balance, beginning of period | $ 4,381 | $ 3,795 | $ 2,540 | $ 2,149 | $ 2,925 |
| Loans charged off | 251 | -- | 772 | 858 | 863 |
| Recoveries of loans previously charged off | (318) | 186 | 265 | 345 | 87 |
| Net loans charged off/(recovered) | 569 | (186) | 507 | 513 | 776 |
| Provision for loan losses forecasted outside of loss share | 295 | -- | (295) | 904 | -- |
| Provision for loan losses before benefit attributable to FDIC loss share agreements | -- | 400 | 2,057 | -- | -- |
| Benefit attributable to FDIC loss share agreements | (295) | (320) | (844) | -- | -- |
| Net provision for loan losses | -- | 80 | 918 | 904 | -- |
| Reclass of provision for loan losses attributable to FDIC loss share agreements | (1,029) | -- | -- | -- | -- |
| Increase (decrease) in FDIC indemnification asset | 295 | 320 | 844 | -- | -- |
| Balance, end of period | $ 3,078 | $ 4,381 | $ 3,795 | $ 2,540 | $ 2,149 |
| Total allowance for loan losses | $ 63,659 | $ 60,258 | $ 56,526 | $ 55,011 | $ 52,844 |
| NON-PERFORMING ASSETS | |||||
| NOT COVERED BY LOSS SHARE | |||||
| Non-performing non-covered loans | |||||
| Non-accrual non-covered loans | $ 37,405 | $ 29,033 | $ 25,354 | $ 24,691 | $ 22,381 |
| Non-covered loans past due 90 days or more | 11,390 | 10,847 | 12,160 | 14,871 | 18,644 |
| Total non-performing non-covered loans | 48,795 | 39,880 | 37,514 | 39,562 | 41,025 |
| Other non-performing non-covered assets | |||||
| Non-covered foreclosed assets held for sale, net | 18,204 | 16,539 | 17,402 | 16,951 | 19,367 |
| Other non-performing non-covered assets | 14 | 12 | -- | -- | -- |
| Total other non-performing non-covered assets | 18,218 | 16,551 | 17,402 | 16,951 | 19,367 |
| Total non-performing non-covered assets | $ 67,013 | $ 56,431 | $ 54,916 | $ 56,513 | $ 60,392 |
| Allowance for loan losses for non-covered loans to non-performing non-covered loans | 124.15% | 140.11% | 140.56% | 132.63% | 123.57% |
| Non-performing non-covered loans to total non-covered loans | 0.83% | 0.73% | 0.76% | 0.82% | 0.90% |
| Non-performing non-covered assets to total non-covered assets | 0.80% | 0.71% | 0.75% | 0.79% | 0.88% |
| Home BancShares, Inc. | |||||
| Loan Information | |||||
| (Unaudited) | |||||
| Sep. 30, | Jun. 30, | Mar. 31, | Dec. 31, | Sep. 30, | |
| (Dollars in thousands) | 2015 | 2015 | 2015 | 2014 | 2014 |
| LOANS NOT COVERED BY LOSS SHARE | |||||
| Real estate | |||||
| Commercial real estate loans | |||||
| Non-farm/non-residential | $ 2,655,882 | $ 2,477,688 | $ 2,042,781 | $ 1,987,890 | $ 1,918,827 |
| Construction/land development | 805,003 | 796,589 | 733,564 | 700,139 | 660,107 |
| Agricultural | 75,233 | 81,633 | 82,985 | 72,211 | 78,243 |
| Residential real estate loans | |||||
| Residential 1-4 family | 1,055,504 | 997,952 | 976,719 | 963,990 | 935,547 |
| Multifamily residential | 392,483 | 321,593 | 274,515 | 250,222 | 251,726 |
| Total real estate | 4,984,105 | 4,675,455 | 4,110,564 | 3,974,452 | 3,844,450 |
| Consumer | 46,677 | 48,320 | 51,852 | 56,720 | 57,821 |
| Commercial and industrial | 749,846 | 658,501 | 641,411 | 670,124 | 547,706 |
| Agricultural | 78,217 | 72,766 | 58,317 | 48,833 | 64,875 |
| Other | 41,330 | 43,986 | 67,845 | 67,185 | 68,163 |
| Loans receivable not covered by loss share | $ 5,900,175 | $ 5,499,028 | $ 4,929,989 | $ 4,817,314 | $ 4,583,015 |
| LOANS COVERED BY LOSS SHARE | |||||
| Real estate | |||||
| Commercial real estate loans | |||||
| Non-farm/non-residential | $ 25,903 | $ 54,777 | $ 58,251 | $ 93,979 | $ 99,518 |
| Construction/land development | 7,836 | 24,003 | 25,495 | 39,946 | 42,713 |
| Agricultural | 735 | 848 | 875 | 943 | 1,039 |
| Residential real estate loans | |||||
| Residential 1-4 family | 66,447 | 72,002 | 76,758 | 87,309 | 90,088 |
| Multifamily residential | 1,200 | 1,394 | 1,421 | 8,617 | 8,263 |
| Total real estate | 102,121 | 153,024 | 162,800 | 230,794 | 241,621 |
| Consumer | 10 | 17 | 17 | 16 | 22 |
| Commercial and industrial | 2,682 | 6,118 | 5,887 | 8,651 | 8,295 |
| Agricultural | -- | -- | -- | -- | -- |
| Other | 601 | 732 | 756 | 727 | 1,032 |
| Loans receivable covered by loss share | $ 105,414 | $ 159,891 | $ 169,460 | $ 240,188 | $ 250,970 |
| Home BancShares, Inc. | ||||||
| Consolidated Net Interest Margin | ||||||
| (Unaudited) | ||||||
| Three Months Ended | ||||||
| September 30, 2015 | June 30, 2015 | |||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | |
| (Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate |
| ASSETS | ||||||
| Earning assets | ||||||
| Interest-bearing balances due from banks | $ 78,783 | $ 32 | 0.16% | $ 84,443 | $ 44 | 0.21% |
| Federal funds sold | 5,293 | 4 | 0.30% | 4,355 | 3 | 0.28% |
| Investment securities - taxable | 1,129,453 | 5,157 | 1.81% | 1,082,113 | 5,130 | 1.90% |
| Investment securities - non-taxable - FTE | 326,069 | 4,557 | 5.54% | 327,088 | 4,543 | 5.57% |
| Loans receivable - FTE | 5,800,688 | 88,854 | 6.08% | 5,507,405 | 82,470 | 6.01% |
| Total interest-earning assets | 7,340,286 | 98,604 | 5.33% | 7,005,404 | 92,190 | 5.28% |
| Non-earning assets | 890,551 | 895,317 | ||||
| Total assets | $ 8,230,837 | $ 7,900,721 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Liabilities | ||||||
| Interest-bearing liabilities | ||||||
| Savings and interest-bearing transaction accounts | $ 3,157,279 | $ 1,514 | 0.19% | $ 3,149,490 | $ 1,576 | 0.20% |
| Time deposits | 1,320,995 | 1,531 | 0.46% | 1,418,803 | 1,735 | 0.49% |
| Total interest-bearing deposits | 4,478,274 | 3,045 | 0.27% | 4,568,293 | 3,311 | 0.29% |
| Federal funds purchased | 1,250 | 1 | 0.32% | 213 | 1 | 1.88% |
| Securities sold under agreement to repurchase | 143,672 | 146 | 0.40% | 168,314 | 163 | 0.39% |
| FHLB borrowed funds | 1,044,369 | 2,030 | 0.77% | 677,108 | 1,053 | 0.62% |
| Subordinated debentures | 60,826 | 340 | 2.22% | 60,826 | 334 | 2.20% |
| Total interest-bearing liabilities | 5,728,391 | 5,562 | 0.39% | 5,474,754 | 4,862 | 0.36% |
| Non-interest bearing liabilities | ||||||
| Non-interest bearing deposits | 1,371,924 | 1,344,580 | ||||
| Other liabilities | 58,729 | 33,622 | ||||
| Total liabilities | 7,159,044 | 6,852,956 | ||||
| Shareholders' equity | 1,071,793 | 1,047,765 | ||||
| Total liabilities and shareholders' equity | $ 8,230,837 | $ 7,900,721 | ||||
| Net interest spread | 4.94% | 4.92% | ||||
| Net interest income and margin - FTE | $ 93,042 | 5.03% | $ 87,328 | 5.00% | ||
| Home BancShares, Inc. | ||||||
| Consolidated Net Interest Margin | ||||||
| (Unaudited) | ||||||
| Nine Months Ended | ||||||
| September 30, 2015 | September 30, 2014 | |||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | |
| (Dollars in thousands) | Balance | Expense | Rate | Balance | Expense | Rate |
| ASSETS | ||||||
| Earning assets | ||||||
| Interest-bearing balances due from banks | $ 104,764 | $ 167 | 0.21% | $ 52,741 | $ 73 | 0.19% |
| Federal funds sold | 8,276 | 15 | 0.24% | 22,746 | 35 | 0.21% |
| Investment securities - taxable | 1,097,901 | 15,830 | 1.93% | 1,029,496 | 14,137 | 1.84% |
| Investment securities - non-taxable - FTE | 327,040 | 13,604 | 5.56% | 292,349 | 11,852 | 5.42% |
| Loans receivable - FTE | 5,461,573 | 246,914 | 6.04% | 4,498,643 | 226,674 | 6.74% |
| Total interest-earning assets | 6,999,554 | 276,530 | 5.28% | 5,895,975 | 252,771 | 5.73% |
| Non-earning assets | 894,092 | 923,800 | ||||
| Total assets | $ 7,893,646 | $ 6,819,775 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Liabilities | ||||||
| Interest-bearing liabilities | ||||||
| Savings and interest-bearing transaction accounts | $ 3,116,308 | $ 4,564 | 0.20% | $ 2,809,963 | $ 3,882 | 0.18% |
| Time deposits | 1,358,539 | 5,050 | 0.50% | 1,407,255 | 5,840 | 0.55% |
| Total interest-bearing deposits | 4,474,847 | 9,614 | 0.29% | 4,217,218 | 9,722 | 0.31% |
| Federal funds purchased | 863 | 3 | 0.46% | 1,001 | 2 | 0.27% |
| Securities sold under agreement to repurchase | 163,718 | 481 | 0.39% | 145,348 | 536 | 0.49% |
| FHLB borrowed funds | 788,393 | 4,133 | 0.70% | 416,531 | 2,933 | 0.94% |
| Subordinated debentures | 60,826 | 1,003 | 2.20% | 60,826 | 986 | 2.17% |
| Total interest-bearing liabilities | 5,488,647 | 15,234 | 0.37% | 4,840,924 | 14,179 | 0.39% |
| Non-interest bearing liabilities | ||||||
| Non-interest bearing deposits | 1,315,160 | 1,068,626 | ||||
| Other liabilities | 41,982 | 19,642 | ||||
| Total liabilities | 6,845,789 | 5,929,192 | ||||
| Shareholders' equity | 1,047,857 | 890,583 | ||||
| Total liabilities and shareholders' equity | $ 7,893,646 | $ 6,819,775 | ||||
| Net interest spread | 4.91% | 5.34% | ||||
| Net interest income and margin - FTE | $ 261,296 | 4.99% | $ 238,592 | 5.41% | ||