-
Home BancShares Beats EPS Estimates for First Quarter
المصدر: Nasdaq GlobeNewswire / 21 أبريل 2022 07:15:02 America/Chicago
CONWAY, Ark., April 21, 2022 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (NYSE: HOMB) (“Home” or the “Company”), parent company of Centennial Bank, released quarterly earnings today.
Highlights of the First Quarter of 2022:
Metric Q1 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021 Net Income $64.9 million $73.4 million $75.0 million $79.1 million $91.6 million Total Revenue (net) $161.8 million $171.0 million $173.8 million $172.4 million $193.4 million Income before income taxes $84.9 million $93.9 million $98.2 million $104.1 million $120.5 million Pre-tax, pre-provision, net income (PPNR) (non-GAAP)(1) $84.9 million $93.9 million $98.2 million $99.4 million $120.5 million Pre-tax net income to total revenue (net) 52.48% 54.94% 56.50% 60.42% 62.32% P5NR (Pre-tax, pre-provision, profit percentage) (PPNR to total revenue (net)) (non-GAAP)(1) 52.48% 54.94% 56.50% 57.66% 62.32% ROA 1.43% 1.62% 1.68% 1.81% 2.22% NIM 3.21% 3.42% 3.60% 3.61% 4.02% NIM, excluding PPP loans (non-GAAP)(1) 3.17% 3.32% 3.43% 3.54% 3.86% Purchase Accounting Accretion $3.1 million $4.0 million $4.9 million $5.8 million $5.5 million ROE 9.58% 10.63% 10.97% 11.92% 14.15% ROTCE (non-GAAP)(1) 15.03% 16.73% 17.39% 19.12% 22.90% Diluted Earnings Per Share $0.40 $0.45 $0.46 $0.48 $0.55 Non-Performing Assets to Total Assets 0.25% 0.29% 0.29% 0.35% 0.38% Common Equity Tier 1 Capital 14.9% 15.4% 15.2% 15.0% 14.3% Leverage 10.8% 11.1% 11.0% 10.9% 11.1% Tier 1 Capital 15.4% 16.0% 15.8% 15.6% 14.9% Total Risk-Based Capital 21.6% 19.8% 19.6% 19.5% 18.8% Allowance for Credit Losses to Total Loans 2.34% 2.41% 2.41% 2.36% 2.25% Allowance for Credit Losses to Total Loans, excluding PPP loans (non-GAAP)(1) 2.35% 2.43% 2.47% 2.47% 2.40% (1) Calculation of this metric and the reconciliation to GAAP are included in the schedules accompanying this release.
“The first quarter brought about record high wholesale prices, rising interest rates, future recession fears and global unrest, thus creating one of the most volatile quarters on record during my business career,” said John Allison, Chairman. “During this time, HOMB has stayed true to our discipline and still delivered solid performance during the quarter. We like how we have positioned ourselves in the market with over $3.5 billion in excess cash, and with rising interest rates, it seems as though we have played the chess game very well so far. We believe the Fed will be forced to continue raising rates at a faster pace in the near term. As a result, we could be poised to start deploying some of the cash in the remainder of the year,” continued Allison.
Operating Highlights
Net income for the three-month period ended March 31, 2022 was $64.9 million, or $0.40 earnings per share.
During the first quarter of 2022, 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 March 31, 2022. 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 3.21% for the three-month period ended March 31, 2022 compared to 3.42% for the three-month period ended December 31, 2021. The yield on loans was 5.29% and 5.48% for the three months ended March 31, 2022 and December 31, 2021, respectively, as average loans increased from $9.91 billion to $9.94 billion. Additionally, the rate on interest bearing deposits decreased to 0.19% as of March 31, 2022 from 0.20% as of December 31, 2021, as average balances increased from $10.00 billion to $10.22 billion.
As of March 31, 2022, we had $59.6 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 March 31, 2022 was 3.17%(1). The PPP loans were accretive to the net interest margin by 4 basis points for the three-month period ended March 31, 2022 compared to 10 basis points for the three-month period ended December 31, 2021. This was primarily due to approximately $53.2 million of the Company’s PPP loans being forgiven during the first quarter of 2022 as well as the acceleration of deferred fees for the loans that were forgiven. The deferred fee income decreased from $5.4 million to $2.0 million for the three-month periods ended December 31, 2021 and March 31, 2022, respectively.
As a result of excess liquidity, we had an increase of $236.0 million of average interest-bearing cash balances in the first quarter of 2022 compared to the fourth quarter of 2021. This excess liquidity diluted the net interest margin by 5 basis points for the three-month period ended March 31, 2022.
During the first quarter of 2022, there was $1.4 million of event interest income compared to event interest income of $1.2 million for the fourth quarter of 2021. The increase in event income led to a 0.6 basis point increase to the net interest margin.
Purchase accounting accretion on acquired loans was $3.1 million and $4.0 million and average purchase accounting loan discounts were $25.4 million and $28.9 million for the three-month periods ended March 31, 2022 and December 31, 2021, respectively. The reduction in accretion income reduced the net interest margin by 2 basis points for the three-month period ended March 31, 2022.
Net interest income on a fully taxable equivalent basis was $132.9 million for the three-month period ended March 31, 2022 and $140.8 million for the three-month period ended December 31, 2021. This decrease in net interest income for the three-month period ended March 31, 2022 was the result of a $6.1 million decrease in interest income and a $1.8 million increase in interest expense. The $6.1 million decrease in interest income was primarily the result of a $7.3 million decrease in loan interest income, partially offset by an $835,000 increase in investment income. The $1.8 million increase in interest expense was due to a $2.1 million increase in interest expense on subordinated debentures, which was partially offset by a $261,000 decrease in interest expense on deposits. The increase in interest expense on subordinated debentures was the result of the Company completing an underwritten public offering of $300.0 million in aggregate principal of its 3.125% Fixed-to-Floating Rate Subordinated Notes due 2032 during the first quarter of 2022. The new subordinated debt was dilutive to the net interest margin by 5 basis points.
The Company reported $30.7 million of non-interest income for the first quarter of 2022. The most important components of the first quarter non-interest income were $7.7 million from other service charges and fees, $6.1 million from service charges on deposit accounts, $3.9 million in mortgage lending income, $7.9 million from other income, $2.1 million income from the fair value adjustment for marketable securities, $698,000 million from dividends from FHLB, FRB, FNBB and other, $574,000 from trust fees, $492,000 increase in cash value of life insurance, $480,000 from insurance commissions and $478,000 from gain on OREO. The $7.9 million in other income includes $3.3 million in recoveries on historic losses for a single borrower.
Non-interest expense for the first quarter of 2022 was $76.9 million. The most important components of the first quarter non-interest expense were $43.6 million from salaries and employee benefits, $16.3 million in other expense, $9.1 million in occupancy and equipment expenses and $7.0 million in data processing expenses. Also included within non-interest expense was $863,000 in merger and acquisition expenses. For the first quarter of 2022, our efficiency ratio was 46.15%.
Financial Condition
Total loans receivable were $10.05 billion at March 31, 2022 compared to $9.84 billion at December 31, 2021. Total deposits were $14.58 billion at March 31, 2022 compared to $14.26 billion at December 31, 2021. Total assets were $18.62 billion at March 31, 2022 compared to $18.05 billion at December 31, 2021.
During the first quarter of 2022, the Company experienced approximately $216.6 million in loan growth. On February 7, 2022, the Company completed the acquisition of $242.2 million of marine loans, from LendingClub Bank. Centennial CFG experienced $225.6 million of organic loan growth and had loans of $2.15 billion at March 31, 2022. Our legacy footprint experienced $198.0 million in organic loan decline and $53.2 million in PPP loan decline during the quarter.
Non-performing loans to total loans was 0.44% and 0.51% as of March 31, 2022 and December 31, 2021, respectively. Non-performing assets to total assets was 0.25% and 0.29% as of March 31, 2022 and December 31, 2021, respectively. Net charge-offs were $1.9 million and $2.0 million for the three months ended March 31, 2022 and December 31, 2021, respectively.
Non-performing loans at March 31, 2022 were $13.2 million, $24.8 million, $480,000, $1.4 million and $4.8 million in the Arkansas, Florida, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $44.7 million. Non-performing assets at March 31, 2022 were $13.2 million, $25.9 million, $480,000, $1.4 million and $4.8 million in the Arkansas, Florida, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $45.8 million.
The Company’s allowance for credit losses on loans was $234.8 million at March 31, 2022, or 2.34% of total loans, compared to the allowance for credit losses of $236.7 million, or 2.41% of total loans, at December 31, 2021. The Company’s allowance for credit losses on loans to total loans, excluding PPP loans (non-GAAP), was 2.35%(1) and 2.43%(1) for the three months ended March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022 and December 31, 2021, the Company’s allowance for credit losses on loans was 525.50% and 471.61% of its total non-performing loans, respectively.
Stockholders’ equity was $2.69 billion at March 31, 2022 compared to $2.77 billion at December 31, 2021, a decrease of approximately $79.0 million. The decrease in stockholders’ equity was associated with a $115.0 million decrease in accumulated other comprehensive income as well as net stock repurchases and share-based compensation activity of $1.8 million, which was partially offset by a $37.8 million increase in retained earnings. Book value per common share was $16.41 at March 31, 2022 compared to $16.90 at December 31, 2021. Tangible book value per common share (non-GAAP) was $10.32(1) at March 31, 2022 compared to $10.80(1) at December 31, 2021, a decrease of 17.94% on an annualized basis.
Branches
The Company currently has 76 branches in Arkansas, 78 branches in Florida, 62 branches in Texas, 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, was completed on April 1, 2022. As of March 31, 2022, Happy had approximately $6.76 billion in total assets, $3.60 billion in loans, and $5.85 billion in deposits. With the completion of the acquisition, the Company now operates 62 branches in Texas.
Subordinated Debt Payoff
On April 15, 2022, the Company completed the payoff of its $300.0 million in aggregate principal amount of 5.625% Fixed-to-Floating Rate Subordinated Notes due 2027. Each 2027 Note was redeemed pursuant to the terms of the Subordinated Indenture, as supplemented by the First Supplemental Indenture, each dated as of April 3, 2017, between the Company and U.S. Bank Trust Company, National Association, the Trustee for the 2027 Notes, at the redemption price of 100% of its principal amount, plus accrued and unpaid interest to, but excluding, the Redemption Date.
(1) Calculation of this metric and the reconciliation to GAAP are included in the schedules accompanying this release.
Conference Call
Management will conduct a conference call to review this information at 1:00 p.m. CT (2:00 ET) on Thursday, April 21, 2022. 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/468089456. 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.incommglobalevents.com/registration/q4inc/10378/home-bancshares-inc-1st-quarter-earnings-call/. 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: 064337. A replay of the call will be available by calling 1-866-813-9403, Passcode: 129968, which will be available until April 28, 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.
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.
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. 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 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 acquisition of Happy 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, 2021, filed with the SEC on February 24, 2022.
FOR MORE INFORMATION CONTACT:
Donna Townsell
Director of Investor Relations
Home BancShares, Inc.
(501) 328-4625Home BancShares, Inc. Consolidated End of Period Balance Sheets (Unaudited) (In thousands) Mar. 31,
2022Dec. 31,
2021Sep. 30,
2021Jun. 30,
2021Mar. 31,
2021ASSETS Cash and due from banks $ 173,134 $ 119,908 $ 146,378 $ 182,226 $ 218,814 Interest-bearing deposits with other banks 3,446,324 3,530,407 3,133,878 2,759,027 2,259,734 Cash and cash equivalents 3,619,458 3,650,315 3,280,256 2,941,253 2,478,548 Investment securities - available-for sale, net of allowance for credit losses 2,957,322 3,119,807 3,150,608 3,053,712 2,539,123 Investment securities - held-to-maturity 499,265 - - - - Loans receivable 10,052,714 9,836,089 9,901,100 10,199,175 10,778,493 Allowance for credit losses (234,768 ) (236,714 ) (238,673 ) (240,451 ) (242,932 ) Loans receivable, net 9,817,946 9,599,375 9,662,427 9,958,724 10,535,561 Bank premises and equipment, net 274,503 275,760 276,972 278,502 278,620 Foreclosed assets held for sale 1,144 1,630 1,171 1,969 3,004 Cash value of life insurance 105,623 105,135 104,638 104,132 103,599 Accrued interest receivable 46,934 46,736 48,577 48,725 55,495 Deferred tax asset, net 116,605 78,290 69,724 72,273 77,145 Goodwill 973,025 973,025 973,025 973,025 973,025 Core deposit and other intangibles 23,624 25,045 26,466 27,886 29,307 Other assets 182,546 177,020 171,192 166,991 166,814 Total assets $ 18,617,995 $ 18,052,138 $ 17,765,056 $ 17,627,192 $ 17,240,241 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Deposits: Demand and non-interest-bearing $ 4,311,400 $ 4,127,878 $ 4,139,149 $ 4,076,570 $ 3,859,722 Savings and interest-bearing transaction accounts 9,461,393 9,251,805 8,813,326 8,744,900 8,477,208 Time deposits 808,141 880,887 1,050,896 1,069,871 1,175,664 Total deposits 14,580,934 14,260,570 14,003,371 13,891,341 13,512,594 Securities sold under agreements to repurchase 151,151 140,886 141,002 150,540 162,929 FHLB and other borrowed funds 400,000 400,000 400,000 400,000 400,000 Accrued interest payable and other liabilities 131,339 113,868 113,721 118,415 148,999 Subordinated debentures 667,868 371,093 370,900 370,707 370,515 Total liabilities 15,931,292 15,286,417 15,028,994 14,931,003 14,595,037 Stockholders' equity Common stock 1,638 1,637 1,640 1,645 1,651 Capital surplus 1,485,524 1,487,373 1,492,588 1,501,615 1,516,286 Retained earnings 1,304,098 1,266,249 1,215,831 1,163,810 1,107,818 Accumulated other comprehensive (loss) income (104,557 ) 10,462 26,003 29,119 19,449 Total stockholders' equity 2,686,703 2,765,721 2,736,062 2,696,189 2,645,204 Total liabilities and stockholders' equity $ 18,617,995 $ 18,052,138 $ 17,765,056 $ 17,627,192 $ 17,240,241 Home BancShares, Inc. Consolidated Statements of Income (Unaudited) Quarter Ended Three Months Ended (In thousands) Mar. 31,
2022Dec. 31,
2021Sep. 30,
2021Jun. 30,
2021Mar. 31,
2021Mar. 31,
2022Mar. 31,
2021Interest income Loans $ 129,442 $ 136,750 $ 142,609 $ 141,684 $ 150,917 $ 129,442 $ 150,917 Investment securities Taxable 9,080 8,121 8,495 7,185 6,253 9,080 6,253 Tax-exempt 4,707 4,827 4,839 4,905 5,071 4,707 5,071 Deposits - other banks 1,673 1,281 1,117 707 410 1,673 410 Federal funds sold 1 - - - - 1 - Total interest income 144,903 150,979 157,060 154,481 162,651 144,903 162,651 Interest expense Interest on deposits 4,894 5,155 5,642 6,434 7,705 4,894 7,705 FHLB borrowed funds 1,875 1,916 1,917 1,896 1,875 1,875 1,875 Securities sold under agreements to repurchase 108 98 102 107 190 108 190 Subordinated debentures 6,878 4,790 4,788 4,792 4,793 6,878 4,793 Total interest expense 13,755 11,959 12,449 13,229 14,563 13,755 14,563 Net interest income 131,148 139,020 144,611 141,252 148,088 131,148 148,088 Provision for credit losses - - - - - - - Provision for credit loss - unfunded commitments - - - (4,752 ) - - - Total credit loss expense - - - (4,752 ) - - - Net interest income after provision for credit losses 131,148 139,020 144,611 146,004 148,088 131,148 148,088 Non-interest income Service charges on deposit accounts 6,140 6,217 5,941 5,116 5,002 6,140 5,002 Other service charges and fees 7,733 11,133 8,051 9,659 7,608 7,733 7,608 Trust fees 574 515 479 444 522 574 522 Mortgage lending income 3,916 5,359 5,948 6,202 8,167 3,916 8,167 Insurance commissions 480 387 586 478 492 480 492 Increase in cash value of life insurance 492 501 509 537 502 492 502 Dividends from FHLB, FRB, FNBB & other 698 919 2,661 2,646 8,609 698 8,609 Gain on SBA loans 95 792 439 1,149 - 95 - Gain (loss) on branches, equipment and other assets, net 16 (19 ) (34 ) (23 ) (29 ) 16 (29 ) Gain on OREO, net 478 737 246 619 401 478 401 Gain on securities, net - - - - 219 - 219 Fair value adjustment for marketable securities 2,125 85 61 1,250 5,782 2,125 5,782 Other income 7,922 5,338 4,322 3,043 8,001 7,922 8,001 Total non-interest income 30,669 31,964 29,209 31,120 45,276 30,669 45,276 Non-interest expense Salaries and employee benefits 43,551 43,765 42,469 42,462 42,059 43,551 42,059 Occupancy and equipment 9,144 9,047 9,305 9,042 9,237 9,144 9,237 Data processing expense 7,039 6,493 6,024 5,893 5,870 7,039 5,870 Merger and acquisition expenses 863 880 1,006 - - 863 - Other operating expenses 16,299 16,865 16,815 15,585 15,700 16,299 15,700 Total non-interest expense 76,896 77,050 75,619 72,982 72,866 76,896 72,866 Income before income taxes 84,921 93,934 98,201 104,142 120,498 84,921 120,498 Income tax expense 20,029 20,577 23,209 25,072 28,896 20,029 28,896 Net income $ 64,892 $ 73,357 $ 74,992 $ 79,070 $ 91,602 $ 64,892 $ 91,602 Home BancShares, Inc. Selected Financial Information (Unaudited) Quarter Ended Three Months Ended (Dollars and shares in thousands, except per share data) Mar. 31,
2022Dec. 31,
2021Sep. 30,
2021Jun. 30,
2021Mar. 31,
2021Mar. 31,
2022Mar. 31,
2021PER SHARE DATA Diluted earnings per common share $ 0.40 $ 0.45 $ 0.46 $ 0.48 $ 0.55 $ 0.40 $ 0.55 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 & merger and acquisition expenses (non-GAAP)(1) 0.37 0.45 0.45 0.46 0.47 0.37 0.47 Basic earnings per common share 0.40 0.45 0.46 0.48 0.55 0.40 0.55 Dividends per share - common 0.165 0.14 0.14 0.14 0.14 0.165 0.14 Book value per common share 16.41 16.90 16.68 16.39 16.02 16.41 16.02 Tangible book value per common share (non-GAAP)(1) 10.32 10.80 10.59 10.31 9.95 10.32 9.95 STOCK INFORMATION Average common shares outstanding 163,787 163,859 164,126 164,781 165,257 163,787 165,257 Average diluted shares outstanding 164,196 164,306 164,603 165,226 165,446 164,196 165,446 End of period common shares outstanding 163,758 163,699 164,008 164,488 165,141 163,758 165,141 ANNUALIZED PERFORMANCE METRICS Return on average assets (ROA) 1.43 % 1.62 % 1.68 % 1.81 % 2.22 % 1.43 % 2.22 % Return on average assets excluding fair value adjustment for marketable securities, special dividend from equity investment, gain on securities, recoveries on historic losses & merger and acquisition expenses: (ROA, as adjusted) (non-GAAP)(1) 1.36 1.64 1.67 1.75 1.88 1.36 1.88 Return on average assets excluding intangible amortization (non-GAAP)(1) 1.54 1.75 1.81 1.95 2.39 1.54 2.39 Return on average assets excluding excess liquidity (non-GAAP)(1) 1.74 1.96 1.98 2.09 2.42 1.74 2.42 Return on average common equity (ROE) 9.58 10.63 10.97 11.92 14.15 9.58 14.15 Return on average common equity excluding fair value adjustment for marketable securities, special dividend from equity investment, gain on securities, recoveries on historic losses & merger and acquisition expenses: (ROE, as adjusted) (non-GAAP)(1) 9.09 10.72 10.87 11.54 11.95 9.09 11.95 Return on average tangible common equity (ROTCE) (non-GAAP)(1) 15.03 16.73 17.39 19.12 22.90 15.03 22.90 Return on average tangible common equity excluding intangible amortization (non-GAAP)(1) 15.28 16.97 17.64 19.38 23.16 15.28 23.16 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 & merger and acquisition expenses: (ROTCE, as adjusted) (non-GAAP)(1) 14.26 16.87 17.23 18.50 19.33 14.26 19.33 (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 Three Months Ended (Dollars in thousands) Mar. 31,
2022Dec. 31,
2021Sep. 30,
2021Jun. 30,
2021Mar. 31,
2021Mar. 31,
2022Mar. 31,
2021Efficiency ratio 46.15 % 43.79 % 42.26 % 41.09 % 36.60 % 46.15 % 36.60 % Efficiency ratio, as adjusted (non-GAAP)(1) 47.33 43.48 42.29 42.07 40.68 47.33 40.68 Net interest margin - FTE (NIM) 3.21 3.42 3.60 3.61 4.02 3.21 4.02 Net interest margin - FTE, excluding PPP loans (non-GAAP)(1) 3.17 3.32 3.43 3.54 3.86 3.17 3.86 Fully taxable equivalent adjustment $ 1,738 $ 1,736 $ 1,748 $ 1,774 $ 1,821 $ 1,738 $ 1,821 Total revenue (net) 161,817 170,984 173,820 172,372 193,364 161,817 193,364 Pre-tax, pre-provision, net income (PPNR) (non-GAAP)(1) 84,921 93,934 98,201 99,390 120,498 84,921 120,498 Pre-tax net income to total revenue (net) 52.48 % 54.94 % 56.50 % 60.42 % 62.32 % 52.48 % 62.32 % P5NR(Pre-tax, pre-provision, profit percentage) (PPNR to total revenue (net)) (non-GAAP)(1) 52.48 54.94 56.50 57.66 62.32 52.48 62.32 Total purchase accounting accretion $ 3,089 $ 4,001 $ 4,868 $ 5,797 $ 5,485 $ 3,089 $ 5,485 Average purchase accounting loan discounts 25,359 28,882 33,320 38,568 43,940 25,359 43,940 OTHER OPERATING EXPENSES Advertising $ 1,266 $ 1,411 $ 1,204 $ 1,194 $ 1,046 $ 1,266 $ 1,046 Amortization of intangibles 1,421 1,420 1,421 1,421 1,421 1,421 1,421 Electronic banking expense 2,538 2,442 2,521 2,616 2,238 2,538 2,238 Directors' fees 404 422 395 414 383 404 383 Due from bank service charges 270 257 265 273 249 270 249 FDIC and state assessment 1,668 1,353 1,648 1,108 1,363 1,668 1,363 Insurance 770 801 749 787 781 770 781 Legal and accounting 797 749 1,050 1,058 846 797 846 Other professional fees 1,609 1,754 1,787 1,796 1,613 1,609 1,613 Operating supplies 754 489 474 465 487 754 487 Postage 306 352 301 292 338 306 338 Telephone 337 343 371 365 346 337 346 Other expense 4,159 5,072 4,629 3,796 4,589 4,159 4,589 Total other operating expenses $ 16,299 $ 16,865 $ 16,815 $ 15,585 $ 15,700 $ 16,299 $ 15,700 (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) Mar. 31,
2022Dec. 31,
2021Sep. 30,
2021Jun. 30,
2021Mar. 31,
2021BALANCE SHEET RATIOS Total loans to total deposits 68.94 % 68.97 % 70.71 % 73.42 % 79.77 % Common equity to assets 14.43 15.32 15.40 15.30 15.34 Tangible common equity to tangible assets (non-GAAP)(1) 9.59 10.36 10.36 10.20 10.12 . LOANS RECEIVABLE Real estate Commercial real estate loans Non-farm/non-residential $ 3,810,383 $ 3,889,284 $ 4,005,841 $ 4,144,375 $ 4,289,142 Construction/land development 1,856,096 1,850,050 1,742,687 1,541,482 1,612,973 Agricultural 142,920 130,674 138,881 126,293 113,382 Residential real estate loans Residential 1-4 family 1,223,890 1,274,953 1,273,988 1,316,485 1,437,546 Multifamily residential 248,650 280,837 274,131 332,256 377,661 Total real estate 7,281,939 7,425,798 7,435,528 7,460,891 7,830,704 Consumer 1,059,342 825,519 814,732 824,938 839,819 Commercial and industrial 1,510,205 1,386,747 1,414,079 1,612,826 1,794,787 Agricultural 48,095 43,920 68,272 69,152 65,017 Other 153,133 154,105 168,489 231,368 248,166 Loans receivable $ 10,052,714 $ 9,836,089 $ 9,901,100 $ 10,199,175 $ 10,778,493 Paycheck Protection Program (PPP) loans (net of discounts) (included in total loans receivable) 59,609 112,814 241,476 473,894 646,382 ALLOWANCE FOR CREDIT LOSSES Balance, beginning of period $ 236,714 $ 238,673 $ 240,451 $ 242,932 $ 245,473 Loans charged off 2,310 3,125 2,469 3,023 3,047 Recoveries of loans previously charged off 364 1,166 691 542 506 Net loans charged off 1,946 1,959 1,778 2,481 2,541 Provision for credit losses - loans - - - - - Balance, end of period $ 234,768 $ 236,714 $ 238,673 $ 240,451 $ 242,932 Net charge-offs to average total loans 0.08 % 0.08 % 0.07 % 0.09 % 0.09 % Allowance for credit losses to total loans 2.34 2.41 2.41 2.36 2.25 Allowance for credit losses to total loans, excluding PPP loans 2.35 2.43 2.47 2.47 2.40 NON-PERFORMING ASSETS Non-performing loans Non-accrual loans $ 44,629 $ 47,158 $ 47,604 $ 55,269 $ 59,142 Loans past due 90 days or more 46 3,035 3,311 3,667 4,209 Total non-performing loans 44,675 50,193 50,915 58,936 63,351 Other non-performing assets Foreclosed assets held for sale, net 1,144 1,630 1,171 1,969 3,004 Other non-performing assets - - - - - Total other non-performing assets 1,144 1,630 1,171 1,969 3,004 Total non-performing assets $ 45,819 $ 51,823 $ 52,086 $ 60,905 $ 66,355 Allowance for credit losses for loans to non-performing loans 525.50 % 471.61 % 468.77 % 407.99 % 383.47 % Non-performing loans to total loans 0.44 0.51 0.51 0.58 0.59 Non-performing assets to total assets 0.25 0.29 0.29 0.35 0.38 (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 March 31, 2022 December 31, 2021 (Dollars in thousands) Average
BalanceIncome/
ExpenseYield/
RateAverage
BalanceIncome/
ExpenseYield/
RateASSETS Earning assets Interest-bearing balances due from banks $ 3,497,894 $ 1,673 0.19 % $ 3,261,846 $ 1,281 0.16 % Federal funds sold 1,751 1 0.23 33 - - Investment securities - taxable 2,486,401 9,080 1.48 2,278,440 8,121 1.41 Investment securities - non-taxable - FTE 850,722 6,284 3.00 858,692 6,408 2.96 Loans receivable - FTE 9,937,993 129,603 5.29 9,909,711 136,905 5.48 Total interest-earning assets 16,774,761 146,641 3.55 16,308,722 152,715 3.72 Non-earning assets 1,618,314 1,606,005 Total assets $ 18,393,075 $ 17,914,727 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Interest-bearing liabilities Savings and interest-bearing transaction accounts $ 9,363,793 $ 3,873 0.17 % $ 9,037,302 $ 3,667 0.16 % Time deposits 854,593 1,021 0.48 958,309 1,488 0.62 Total interest-bearing deposits 10,218,386 4,894 0.19 9,995,611 5,155 0.20 Securities sold under agreement to repurchase 137,565 108 0.32 143,811 98 0.27 FHLB borrowed funds 400,000 1,875 1.90 400,000 1,916 1.90 Subordinated debentures 611,888 6,878 4.56 370,999 4,790 5.12 Total interest-bearing liabilities 11,367,839 13,755 0.49 10,910,421 11,959 0.43 Non-interest bearing liabilities Non-interest bearing deposits 4,155,894 4,149,978 Other liabilities 121,362 116,023 Total liabilities 15,645,095 15,176,422 Shareholders' equity 2,747,980 2,738,305 Total liabilities and shareholders' equity $ 18,393,075 $ 17,914,727 Net interest spread 3.06 % 3.29 % Net interest income and margin - FTE $ 132,886 3.21 $ 140,756 3.42 Home BancShares, Inc. Consolidated Net Interest Margin (Unaudited) Three Months Ended March 31, 2022 March 31, 2021 (Dollars in thousands) Average Balance Income/ Expense Yield/
RateAverage Balance Income/ Expense Yield/
RateASSETS Earning assets Interest-bearing balances due from banks $ 3,497,894 $ 1,673 0.19 % $ 1,610,463 $ 410 0.10 % Federal funds sold 1,751 1 0.23 119 - - Investment securities - taxable 2,486,401 9,080 1.48 1,637,061 6,253 1.55 Investment securities - non-taxable - FTE 850,722 6,284 3.00 848,158 6,700 3.20 Loans receivable - FTE 9,937,993 129,603 5.29 11,023,139 151,109 5.56 Total interest-earning assets 16,774,761 146,641 3.55 15,118,940 164,472 4.41 Non-earning assets 1,618,314 1,599,950 Total assets $ 18,393,075 $ 16,718,890 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Interest-bearing liabilities Savings and interest-bearing transaction accounts $ 9,363,793 $ 3,873 0.17 % $ 8,338,791 $ 4,716 0.23 % Time deposits 854,593 1,021 0.48 1,209,431 2,989 1.00 Total interest-bearing deposits 10,218,386 4,894 0.19 9,548,222 7,705 0.33 Securities sold under agreement to repurchase 137,565 108 0.32 159,697 190 0.48 FHLB borrowed funds 400,000 1,875 1.90 400,000 1,875 1.90 Subordinated debentures 611,888 6,878 4.56 370,421 4,793 5.25 Total interest-bearing liabilities 11,367,839 13,755 0.49 10,478,340 14,563 0.56 Non-interest bearing liabilities Non-interest bearing deposits 4,155,894 3,480,050 Other liabilities 121,362 134,882 Total liabilities 15,645,095 14,093,272 Shareholders' equity 2,747,980 2,625,618 Total liabilities and shareholders' equity $ 18,393,075 $ 16,718,890 Net interest spread 3.06 % 3.85 % Net interest income and margin - FTE $ 132,886 3.21 $ 149,909 4.02 Home BancShares, Inc. Non-GAAP Reconciliations (Unaudited) Quarter Ended Three Months Ended (Dollars and shares in thousands, except per share data) Mar. 31,
2022Dec. 31,
2021Sep. 30,
2021Jun. 30,
2021Mar. 31,
2021Mar. 31,
2022Mar. 31,
2021EARNINGS, AS ADJUSTED GAAP net income available to common shareholders (A) $ 64,892 $ 73,357 $ 74,992 $ 79,070 $ 91,602 $ 64,892 $ 91,602 Pre-tax adjustments Fair value adjustment for marketable securities (2,125 ) (85 ) (61 ) (1,250 ) (5,782 ) (2,125 ) (5,782 ) Special dividend from equity investment - - (2,227 ) (2,200 ) (8,073 ) - (8,073 ) Gain on securities - - - - (219 ) - (219 ) Recoveries on historic losses (3,288 ) - - - (5,107 ) (3,288 ) (5,107 ) Merger and acquisition expenses 863 880 1,006 - - 863 - Total pre-tax adjustments (4,550 ) 795 (1,282 ) (3,450 ) (19,181 ) (4,550 ) (19,181 ) Tax-effect of adjustments (1,220 ) 188 (587 ) (888 ) (4,937 ) (1,220 ) (4,937 ) Total adjustments after-tax (B) (3,330 ) 607 (695 ) (2,562 ) (14,244 ) (3,330 ) (14,244 ) Earnings, as adjusted (C) $ 61,562 $ 73,964 $ 74,297 $ 76,508 $ 77,358 $ 61,562 $ 77,358 Average diluted shares outstanding (D) 164,196 164,306 164,603 165,226 165,446 164,196 165,446 GAAP diluted earnings per share: (A/D) $ 0.40 $ 0.45 $ 0.46 $ 0.48 $ 0.55 $ 0.40 $ 0.55 Adjustments after-tax: (B/D) (0.03 ) 0.00 (0.01 ) (0.02 ) (0.08 ) (0.03 ) (0.08 ) 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 & merger and acquisition expenses: (C/D) $ 0.37 $ 0.45 $ 0.45 $ 0.46 $ 0.47 $ 0.37 $ 0.47 ANNUALIZED RETURN ON AVERAGE ASSETS Return on average assets: (A/G) 1.43 % 1.62 % 1.68 % 1.81 % 2.22 % 1.43 % 2.22 % Return on average assets excluding fair value adjustment for marketable securities, special dividend from equity investment, gain on securities, recoveries on historic losses & merger and acquisition expenses: (ROA, as adjusted) ((A+F)/G) 1.36 1.64 1.67 1.75 1.88 1.36 1.88 Return on average assets excluding intangible amortization: ((A+E)/(G-H)) 1.54 1.75 1.81 1.95 2.39 1.54 2.39 Return on average assets excluding excess liquidity: (A/(G-I)) 1.74 1.96 1.98 2.09 2.42 1.74 2.42 GAAP net income available to common shareholders (A) $ 64,892 $ 73,357 $ 74,992 $ 79,070 $ 91,602 $ 64,892 $ 91,602 Amortization of intangibles (D) 1,421 1,420 1,421 1,421 1,421 1,421 1,421 Amortization of intangibles after-tax (E) 1,049 1,054 1,055 1,055 1,055 1,049 1,055 Adjustments after-tax (F) (3,330 ) 607 (695 ) (2,562 ) (14,244 ) (3,330 ) (14,244 ) Average assets (G) 18,393,075 17,914,727 17,695,226 17,491,359 16,718,890 18,393,075 16,718,890 Average goodwill, core deposits & other intangible assets (H) 997,338 998,760 1,000,175 1,001,598 1,003,011 997,338 1,003,011 Average interest bearing cash balance 3,497,894 3,261,846 2,914,785 2,577,101 1,610,463 3,497,894 1,610,463 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) 3,272,894 3,036,846 2,689,785 2,352,101 1,385,463 3,272,894 1,385,463 Home BancShares, Inc. Non-GAAP Reconciliations (Unaudited) Quarter Ended Three Months Ended (Dollars in thousands) Mar. 31,
2022Dec. 31,
2021Sep. 30,
2021Jun. 30,
2021Mar. 31,
2021Mar. 31,
2022Mar. 31,
2021ANNUALIZED RETURN ON AVERAGE COMMON EQUITY Return on average common equity: (A/D) 9.58 % 10.63 % 10.97 % 11.92 % 14.15 % 9.58 % 14.15 % Return on average common equity excluding fair value adjustment for marketable securities, special dividend from equity investment, gain on securities, recoveries on historic losses & merger and acquisition expenses: (ROE, as adjusted) ((A+C)/D) 9.09 10.72 10.87 11.54 11.95 9.09 11.95 Return on average tangible common equity: (A/(D-E)) 15.03 16.73 17.39 19.12 22.90 15.03 22.90 Return on average tangible common equity excluding intangible amortization: (B/(D-E)) 15.28 16.97 17.64 19.38 23.16 15.28 23.16 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 & merger and acquisition expenses: (ROTCE, as adjusted) ((A+C)/(D-E)) 14.26 16.87 17.23 18.50 19.33 14.26 19.33 GAAP net income available to common shareholders (A) $ 64,892 $ 73,357 $ 74,992 $ 79,070 $ 91,602 $ 64,892 $ 91,602 Earnings excluding intangible amortization (B) 65,941 74,411 76,047 80,125 92,657 65,941 92,657 Adjustments after-tax (C) (3,330 ) 607 (695 ) (2,562 ) (14,244 ) (3,330 ) (14,244 ) Average common equity (D) 2,747,980 2,738,305 2,710,953 2,660,147 2,625,618 2,747,980 2,625,618 Average goodwill, core deposits & other intangible assets (E) 997,338 998,760 1,000,175 1,001,598 1,003,011 997,338 1,003,011 EFFICIENCY RATIO & P5NR Efficiency ratio: ((D-F)/(B+C+E)) 46.15 % 43.79 % 42.26 % 41.09 % 36.60 % 46.15 % 36.60 % Efficiency ratio, as adjusted: ((D-F-H)/(B+C+E-G)) 47.33 % 43.48 % 42.29 % 42.07 % 40.68 % 47.33 % 40.68 % Pre-tax net income to total revenue (net) (A/(B+C)) 52.48 % 54.94 % 56.50 % 60.42 % 62.32 % 52.48 % 62.32 % Pre-tax, pre-provision, net income (PPNR) (B+C-D) $ 84,921 $ 93,934 $ 98,201 $ 99,390 $ 120,498 $ 84,921 $ 120,498 P5NR (Pre-tax, pre-provision, profit percentage) PPNR to total revenue (net)) (B+C-D)/(B+C) 52.48 % 54.94 % 56.50 % 57.66 % 62.32 % 52.48 % 62.32 % Pre-tax net income (A) $ 84,921 $ 93,934 $ 98,201 $ 104,142 $ 120,498 $ 84,921 $ 120,498 Net interest income (B) 131,148 139,020 144,611 141,252 148,088 131,148 148,088 Non-interest income (C) 30,669 31,964 29,209 31,120 45,276 30,669 45,276 Non-interest expense (D) 76,896 77,050 75,619 72,982 72,866 76,896 72,866 Fully taxable equivalent adjustment (E) 1,738 1,736 1,748 1,774 1,821 1,738 1,821 Amortization of intangibles (F) 1,421 1,420 1,421 1,421 1,421 1,421 1,421 Adjustments: Non-interest income: Fair value adjustment for marketable securities $ 2,125 $ 85 $ 61 $ 1,250 $ 5,782 $ 2,125 $ 5,782 Gain on OREO 478 737 246 619 401 478 401 Gain (loss) on branches, equipment and other assets, net 16 (19 ) (34 ) (23 ) (29 ) 16 (29 ) Special dividend from equity investment - - 2,227 2,200 8,073 - 8,073 Gain on securities - - - - 219 - 219 Recoveries on historic losses 3,288 - - - 5,107 3,288 5,107 Total non-interest income adjustments (G) $ 5,907 $ 803 $ 2,500 $ 4,046 $ 19,553 $ 5,907 $ 19,553 Non-interest expense: Merger and acquisition expenses 863 880 1,006 - - 863 - Total non-interest expense adjustments (H) $ 863 $ 880 $ 1,006 $ - $ - $ 863 $ - Home BancShares, Inc. Non-GAAP Reconciliations (Unaudited) Quarter Ended Three Months Ended (Dollars in thousands) Mar. 31,
2022Dec. 31,
2021Sep. 30,
2021Jun. 30,
2021Mar. 31,
2021Mar. 31,
2022Mar. 31,
2021ANNUALIZED NET INTEREST MARGIN Net interest margin: (A/C) 3.21 % 3.42 % 3.60 % 3.61 % 4.02 % 3.21 % 4.02 % Net interest margin, excluding PPP loans:(B/D) 3.17 3.32 3.43 3.54 3.86 3.17 3.86 Net interest income - FTE (A) $ 132,886 $ 140,756 $ 146,359 $ 143,026 $ 149,909 $ 132,886 $ 149,909 PPP loan interest & discount accretion income 2,196 5,786 10,162 7,802 11,878 2,196 11,878 Net interest income - FTE, excluding PPP loans (B) $ 130,690 $ 134,970 $ 136,197 $ 135,224 $ 138,031 $ 130,690 $ 138,031 Average interest-earning assets (C) $ 16,774,761 $ 16,308,722 $ 16,110,526 $ 15,892,519 $ 15,118,940 $ 16,774,761 $ 15,118,940 Average PPP loans 78,008 162,969 371,523 581,371 633,790 78,008 633,790 Average interest-earning assets, excluding PPP loans (D) $ 16,696,753 $ 16,145,753 $ 15,739,003 $ 15,311,148 $ 14,485,150 $ 16,696,753 $ 14,485,150 Quarter Ended Mar. 31,
2022Dec. 31,
2021Sep. 30,
2021Jun. 30,
2021Mar. 31,
2021TANGIBLE BOOK VALUE PER COMMON SHARE Book value per common share: (A/B) $ 16.41 $ 16.90 $ 16.68 $ 16.39 $ 16.02 Tangible book value per common share: ((A-C-D)/B) 10.32 10.80 10.59 10.31 9.95 Total stockholders' equity (A) $ 2,686,703 $ 2,765,721 $ 2,736,062 $ 2,696,189 $ 2,645,204 End of period common shares outstanding (B) 163,758 163,699 164,008 164,488 165,141 Goodwill (C) 973,025 973,025 973,025 973,025 973,025 Core deposit and other intangibles (D) 23,624 25,045 26,466 27,886 29,307 TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS Equity to assets: (B/A) 14.43 % 15.32 % 15.40 % 15.30 % 15.34 % Tangible common equity to tangible assets: ((B-C-D)/(A-C-D)) 9.59 10.36 10.36 10.20 10.12 Total assets (A) $ 18,617,995 $ 18,052,138 $ 17,765,056 $ 17,627,192 $ 17,240,241 Total stockholders' equity (B) 2,686,703 2,765,721 2,736,062 2,696,189 2,645,204 Goodwill (C) 973,025 973,025 973,025 973,025 973,025 Core deposit and other intangibles (D) 23,624 25,045 26,466 27,886 29,307 
