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HOMB Beats Analyst Expectations Despite Glooming Uncertainty and West Texas Headwinds
ソース: Nasdaq GlobeNewswire / 20 10 2022 07:15:01 America/Chicago
CONWAY, Ark., Oct. 20, 2022 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (NYSE: HOMB) (“Home” or the “Company”), parent company of Centennial Bank, released quarterly earnings today.
Highlights of the Third Quarter of 2022:
Metric Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Net income $108.7 million $16.0 million $64.9 million $73.4 million $75.0 million Net income, as adjusted (non-GAAP)(1) $109.9 million $97.0 million $61.6 million $74.0 million $74.3 million Total revenue (net) $256.3 million $243.3 million $161.8 million $171.0 million $173.8 million Income before income taxes $142.0 million $19.3 million $84.9 million $93.9 million $98.2 million Pre-tax, pre-provision, net income (PPNR)
(non-GAAP)(1)$142.0 million $77.9 million $84.9 million $93.9 million $98.2 million PPNR, as adjusted (non-GAAP)(1) $143.5 million $126.7 million $80.4 million $94.7 million $96.9 million Pre-tax net income to total revenue (net) 55.39% 7.92% 52.48% 54.94% 56.50% Pre-tax net income, as adjusted, to total revenue (net) (non-GAAP)(1) 56.00% 52.06% 49.67% 55.40% 55.76% P5NR (Pre-tax, pre-provision, profit percentage) (PPNR to total revenue (net)) (non-GAAP)(1) 55.39% 32.00% 52.48% 54.94% 56.50% P5NR, as adjusted (non-GAAP)(1) 56.00% 52.06% 49.67% 55.40% 55.76% ROA 1.81% 0.26% 1.43% 1.62% 1.68% ROA, as adjusted (non-GAAP)(1) 1.83% 1.57% 1.36% 1.64% 1.67% NIM 4.05% 3.64% 3.21% 3.42% 3.60% Purchase accounting accretion $4.6 million $5.2 million $3.1 million $4.0 million $4.9 million ROE 12.25% 1.78% 9.58% 10.63% 10.97% ROE, as adjusted (non-GAAP)(1) 12.39% 10.83% 9.09% 10.72% 10.87% ROTCE (non-GAAP)(1) 20.93% 2.96% 15.03% 16.73% 17.39% ROTCE, as adjusted (non-GAAP)(1) 21.16% 17.94% 14.26% 16.87% 17.23% Diluted earnings per share $0.53 $0.08 $0.40 $0.45 $0.46 Diluted earnings per share, as adjusted (non-GAAP)(1) $0.54 $0.47 $0.37 $0.45 $0.45 Non-performing assets to total assets 0.27% 0.25% 0.25% 0.29% 0.29% Common equity tier 1 capital 13.0% 12.8% 14.9% 15.4% 15.1% Leverage 10.4% 9.8% 10.8% 11.1% 11.0% Tier 1 capital 13.0% 12.9% 15.5% 16.0% 15.7% Total risk-based capital 16.7% 16.6% 21.6% 19.8% 19.6% Allowance for credit losses to total loans 2.09% 2.11% 2.34% 2.41% 2.41% (1) Calculation of this metric and the reconciliation to GAAP are included in the schedules accompanying this release.
“Despite the distraction out of West Texas and changes in the economy, HOMB reported record net income for the quarter of $108.7 million along with record total net revenue of $256.3 million, and our net interest margin is back where we like it at 4.05%. We continue to keep the Company positioned to weather the storm, when and if it hits,” said John Allison, Chairman.
“While reviewing the results of the quarter, I circled eighteen different numbers on the final results page and many of the circles were some of the best numbers we have ever had. I want to thank our team for the outstanding effort that led to this great quarter. I also want to send a special thanks to the West Texas Happy team for fighting the battle with the competition the way they have,” said Tracy French, Centennial Bank President and Chief Executive Officer.
Operating Highlights
Net income for the three-month period ended September 30, 2022 was $108.7 million, or $0.53 earnings per share. Net income for the nine-month period ended September 30, 2022 was $189.6 million, or $0.99 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 $109.9 million(1), or $0.54 per share(1), and $268.4 million(1), or $1.40 per share(1), for the three-month and nine-month periods ended September 30, 2022, respectively.
Our net interest margin was 4.05% for the three-month period ended September 30, 2022, compared to 3.64% for the three-month period ended June 30, 2022. The yield on loans was 5.63% and 5.27% for the three months ended September 30, 2022 and June 30, 2022, respectively, as average loans decreased from $13.84 billion to $13.82 billion. Additionally, the rate on interest bearing deposits increased to 0.70% as of September 30, 2022, from 0.31% as of June 30, 2022, while average balances decreased from $13.80 billion to $13.31 billion.
During the third quarter of 2022, there was $943,000 of event interest income compared to event interest income of $602,000 for the second quarter of 2022.
Purchase accounting accretion on acquired loans was $4.6 million and $5.2 million and average purchase accounting loan discounts were $42.1 million and $46.3 million for the three-month periods ended September 30, 2022 and June 30, 2022, respectively. The reduction in accretion income lowered the net interest margin by 2 basis points for the three-month period ended September 30, 2022.
Net interest income on a fully taxable equivalent basis was $215.5 million for the three-month period ended September 30, 2022, and $201.2 million for the three-month period ended June 30, 2022. This increase in net interest income for the three-month period ended September 30, 2022, was the result of a $25.9 million increase in interest income, partially offset by an $11.6 million increase in interest expense. The $25.9 million increase in interest income was primarily the result of a $14.1 million increase in loan interest income, a $7.6 million increase in investment income and a $4.2 million increase in income from deposits with other banks resulting from the rising interest rate environment. The $11.6 million increase in interest expense was due to a $12.6 million increase in interest expense on deposits, which was partially offset by a $1.3 decrease in interest expense on subordinated debentures. The increase in interest expense on deposits is a result of the rising rate environment.
The Company reported $43.2 million of non-interest income for the third quarter of 2022. The most important components of the third quarter non-interest income were $14.0 million from other service charges and fees, $10.8 million from service charges on deposit accounts, $9.5 million from other income, $4.2 million in mortgage lending income, $4.0 million from trust fees, $1.7 million from dividends from FHLB, FRB, FNBB and other, a $1.1 million increase in cash value of life insurance, and $601,000 from insurance commissions. These amounts were partially offset by a $2.6 million loss from the fair value adjustment for marketable securities. The $9.5 million in other income includes $1.1 million in recoveries on historic losses of loans acquired that were written off prior to acquisition.
Non-interest expense for the third quarter of 2022 was $114.3 million. The most important components of the third quarter non-interest expense were $65.3 million from salaries and employee benefits, $25.2 million in other expense, $15.1 million in occupancy and equipment expenses and $8.7 million in data processing expenses. There were no merger and acquisition expenses during the third quarter of 2022. For the third quarter of 2022, our efficiency ratio was 43.24%; and, our efficiency ratio, as adjusted (non-GAAP) was 42.97%(1).
Financial Condition
Total loans receivable were $13.83 billion at September 30, 2022, compared to $13.92 billion at June 30, 2022. Total deposits were $18.54 billion at September 30, 2022, compared to $19.58 billion at June 30, 2022. Total assets were $23.16 billion at September 30, 2022, compared to $24.25 billion at June 30, 2022.
During the third quarter of 2022, the Company experienced approximately $94.6 million in loan decline. Centennial CFG experienced $342.0 million of organic loan decline and had loans of $2.08 billion at September 30, 2022. Our remaining footprint experienced $273.8 million in organic loan growth and $26.4 million in PPP loan decline during the quarter.
Non-performing loans to total loans was 0.45% and 0.44% at September 30, 2022 and June 30, 2022, respectively. Non-performing assets to total assets was 0.27% and 0.25% at September 30, 2022 and June 30, 2022, respectively. Net charge-offs were $5.1 million and $2.5 million for the three months ended September 30, 2022 and June 30, 2022, respectively.
Non-performing loans at September 30, 2022, were $10.2 million, $24.8 million, $13.7 million, $204,000, $1.4 million and $11.4 million in the Arkansas, Florida, Texas, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $61.7 million. Non-performing assets at September 30, 2022, were $10.2 million, $25.0 million, $14.0 million, $204,000, $1.4 million and $11.4 million in the Arkansas, Florida, Texas, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $62.2 million.
The Company’s allowance for credit losses on loans was $289.2 million at September 30, 2022, or 2.09% of total loans, compared to the allowance for credit losses on loans of $294.3 million, or 2.11% of total loans, at June 30, 2022. As of September 30, 2022 and June 30, 2022, the Company’s allowance for credit losses on loans was 468.77% and 485.57% of its total non-performing loans, respectively.
Stockholders’ equity was $3.46 billion at September 30, 2022, compared to $3.50 billion at June 30, 2022, a decrease of approximately $38.6 million. The decrease in stockholders’ equity is primarily associated with the $91.6 million increase in accumulated other comprehensive loss and net stock repurchases of $24.3 million, which were partially offset by a $74.9 million increase in retained earnings and share-based compensation of $2.4 million. Book value per common share was $16.94 at September 30, 2022, compared to $17.04 at June 30, 2022. Tangible book value per common share (non-GAAP) was $9.82(1) at September 30, 2022, compared to $9.92(1) at June 30, 2022.
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.
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, October 20, 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/384737075. 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=d3582338&confId=42282. 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: 824264. A replay of the call will be available by calling 1-866-813-9403, Passcode: 090248, which will be available until October 27, 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.
(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 assets excluding excess liquidity; return on average assets, as adjusted, excluding excess liquidity; 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 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, 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, 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, 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) 328-4625Home BancShares, Inc. Consolidated End of Period Balance Sheets (Unaudited) (In thousands) Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021 ASSETS Cash and due from banks $ 268,929 $ 287,451 $ 173,134 $ 119,908 $ 146,378 Interest-bearing deposits with other banks 1,311,492 2,528,925 3,446,324 3,530,407 3,133,878 Cash and cash equivalents 1,580,421 2,816,376 3,619,458 3,650,315 3,280,256 Federal funds sold 2,700 — — — — Investment securities - available-for sale, net of allowance for credit losses 4,085,102 3,791,509 2,957,322 3,119,807 3,150,608 Investment securities - held-to-maturity, net of allowance for credit losses 1,251,007 1,366,781 499,265 — — Total investment securities 5,336,109 5,158,290 3,456,587 3,119,807 3,150,608 Loans receivable 13,829,311 13,923,873 10,052,714 9,836,089 9,901,100 Allowance for credit losses (289,203 ) (294,267 ) (234,768 ) (236,714 ) (238,673 ) Loans receivable, net 13,540,108 13,629,606 9,817,946 9,599,375 9,662,427 Bank premises and equipment, net 411,479 415,056 274,503 275,760 276,972 Foreclosed assets held for sale 365 373 1,144 1,630 1,171 Cash value of life insurance 212,619 211,811 105,623 105,135 104,638 Accrued interest receivable 88,671 80,274 46,934 46,736 48,577 Deferred tax asset, net 228,979 208,585 116,605 78,290 69,724 Goodwill 1,394,353 1,398,400 973,025 973,025 973,025 Core deposit and other intangibles 60,932 63,410 23,624 25,045 26,466 Other assets 300,634 270,987 182,546 177,020 171,192 Total assets $ 23,157,370 $ 24,253,168 $ 18,617,995 $ 18,052,138 $ 17,765,056 LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Demand and non-interest-bearing $ 5,540,539 $ 6,036,583 $ 4,311,400 $ 4,127,878 $ 4,139,149 Savings and interest-bearing transaction accounts 11,968,519 12,424,192 9,461,393 9,251,805 8,813,326 Time deposits 1,033,266 1,119,297 808,141 880,887 1,050,896 Total deposits 18,542,324 19,580,072 14,580,934 14,260,570 14,003,371 Securities sold under agreements to repurchase 121,555 118,573 151,151 140,886 141,002 FHLB and other borrowed funds 400,000 400,000 400,000 400,000 400,000 Accrued interest payable and other liabilities 192,908 197,503 131,339 113,868 113,721 Subordinated debentures 440,568 458,455 667,868 371,093 370,900 Total liabilities 19,697,355 20,754,603 15,931,292 15,286,417 15,028,994 Stockholders' equity Common stock 2,042 2,053 1,638 1,637 1,640 Capital surplus 2,404,388 2,426,271 1,485,524 1,487,373 1,492,588 Retained earnings 1,361,040 1,286,146 1,304,098 1,266,249 1,215,831 Accumulated other comprehensive (loss) income (307,455 ) (215,905 ) (104,557 ) 10,462 26,003 Total stockholders' equity 3,460,015 3,498,565 2,686,703 2,765,721 2,736,062 Total liabilities and stockholders' equity $ 23,157,370 $ 24,253,168 $ 18,617,995 $ 18,052,138 $ 17,765,056 Home BancShares, Inc. Consolidated Statements of Income (Unaudited) Quarter Ended Nine Months Ended (In thousands) Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021 Sep. 30, 2022 Sep. 30, 2021 Interest income: Loans $ 195,841 $ 181,779 $ 129,442 $ 136,750 $ 142,609 $ 507,062 $ 435,210 Investment securities Taxable 28,273 20,941 9,080 8,121 8,495 58,294 21,933 Tax-exempt 8,069 7,725 4,707 4,827 4,839 20,501 14,815 Deposits - other banks 10,763 6,565 1,673 1,281 1,117 19,001 2,234 Federal funds sold 9 3 1 — — 13 — Total interest income 242,955 217,013 144,903 150,979 157,060 604,871 474,192 Interest expense: Interest on deposits 23,347 10,729 4,894 5,155 5,642 38,970 19,781 Federal funds purchased — 2 — — — 2 — FHLB borrowed funds 1,917 1,896 1,875 1,916 1,917 5,688 5,688 Securities sold under agreements to repurchase 434 187 108 98 102 729 399 Subordinated debentures 4,153 5,441 6,878 4,790 4,788 16,472 14,373 Total interest expense 29,851 18,255 13,755 11,959 12,449 61,861 40,241 Net interest income 213,104 198,758 131,148 139,020 144,611 543,010 433,951 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) — 58,585 — — — 58,585 (4,752 ) Net interest income after credit loss expense (benefit) 213,104 140,173 131,148 139,020 144,611 484,425 438,703 Non-interest income: Service charges on deposit accounts 10,756 10,084 6,140 6,217 5,941 26,980 16,059 Other service charges and fees 13,951 12,541 7,733 11,133 8,051 34,225 25,318 Trust fees 3,980 4,320 574 515 479 8,874 1,445 Mortgage lending income 4,179 5,996 3,916 5,359 5,948 14,091 20,317 Insurance commissions 601 658 480 387 586 1,739 1,556 Increase in cash value of life insurance 1,089 1,140 492 501 509 2,721 1,548 Dividends from FHLB, FRB, FNBB & other 1,741 3,945 698 919 2,661 6,384 13,916 Gain on SBA loans 58 — 95 792 439 153 1,588 (Loss) gain on branches, equipment and other assets, net (13 ) 2 16 (19 ) (34 ) 5 (86 ) Gain on OREO, net — 9 478 737 246 487 1,266 Gain on securities, net — — — — — — 219 Fair value adjustment for marketable securities (2,628 ) (1,801 ) 2,125 85 61 (2,304 ) 7,093 Other income 9,487 7,687 7,922 5,338 4,322 25,096 15,366 Total non-interest income 43,201 44,581 30,669 31,964 29,209 118,451 105,605 Non-interest expense: Salaries and employee benefits 65,290 65,795 43,551 43,765 42,469 174,636 126,990 Occupancy and equipment 15,133 14,256 9,144 9,047 9,305 38,533 27,584 Data processing expense 8,747 10,094 7,039 6,493 6,024 25,880 17,787 Merger and acquisition expenses — 48,731 863 880 1,006 49,594 1,006 Other operating expenses 25,176 26,606 16,299 16,865 16,815 68,081 48,100 Total non-interest expense 114,346 165,482 76,896 77,050 75,619 356,724 221,467 Income before income taxes 141,959 19,272 84,921 93,934 98,201 246,152 322,841 Income tax expense 33,254 3,294 20,029 20,577 23,209 56,577 77,177 Net income $ 108,705 $ 15,978 $ 64,892 $ 73,357 $ 74,992 $ 189,575 $ 245,664 Home BancShares, Inc. Selected Financial Information (Unaudited) Quarter Ended Nine Months Ended (Dollars and shares in thousands, except per share data) Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021 Sep. 30, 2022 Sep. 30, 2021 PER SHARE DATA Diluted earnings per common share $ 0.53 $ 0.08 $ 0.40 $ 0.45 $ 0.46 $ 0.99 $ 1.49 Diluted earnings per common share, as adjusted (non-GAAP)(1) 0.54 0.47 0.37 0.45 0.45 1.40 1.38 Basic earnings per common share 0.53 0.08 0.40 0.45 0.46 0.99 1.49 Dividends per share - common 0.165 0.165 0.165 0.14 0.14 0.495 0.42 Book value per common share 16.94 17.04 16.41 16.90 16.68 16.94 16.68 Tangible book value per common share (non-GAAP)(1) 9.82 9.92 10.32 10.80 10.59 9.82 10.59 STOCK INFORMATION Average common shares outstanding 204,829 205,683 163,787 163,859 164,126 191,584 164,717 Average diluted shares outstanding 205,135 206,015 164,196 164,306 164,603 191,941 165,050 End of period common shares outstanding 204,219 205,291 163,758 163,699 164,008 204,219 164,008 ANNUALIZED PERFORMANCE METRICS Return on average assets (ROA) 1.81% 0.26% 1.43% 1.62% 1.68% 1.13% 1.90% Return on average assets, as adjusted: (ROA, as adjusted) (non-GAAP)(1) 1.83% 1.57% 1.36% 1.64% 1.67% 1.61% 1.76% Return on average assets excluding intangible amortization (non-GAAP)(1) 1.97% 0.31% 1.54% 1.75% 1.81% 1.23% 2.04% Return on average assets, as adjusted, excluding intangible amortization (non-GAAP)(1) 1.99% 1.70% 1.46% 1.76% 1.79% 1.74% 1.90% Return on average assets excluding excess liquidity (non-GAAP)(1) 1.96% 0.29% 1.74% 1.96% 1.98% 1.29% 2.17% Return on average assets, as adjusted, excluding excess liquidity (non-GAAP)(1) 1.98% 1.79% 1.65% 1.97% 1.96% 1.83% 2.01% Return on average common equity (ROE) 12.25% 1.78% 9.58% 10.63% 10.97% 7.71% 12.32% Return on average common equity, as adjusted: (ROE, as adjusted) (non-GAAP)(1) 12.39% 10.83% 9.09% 10.72% 10.87% 10.91% 11.44% Return on average tangible common equity (ROTCE) (non-GAAP)(1) 20.93% 2.96% 15.03% 16.73% 17.39% 12.71% 19.74% Return on average tangible common equity, as adjusted: (ROTCE, as adjusted) (non-GAAP)(1) 21.16% 17.94% 14.26% 16.87% 17.23% 18.00% 18.33% Return on average tangible common equity excluding intangible amortization (non-GAAP)(1) 21.29% 3.30% 15.28% 16.97% 17.64% 13.03% 19.99% Return on average tangible common equity, as adjusted, excluding intangible amortization (non-GAAP)(1) 21.52% 18.29% 14.50% 17.11% 17.47% 18.32% 18.58% (1) Calculation of this metric and the reconciliation to GAAP are included in the schedules accompanying this release. Home BancShares, Inc. Selected Financial Information (Unaudited) Quarter Ended Nine Months Ended (Dollars in thousands) Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021 Sep. 30, 2022 Sep. 30, 2021 Efficiency ratio 43.24% 66.31% 46.15% 43.79% 42.26% 52.44% 39.86% Efficiency ratio, as adjusted (non-GAAP)(1) 42.97% 46.02% 47.33% 43.48% 42.29% 45.13% 41.67% Net interest margin - FTE (NIM) 4.05% 3.64% 3.21% 3.42% 3.60% 3.67% 3.74% Fully taxable equivalent adjustment $ 2,437 $ 2,471 $ 1,738 $ 1,736 $ 1,748 $ 6,646 $ 5,343 Total revenue (net) 256,305 243,339 161,817 170,984 173,820 661,461 539,556 Pre-tax, pre-provision, net income (PPNR) (non-GAAP)(1) 141,959 77,857 84,921 93,934 98,201 304,737 318,089 PPNR, as adjusted (non-GAAP)(1) 143,522 126,683 80,371 94,729 96,919 350,576 294,176 Pre-tax net income to total revenue (net) 55.39% 7.92% 52.48% 54.94% 56.50% 37.21% 59.83% Pre-tax net income, as adjusted, to total revenue (net) (non-GAAP)(1) 56.00% 52.06% 49.67% 55.40% 55.76% 53.00% 55.40% P5NR(Pre-tax, pre-provision, profit percentage) (PPNR to total revenue (net)) (non-GAAP)(1) 55.39% 32.00% 52.48% 54.94% 56.50% 46.07% 58.95% P5NR, as adjusted (non-GAAP)(1) 56.00% 52.06% 49.67% 55.40% 55.76% 53.00% 54.52% Total purchase accounting accretion $ 4,578 $ 5,177 $ 3,089 $ 4,001 $ 4,868 $ 12,844 $ 16,150 Average purchase accounting loan discounts 42,050 46,258 25,359 28,882 33,320 37,889 38,587 OTHER OPERATING EXPENSES Advertising $ 2,024 $ 2,117 $ 1,266 $ 1,411 $ 1,204 $ 5,407 $ 3,444 Amortization of intangibles 2,477 2,477 1,421 1,420 1,421 6,375 4,262 Electronic banking expense 3,828 3,352 2,538 2,442 2,521 9,718 7,375 Directors' fees 354 375 404 422 395 1,133 1,192 Due from bank service charges 316 396 270 257 265 982 787 FDIC and state assessment 2,146 2,390 1,668 1,353 1,648 6,204 4,119 Insurance 959 973 770 801 749 2,702 2,317 Legal and accounting 1,581 1,061 797 749 1,050 3,439 2,954 Other professional fees 2,466 2,254 1,609 1,754 1,787 6,329 5,196 Operating supplies 681 995 754 489 474 2,430 1,426 Postage 614 556 306 352 301 1,476 931 Telephone 593 384 337 343 371 1,314 1,082 Other expense 7,137 9,276 4,159 5,072 4,629 20,572 13,015 Total other operating expenses $ 25,176 $ 26,606 $ 16,299 $ 16,865 $ 16,815 $ 68,081 $ 48,100 (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) Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021 BALANCE SHEET RATIOS Total loans to total deposits 74.58% 71.11% 68.94% 68.97% 70.71% Common equity to assets 14.94% 14.43% 14.43% 15.32% 15.40% Tangible common equity to tangible assets (non-GAAP)(1) 9.24% 8.94% 9.59% 10.36% 10.36% LOANS RECEIVABLE Real estate Commercial real estate loans Non-farm/non-residential $ 5,156,438 $ 5,092,539 $ 3,810,383 $ 3,889,284 $ 4,005,841 Construction/land development 2,232,906 2,595,384 1,856,096 1,850,050 1,742,687 Agricultural 330,748 329,106 142,920 130,674 138,881 Residential real estate loans Residential 1-4 family 1,704,850 1,708,221 1,223,890 1,274,953 1,273,988 Multifamily residential 525,110 389,633 248,650 280,837 274,131 Total real estate 9,950,052 10,114,883 7,281,939 7,425,798 7,435,528 Consumer 1,120,250 1,106,343 1,059,342 825,519 814,732 Commercial and industrial 2,268,750 2,187,771 1,510,205 1,386,747 1,414,079 Agricultural 313,693 324,630 48,095 43,920 68,272 Other 176,566 190,246 153,133 154,105 168,489 Loans receivable $ 13,829,311 $ 13,923,873 $ 10,052,714 $ 9,836,089 $ 9,901,100 Paycheck Protection Program (PPP) loans (net of discounts) (included in total loans receivable) 10,771 37,204 59,609 112,814 241,476 ALLOWANCE FOR CREDIT LOSSES Balance, beginning of period $ 294,267 $ 234,768 $ 236,714 $ 238,673 $ 240,451 Allowance for credit losses on PCD loans - Happy acquisition — 16,816 — — — Loans charged off 6,313 3,265 2,310 3,125 2,469 Recoveries of loans previously charged off 1,249 778 364 1,166 691 Net loans charged off 5,064 2,487 1,946 1,959 1,778 Provision for credit losses - Happy acquisition — 45,170 — — — Balance, end of period $ 289,203 $ 294,267 $ 234,768 $ 236,714 $ 238,673 Net charge-offs to average total loans 0.15% 0.07% 0.08% 0.08% 0.07% Allowance for credit losses to total loans 2.09% 2.11% 2.34% 2.41% 2.41% NON-PERFORMING ASSETS Non-performing loans Non-accrual loans $ 56,796 $ 44,170 $ 44,629 $ 47,158 $ 47,604 Loans past due 90 days or more 4,898 16,432 46 3,035 3,311 Total non-performing loans 61,694 60,602 44,675 50,193 50,915 Other non-performing assets Foreclosed assets held for sale, net 365 373 1,144 1,630 1,171 Other non-performing assets 104 104 — — — Total other non-performing assets 469 477 1,144 1,630 1,171 Total non-performing assets $ 62,163 $ 61,079 $ 45,819 $ 51,823 $ 52,086 Allowance for credit losses for loans to non-performing loans 468.77% 485.57% 525.50% 471.61% 468.77% Non-performing loans to total loans 0.45% 0.44% 0.44% 0.51% 0.51% Non-performing assets to total assets 0.27% 0.25% 0.25% 0.29% 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 September 30, 2022 June 30, 2022 (Dollars in thousands) Average
BalanceIncome/
ExpenseYield/
RateAverage
BalanceIncome/
ExpenseYield/
RateASSETS Earning assets Interest-bearing balances due from banks $ 1,965,136 $ 10,763 2.17 % $ 3,252,674 $ 6,565 0.81 % Federal funds sold 1,176 9 3.04 % 1,857 3 0.65 % Investment securities - taxable 4,008,230 28,273 2.80 % 3,817,209 20,941 2.20 % Investment securities - non-taxable - FTE 1,292,702 10,370 3.18 % 1,270,602 10,055 3.17 % Loans receivable - FTE 13,822,459 195,977 5.63 % 13,838,687 181,920 5.27 % Total interest-earning assets 21,089,703 245,392 4.62 % 22,181,029 219,484 3.97 % Non-earning assets 2,689,066 2,607,336 Total assets $ 23,778,769 $ 24,788,365 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Interest-bearing liabilities Savings and interest-bearing transaction accounts $ 12,233,755 $ 22,388 0.73 % $ 12,632,612 $ 9,770 0.31 % Time deposits 1,078,112 959 0.35 % 1,170,860 959 0.33 % Total interest-bearing deposits 13,311,867 23,347 0.70 % 13,803,472 10,729 0.31 % Federal funds purchased 14 — — % 869 2 0.92 % Securities sold under agreement to repurchase 126,770 434 1.36 % 123,011 187 0.61 % FHLB borrowed funds 400,012 1,917 1.90 % 400,000 1,896 1.90 % Subordinated debentures 442,312 4,153 3.73 % 568,187 5,441 3.84 % Total interest-bearing liabilities 14,280,975 29,851 0.83 % 14,895,539 18,255 0.49 % Non-interest bearing liabilities Non-interest bearing deposits 5,779,082 6,138,497 Other liabilities 199,416 162,571 Total liabilities 20,259,473 21,196,607 Shareholders' equity 3,519,296 3,591,758 Total liabilities and shareholders' equity $ 23,778,769 $ 24,788,365 Net interest spread 3.79 % 3.48 % Net interest income and margin - FTE $ 215,541 4.05 % $ 201,229 3.64 % Home BancShares, Inc. Consolidated Net Interest Margin (Unaudited) Nine Months Ended September 30, 2022 September 30, 2021 (Dollars in thousands) Average
BalanceIncome/
ExpenseYield/
RateAverage
BalanceIncome/
ExpenseYield/
RateASSETS Earning assets Interest-bearing balances due from banks $ 2,899,620 $ 19,001 0.88 % $ 2,372,227 $ 2,234 0.13 % Federal funds sold 1,593 13 1.09 % 83 — — % Investment securities - taxable 3,442,854 58,294 2.26 % 1,947,799 21,933 1.51 % Investment securities - non-taxable - FTE 1,139,628 26,709 3.13 % 858,440 19,610 3.05 % Loans receivable - FTE 12,547,275 507,500 5.41 % 10,532,411 435,758 5.53 % Total interest-earning assets 20,030,970 611,517 4.08 % 15,710,960 479,535 4.08 % Non-earning assets 2,308,827 1,594,442 Total assets $ 22,339,797 $ 17,305,402 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities Interest-bearing liabilities Savings and interest-bearing transaction accounts $ 11,420,566 $ 36,031 0.42 % $ 8,607,728 $ 12,289 0.19 % Time deposits 1,035,340 2,939 0.38 % 1,131,538 7,492 0.89 % Total interest-bearing deposits 12,455,906 38,970 0.42 % 9,739,266 19,781 0.27 % Federal funds purchased 294 2 0.91 % — — — % Securities sold under agreement to repurchase 129,076 729 0.76 % 153,677 399 0.35 % FHLB borrowed funds 400,004 5,688 1.90 % 400,000 5,688 1.90 % Subordinated debentures 540,175 16,472 4.08 % 370,615 14,373 5.19 % Total interest-bearing liabilities 13,525,455 61,861 0.61 % 10,663,558 40,241 0.50 % Non-interest bearing liabilities Non-interest bearing deposits 5,363,770 3,848,302 Other liabilities 161,402 127,656 Total liabilities 19,050,627 14,639,516 Shareholders' equity 3,289,170 2,665,886 Total liabilities and shareholders' equity $ 22,339,797 $ 17,305,402 Net interest spread 3.47 % 3.58 % Net interest income and margin - FTE $ 549,656 3.67 % $ 439,294 3.74 % Non-GAAP Reconciliations (Unaudited) Quarter Ended Nine Months Ended (Dollars and shares in thousands, except per share data) Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021 Sep. 30, 2022 Sep. 30, 2021 EARNINGS, AS ADJUSTED GAAP net income available to common shareholders (A) $ 108,705 $ 15,978 $ 64,892 $ 73,357 $ 74,992 $ 189,575 $ 245,664 Pre-tax adjustments Merger and acquisition expenses — 48,731 863 880 1,006 49,594 1,006 Initial provision for credit losses - acquisition — 58,585 — — — 58,585 — Fair value adjustment for marketable securities 2,628 1,801 (2,125 ) (85 ) (61 ) 2,304 (7,093 ) Special dividend from equity investment — (1,434 ) — — (2,227 ) (1,434 ) (12,500 ) TRUPS redemption fees — 2,081 — — — 2,081 — Recoveries on historic losses (1,065 ) (2,353 ) (3,288 ) — — (6,706 ) (5,107 ) Gain on securities — — — — — — (219 ) Total pre-tax adjustments 1,563 107,411 (4,550 ) 795 (1,282 ) 104,424 (23,913 ) Tax-effect of adjustments 393 26,396 (1,220 ) 188 (587 ) 25,569 (6,412 ) Total adjustments after-tax (B) 1,170 81,015 (3,330 ) 607 (695 ) 78,855 (17,501 ) Earnings, as adjusted (C) $ 109,875 $ 96,993 $ 61,562 $ 73,964 $ 74,297 $ 268,430 $ 228,163 Average diluted shares outstanding (D) 205,135 206,015 164,196 164,306 164,603 191,941 165,050 GAAP diluted earnings per share: (A/D) $ 0.53 $ 0.08 $ 0.40 $ 0.45 $ 0.46 $ 0.99 $ 1.49 Adjustments after-tax: (B/D) 0.01 0.39 (0.03 ) 0.00 (0.01 ) 0.41 (0.11 ) Diluted earnings per common share, as adjusted: (C/D) $ 0.54 $ 0.47 $ 0.37 $ 0.45 $ 0.45 $ 1.40 $ 1.38 ANNUALIZED RETURN ON AVERAGE ASSETS Return on average assets: (A/E) 1.81% 0.26% 1.43% 1.62% 1.68% 1.13% 1.90% Return on average assets, as adjusted: (ROA, as adjusted) ((A+D)/E) 1.83% 1.57% 1.36% 1.64% 1.67% 1.61% 1.76% Return on average assets excluding intangible amortization: ((A+C)/(E-F)) 1.97% 0.31% 1.54% 1.75% 1.81% 1.23% 2.04% Return on average assets, as adjusted, excluding intangible amortization: ((A+C+D)/(E-F)) 1.99% 1.70% 1.46% 1.76% 1.79% 1.74% 1.90% Return on average assets excluding excess liquidity: (A/(E-G)) 1.96% 0.29% 1.74% 1.96% 1.98% 1.29% 2.17% Return on average assets, as adjusted, excluding excess liquidity: ((A+D)/(E-G)) 1.98% 1.79% 1.65% 1.97% 1.96% 1.83% 2.01% GAAP net income available to common shareholders (A) $ 108,705 $ 15,978 $ 64,892 $ 73,357 $ 74,992 $ 189,575 $ 245,664 Amortization of intangibles (B) 2,477 2,477 1,421 1,420 1,421 6,375 4,262 Amortization of intangibles after-tax (C) 1,854 1,854 1,049 1,054 1,055 4,757 3,164 Adjustments after-tax (D) 1,170 81,015 (3,330 ) 607 (695 ) 78,855 (17,501 ) Average assets (E) 23,778,769 24,788,365 18,393,075 17,914,727 17,695,226 22,339,797 17,305,402 Average goodwill, core deposits & other intangible assets (F) 1,459,034 1,423,466 997,338 998,760 1,000,175 1,294,971 1,001,585 Average interest bearing cash balance 1,965,136 3,252,674 3,497,894 3,261,846 2,914,785 2,899,620 2,372,227 Average historical interest bearing cash balance 225,000 225,000 225,000 225,000 225,000 225,000 225,000 Average excess cash balance (G) 1,740,136 3,027,674 3,272,894 3,036,846 2,689,785 2,674,620 2,147,227 Home BancShares, Inc. Non-GAAP Reconciliations (Unaudited) Quarter Ended Nine Months Ended (Dollars in thousands) Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021 Sep. 30, 2022 Sep. 30, 2021 ANNUALIZED RETURN ON AVERAGE COMMON EQUITY Return on average common equity: (A/D) 12.25% 1.78% 9.58% 10.63% 10.97% 7.71% 12.32% Return on average common equity, as adjusted: (ROE, as adjusted) ((A+C)/D) 12.39% 10.83% 9.09% 10.72% 10.87% 10.91% 11.44% Return on average tangible common equity: (A/(D-E)) 20.93% 2.96% 15.03% 16.73% 17.39% 12.71% 19.74% Return on average tangible common equity, as adjusted: (ROTCE, as adjusted) ((A+C)/(D-E)) 21.16% 17.94% 14.26% 16.87% 17.23% 18.00% 18.33% Return on average tangible common equity excluding intangible amortization: (B/(D-E)) 21.29% 3.30% 15.28% 16.97% 17.64% 13.03% 19.99% Return on average tangible common equity, as adjusted, excluding intangible amortization: ((B+C)/(D-E)) 21.52% 18.29% 14.50% 17.11% 17.47% 18.32% 18.58% GAAP net income available to common shareholders (A) $ 108,705 $ 15,978 $ 64,892 $ 73,357 $ 74,992 $ 189,575 $ 245,664 Earnings excluding intangible amortization (B) 110,559 17,832 65,941 74,411 76,047 194,332 248,828 Adjustments after-tax (C) 1,170 81,015 (3,330 ) 607 (695 ) 78,855 (17,501 ) Average common equity (D) 3,519,296 3,591,758 2,747,980 2,738,305 2,710,953 3,289,170 2,665,886 Average goodwill, core deposits & other intangible assets (E) 1,459,034 1,423,466 997,338 998,760 1,000,175 1,294,971 1,001,585 EFFICIENCY RATIO & P5NR Efficiency ratio: ((D-H)/(B+C+E)) 43.24% 66.31% 46.15% 43.79% 42.26% 52.44% 39.86% Efficiency ratio, as adjusted: ((D-H-J)/(B+C+E-I)) 42.97% 46.02% 47.33% 43.48% 42.29% 45.13% 41.67% Pre-tax net income to total revenue (net) (A/(B+C)) 55.39% 7.92% 52.48% 54.94% 56.50% 37.21% 59.83% Pre-tax net income, as adjusted, to total revenue (net) ((A+F)/(B+C)) 56.00% 52.06% 49.67% 55.40% 55.76% 53.00% 55.40% Pre-tax, pre-provision, net income (PPNR) (B+C-D) $ 141,959 $ 77,857 $ 84,921 $ 93,934 $ 98,201 $ 304,737 $ 318,089 Pre-tax, pre-provision, net income, as adjusted (B+C-D+F-G) $ 143,522 $ 126,683 $ 80,371 $ 94,729 $ 96,919 $ 350,576 $ 294,176 P5NR(Pre-tax, pre-provision, profit percentage) PPNR to total revenue (net)) (B+C-D)/(B+C) 55.39% 32.00% 52.48% 54.94% 56.50% 46.07% 58.95% P5NR, as adjusted (B+C-D+F-G)/(B+C) 56.00% 52.06% 49.67% 55.40% 55.76% 53.00% 54.52% Pre-tax net income (A) $ 141,959 $ 19,272 $ 84,921 $ 93,934 $ 98,201 $ 246,152 $ 322,841 Net interest income (B) 213,104 198,758 131,148 139,020 144,611 543,010 433,951 Non-interest income (C) 43,201 44,581 30,669 31,964 29,209 118,451 105,605 Non-interest expense (D) 114,346 165,482 76,896 77,050 75,619 356,724 221,467 Fully taxable equivalent adjustment (E) 2,437 2,471 1,738 1,736 1,748 6,646 5,343 Total pre-tax adjustments (F) 1,563 107,411 (4,550 ) 795 (1,282 ) 104,424 (23,913 ) Initial provision for credit losses - acquisition (G) — 58,585 — — — 58,585 — Amortization of intangibles (H) 2,477 2,477 1,421 1,420 1,421 6,375 4,262 Adjustments: Non-interest income: Fair value adjustment for marketable securities $ (2,628 ) $ (1,801 ) $ 2,125 $ 85 $ 61 $ (2,304 ) $ 7,093 Gain on OREO — 9 478 737 246 487 1,266 (Loss) gain on branches, equipment and other assets, net (13 ) 2 16 (19 ) (34 ) 5 (86 ) Special dividend from equity investment — 1,434 — — 2,227 1,434 12,500 Gain on securities — — — — — — 219 Recoveries on historic losses 1,065 2,353 3,288 — — 6,706 5,107 Total non-interest income adjustments (I) $ (1,576 ) $ 1,997 $ 5,907 $ 803 $ 2,500 $ 6,328 $ 26,099 Non-interest expense: Merger and acquisition expenses — 48,731 863 880 1,006 49,594 1,006 TRUPS redemption fees — 2,081 — — — 2,081 — Total non-interest expense adjustments (J) $ — $ 50,812 $ 863 $ 880 $ 1,006 $ 51,675 $ 1,006 Home BancShares, Inc. Non-GAAP Reconciliations (Unaudited) Quarter Ended Sep. 30, 2022 Jun. 30, 2022 Mar. 31, 2022 Dec. 31, 2021 Sep. 30, 2021 TANGIBLE BOOK VALUE PER COMMON SHARE Book value per common share: (A/B) $ 16.94 $ 17.04 $ 16.41 $ 16.90 $ 16.68 Tangible book value per common share: ((A-C-D)/B) 9.82 9.92 10.32 10.80 10.59 Total stockholders' equity (A) $ 3,460,015 $ 3,498,565 $ 2,686,703 $ 2,765,721 $ 2,736,062 End of period common shares outstanding (B) 204,219 205,291 163,758 163,699 164,008 Goodwill (C) 1,394,353 1,398,400 973,025 973,025 973,025 Core deposit and other intangibles (D) 60,932 63,410 23,624 25,045 26,466 TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS Equity to assets: (B/A) 14.94% 14.43% 14.43% 15.32% 15.40% Tangible common equity to tangible assets: ((B-C-D)/(A-C-D)) 9.24% 8.94% 9.59% 10.36% 10.36% Total assets (A) $ 23,157,370 $ 24,253,168 $ 18,617,995 $ 18,052,138 $ 17,765,056 Total stockholders' equity (B) 3,460,015 3,498,565 2,686,703 2,765,721 2,736,062 Goodwill (C) 1,394,353 1,398,400 973,025 973,025 973,025 Core deposit and other intangibles (D) 60,932 63,410 23,624 25,045 26,466 
