HOMB Continues Stable Performance in Second Quarter Delivering Record Net Income Through First Six Months of 2021

ソース: Nasdaq GlobeNewswire / 15 7 2021 08:15:01 America/New_York

CONWAY, Ark., July 15, 2021 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (NASDAQ GS: HOMB), parent company of Centennial Bank, released quarterly earnings today.

Highlights of the Second Quarter of 2021:

Metric	Q2 2021	Q1 2021	Q4 2020	Q3 2020	Q2 2020
Net Income	$79.1 million	$91.6 million	$81.8 million	$69.3 million	$62.8 million
Total Revenue (net)	$172.4 million	$193.4 million	$181.9 million	$176.1 million	$173.7 million
Income (loss) before income taxes	$104.1 million	$120.5 million	$107.7 million	$90.4 million	$82.1 million
Pre-tax, pre-provision, net income (PPNR) (non-GAAP)⁽¹⁾	$99.4 million	$120.5 million	$107.7 million	$104.4 million	$102.7 million
Pre-tax net income to total revenue (net)	60.42%	62.32%	59.19%	51.32%	47.25%
P5_NR (Pre-tax, pre-provision, profit percentage) (PPNR to total revenue (net)) (non-GAAP)⁽¹⁾	57.66%	62.32%	59.19%	59.28%	59.15%
ROA	1.81%	2.22%	1.97%	1.66%	1.55%
NIM	3.61%	4.02%	4.00%	3.92%	4.11%
NIM, excluding PPP loans (non-GAAP)⁽¹⁾	3.54%	3.87%	3.97%	3.98%	4.16%
Purchase Accounting Accretion	$5.8 million	$5.5 million	$5.7 million	$7.0 million	$7.0 million
ROE	11.92%	14.15%	12.72%	10.97%	10.27%
ROTCE (non-GAAP)⁽¹⁾	19.12%	22.90%	20.96%	18.29%	17.40%
Diluted Earnings Per Share	$0.48	$0.55	$0.50	$0.42	$0.38
Non-Performing Assets to Total Assets	0.35%	0.38%	0.48%	0.47%	0.39%
Common Equity Tier 1 Capital	15.0%	14.3%	13.4%	12.6%	12.0%
Leverage	10.9%	11.1%	10.8%	10.4%	10.3%
Tier 1 Capital	15.6%	14.9%	14.0%	13.2%	12.6%
Total Risk-Based Capital	19.5%	18.8%	17.8%	16.9%	16.2%
Allowance for Credit Losses to Total Loans	2.36%	2.25%	2.19%	2.12%	1.99%
Allowance for Credit Losses to Total Loans, excluding PPP loans (non-GAAP)⁽¹⁾	2.47%	2.40%	2.33%	2.28%	2.14%

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

“An annualized look at gross revenue and pre-tax, pre-provision, net income (PPNR) shows us on a steady track for the last four years,” said John Allison, Chairman. “Net income for the six-month period ended June 30, 2021 was $170.7 million, or $1.03 earnings per share, which is a record for the Company,” Allison stated. “The continued stable performance our team delivers each quarter brings both a sense of pride and comfort during these unstable economic times,” Allison continued.

“Jamie Dimon recently stated that JP Morgan Chase is effectively ‘stockpiling cash’ with plans to be patient because he believes in being prepared for higher rates and more inflation,” quoted Tracy French, Centennial Bank President and Chief Executive Officer. “One of the hardest things we do is maintain our discipline, and although loan growth might seem a little slow, we too plan to be patient as we do not intend to sell the future of our Company. We won’t be one to reach out in the market for short term gain to create long term pain,” French added.

Operating Highlights

Net income for the three-month period ended June 30, 2021 was $79.1 million, or $0.48 earnings per share. Net income for the six-month period ended June 30, 2021 was $170.7 million, or $1.03 earnings per share, which is a record for the Company.

During the second quarter of 2021, the Company recorded a negative provision for unfunded commitments of $4.8 million, or $0.02 per share. This was primarily due to a single commercial & industrial loan for which a reserve was no longer considered necessary due to the borrower’s current cash flow position. 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 June 30, 2021.

Our net interest margin was 3.61% for the three-month period ended June 30, 2021 compared to 4.02% for the three-month period ended March 31, 2021. The yield on loans was 5.40% and 5.56% for the three months ended June 30, 2021 and March 31, 2021, respectively, as average loans decreased from $11.02 billion to $10.54 billion. Additionally, the rate on interest bearing deposits decreased to 0.26% as of June 30, 2021 from 0.33% as of March 31, 2021, with average balances of $9.81 billion and $9.55 billion, respectively.

As of June 30, 2021, we had $473.9 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 June 30, 2021 was 3.54%.⁽¹⁾ The PPP loans were accretive to the net interest margin by 7 basis points for the three-month period ended June 30, 2021 compared to 15 basis points for the three-month period ended March 31, 2021. This was primarily due to approximately $243.2 million of the Company’s PPP loans being forgiven during the second quarter of 2021 as well as the acceleration of deferred fees for the loans that were forgiven. The $243.2 million of PPP loans forgiven during the second quarter of 2021 were partially offset by $70.7 million in new PPP loan originations and funding during the second quarter of 2021. The deferred fee income decreased from $10.4 million to $6.3 million for the three-month periods ended March 31, 2021 and June 30, 2021, respectively.

The effects of the COVID-19 pandemic continued to create a significant amount of excess liquidity in the market. As a result of this excess liquidity, we had an increase of $966.6 million of average interest-bearing cash balances in the second quarter of 2021 compared to the first quarter of 2021. This excess liquidity diluted the net interest margin by 23 basis points for the three-month period ended June 30, 2021.

Purchase accounting accretion on acquired loans was $5.8 million and $5.5 million and average purchase accounting loan discounts were $38.6 million and $43.9 million for the three-month periods ended June 30, 2021 and March 31, 2021, respectively. Net amortization of time deposit premiums was $30,000 per quarter and net average remaining time deposit premiums were $85,000 and $115,000 for the three-month periods ended June 30, 2021 and March 31, 2021, respectively.

Net interest income on a fully taxable equivalent basis was $143.1 million for the three-month period ended June 30, 2021 and $149.9 million for the three-month period ended March 31, 2021. This decrease in net interest income for the three-month period ended June 30, 2021 was the result of an $8.2 million decrease in interest income, which was partially offset by a $1.3 million decrease in interest expense. The $8.2 million decrease in interest income was primarily the result of a $9.2 million decrease in loan interest income, which was partially offset by a $727,000 net increase in investment income and a $297,000 increase in interest-bearing balances due from banks. The $1.3 million decrease in interest expense was primarily the result of a decrease in interest expense on deposits.

The Company reported $31.1 million of non-interest income for the second quarter of 2021. The most important components of the second quarter non-interest income were $9.7 million from other service charges and fees, $6.2 million from mortgage lending income, $5.1 million from service charges on deposit accounts, $3.0 million from other income, $2.6 million from dividends from FHLB, FRB, FNBB and other, and a $1.3 million adjustment for the increase in fair market value of marketable securities. Included in the $2.6 million in dividends from FHLB, FRB, FNBB and other were $2.2 million in special dividends from equity investments. The Company is still currently involved in these investments; however, past performance does not guarantee future performance.

Non-interest expense for the second quarter of 2021 was $73.0 million. The most important components of the second quarter non-interest expense were $42.5 million from salaries and employee benefits, $15.6 million in other expense and $9.0 million in occupancy and equipment expenses. For the second quarter of 2021, our efficiency ratio was 41.08%.

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

Financial Condition

Total loans receivable were $10.20 billion at June 30, 2021 compared to $10.78 billion at March 31, 2021. Total deposits were $13.89 billion at June 30, 2021 compared to $13.51 billion at March 31, 2021. Total assets were $17.63 billion at June 30, 2021 compared to $17.24 billion at March 31, 2021.

During the second quarter 2021, the Company experienced approximately $579.3 million in loan decline. Centennial CFG experienced $41.1 million of organic loan growth and had loans of $1.56 billion at June 30, 2021. Our legacy footprint experienced $447.9 million in organic loan decline and $172.5 million in PPP loan decline during the quarter.

Non-performing loans to total loans was 0.58% as of June 30, 2021 compared to 0.59% as of March 31, 2021. Non-performing assets to total assets decreased from 0.38% as of March 31, 2021 to 0.35% as of June 30, 2021. Net charge-offs were $2.5 million for both the first and second quarter of 2021.

Non-performing loans at June 30, 2021 were $22.4 million, $31.8 million, $380,000, $1.6 million and $2.7 million in the Arkansas, Florida, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $58.9 million. Non-performing assets at June 30, 2021 were $23.2 million, $32.9 million, $424,000, $1.6 million and $2.8 million in the Arkansas, Florida, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $60.9 million.

The Company’s allowance for credit losses on loans was $240.5 million at June 30, 2021, or 2.36% of total loans, compared to the allowance for credit losses of $242.9 million, or 2.25% of total loans, at March 31, 2021. The Company’s allowance for credit losses on loans to total loans, excluding PPP loans (non-GAAP), was 2.47%⁽¹⁾ at June 30, 2021. As of June 30, 2021 and March 31, 2021, the Company’s allowance for credit losses on loans was 407.99% and 383.47% of its total non-performing loans, respectively.

Stockholders’ equity was $2.70 billion at June 30, 2021 compared to $2.65 billion at March 31, 2021, an increase of approximately $51.0 million. The increase in stockholders’ equity was primarily associated with the $56.0 million increase in retained earnings and a $9.7 million increase in accumulated other comprehensive income, which was partially offset by net stock repurchases and share-based compensation activity of $14.7 million. Book value per common share was $16.39 at June 30, 2021 compared to $16.02 at March 31, 2021. Tangible book value per common share (non-GAAP) was $10.31⁽¹⁾ at June 30, 2021 compared to $9.95⁽¹⁾ at March 31, 2021, an increase of 14.51% on an annualized basis.
______________________________
(1) Calculation of this metric and the reconciliation to GAAP are included in the schedules accompanying this release.

Branches

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

Conference Call

Management will conduct a conference call to review this information at 1:00 p.m. CT (2:00 ET) on Thursday, July 15, 2021. We encourage all participants to pre-register for the conference call using the following link: https://dpregister.com/sreg/10157552/e986b17690. Callers who pre-register will be given dial-in instructions and a unique PIN to gain immediate access to the live call. Participants may pre-register now, or at any time prior to the call, and will immediately receive simple instructions via email. The Home BancShares conference call will also be automatically scheduled as an event in your Outlook calendar.

Those without internet access or unable to pre-register may dial in and listen to the live call by calling 1-877-508-9586 and asking for the Home BancShares conference call. A replay of the call will be available by calling 1-877-344-7529, Passcode: 10157552, which will be available until July 22, 2021 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.

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 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 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 ability to identify, complete and successfully integrate new acquisitions; legislative and regulatory changes and risks and expenses associated with current and future legislation and regulations, including those in response to the COVID-19 pandemic; technological changes and cybersecurity risks; the effects of changes in accounting policies and practices; changes in governmental monetary and fiscal policies; political instability; competition from other financial institutions; potential claims, expenses and other adverse effects related to current or future litigation, regulatory examinations or other government actions; changes in the assumptions used in making the forward-looking statements; and other factors described in reports we file with the Securities and Exchange Commission (the “SEC”), including those factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 26, 2021.

Home BancShares, Inc. is a bank holding company, headquartered in Conway, Arkansas. Its wholly-owned subsidiary, Centennial Bank, provides a broad range of commercial and retail banking plus related financial services to businesses, real estate developers, investors, individuals and municipalities. Centennial Bank has branch locations in Arkansas, Florida, South Alabama and New York City. The Company’s common stock is traded through the NASDAQ Global Select Market under the symbol “HOMB.”

FOR MORE INFORMATION CONTACT:
Donna Townsell
Director of Investor Relations
Home BancShares, Inc.
(501) 328-4625

Home BancShares, Inc.
Consolidated End of Period Balance Sheets
(Unaudited)


	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,
(In thousands)	2021			2021			2020			2020			2020

ASSETS

Cash and due from banks	$	182,226		$	218,814		$	242,173		$	144,197		$	185,047
Interest-bearing deposits with other banks		2,759,027			2,259,734			1,021,615			899,140			1,030,609
Cash and cash equivalents		2,941,253			2,478,548			1,263,788			1,043,337			1,215,656
Investment securities - available-for-sale, net of
allowance for credit losses		3,053,712			2,539,123			2,473,781			2,361,900			2,238,005
Loans receivable		10,199,175			10,778,493			11,220,721			11,691,470			11,955,743
Allowance for credit losses		(240,451	)		(242,932	)		(245,473	)		(248,224	)		(238,340	)
Loans receivable, net		9,958,724			10,535,561			10,975,248			11,443,246			11,717,403
Bank premises and equipment, net		278,502			278,620			278,614			280,364			279,498
Foreclosed assets held for sale		1,969			3,004			4,420			4,322			6,292
Cash value of life insurance		104,132			103,599			103,519			102,989			102,443
Accrued interest receivable		48,725			55,495			60,528			72,599			80,274
Deferred tax asset, net		72,273			77,145			70,249			75,167			74,333
Goodwill		973,025			973,025			973,025			973,025			973,025
Core deposit and other intangibles		27,886			29,307			30,728			32,149			33,569
Other assets		166,991			166,814			164,904			160,660			174,908
Total assets	$	17,627,192		$	17,240,241		$	16,398,804		$	16,549,758		$	16,895,406

LIABILITIES AND STOCKHOLDERS’ EQUITY

Liabilities
Deposits:
Demand and non-interest-bearing	$	4,076,570		$	3,859,722		$	3,266,753		$	3,207,967		$	3,413,727
Savings and interest-bearing transaction accounts		8,744,900			8,477,208			8,212,240			8,011,200			7,970,979
Time deposits		1,069,871			1,175,664			1,246,797			1,718,299			1,793,230
Total deposits		13,891,341			13,512,594			12,725,790			12,937,466			13,177,936
Securities sold under agreements to repurchase		150,540			162,929			168,931			158,447			162,858
FHLB and other borrowed funds		400,000			400,000			400,000			403,428			531,432
Accrued interest payable and other liabilities		118,415			148,999			127,999			139,485			161,095
Subordinated debentures		370,707			370,515			370,326			370,133			369,939
Total liabilities		14,931,003			14,595,037			13,793,046			14,008,959			14,403,260

Stockholders’ equity
Common stock		1,645			1,651			1,651			1,652			1,652
Capital surplus		1,501,615			1,516,286			1,520,617			1,520,103			1,518,631
Retained earnings		1,163,810			1,107,818			1,039,370			980,699			932,856
Accumulated other comprehensive income		29,119			19,449			44,120			38,345			39,007
Total stockholders’ equity		2,696,189			2,645,204			2,605,758			2,540,799			2,492,146
Total liabilities and stockholders’ equity	$	17,627,192		$	17,240,241		$	16,398,804		$	16,549,758		$	16,895,406

Home BancShares, Inc.
Consolidated Statements of Income
(Unaudited)

	Quarter Ended													Six Months Ended
	Jun. 30,			Mar. 31,			Dec. 31,		Sep. 30,			Jun. 30,		Jun. 30,			Jun. 30,
(In thousands)	2021			2021			2020		2020			2020		2021			2020

Interest income
Loans	$	141,684		$	150,917		$	153,407	$	154,787		$	158,996	$	292,601		$	317,144
Investment securities
Taxable		7,185			6,253			6,900		7,227			8,693		13,438			18,469
Tax-exempt		4,905			5,071			4,979		4,367			3,698		9,976			6,812
Deposits - other banks		707			410			270		252			211		1,117			1,327
Federal funds sold		-			-			-		-			-		-			21
Total interest income		154,481			162,651			165,556		166,633			171,598		317,132			343,773

Interest expense
Interest on deposits		6,434			7,705			10,596		13,200			15,116		14,139			39,314
Federal funds purchased		-			-			-		-			-		-			13
FHLB borrowed funds		1,896			1,875			1,917		2,235			2,656		3,771			5,354
Securities sold under agreements to repurchase		107			190			208		237			260		297			722
Subordinated debentures		4,792			4,793			4,810		4,823			4,899		9,585			9,978
Total interest expense		13,229			14,563			17,531		20,495			22,931		27,792			55,381

Net interest income		141,252			148,088			148,025		146,138			148,667		289,340			288,392

Provision for credit losses - loans		-			-			-		14,000			11,441		-			98,264
Provision for credit loss - unfunded commitments		(4,752	)		-			-		-			9,214		(4,752	)		16,989
Total credit loss expense		(4,752	)		-			-		14,000			20,655		(4,752	)		115,253

Net interest income after provision for credit losses		146,004			148,088			148,025		132,138			128,012		294,092			173,139

Non-interest income
Service charges on deposit accounts		5,116			5,002			5,544		4,910			4,296		10,118			10,927
Other service charges and fees		9,659			7,608			8,425		8,539			7,666		17,267			13,722
Trust fees		444			522			420		378			397		966			835
Mortgage lending income		6,202			8,167			10,071		10,177			6,196		14,369			8,817
Insurance commissions		478			492			366		271			533		970			1,211
Increase in cash value of life insurance		537			502			534		548			558		1,039			1,118
Dividends from FHLB, FRB, FNBB & other		2,646			8,609			967		3,433			230		11,255			8,072
Gain on SBA loans		1,149			-			304		-			-		1,149			341
(Loss) gain on branches, equipment and
other assets, net		(23	)		(29	)		217		(27	)		54		(52	)		136
Gain on OREO, net		619			401			150		470			235		1,020			512
Gain on securities, net		-			219			-		-			-		219			-
Fair value adjustment for marketable securities		1,250			5,782			4,271		(1,350	)		919		7,032			(4,899	)
Other income		3,043			8,001			2,616		2,602			3,939		11,044			7,158
Total non-interest income		31,120			45,276			33,885		29,951			25,023		76,396			47,950

Non-interest expense
Salaries and employee benefits		42,462			42,059			43,022		41,511			40,088		84,521			79,417
Occupancy and equipment		9,042			9,237			9,801		9,566			10,172		18,279			19,045
Data processing expense		5,893			5,870			5,171		4,921			4,614		11,763			8,940
Other operating expenses		15,585			15,700			16,247		15,714			16,084		31,285			34,030
Total non-interest expense		72,982			72,866			74,241		71,712			70,958		145,848			141,432

Income (loss) before income taxes		104,142			120,498			107,669		90,377			82,077		224,640			79,657
Income tax expense (benefit)		25,072			28,896			25,875		21,057			19,250		53,968			16,323
Net income	$	79,070		$	91,602		$	81,794	$	69,320		$	62,827	$	170,672		$	63,334

Home BancShares, Inc.
Selected Financial Information
(Unaudited)

	Quarter Ended															Six Months Ended
(Dollars and shares in thousands,	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Jun. 30,			Jun. 30,
except per share data)	2021			2021			2020			2020			2020			2021			2020

PER SHARE DATA

Diluted earnings per common share	$	0.48		$	0.55		$	0.50		$	0.42		$	0.38		$	1.03		$	0.38
Diluted earnings per common share, as adjusted,
excluding fair value adjustment for marketable securities, special dividend from equity investment, gain on securities, recoveries on historic losses, branch write-off expense, outsourced special project expense & merger and acquisition expenses (non-GAAP)⁽¹⁾		0.46			0.47			0.48			0.41			0.38			0.93			0.39
Basic earnings per common share		0.48			0.55			0.50			0.42			0.38			1.03			0.38
Dividends per share - common		0.14			0.14			0.14			0.13			0.13			0.28			0.26
Book value per common share		16.39			16.02			15.78			15.38			15.09			16.39			15.09
Tangible book value per common share (non-GAAP)⁽¹⁾		10.31			9.95			9.70			9.30			8.99			10.31			8.99

STOCK INFORMATION

Average common shares outstanding		164,781			165,257			165,119			165,200			165,163			165,018			165,588
Average diluted shares outstanding		165,226			165,446			165,119			165,200			165,163			165,314			165,588
End of period common shares outstanding		164,488			165,141			165,095			165,163			165,206			164,488			165,206

ANNUALIZED PERFORMANCE METRICS

Return on average assets		1.81	%		2.22	%		1.97	%		1.66	%		1.55	%		2.01	%		0.81	%
Return on average assets excluding fair value adjustment
for marketable securities, special dividend from equity investment, gain on securities, recoveries on historic losses, branch write-off expense, outsourced special project expense & merger and acquisition expenses: (ROA, as adjusted) (non-GAAP)⁽¹⁾		1.75	%		1.88	%		1.90	%		1.63	%		1.55	%		1.81	%		0.82	%
Return on average assets excluding intangible
amortization (non-GAAP)⁽¹⁾		1.95	%		2.39	%		2.13	%		1.80	%		1.68	%		2.16	%		0.90	%
Return on average common equity		11.92	%		14.15	%		12.72	%		10.97	%		10.27	%		13.02	%		5.16	%
Return on average common equity excluding fair value
adjustment for marketable securities, special dividend from equity investment, gain on securities, recoveries on historic losses, branch write-off expense, outsourced special project expense & merger and acquisition expenses: (ROE, as adjusted) (non-GAAP)⁽¹⁾		11.54	%		11.96	%		12.23	%		10.76	%		10.28	%		11.75	%		5.20	%
Return on average tangible common equity
(non-GAAP)⁽¹⁾		19.12	%		22.90	%		20.96	%		18.29	%		17.40	%		20.98	%		8.68	%
Return on average tangible common equity excluding
intangible amortization (non-GAAP)⁽¹⁾		19.38	%		23.16	%		21.22	%		18.56	%		17.70	%		21.24	%		8.98	%
Return on average tangible common equity excluding fair
value adjustment for marketable securities, special dividend from equity investment, gain on securities, recoveries on historic losses, branch write-off expense, outsourced special project expense & merger and acquisition expenses: (ROTCE, as adjusted) (non-GAAP)⁽¹⁾		18.51	%		19.35	%		20.15	%		17.93	%		17.41	%		18.92	%		8.75	%

(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															Six Months Ended
	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Jun. 30,			Jun. 30,
(Dollars in thousands)	2021			2021			2020			2020			2020			2021			2020


Efficiency ratio		41.08	%		36.60	%		39.64	%		39.56	%		39.67	%		38.71	%		40.83	%
Efficiency ratio, as adjusted (non-GAAP)⁽¹⁾		42.06	%		40.67	%		40.67	%		40.08	%		39.38	%		41.35	%		40.34	%
Net interest margin - FTE		3.61	%		4.02	%		4.00	%		3.92	%		4.11	%		3.81	%		4.17	%
Net interest margin - FTE, excluding PPP loans
(non-GAAP)⁽¹⁾		3.54	%		3.87	%		3.97	%		3.98	%		4.16	%		3.70	%		4.19	%
Fully taxable equivalent adjustment	$	1,810		$	1,857		$	1,778		$	1,576		$	1,434		$	3,667		$	2,661
Total revenue (net)		172,372			193,364			181,910			176,089			173,690			365,736			336,342
Pre-tax, pre-provision, net income (PPNR) (non-GAAP)⁽¹⁾		99,390			120,498			107,669			104,377			102,732			219,888			194,910
Pre-tax net income to total revenue (net)		60.42	%		62.32	%		59.19	%		51.32	%		47.25	%		61.42	%		23.68	%
P5_NR (Pre-tax, pre-provision, profit percentage)
(PPNR to total revenue (net)) (non-GAAP)⁽¹⁾		57.66	%		62.32	%		59.19	%		59.28	%		59.15	%		60.12	%		57.95	%
Total purchase accounting accretion		5,797			5,485			5,736			6,957			7,036			11,282			14,683
Average purchase accounting loan discounts		38,568			43,940			49,563			55,835			62,822			41,218			66,105


OTHER OPERATING EXPENSES

Advertising	$	1,194		$	1,046		$	1,076		$	902		$	795		$	2,240		$	2,021
Merger and acquisition expenses		-			-			-			-			-			-			711
Amortization of intangibles		1,421			1,421			1,421			1,420			1,486			2,842			3,003
Electronic banking expense		2,616			2,238			2,282			2,426			2,054			4,854			3,769
Directors’ fees		414			383			359			429			412			797			836
Due from bank service charges		273			249			254			259			239			522			462
FDIC and state assessment		1,108			1,363			1,493			1,607			1,846			2,471			3,394
Insurance		787			781			795			766			711			1,568			1,457
Legal and accounting		1,058			846			790			1,235			1,278			1,904			2,197
Other professional fees		1,796			1,613			1,528			1,661			1,735			3,409			4,961
Operating supplies		465			487			440			460			553			952			1,088
Postage		292			338			315			328			313			630			640
Telephone		365			346			347			321			310			711			634
Other expense		3,796			4,589			5,147			3,900			4,352			8,385			8,857

Total other operating expenses	$	15,585		$	15,700		$	16,247		$	15,714		$	16,084		$	31,285		$	34,030

(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)

	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,
(Dollars in thousands)	2021			2021			2020			2020			2020

BALANCE SHEET RATIOS

Total loans to total deposits		73.42	%		79.77	%		88.17	%		90.37	%		90.73	%
Common equity to assets		15.30	%		15.34	%		15.89	%		15.35	%		14.75	%
Tangible common equity to tangible assets (non-GAAP)⁽¹⁾		10.20	%		10.12	%		10.41	%		9.88	%		9.35	%

LOANS RECEIVABLE

Real estate
Commercial real estate loans
Non-farm/non-residential	$	4,144,375		$	4,289,142		$	4,429,060		$	4,342,141		$	4,325,795
Construction/land development		1,541,482			1,612,973			1,562,298			1,748,928			1,818,151
Agricultural		126,293			113,382			114,431			89,476			105,554
Residential real estate loans
Residential 1-4 family		1,316,485			1,437,546			1,536,257			1,665,628			1,730,716
Multifamily residential		332,256			377,661			536,538			491,380			482,635
Total real estate		7,460,891			7,830,704			8,178,584			8,337,553			8,462,851
Consumer		824,938			839,819			864,690			883,568			851,344
Commercial and industrial		1,612,826			1,794,787			1,896,442			2,161,818			2,228,816
Agricultural		69,152			65,017			66,869			85,365			80,023
Other		231,368			248,166			214,136			223,166			332,709
Loans receivable	$	10,199,175		$	10,778,493		$	11,220,721		$	11,691,470		$	11,955,743

Paycheck Protection Program (PPP) loans (net of discounts)
(included in total loans receivable)		473,894			646,382			675,225			825,362			819,154

ALLOWANCE FOR CREDIT LOSSES

Balance, beginning of period	$	242,932		$	245,473		$	248,224		$	238,340		$	228,923
Loans charged off		3,023			3,047			3,040			4,599			2,582
Recoveries of loans previously charged off		542			506			289			483			558
Net loans charged off		2,481			2,541			2,751			4,116			2,024
Provision for credit losses - loans		-			-			-			14,000			11,441
Balance, end of period	$	240,451		$	242,932		$	245,473		$	248,224		$	238,340

Net charge-offs to average total loans		0.09	%		0.09	%		0.10	%		0.14	%		0.07	%
Allowance for credit losses to total loans		2.36	%		2.25	%		2.19	%		2.12	%		1.99	%
Allowance for credit losses to total loans, excluding PPP loans		2.47	%		2.40	%		2.33	%		2.28	%		2.14	%

NON-PERFORMING ASSETS

Non-performing loans
Non-accrual loans	$	55,269		$	59,142		$	64,528		$	65,148		$	52,074
Loans past due 90 days or more		3,667			4,209			9,610			8,635			7,824
Total non-performing loans		58,936			63,351			74,138			73,783			59,898
Other non-performing assets
Foreclosed assets held for sale, net		1,969			3,004			4,420			4,322			6,292
Other non-performing assets		-			-			-			247			247
Total other non-performing assets		1,969			3,004			4,420			4,569			6,539
Total non-performing assets	$	60,905		$	66,355		$	78,558		$	78,352		$	66,437

Allowance for credit losses for loans to non-performing loans		407.99	%		383.47	%		331.10	%		336.42	%		397.91	%
Non-performing loans to total loans		0.58	%		0.59	%		0.66	%		0.63	%		0.50	%
Non-performing assets to total assets		0.35	%		0.38	%		0.48	%		0.47	%		0.39	%

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

Home BancShares, Inc.
Consolidated Net Interest Margin
(Unaudited)

	Three Months Ended
	June 30, 2021							March 31, 2021
	Average		Income/		Yield/			Average		Income/		Yield/
(Dollars in thousands)	Balance		Expense		Rate			Balance		Expense		Rate

ASSETS
Earning assets
Interest-bearing balances due from banks	$	2,577,101	$	707		0.11	%	$	1,610,463	$	410		0.10	%
Federal funds sold		51		-		0.00	%		119		-		0.00	%
Investment securities - taxable		1,909,485		7,185		1.51	%		1,637,061		6,253		1.55	%
Investment securities - non-taxable - FTE		864,416		6,527		3.03	%		848,158		6,732		3.22	%
Loans receivable - FTE		10,541,466		141,872		5.40	%		11,023,139		151,113		5.56	%
Total interest-earning assets		15,892,519		156,291		3.94	%		15,118,940		164,508		4.41	%
Non-earning assets		1,598,840							1,599,950
Total assets	$	17,491,359						$	16,718,890

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts	$	8,684,726	$	3,960		0.18	%	$	8,338,791	$	4,716		0.23	%
Time deposits		1,123,287		2,474		0.88	%		1,209,431		2,989		1.00	%
Total interest-bearing deposits		9,808,013		6,434		0.26	%		9,548,222		7,705		0.33	%
Federal funds purchased		-		-		0.00	%		-		-		0.00	%
Securities sold under agreement to repurchase		157,570		107		0.27	%		159,697		190		0.48	%
FHLB borrowed funds		400,000		1,896		1.90	%		400,000		1,875		1.90	%
Subordinated debentures		370,613		4,792		5.19	%		370,421		4,793		5.25	%
Total interest-bearing liabilities		10,736,196		13,229		0.49	%		10,478,340		14,563		0.56	%
Non-interest bearing liabilities
Non-interest bearing deposits		3,966,968							3,480,050
Other liabilities		128,048							134,882
Total liabilities		14,831,212							14,093,272
Shareholders’ equity		2,660,147							2,625,618
Total liabilities and shareholders’ equity	$	17,491,359						$	16,718,890
Net interest spread						3.45	%						3.85	%
Net interest income and margin - FTE			$	143,062		3.61	%			$	149,945		4.02	%

Home BancShares, Inc.
Consolidated Net Interest Margin
(Unaudited)

	Six Months Ended
	June 30, 2021							June 30, 2020
	Average		Income/		Yield/			Average		Income/		Yield/
(Dollars in thousands)	Balance		Expense		Rate			Balance		Expense		Rate

ASSETS
Earning assets
Interest-bearing balances due from banks	$	2,096,452	$	1,117		0.11	%	$	542,066	$	1,327		0.49	%
Federal funds sold		84		-		0.00	%		2,609		21		1.62	%
Investment securities - taxable		1,774,026		13,438		1.53	%		1,690,083		18,469		2.20	%
Investment securities - non-taxable - FTE		856,332		13,259		3.12	%		417,919		8,981		4.32	%
Loans receivable - FTE		10,780,972		292,985		5.48	%		11,399,178		317,636		5.60	%
Total interest-earning assets		15,507,866		320,799		4.17	%		14,051,855		346,434		4.96	%
Non-earning assets		1,599,393							1,674,486
Total assets	$	17,107,259						$	15,726,341

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Interest-bearing liabilities
Savings and interest-bearing transaction accounts	$	8,512,714	$	8,677		0.21	%	$	7,346,281	$	23,621		0.65	%
Time deposits		1,166,121		5,462		0.94	%		1,899,673		15,693		1.66	%
Total interest-bearing deposits		9,678,835		14,139		0.29	%		9,245,954		39,314		0.86	%
Federal funds purchased		-		-		0.00	%		3,132		13		0.83	%
Securities sold under agreement to repurchase		158,628		297		0.38	%		146,404		722		0.99	%
FHLB borrowed funds		400,000		3,771		1.90	%		637,940		5,354		1.69	%
Subordinated debentures		370,518		9,585		5.22	%		369,749		9,978		5.43	%
Total interest-bearing liabilities		10,607,981		27,792		0.53	%		10,403,179		55,381		1.07	%
Non-interest bearing liabilities
Non-interest bearing deposits		3,724,854							2,724,537
Other liabilities		131,446							128,102
Total liabilities		14,464,281							13,255,818
Shareholders’ equity		2,642,978							2,470,523
Total liabilities and shareholders’ equity	$	17,107,259						$	15,726,341
Net interest spread						3.64	%						3.89	%
Net interest income and margin - FTE			$	293,007		3.81	%			$	291,053		4.17	%

Home BancShares, Inc.
Non-GAAP Reconciliations
(Unaudited)

	Quarter Ended															Six Months Ended
(Dollars and shares in thousands,	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Jun. 30,			Jun. 30,
except per share data)	2021			2021			2020			2020			2020			2021			2020

EARNINGS, AS ADJUSTED

GAAP net income available to common shareholders (A)	$	79,070		$	91,602		$	81,794		$	69,320		$	62,827		$	170,672		$	63,334
Pre-tax adjustments
Fair value adjustment for marketable securities		(1,250	)		(5,782	)		(4,271	)		1,350			(919	)		(7,032	)		4,899
Special dividend from equity investment		(2,200	)		(8,073	)		-			(3,181	)		-			(10,273	)		(7,004	)
Gain on securities		-			(219	)		-			-			-			(219	)		-
Recoveries on historic losses		-			(5,107	)		-			-			-			(5,107	)		-
Branch write-off expense		-			-			-			-			981			-			981
Outsourced special project expense		-			-			-			-			-			-			1,092
Merger and acquisition expenses		-			-			-			-			-			-			711
Total pre-tax adjustments		(3,450	)		(19,181	)		(4,271	)		(1,831	)		62			(22,631	)		679
Tax-effect of adjustments		(902	)		(5,013	)		(1,116	)		(479	)		16			(5,915	)		177
Total adjustments after-tax (B)		(2,548	)		(14,168	)		(3,155	)		(1,352	)		46			(16,716	)		502
Earnings, as adjusted (C)	$	76,522		$	77,434		$	78,639		$	67,968		$	62,873		$	153,956		$	63,836

Average diluted shares outstanding (D)		165,226			165,446			165,119			165,200			165,163			165,314			165,588

GAAP diluted earnings per share: (A/D)	$	0.48		$	0.55		$	0.50		$	0.42		$	0.38		$	1.03		$	0.38
Adjustments after-tax: (B/D)		(0.02	)		(0.08	)		(0.02	)		(0.01	)		-			(0.10	)		0.01
Diluted earnings per common share, as
adjusted, excluding fair value adjustment for marketable securities, special dividend from equity investment, gain on securities, recoveries on historic losses, branch write-off expense, outsourced special project expense & merger and acquisition expenses: (C/D)	$	0.46		$	0.47		$	0.48		$	0.41		$	0.38		$	0.93		$	0.39

ANNUALIZED RETURN ON AVERAGE ASSETS

Return on average assets: (A/G)		1.81	%		2.22	%		1.97	%		1.66	%		1.55	%		2.01	%		0.81	%
Return on average assets excluding fair
value adjustment for marketable securities, special dividend from equity investment, gain on securities, recoveries on historic losses, branch write-off expense, outsourced special project expense & merger and acquisition expenses: (ROA, as adjusted) ((A+F)/G)		1.75	%		1.88	%		1.90	%		1.63	%		1.55	%		1.81	%		0.82	%
Return on average assets excluding intangible
amortization: ((A+E)/(G-H))		1.95	%		2.39	%		2.13	%		1.80	%		1.68	%		2.16	%		0.90	%

GAAP net income available to common shareholders (A)	$	79,070		$	91,602		$	81,794		$	69,320		$	62,827		$	170,672		$	63,334
Amortization of intangibles (D)		1,421			1,421			1,421			1,420			1,486			2,842			3,003
Amortization of intangibles after-tax (E)		1,049			1,049			1,049			1,049			1,098			2,098			2,218
Adjustments after-tax (F)		(2,548	)		(14,168	)		(3,155	)		(1,352	)		46			(16,716	)		502
Average assets (G)		17,491,359			16,718,890			16,493,066			16,594,495			16,319,206			17,107,259			15,726,341
Average goodwill, core deposits & other
intangible assets (H)		1,001,598			1,003,011			1,004,432			1,005,864			1,007,307			1,002,301			1,003,156

Home BancShares, Inc.
Non-GAAP Reconciliations
(Unaudited)

	Quarter Ended															Six Months Ended
	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Jun. 30,			Jun. 30,
(Dollars in thousands)	2021			2021			2020			2020			2020			2021			2020

ANNUALIZED RETURN ON AVERAGE COMMON EQUITY

Return on average common equity: (A/D)		11.92	%		14.15	%		12.72	%		10.97	%		10.27	%		13.02	%		5.16	%
Return on average common equity excluding fair value
adjustment for marketable securities, special dividend from equity investment, gain on securities, recoveries on historic losses, branch write-off expense, outsourced special project expense & merger and acquisition expenses: (ROE, as adjusted) ((A+C)/D)		11.54	%		11.96	%		12.23	%		10.76	%		10.28	%		11.75	%		5.20	%
Return on average tangible common equity: (A/(D-E))		19.12	%		22.90	%		20.96	%		18.29	%		17.40	%		20.98	%		8.68	%
Return on average tangible common equity
excluding intangible amortization: (B/(D-E))		19.38	%		23.16	%		21.22	%		18.56	%		17.70	%		21.24	%		8.98	%
Return on average tangible common equity excluding
fair value adjustment for marketable securities, special dividend from equity investment, gain on securities, recoveries on historic losses, branch write-off expense, outsourced special project expense & merger and acquisition expenses: (ROTCE, as adjusted) ((A+C)/(D-E))		18.51	%		19.35	%		20.15	%		17.93	%		17.41	%		18.92	%		8.75	%

GAAP net income available to common shareholders (A)	$	79,070		$	91,602		$	81,794		$	69,320		$	62,827		$	170,672		$	63,334
Earnings excluding intangible amortization (B)		80,119			92,651			82,843			70,369			63,925			172,770			65,553
Adjustments after-tax (C)		(2,548	)		(14,168	)		(3,155	)		(1,352	)		46			(16,716	)		502
Average common equity (D)		2,660,147			2,625,618			2,557,251			2,513,792			2,459,941			2,642,978			2,470,523
Average goodwill, core deposits & other intangible assets (E)		1,001,598			1,003,011			1,004,432			1,005,864			1,007,307			1,002,301			1,003,156

EFFICIENCY RATIO & P5NR

Efficiency ratio: ((D-F)/(B+C+E))		41.08	%		36.60	%		39.64	%		39.56	%		39.67	%		38.71	%		40.83	%
Efficiency ratio, as adjusted: ((D-F-H)/(B+C+E-G))		42.06	%		40.67	%		40.67	%		40.08	%		39.38	%		41.35	%		40.34	%

Pre-tax net income to total revenue (net) (A/(B+C))		60.42	%		62.32	%		59.19	%		51.32	%		47.25	%		61.42	%		23.68	%
Pre-tax, pre-provision, net income (PPNR) (B+C-D)	$	99,390		$	120,498		$	107,669		$	104,377		$	102,732		$	219,888		$	194,910
P5NR (Pre-tax, pre-provision, profit
percentage) PPNR to total revenue (net) (B+C-D)/(B+C)		57.66	%		62.32	%		59.19	%		59.28	%		59.15	%		60.12	%		57.95	%

Pre-tax net income (A)	$	104,142		$	120,498		$	107,669		$	90,377		$	82,077		$	224,640		$	79,657
Net interest income (B)		141,252			148,088			148,025			146,138			148,667			289,340			288,392
Non-interest income (C)		31,120			45,276			33,885			29,951			25,023			76,396			47,950
Non-interest expense (D)		72,982			72,866			74,241			71,712			70,958			145,848			141,432
Fully taxable equivalent adjustment (E)		1,810			1,857			1,778			1,576			1,434			3,667			2,661
Amortization of intangibles (F)		1,421			1,421			1,421			1,420			1,486			2,842			3,003

Adjustments:
Non-interest income:
Fair value adjustment for marketable securities	$	1,250		$	5,782		$	4,271		$	(1,350	)	$	919		$	7,032		$	(4,899	)
Gain (loss) on OREO		619			401			150			470			235			1,020			512
Gain (loss) on branches, equipment and other assets, net		(23	)		(29	)		217			(27	)		54			(52	)		136
Special dividend from equity investment		2,200			8,073			-			3,181			-			10,273			7,004
Gain (loss) on securities		-			219			-			-			-			219			-
Recoveries on historic losses		-			5,107			-			-			-			5,107			-
Total non-interest income adjustments (G)	$	4,046		$	19,553		$	4,638		$	2,274		$	1,208		$	23,599		$	2,753

Non-interest expense:
Branch write-off expense	$	-		$	-		$	-		$	-		$	981		$	-		$	981
Merger Expenses		-			-			-			-			-			-			711
Outsourced special project expense		-			-			-			-			-			-			1,092
Total non-interest expense adjustments (H)	$	-		$	-		$	-		$	-		$	981		$	-		$	2,784

Home BancShares, Inc.
Non-GAAP Reconciliations
(Unaudited)

	Quarter Ended															Six Months Ended
	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,			Jun. 30,			Jun. 30,
(Dollars in thousands)	2021			2021			2020			2020			2020			2021			2020

ANNUALIZED NET INTEREST MARGIN

Net interest margin: (A/C)		3.61	%		4.02	%		4.00	%		3.92	%		4.11	%		3.81	%		4.17	%
Net interest margin, excluding PPP loans:
(B/D)		3.54	%		3.87	%		3.97	%		3.98	%		4.16	%		3.70	%		4.19	%

Net interest income - FTE (A)	$	143,062		$	149,945		$	149,803		$	147,714		$	150,101		$	293,007		$	291,053
PPP loan interest & discount accretion
income		7,802			11,878			8,841			5,943			4,450			19,680			4,450
Net interest income - FTE, excluding
PPP loans (B)	$	135,260		$	138,067		$	140,962		$	141,771		$	145,651		$	273,327		$	286,603

Average interest-earning assets (C)	$	15,892,519		$	15,118,940		$	14,900,381		$	14,975,146		$	14,678,465		$	15,507,866		$	14,051,855
Average PPP loans		581,371			633,790			775,861			821,977			585,946			607,436			292,973
Average interest-earning assets, excluding
PPP loans (D)	$	15,311,148		$	14,485,150		$	14,124,520		$	14,153,169		$	14,092,519		$	14,900,430		$	13,758,882


	Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,			Jun. 30,
	2021			2021			2020			2020			2020

TANGIBLE BOOK VALUE PER COMMON SHARE

Book value per common share: (A/B)	$	16.39		$	16.02		$	15.78		$	15.38		$	15.09
Tangible book value per common share:
((A-C-D)/B)		10.31			9.95			9.70			9.30			8.99

Total stockholders’ equity (A)	$	2,696,189		$	2,645,204		$	2,605,758		$	2,540,799		$	2,492,146
End of period common shares outstanding (B)		164,488			165,141			165,095			165,163			165,206
Goodwill (C)		973,025			973,025			973,025			973,025			973,025
Core deposit and other intangibles (D)		27,886			29,307			30,728			32,149			33,569


TANGIBLE COMMON EQUITY TO TANGIBLE ASSETS

Equity to assets: (B/A)		15.30	%		15.34	%		15.89	%		15.35	%		14.75	%
Tangible common equity to tangible assets:
((B-C-D)/(A-C-D))		10.20	%		10.12	%		10.41	%		9.88	%		9.35	%

Total assets (A)	$	17,627,192		$	17,240,241		$	16,398,804		$	16,549,758		$	16,895,406
Total stockholders’ equity (B)		2,696,189			2,645,204			2,605,758			2,540,799			2,492,146
Goodwill (C)		973,025			973,025			973,025			973,025			973,025
Core deposit and other intangibles (D)		27,886			29,307			30,728			32,149			33,569

HOMB Continues Stable Performance in Second Quarter Delivering Record Net Income Through First Six Months of 2021

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