CONWAY, Ark., April 18, 2024 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (NYSE:HOMB) ("Home" or the "Company"), parent company of Centennial Bank, released quarterly earnings today. Quarterly Highlights Metric Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Net income $100.1 million $86.2 million $98.5 million $105.3 million $103.0 million Net income, as adjusted (non-GAAP)(1) $99.2 million $92.2 million $94.7 million $102.6 million $108.9 million Total revenue (net) $246.4 million $245.6 million $245.4 million $257.2 million $248.8 million Income before income taxes $130.4 million $112.8 million $129.3 million $136.9 million $132.9 million Pre-tax, pre-provision, net income (PPNR) (non-GAAP)(1) $134.9 million $118.4 million $130.6 million $140.9 million $134.1 million PPNR, as adjusted (non-GAAP)(1) $133.7 million $126.4 million $125.7 million $137.3 million $142.1 million Pre-tax net income to total revenue (net) 52.92% 45.92% 52.70% 53.23% 53.43% Pre-tax net income, as adjusted, to total revenue (net) (non-GAAP)(1) 52.45% 49.16% 50.72% 51.85% 56.63% P5NR (Pre-tax, pre-provision, profit percentage) (PPNR to total revenue (net)) (non-GAAP)(1) 54.75% 48.22% 53.23% 54.78% 53.91% P5NR, as adjusted (non-GAAP)(1) 54.28% 51.46% 51.25% 53.40% 57.11% ROA 1.78% 1.55% 1.78% 1.90% 1.84% ROA, as adjusted (non-GAAP)(1) 1.76% 1.66% 1.72% 1.85% 1.95% NIM 4.13% 4.17% 4.19% 4.28% 4.37% Purchase accounting accretion $2.8 million $2.3 million $2.4 million $2.7 million $3.2 million ROE 10.64% 9.36% 10.65% 11.63% 11.70% ROE, as adjusted (non-GAAP)(1) 10.54% 10.00% 10.25% 11.33% 12.38% ROTCE (non-GAAP)(1) 17.22% 15.49% 17.62% 19.39% 19.75% ROTCE, as adjusted (non-GAAP)(1) 17.07% 16.56% 16.95% 18.90% 20.90% Diluted earnings per share $0.50 $0.43 $0.49 $0.52 $0.51 Diluted earnings per share, as adjusted (non-GAAP)(1) $0.49 $0.46 $0.47 $0.51 $0.54 Non-performing assets to total assets 0.48% 0.42% 0.42% 0.28% 0.33% Common equity tier 1 capital 14.3% 14.2% 14.0% 13.6% 13.2% Leverage 12.3% 12.4% 12.4% 11.9% 11.4% Tier 1 capital 14.3% 14.2% 14.0% 13.6% 13.2% Total risk-based capital 17.9% 17.8% 17.6% 17.3% 16.8% Allowance for credit losses to total loans 2.00% 2.00% 2.00% 2.01% 2.00% Book value per share $18.98 $18.81 $18.06 $18.04 $17.87 Tangible book value per share (non-GAAP)(1) 11.79 11.63 10.90 10.87 10.71 (1) Calculation of this metric and the reconciliation to GAAP are included in the schedules accompanying this release. "I'm always looking for improvement, but if the next three quarters show positive trends such as this quarter did, I think HOMB is poised for a great year. The period for January to March resulted in increases in net interest income, revenue, EPS, margin (when adjusting for excess liquidity), loans and deposits along with strong liquidity while lowering our efficiency ratio. In addition, we reduced non-interest expense by $3 million, quarter over quarter. Any questions?" said John Allison, Chairman and CEO of HOMB. Liquidity and Funding Sources At March 31, 2024, the Company held $2.67 billion in net available internal liquidity. This balance consisted of $1.58 billion in unpledged investment securities which could be used for additional secured borrowing capacity, $924.1 million in cash with the Federal Reserve Bank (FRB) and $160.7 million in other liquid cash accounts. Consistent with the Company's practice of maintaining access to significant external liquidity, the Company had $3.11 billion in net available external liquidity as of March 31, 2024. This included $4.75 billion in available liquidity with the Federal Home Loan Bank (FHLB), of which $1.84 billion has been drawn upon in the ordinary course of business, resulting in $2.91 billion in net available liquidity with the FHLB as of March 31, 2024. The $1.84 billion consisted of $600.0 million in outstanding FHLB advances and $1.24 billion used for pledging purposes. The Company also had access to approximately $798.3 million in liquidity with the FRB as of March 31, 2024, of which $700.0 million has been drawn upon in the ordinary course of business, resulting in $98.3 million in net available liquidity with the FRB as of March 31, 2024. As of March 31, 2024, the Company also had access to $55.0 million from First National Bankers' Bank (FNBB) and $45.0 million from other various external sources. Overall, the Company had $5.77 billion in net available liquidity as of March 31, 2024, which consisted of $2.67 billion of net available internal liquidity and $3.11 billion in net available external liquidity. Details on the Company's available liquidity as of March 31, 2024 is available below. (In thousands) Total Available   Amount Used   Net Availability Internal Sources           Unpledged investment securities (market value) $ 1,581,821     $ —     $ 1,581,821   Cash at FRB   924,148       —       924,148   Other liquid cash accounts   160,738       —       160,738   Total Internal Liquidity   2,666,707       —       2,666,707   External Sources           FHLB   4,746,613       1,837,367       2,909,246   FRB Discount Window   98,307       —       98,307   BTFP (par value)   700,000       700,000       —   FNBB   55,000       —       55,000   Other   45,000       —       45,000   Total External Liquidity   5,644,920       2,537,367       3,107,553   Total Available Liquidity $ 8,311,627     $ 2,537,367     $ 5,774,260     The Company has continued to limit its exposure to uninsured deposits and has been actively monitoring this in light of the current banking environment. As of March 31, 2024, the Company held approximately $8.42 billion in uninsured deposits of which $602.4 million were intercompany subsidiary deposit balances and $3.03 billion were collateralized deposits, for a net position of $4.79 billion. This represents approximately 28.4% of total deposits. In addition, net available liquidity exceeded uninsured and uncollateralized deposits by $987.0 million. (in thousands) As ofMarch 31, 2024 Uninsured Deposits $ 8,415,764   Intercompany Subsidiary and Affiliate Balances   602,351   Collateralized Deposits   3,026,129   Net Uninsured Position $ 4,787,284       Total Available Liquidity $ 5,774,260   Net Uninsured Position   4,787,284   Net Available Liquidity in Excess of Uninsured Deposits $ 986,976     In the event the Company's $4.79 billion net position of uninsured deposits had been called by depositors on the first day of the first quarter of 2024 and the Company utilized available funding, which remained outstanding during the entire quarter, the Company estimates that interest expense would have increased by approximately $71.7 million for the quarter ended March 31, 2024. The outflow of deposits could have been funded through available sources of liquidity without selling our investment securities. In this event, because of the high profitability levels of HOMB, the Company estimates that it would still have achieved return on average assets (ROA) of 1.27% for the quarter ended March 31, 2024. Operating Highlights Net income for the three-month period ended March 31, 2024 was $100.1 million, or $0.50 diluted earnings per share. When adjusting for non-fundamental items, net income and diluted earnings per share on an as-adjusted basis (non-GAAP), were $99.2 million(1) and $0.49 per share(1), respectively, for the three months ended March 31, 2024. Our net interest margin was 4.13% for the three-month period ended March 31, 2024, compared to 4.17% for the three-month period ended December 31, 2023. During the first quarter of 2024, the Company held excess liquidity of approximately $500.0 million which was dilutive to the net interest margin by 10 basis points. The yield on loans was 7.37% and 7.20% for the three months ended March 31, 2024 and December 31, 2023, respectively, as average loans increased from $14.34 billion to $14.49 billion. Additionally, the rate on interest bearing deposits increased to 2.93% as of March 31, 2024, from 2.80% as of December 31, 2023, while average interest-bearing deposits increased from $12.48 billion to $12.72 billion. During the first quarter of 2024, there was $1.1 million of event interest income compared to $120,000 of event interest expense for the fourth quarter of 2023. Purchase accounting accretion on acquired loans was $2.8 million and $2.3 million and average purchase accounting loan discounts were $24.8 million and $27.4 million for the three-month periods ended March 31, 2024 and December 31, 2023, respectively. Net interest income on a fully taxable equivalent basis was $205.5 million for the three-month period ended March 31, 2024, and $203.9 million for the three-month period ended December 31, 2023. This increase in net interest income for the three-month period ended March 31, 2024, was the result of a $10.5 million increase in interest income, partially offset by an $8.9 million increase in interest expense. The $10.5 million increase in interest income was primarily the result of a $6.2 million increase in income from interest-bearing balances due from banks and a $5.3 million increase in loan interest income, partially offset by a $1.0 million decrease in investment income. The increase in interest income is a result of the current high interest rate environment. The $8.9 million increase in interest expense was due to a $4.6 million increase in interest expense on deposits and a $4.4 million increase in interest expense on FHLB and other borrowed funds. The increase in interest expense is also a result of the current high interest rate environment. The Company reported $41.8 million of non-interest income for the first quarter of 2024. The most important components of first quarter non-interest income were $10.2 million from other service charges and fees, $9.7 million from service charges on deposit accounts, $7.4 million from other income, $5.1 million from trust fees, $3.6 million in mortgage lending income, $3.0 million from dividends from FHLB, FRB, FNBB and other, $1.2 million from the increase in cash value of life insurance and $1.0 million from the fair value adjustment for marketable securities. Non-interest expense for the first quarter of 2024 was $111.5 million. The most important components of non-interest expense were $60.9 million from salaries and employee benefits, $26.9 million in other operating expense, $14.6 million in occupancy and equipment expenses and $9.1 million in data processing expenses. For the first quarter of 2024, our efficiency ratio was 44.22%, and our efficiency ratio, as adjusted (non-GAAP), was 44.43%(1). Financial Condition Total loans receivable were $14.51 billion at March 31, 2024, compared to $14.42 billion at December 31, 2023. Total deposits were $16.87 billion at March 31, 2024, compared to $16.79 billion at December 31, 2023. Total assets were $22.84 billion at March 31, 2024, compared to $22.66 billion at December 31, 2023. During the first quarter of 2024, the Company experienced approximately $88.9 million in loan growth. Centennial CFG experienced $81.5 million of organic loan growth and had loans of $2.03 billion at March 31, 2024. Our remaining markets experienced $7.4 million in organic loan growth during the quarter. Non-performing loans to total loans was 0.55% and 0.44% at March 31, 2024 and December 31, 2023, respectively. Non-performing assets to total assets were 0.48% and 0.42% at March 31, 2024 and December 31, 2023, respectively. Net charge-offs were $3.4 million and $3.0 million for the three months ended March 31, 2024 and December 31, 2023, respectively. Non-performing loans at March 31, 2024 were $17.5 million, $10.6 million, $44.7 million, $408,000, $3.9 million and $2.8 million in the Arkansas, Florida, Texas, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $80.0 million. Non-performing assets at March 31, 2024 were $17.9 million, $17.9 million, $45.0 million, $408,000, $3.9 million and $25.5 million in the Arkansas, Florida, Texas, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $110.7 million. The Company's allowance for credit losses on loans was $290.3 million at March 31, 2024, or 2.00% of total loans, compared to the allowance for credit losses on loans of $288.2 million, or 2.00% of total loans, at December 31, 2023. As of March 31, 2024 and December 31, 2023, the Company's allowance for credit losses on loans was 362.94% and 449.66% of its total non-performing loans, respectively. Stockholders' equity was $3.81 billion at March 31, 2024, compared to $3.79 billion at December 31, 2023, an increase of approximately $20.3 million. The increase in stockholders' equity is primarily associated with the $63.9 million increase in retained earnings, partially offset by the $24.0 million in stock repurchases and $22.4 million reduction in accumulated other comprehensive income. Book value per common share was $18.98 at March 31, 2024, compared to $18.81 at December 31, 2023. Tangible book value per common share (non-GAAP) was $11.79(1) at March 31, 2024, compared to $11.63(1) at December 31, 2023. Branches The Company currently has 76 branches in Arkansas, 78 branches in Florida, 58 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, April 18, 2024. 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/645372014. 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=b0ede7ae&confId=62290. 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 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 1-833-470-1428, Passcode: 421224. A replay of the call will be available by calling 1-866-813-9403, Passcode: 724868, which will be available until April 25, 2024, at 10:59 p.m. CT (11:59 p.m. ET). Internet access to the call will be available live or in recorded version on the Company's website at www.homebancshares.com. About Home BancShares Home BancShares, Inc. is a bank holding company, headquartered in Conway, Arkansas. Its wholly-owned subsidiary, Centennial Bank, provides a broad range of commercial and retail banking plus related financial services to businesses, real estate developers, investors, individuals and municipalities. Centennial Bank has branch locations in Arkansas, Florida, Texas, South Alabama and New York City. The Company's common stock is traded through the New York Stock Exchange under the symbol "HOMB." The Company was founded in 1998. Visit www.homebancshares.com or www.my100bank.com for more information. (1) Calculation of this metric and the reconciliation to GAAP are included in the schedules accompanying this release. Non-GAAP Financial Measures This press release contains financial information determined by methods other than in accordance with generally accepted accounting principles (GAAP). The Company's management uses these non-GAAP financial measures--including net income (earnings), as adjusted; pre-tax, pre-provision, net income (PPNR); PPNR, as adjusted; pre-tax net income, as adjusted, to total revenue (net); pre-tax, pre-provision, profit percentage; pre-tax, pre-provision, profit percentage, as adjusted; diluted earnings per common share, as adjusted; return on average assets, as adjusted; return on average assets excluding intangible amortization; return on average assets, as adjusted, excluding intangible amortization; return on average common equity, as adjusted; return on average tangible common equity; return on average tangible common equity, as adjusted; return on average tangible common equity excluding intangible amortization; return on average tangible common equity, as adjusted, excluding intangible amortization; efficiency ratio, as adjusted; tangible book value per common share and tangible common equity to tangible assets--to provide meaningful supplemental information regarding our performance. These measures typically adjust GAAP performance measures to include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant items or transactions that management believes are not indicative of the Company's primary business operating results. Since the presentation of these GAAP performance measures and their impact differ between companies, management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company's business. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in the tables of this release. General This release contains forward-looking statements regarding the Company's plans, expectations, goals and outlook for the future, including future financial results. 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 or phrases like "may," "plan," "propose," "contemplate," "anticipate," "believe," "intend," "continue," "expect," "project," "predict," "estimate," "could," "should," "would," "on track" and similar expressions, you should consider them as identifying forward-looking statements, although we may use other phrasing. Forward-looking statements of this type speak only as of the date of this news release. By nature, forward-looking statements involve inherent risks and uncertainties. Various factors could cause actual results to differ materially from those contemplated by the forward-looking statements. These factors include, but are not limited to, the following: economic conditions, credit quality, interest rates, loan demand, real estate values and unemployment, including the ongoing impacts of inflation; disruptions, uncertainties and related effects on our business and operations that may result from any future outbreaks of the COVID-19 pandemic or other public health crises, including the impact on, among other things, credit quality and liquidity; the ability to identify, complete and successfully integrate new acquisitions; the risk that expected cost savings and other benefits from acquisitions may not be fully realized or may take longer to realize than expected; diversion of management time on acquisition-related issues; the availability of and access to capital and liquidity on terms acceptable to us; legislative and regulatory changes and risks and expenses associated with current and future legislation and regulations; technological changes and cybersecurity risks and incidents; 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; potential increases in deposit insurance assessments, increased regulatory scrutiny or market disruptions resulting from financial challenges in the banking industry; 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, 2023, filed with the SEC on February 26, 2024. FOR MORE INFORMATION CONTACT:Donna TownsellDirector of Investor RelationsHome BancShares, Inc.(501) 328-4625 Home BancShares, Inc. Consolidated End of Period Balance Sheets (Unaudited)                       (In thousands)   Mar. 31, 2024   Dec. 31, 2023   Sep. 30, 2023   Jun. 30, 2023   Mar. 31, 2023 ASSETS                                           Cash and due from banks   $ 205,262     $ 226,363     $ 229,474     $ 275,656     $ 250,841   Interest-bearing deposits with other banks     969,996       773,850       258,605       335,535       437,213   Cash and cash equivalents     1,175,258       1,000,213       488,079       611,191       688,054   Federal funds sold     5,200       5,100       3,925       1,550       —   Investment securities - available-for-sale, net of allowance for credit losses     3,400,884       3,507,841       3,472,173       3,645,013       3,772,138   Investment securities - held-to-maturity, net of allowance for credit losses     1,280,586       1,281,982       1,283,475       1,285,150       1,286,373   Total investment securities     4,681,470       4,789,823       4,755,648       4,930,163       5,058,511   Loans receivable     14,513,673       14,424,728       14,271,833       14,180,972       14,386,634   Allowance for credit losses     (290,294 )     (288,234 )     (285,562 )     (285,683 )     (287,169 ) Loans receivable, net     14,223,379       14,136,494       13,986,271       13,895,289       14,099,465   Bank premises and equipment, net     389,618       393,300       397,093       397,315       402,094   Foreclosed assets held for sale     30,650       30,486       691       725       425   Cash value of life insurance     215,424       214,516       213,351       213,090       214,792   Accrued interest receivable     119,029       118,966       110,946       101,066       102,740   Deferred tax asset, net     202,882       197,164       222,741       206,430       193,334   Goodwill     1,398,253       1,398,253       1,398,253       1,398,253       1,398,253   Core deposit intangible     46,630       48,770       51,023       53,500       55,978   Other assets     347,928       323,573       322,617       317,857       304,609   Total assets   $ 22,835,721     $ 22,656,658     $ 21,950,638     $ 22,126,429     $ 22,518,255                         LIABILITIES AND STOCKHOLDERS' EQUITY                                           Liabilities                     Deposits:                     Demand and non-interest-bearing   $ 4,115,603     $ 4,085,501     $ 4,280,429     $ 4,598,593     $ 4,945,729   Savings and interest-bearing transaction accounts     11,047,258       11,050,347       10,786,087       11,169,940       11,392,566   Time deposits     1,703,269       1,651,863       1,452,229       1,228,358       1,107,171   Total deposits     16,866,130       16,787,711       16,518,745       16,996,891       17,445,466   Securities sold under agreements to repurchase     176,107       142,085       160,120       160,349       138,742   FHLB and other borrowed funds     1,301,050       1,301,300       1,001,550       701,550       650,000   Accrued interest payable and other liabilities     241,345       194,653       175,367       173,426       212,887   Subordinated debentures     439,688       439,834       439,982       440,129       440,275   Total liabilities     19,024,320       18,865,583       18,295,764       18,472,345       18,887,370                         Stockholders' equity                     Common stock     2,008       2,015       2,023       2,026       2,032   Capital surplus     2,326,824       2,348,023       2,363,210       2,366,560       2,375,754   Retained earnings     1,753,994       1,690,112       1,640,171       1,578,176       1,509,400   Accumulated other comprehensive loss     (271,425 )     (249,075 )     (350,530 )     (292,678 )     (256,301 ) Total stockholders' equity     3,811,401       3,791,075       3,654,874       3,654,084       3,630,885   Total liabilities and stockholders' equity   $ 22,835,721     $ 22,656,658     $ 21,950,638     $ 22,126,429     $ 22,518,255                         Home BancShares, Inc. Consolidated Statements of Income (Unaudited)                                   Quarter Ended   Three Months Ended (In thousands)   Mar. 31, 2024   Dec. 31, 2023   Sep. 30, 2023   Jun. 30, 2023   Mar. 31, 2023   Mar. 31, 2024   Mar. 31, 2023 Interest income:                             Loans   $ 265,294     $ 260,003     $ 249,464     $ 243,152     $ 236,997     $ 265,294     $ 236,997   Investment securities                             Taxable     33,229       34,016       34,520       34,751       35,288       33,229       35,288   Tax-exempt     7,803       7,855       7,868       7,932       7,963       7,803       7,963   Deposits - other banks     10,528       4,281       2,328       3,729       4,685       10,528       4,685   Federal funds sold     61       65       82       68       6       61       6   Total interest income     316,915       306,220       294,262       289,632       284,939       316,915       284,939   Interest expense:                             Interest on deposits     92,548       87,971       78,698       70,147       59,162       92,548       59,162   Federal funds purchased     —       —       1       2       —       —       —   FHLB and other borrowed funds     14,276       9,878       8,161       6,596       6,190       14,276       6,190   Securities sold under agreements to repurchase     1,404       1,480       1,344       1,121       868       1,404       868   Subordinated debentures     4,097       4,121       4,121       4,123       4,124       4,097       4,124   Total interest expense     112,325       103,450       92,325       81,989       70,344       112,325       70,344   Net interest income     204,590       202,770       201,937       207,643       214,595       204,590       214,595   Provision for credit losses on loans     5,500       5,650       2,800       2,300       1,200       5,500       1,200   Recovery of credit losses on unfunded commitments     (1,000 )     —       (1,500 )     —       —       (1,000 )     —   Provision for credit losses on investment securities     —       —       —       1,683       —       —       —   Total credit loss expense     4,500       5,650       1,300       3,983       1,200       4,500       1,200   Net interest income after credit loss expense     200,090       197,120       200,637       203,660       213,395       200,090       213,395   Non-interest income:                             Service charges on deposit accounts     9,686       10,072       10,062       9,231       9,842       9,686       9,842   Other service charges and fees     10,189       10,422       10,128       11,763       11,875       10,189       11,875   Trust fees     5,066       4,316       4,660       4,052       4,864       5,066       4,864   Mortgage lending income     3,558       2,385       3,132       2,650       2,571       3,558       2,571   Insurance commissions     508       480       562       518       526       508       526   Increase in cash value of life insurance     1,195       1,170       1,170       1,211       1,104       1,195       1,104   Dividends from FHLB, FRB, FNBB & other     3,007       3,010       2,916       2,922       2,794       3,007       2,794   Gain on SBA loans     198       42       97       —       139       198       139   (Loss) gain on branches, equipment and other assets, net     (8 )     583       —       917       7       (8 )     7   Gain on OREO, net     17       13       —       319