Home BancShares, Inc. Announces Record Net Income Of $66.5 Million For 2013

CONWAY, Ark., Jan. 16, 2014 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (Nasdaq:HOMB), parent company of Centennial Bank, today announced record net income for the year ended December 31, 2013 of $66.5 million compared to $63.0 million for the year ended 2012. Diluted earnings per share for the year ended 2013 was $1.14 per share compared to $1.11 per share for 2012. Excluding the $18.4 million of 2013 merger expenses associated with the recently completed acquisition of Liberty Bancshares, Inc. (Liberty), diluted earnings per share for the year ended 2013 was $1.33 per share. Excluding the net total expense of $2.0 million for merger expenses and gain on acquisition associated with the three acquisitions completed during 2012, diluted earnings per share for the year ended 2012 was $1.13 per share. Excluding merger expenses and acquisition gain, this represents an increase of $0.20 per share or 17.7% for the year ended 2013 when compared to the previous year.

For the fourth quarter of 2013, the Company recorded quarterly net income of $13.0 million, or $0.19 diluted earnings per common share, compared to $16.9 million of net income, or $0.30 diluted earnings per common share for the same quarter in 2012. Excluding the $17.3 million of fourth quarter 2013 merger expenses associated with the Liberty Bancshares, Inc. acquisition, diluted earnings per share for the fourth quarter 2013 was $0.37 per share. Excluding the net total income of $36,000 for merger expenses and gain on acquisition associated with the two acquisitions completed during the fourth quarter of 2012, diluted earnings per share for the fourth quarter 2012 was $0.30 per share. Excluding merger expenses and acquisition gain, this represents an increase of $0.07 per share or 23.3% for the fourth quarter 2013 when compared to the fourth quarter of the previous year.

Because acquisitions are growth and capital management strategies, earnings excluding amortization of intangibles after-tax are useful in evaluating the Company. Diluted earnings per share excluding intangible amortization for the fourth quarter of 2013 was $0.21 compared to $0.31 diluted earnings per share excluding intangible amortization (split adjusted) for the same period in 2012.

"During the fourth quarter we made a game-changing purchase with the Liberty acquisition. It was a historical accomplishment for Home BancShares to be able to complete Arkansas's largest ever in-state bank acquisition plus convert the core operating systems in the same quarter. This impressive execution has the Company in position to realize the anticipated cost savings, thereby rewarding our shareholders," said John Allison, Chairman. "Our team is focused on this important task and is working to recognize these enhancements as quickly as possible. I am looking forward to watching our team succeed in this process. As a result, I believe there is a bright future for us during 2014."

"We have been able to achieve many successes throughout the year that positioned us to be ready to handle the acquisition of Liberty," said Randy Sims, Chief Executive Officer. "As for the financial results, we are proud of the record profit reported for 2013. It was a truly remarkable financial performance year with the Company reporting net income of $66.5 million and diluted earnings per share of $1.14 per share or net income of $77.7 million and diluted earnings per share of $1.33 excluding merger expenses. During the year we have been focused on our efficiency ratio and net interest margin. These efforts have paid off as we are pleased to report an impressive 45.49% core efficiency ratio and 5.19% net interest margin for the year."

Operating Highlights

Each quarter we perform credit impairment tests on the loans acquired in our FDIC loss sharing and non-loss sharing acquisitions. During our fourth quarter 2013 impairment testing, eight FDIC loss sharing pools evaluated by the Company were determined to have a material projected credit improvement. As a result of this improvement, the Company will recognize approximately $14.1 million as an adjustment to yield over the weighted average life of the loans ($1.8 million was recognized during the fourth quarter of 2013). Improvements in credit quality decrease the basis in the related indemnification asset and increase our FDIC true-up liability. This positive event will reduce the indemnification asset by approximately $8.4 million ($1.3 was recognized for the fourth quarter of 2013) and increase our FDIC true-up liability by $1.3 million ($46,000 was recognized for the fourth quarter of 2013). The $8.4 million will be amortized over the weighted average life of the shared-loss agreement. This amortization will be shown as a reduction to FDIC indemnification non-interest income. The $1.3 million will be expensed over the remaining true-up measurement date as other non-interest expense.

Additionally, during our fourth quarter 2013 impairment testing, five FDIC loss sharing pools evaluated by the Company were determined to have material projected credit deterioration. As a result of the deterioration, the Company recognized $3.9 million in the allowance for loan losses for covered loans. Since these losses will be under loss share with the FDIC, the Company was able to establish an additional $3.1 million of indemnification asset. The financial impact of this impairment testing was $891,000 of provision for loan losses for covered loans.

Net interest income for the fourth quarter of 2013 increased 62.4% to $67.1 million from $41.3 million during the fourth quarter of 2012.  For the fourth quarter of 2013, the effective yield on non-covered loans and covered loans was 6.00% and 12.93%, respectively.  Net interest margin, on a fully taxable equivalent basis, was 5.09% for the quarter just ended compared to 4.86% in the fourth quarter of 2012, an increase of 23 basis points. The pools which have been determined to have material projected credit improvement as a result of the quarterly impairment testing during 2013 and the acquisition of Liberty have significantly changed the mix and metrics on the net interest margin over the year. Although there have been many changes throughout the year, the Company continues to remain focused on expanding its net interest margin through opportunities such as improved pricing on interest-bearing deposits.

The Company reported $12.2 million of non-interest income for the fourth quarter of 2013, compared to $16.2 million for the fourth quarter of 2012. Excluding gain on acquisitions, non-interest income for the fourth quarter of 2013 was $12.2 million compared to $11.0 million for the fourth quarter of 2012. The most important components of the fourth quarter non-interest income were $6.0 million from service charges on deposits accounts, $5.4 million from other service charges and fees, $1.5 million from mortgage lending income, $840,000 from other income, $778,000 from insurance commissions, and $347,000 from gain on sale of OREO offset by the $2.9 million of net amortization on the FDIC indemnification asset.  

Non-interest expense for the fourth quarter of 2013 was $54.9 million compared to $29.6 million for the fourth quarter of 2012. Excluding merger expenses, non-interest expense for the fourth quarter of 2013 was $37.6 million compared to $24.4 million for the fourth quarter of 2012. These increases are primarily associated with the acquisition of Liberty during the fourth quarter of 2013. Excluding merger expenses, non-interest expense only increased 53.9% when compared to 60.6% in asset growth. For the fourth quarter of 2013, our core efficiency ratio was 45.22% which is comparable to the 44.40% reported for fourth quarter of 2012. On December 6, 2013, the Company completed the integration of Liberty's operating systems. As a result, during 2014 the Company anticipates it will be able to continue achieving cost savings from the Liberty transaction.

Financial Condition

Total non-covered loans were $4.19 billion at December 31, 2013 compared to $2.33 billion at December 31, 2012.  Total covered loans were $282.5 million at December 31, 2013 compared to $384.9 million at December 31, 2012.  Total deposits were $5.39 billion at December 31, 2013 compared to $3.48 billion at December 31, 2012.  Total assets were $6.81 billion at December 31, 2013 compared to $4.24 billion at December 31, 2012. All of these increases are primarily related to the acquisition of Liberty during the fourth quarter of 2013.

Non-performing non-covered loans were $38.3 million as of December 31, 2013, of which $20.3 million were located in Florida. Non-performing non-covered loans as a percent of total non-covered loans were 0.91% as of December 31, 2013 compared to 1.17% as of December 31, 2012.  Non-performing non-covered assets were $68.4 million as of December 31, 2013, of which $24.9 million were located in Florida. Non-performing non-covered assets as a percent of total non-covered assets were 1.07% as of December 31, 2013 compared to 1.30% as of December 31, 2012. 

The Company's allowance for loan losses for non-covered loans was $39.0 million at December 31, 2013, or 0.93% of total non-covered loans, compared to $45.2 million, or 1.94% of total non-covered loans, at December 31, 2012. As of December 31, 2013 and 2012, the allowance for loan losses for non-covered loans plus discount for credit losses on non-covered loans acquired to total non-covered loans plus discount for credit losses on non-covered loans acquired was 4.89% and 5.26%, respectively. As of December 31, 2013 and 2012, the Company's allowance for loan losses for non-covered loans was 102% and 166% of its total non-performing non-covered loans, respectively.

Stockholders' equity was $841.0 million at December 31, 2013 compared to $515.5 million at December 31, 2012, an increase of $325.5 million. During the fourth quarter of 2013, the Company issued $290.1 million of common stock to the shareholders of Liberty. Book value per common share was $12.92 at December 31, 2013 compared to $9.17 (split adjusted) at December 31, 2012. Tangible book value per common share was $7.94 at December 31, 2013 compared to $7.99 and $7.43 (split adjusted) at September 30, 2013 and December 31, 2012, respectively. Excluding the decline of accumulated other comprehensive income (i.e. UGL on investments) in equity and the quarterly dividend on the common stock the December 31, 2013 tangible book value would have increased by $0.07 from the amount reported as of September 30, 2013.

Branches

During the fourth quarter of 2013, the Company acquired 46 Arkansas locations as a result of Liberty. In an effort to achieve efficiencies from this transaction, the Company subsequently closed or merged 4 locations. Also during the fourth quarter of 2013, the Company closed one branch in Panama City, Florida. The Company currently has no plans for additional de novo branch locations. During the first quarter of 2014, the Company has plans to close one branch in Panacea, Florida. The Company currently has 88 branches in Arkansas, 53 branches in Florida and 7 branches in Alabama.

Conference Call

Management will conduct a conference call to review this information at 1:00 p.m. CT (2:00 ET) on Thursday, January 16, 2014. Interested parties can listen to this call by calling 1-888-317-6016 and asking for the Home BancShares conference call. A replay of the call will be available by calling 1-877-344-7529, Passcode: 10038852, which will be available until January 24, 2014 at 8:00 a.m. CT (9:00 ET). Internet access to the call will be available live or in recorded version on the Company's website at www.homebancshares.com under "Investor Relations" for 12 months.

General

This release contains forward-looking statements regarding the Company's plans, expectations, goals and outlook for the future. Statements in this press release that are not historical facts should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements of this type speak only as of the date of this news release. By nature, forward-looking statements involve inherent risk and uncertainties. Various factors, including, but not limited to, economic conditions, credit quality, interest rates, loan demand, the ability to successfully integrate new acquisitions and changes in the assumptions used in making the forward-looking statements, could cause actual results to differ materially from those contemplated by the forward-looking statements. Additional information on factors that might affect Home BancShares, Inc.'s financial results is included in its Annual Report on Form 10-K for the year ended December 31, 2012 filed with the Securities and Exchange Commission. 

Home BancShares, Inc. is a bank holding company, headquartered in Conway, Arkansas. Our wholly-owned subsidiary, Centennial Bank, provides a broad range of commercial and retail banking plus related financial services to businesses, real estate developers, investors, individuals and municipalities. Centennial Bank has locations in Arkansas, Florida and South Alabama. The Company's common stock is traded through the NASDAQ Global Select Market under the symbol "HOMB."
Home BancShares, Inc. 
Consolidated End of Period Balance Sheets 
(Unaudited) 
           
   Dec. 31,   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31, 
(In thousands)   2013   2013   2013   2013   2012 
           
ASSETS          
           
Cash and due from banks   $ 104,005  $ 77,261  $ 75,148  $ 95,604  $ 101,972
Interest-bearing deposits with other banks   61,529  35,080  97,576  206,753  129,883
Cash and cash equivalents   165,534  112,341  172,724  302,357  231,855
Federal funds sold   4,275  10,700  2,475  2,850  17,148
Investment securities - available-for-sale   1,175,484  839,560  736,406  724,929  726,223
Investment securities - held-to-maturity   114,621  9,528  --   --   -- 
Loans receivable not covered by loss share   4,194,437  2,378,838  2,339,242  2,309,146  2,331,199
Loans receivable covered by FDIC loss share   282,516  308,072  329,802  358,669  384,884
Allowance for loan losses   (43,815)  (38,748)  (41,450)  (45,935)  (50,632)
Loans receivable, net   4,433,138  2,648,162  2,627,594  2,621,880  2,665,451
Bank premises and equipment, net   197,224  119,637  119,737  117,534  113,883
Foreclosed assets held for sale not covered by loss share   29,869  14,158  15,985  18,861  20,393
Foreclosed assets held for sale covered by FDIC loss share   20,999  24,320  27,073  29,928  31,526
FDIC indemnification asset   89,611  101,192  116,071  126,275  139,646
Cash value of life insurance   63,501  59,602  59,401  59,185  59,219
Accrued interest receivable   22,944  14,275  14,424  14,367  16,305
Deferred tax asset, net   89,412  46,045  46,655  40,907  46,998
Goodwill   301,736  85,681  85,681  85,681  85,681
Core deposit and other intangibles   22,298  9,655  10,457  11,259  12,061
Other assets   81,215  66,450  56,654  69,494  75,741
Total assets   $ 6,811,861  $ 4,161,306  $ 4,091,337  $ 4,225,507  $ 4,242,130
           
LIABILITIES AND STOCKHOLDERS' EQUITY          
           
Liabilities          
Deposits:           
Demand and non-interest-bearing   $ 991,161  $ 757,328  $ 733,374  $ 717,830  $ 666,414
Savings and interest-bearing transaction accounts   2,792,423  1,683,010  1,735,280  1,810,957  1,784,047
Time deposits   1,609,462  808,480  856,581  936,649  1,032,991
Total deposits   5,393,046  3,248,818  3,325,235  3,465,436  3,483,452
Federal funds purchased   --   --   --   --   -- 
Securities sold under agreements to repurchase   160,984  71,307  73,461  77,194  66,278
FHLB borrowed funds   350,661  270,232  130,251  130,369  130,388
Accrued interest payable and other liabilities   5,389  22,714  25,787  21,020  17,672
Subordinated debentures   60,826  3,093  3,093  3,093  28,867
Total liabilities   5,970,906  3,616,164  3,557,827  3,697,112  3,726,657
           
Stockholders' equity           
Common stock   651  563  562  281  281
Capital surplus   708,058  417,627  416,795  416,741  416,354
Retained earnings   136,386  128,316  114,172  100,730  86,837
Accumulated other comprehensive income (loss)   (4,140)  (1,364)  1,981  10,643  12,001
Total stockholders' equity   840,955  545,142  533,510  528,395  515,473
Total liabilities and stockholders' equity   $ 6,811,861  $ 4,161,306  $ 4,091,337  $ 4,225,507  $ 4,242,130
 
 
Home BancShares, Inc. 
Consolidated Statements of Income 
(Unaudited) 
               
   Quarter Ended   Year Ended 
   Dec. 31,   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31,   Dec. 31,   Dec. 31, 
(In thousands)   2013   2013   2013   2013   2012   2013   2012 
               
Interest income               
Loans   $ 65,338  $ 45,003  $ 44,036  $ 44,159  $ 41,203  $ 198,536  $ 159,359
Investment securities               
Taxable   4,760  2,645  2,490  2,403  2,708  12,298  11,226
Tax-exempt   1,554  1,507  1,467  1,481  1,544  6,009  6,154
Deposits - other banks   51  19  86  98  52  254  379
Federal funds sold   14  2  6  7  9  29  17
               
Total interest income   71,717  49,176  48,085  48,148  45,516  217,126  177,135
               
Interest expense               
Interest on deposits   3,320  1,810  2,129  2,485  2,877  9,744  14,989
Federal funds purchased   1  3  --   --   1  4  1
FHLB borrowed funds   915  910  1,012  1,004  1,030  3,841  4,364
Securities sold under agreements to repurchase   171  87  86  80  79  424  407
Subordinated debentures   255  16  17  230  247  518  1,774
               
Total interest expense   4,662  2,826  3,244  3,799  4,234  14,531  21,535
               
Net interest income   67,055  46,350  44,841  44,349  41,282  202,595  155,600
Provision for loan losses   4,330  --   850  --   1,250  5,180  2,750
Net interest income after provision for loan losses   62,725  46,350  43,991  44,349  40,032  197,415  152,850
               
Non-interest income               
Service charges on deposit accounts   6,001  4,072  4,088  3,709  4,062  17,870  15,069
Other service charges and fees   5,415  3,671  3,479  3,437  3,062  16,002  12,428
Mortgage lending income   1,470  1,527  1,619  1,372  1,461  5,988  5,192
Insurance commissions   778  519  444  679  368  2,420  1,869
Income from title services   122  156  136  109  133  523  462
Increase in cash value of life insurance   235  203  218  180  202  836  873
Dividends from FHLB, FRB, bankers' bank & other   273  179  401  175  635  1,028  1,167
Gain on acquisitions   --   --   --   --   5,205  --   5,205
Gain on sale of SBA loans   --   79  --   56  --   135  404
Gain (loss) on sale of premises & equip, net   (315)  303  394  15  (30)  397  324
Gain (loss) on OREO, net   347  777  441  86  121  1,651  (49)
Gain (loss) on securities, net   --   --   111  --   (1)  111  9
FDIC indemnification accretion/amortization, net   (2,949)  (3,177)  (2,283)  (1,992)  229  (10,401)  1,721
Other income   840  1,009  757  1,199  740  3,805  3,295
               
Total non-interest income   12,217  9,318  9,805  9,025  16,187  40,365  47,969
               
Non-interest expense               
Salaries and employee benefits   19,504  12,981  12,957  12,952  12,348  58,394  47,289
Occupancy and equipment   5,670  4,010  3,894  3,594  3,712  17,168  14,500
Data processing expense   1,538  1,114  1,231  1,510  1,331  5,393  4,930
Other operating expenses   28,162  8,610  7,773  7,807  12,186  52,352  35,649
               
Total non-interest expense   54,874  26,715  25,855  25,863  29,577  133,307  102,368
               
Income before income taxes   20,068  28,953  27,941  27,511  26,642  104,473  98,451
Income tax expense   7,118  10,590  10,282  9,963  9,703  37,953  35,429
Net income available to all shareholders   $ 12,950  $ 18,363  $ 17,659  $ 17,548  $ 16,939  $ 66,520  $ 63,022
 
 
Home BancShares, Inc. 
Selected Financial Information 
(Unaudited) 
               
   Quarter Ended   Year Ended 
(Dollars and shares in thousands,   Dec. 31,   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31,   Dec. 31,   Dec. 31, 
except per share data)   2013   2013   2013   2013   2012   2013   2012 
               
               
PER SHARE DATA              
               
Diluted earnings per common share   $ 0.19  $ 0.33  $ 0.31  $ 0.31  $ 0.30  $ 1.14  $ 1.11
Diluted earnings per common share excluding intangible amortization   0.21  0.33  0.32  0.32  0.31  1.18  1.14
Basic earnings per common share   0.19  0.33  0.32  0.31  0.30  1.15  1.12
Dividends per share - common   0.075  0.075  0.075  0.065  0.130  0.290  0.290
Book value per common share   12.92  9.69  9.49  9.40  9.17  12.92  9.17
Tangible book value per common share   7.94  7.99  7.78  7.67  7.43  7.94  7.43
               
STOCK INFORMATION              
               
Average common shares outstanding   62,865  56,256  56,234  56,222  56,145  57,908  56,274
Average diluted shares outstanding   63,234  56,620  56,577  56,535  56,486  58,252  56,630
End of period common shares outstanding   65,082  56,278  56,243  56,229  56,213  65,082  56,213
               
ANNUALIZED PERFORMANCE METRICS              
               
Return on average assets  0.83% 1.80% 1.71% 1.70% 1.67% 1.43% 1.58%
Return on average assets excluding intangible amortization  0.91% 1.89% 1.80% 1.79% 1.75% 1.52% 1.66%
Return on average assets excluding intangible amortization, provision for loan losses, merger expenses, bargain purchase gain, gain on life insurance proceeds and income taxes (Core ROA)  2.86% 3.09% 2.93% 2.77% 2.88% 2.91% 2.72%
Return on average common equity  6.68% 13.63% 13.27% 13.68% 13.19% 11.27% 12.75%
Return on average tangible common equity excluding intangible amortization  10.83% 17.04% 16.65% 17.29% 16.46% 15.26% 15.87%
Efficiency ratio  66.73% 45.67% 44.98% 46.03% 49.21% 52.44% 47.88%
Core efficiency ratio  45.22% 44.76% 45.76% 46.39% 44.40% 45.49% 45.73%
Net interest margin - FTE  5.09% 5.41% 5.18% 5.15% 4.86% 5.19% 4.70%
Fully taxable equivalent adjustment   $ 1,133  $ 1,073  $ 1,051  $ 1,075  $ 1,122  $ 4,332  $ 4,475
Total revenue   83,934  58,494  57,890  57,173  61,703  257,491  225,104
               
EARNINGS EXCLUDING              
INTANGIBLE AMORTIZATION              
               
GAAP net income available to common shareholders   $ 12,950  $ 18,363  $ 17,659  $ 17,548  $ 16,939  $ 66,520  $ 63,022
Intangible amortization after-tax   740  487  488  487  452  2,202  1,678
Earnings excluding intangible amortization   $ 13,690  $ 18,850  $ 18,147  $ 18,035  $ 17,391  $ 68,722  $ 64,700
               
GAAP diluted earnings per share   $ 0.19  $ 0.33  $ 0.31  $ 0.31  $ 0.30  $ 1.14  $ 1.11
Intangible amortization after-tax   0.02  --   0.01  0.01  0.01  0.04  0.03
Diluted earnings per share excluding intangible amortization   $ 0.21  $ 0.33  $ 0.32  $ 0.32  $ 0.31  $ 1.18  $ 1.14
               
OTHER OPERATING EXPENSES              
               
Advertising   $ 653  $ 363  $ 120  $ 693  $ 549  $ 1,829  $ 2,447
Merger and acquisition expenses   17,315  1,034  1  28  5,169  18,378  7,157
Amortization of intangibles   1,218  802  802  802  743  3,624  2,761
Electronic banking expense   1,458  926  960  863  845  4,207  3,175
Directors' fees   179  188  210  190  196  767  807
Due from bank service charges   179  136  168  133  124  616  536
FDIC and state assessment   858  684  677  630  571  2,849  2,313
Insurance   756  572  555  566  501  2,449  1,774
Legal and accounting   450  227  394  322  225  1,393  1,065
Other professional fees   561  404  490  473  392  1,928  1,655
Operating supplies   455  309  332  343  299  1,439  1,134
Postage   295  212  231  207  216  945  896
Telephone   375  291  291  303  282  1,260  1,074
Other expense   3,410  2,462  2,542  2,254  2,074  10,668  8,855
               
Total other operating expenses   $ 28,162  $ 8,610  $ 7,773  $ 7,807  $ 12,186  $ 52,352  $ 35,649
 
 
Home BancShares, Inc. 
Selected Financial Information 
(Unaudited) 
           
   Dec. 31,   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31, 
(Dollars in thousands)   2013   2013   2013   2013   2012 
           
BALANCE SHEET RATIOS          
           
Total loans to total deposits  83.01% 82.70% 80.27% 76.98% 77.97%
Common equity to assets  12.3% 13.1% 13.0% 12.5% 12.2%
Tangible common equity to tangible assets  8.0% 11.1% 10.9% 10.5% 10.1%
           
ALLOWANCE FOR LOAN LOSSES          
           
Non-Covered           
Balance, beginning of period   $ 37,642  $ 40,498  $ 42,302  $ 45,170  $ 47,292
Loans charged off   2,417  5,101  3,361  3,318  3,739
Recoveries of loans previously charged off   358  2,245  807  450  367
Net loans charged off   2,059  2,856  2,554  2,868  3,372
Provision for loan losses   3,439  --   750  --   1,250
Balance, end of period   $ 39,022  $ 37,642  $ 40,498  $ 42,302  $ 45,170
           
Discount for credit losses on non-covered loans acquired   174,637  77,413  80,322  80,305  81,717
Net charge-offs on loans not covered by loss share to average non-covered loans  0.22% 0.48% 0.44% 0.50% 0.61%
Allowance for loan losses for non-covered loans to total non-covered loans  0.93% 1.58% 1.73% 1.83% 1.94%
Allowance for loan losses for non-covered loans plus discount for credit losses on non-covered loans acquired to total non-covered loans plus discount for credit losses on non-covered loans acquired  4.89% 4.68% 4.99% 5.13% 5.26%
           
Covered          
Balance, beginning of period   $ 1,106  $ 952  $ 3,633  $ 5,462  $ 7,148
Loans charged off   287  --   3,187  1,840  1,688
Recoveries of loans previously charged off   29  154  6  11  2
Net loans charged off   258  (154)  3,181  1,829  1,686
Provision for loan losses before benefit attributable to FDIC loss share agreements   3,945  --   500  --   -- 
Benefit attributable to FDIC loss share agreements   (3,054)  --   (400)  --   -- 
Net provision for loan losses   891  --   100  --   -- 
Increase in FDIC indemnification asset   3,054  --   400  --   -- 
Balance, end of period   $ 4,793  $ 1,106  $ 952  $ 3,633  $ 5,462
           
Total Allowance for Loan Losses   $ 43,815  $ 38,748  $ 41,450  $ 45,935  $ 50,632
           
NON-PERFORMING ASSETS          
NOT COVERED BY LOSS SHARE          
           
Non-performing non-covered loans           
Non-accrual non-covered loans   $ 15,133  $ 17,187  $ 17,798  $ 19,078  $ 21,336
Non-covered loans past due 90 days or more   23,141  11,248  11,514  6,692  5,937
Total non-performing non-covered loans   38,274  28,435  29,312  25,770  27,273
Other non-performing non-covered assets           
Non-covered foreclosed assets held for sale, net   29,869  14,158  15,985  18,861  20,393
Other non-performing non-covered assets   281  185  172  285  164
Total other non-performing non-covered assets   30,150  14,343  16,157  19,146  20,557
Total non-performing non-covered assets   $ 68,424  $ 42,778  $ 45,469  $ 44,916  $ 47,830
           
Allowance for loan losses for non-covered loans to non-performing non-covered loans  101.95% 132.38% 138.16% 164.15% 165.62%
Non-performing non-covered loans to total non-covered loans  0.91% 1.20% 1.25% 1.12% 1.17%
Non-performing non-covered assets to total non-covered assets  1.07% 1.15% 1.26% 1.21% 1.30%
 
 
Home BancShares, Inc. 
Loan Information 
(Unaudited) 
           
   Dec. 31,   Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31, 
(Dollars in thousands)   2013   2013   2013   2013   2012 
           
LOANS NOT COVERED BY LOSS SHARE          
           
Real estate           
Commercial real estate loans           
Non-farm/non-residential   $ 1,739,668  $ 1,026,937  $ 1,003,391  $ 1,014,301  $ 1,019,039
Construction/land development   562,667  314,232  281,994  254,673  254,800
Agricultural   81,618  31,906  31,119  34,288  32,513
Residential real estate loans           
Residential 1-4 family   913,332  529,732  528,260  531,698  549,269
Multifamily residential   213,232  117,639  120,899  122,998  129,742
Total real estate   3,510,517  2,020,446  1,965,663  1,957,958  1,985,363
Consumer   69,570  30,478  32,671  33,823  37,462
Commercial and industrial   511,421  268,900  287,351  269,463  256,908
Agricultural   37,129  30,612  26,462  16,573  19,825
Other   65,800  28,402  27,095  31,329  31,641
Loans receivable not covered by loss share   $ 4,194,437  $ 2,378,838  $ 2,339,242  $ 2,309,146  $ 2,331,199
           
LOANS COVERED BY LOSS SHARE          
           
Real estate           
Commercial real estate loans           
Non-farm/non-residential   $ 117,164  $ 134,843  $ 143,922  $ 155,345  $ 164,723
Construction/land development   48,388  51,492  56,447  58,384  66,713
Agricultural   1,232  1,253  1,784  2,256  2,282
Residential real estate loans           
Residential 1-4 family   98,403  102,673  107,612  120,246  125,625
Multifamily residential   10,378  10,525  10,644  9,443  9,567
Total real estate   275,565  300,786  320,409  345,674  368,910
Consumer   20  17  20  28  39
Commercial and industrial   5,852  6,291  8,193  11,712  14,668
Agricultural   --   --   --   --   -- 
Other   1,079  978  1,180  1,255  1,267
Loans receivable covered by loss share   $ 282,516  $ 308,072  $ 329,802  $ 358,669  $ 384,884
 
 
Home BancShares, Inc. 
Consolidated Net Interest Margin 
(Unaudited) 
             
   Three Months Ended 
   December 31, 2013   September 30, 2013 
   Average   Income/   Yield/   Average   Income/   Yield/ 
(Dollars in thousands)   Balance   Expense   Rate   Balance   Expense   Rate 
             
ASSETS            
Earning assets             
Interest-bearing balances due from banks   $ 85,360  $ 51 0.24%  $ 40,756  $ 19 0.18%
Federal funds sold   24,180  14 0.23%  4,411  2 0.18%
Investment securities - taxable   944,786  4,760 2.00%  579,867  2,645 1.81%
Investment securities - non-taxable - FTE   270,606  2,539 3.72%  183,341  2,462 5.33%
Loans receivable - FTE   3,994,744  65,486 6.50%  2,668,421  45,121 6.71%
Total interest-earning assets   5,319,676  72,850 5.43%  3,476,796  50,249 5.73%
Non-earning assets   894,828      569,829    
Total assets   $ 6,214,504      $ 4,046,625    
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
Liabilities             
Interest-bearing liabilities             
Savings and interest-bearing transaction accounts   $ 2,510,593  $ 1,245 0.20%  $ 1,691,077  $ 637 0.15%
Time deposits   1,430,625  2,075 0.58%  832,149  1,173 0.56%
Total interest-bearing deposits   3,941,218  3,320 0.33%  2,523,226  1,810 0.28%
Federal funds purchased   552  1 0.00%  1,511  3 0.00%
Securities sold under agreement to repurchase   135,569  171 0.50%  73,924  87 0.47%
FHLB borrowed funds   357,922  915 1.01%  144,467  910 2.50%
Subordinated debentures   46,393  255 2.18%  3,093  16 2.05%
Total interest-bearing liabilities   4,481,654  4,662 0.41%  2,746,221  2,826 0.41%
Non-interest bearing liabilities             
Non-interest bearing deposits  931,918      738,526    
Other liabilities   31,312      27,315    
Total liabilities   5,444,884      3,512,062    
Shareholders' equity   769,620      534,563    
Total liabilities and shareholders' equity   $ 6,214,504      $ 4,046,625    
Net interest spread      5.02%     5.32%
Net interest income and margin - FTE     $ 68,188 5.09%    $ 47,423 5.41%
 
 
Home BancShares, Inc. 
Consolidated Net Interest Margin 
(Unaudited) 
             
   Year Ended 
   December 31, 2013   December 31, 2012 
   Average   Income/   Yield/   Average   Income/   Yield/ 
(Dollars in thousands)   Balance   Expense   Rate   Balance   Expense   Rate 
             
ASSETS            
Earning assets             
Interest-bearing balances due from banks   $ 102,777  $ 254 0.25%  $ 165,862  $ 379 0.23%
Federal funds sold   13,619  29 0.21%  7,175  17 0.24%
Investment securities - taxable   665,495  12,298 1.85%  580,826  11,226 1.93%
Investment securities - non-taxable - FTE   198,198  9,814 4.95%  158,231  10,023 6.33%
Loans receivable - FTE   3,005,470  199,063 6.62%  2,490,901  159,965 6.42%
Total interest-earning assets   3,985,559  221,458 5.56%  3,402,995  181,610 5.34%
Non-earning assets   668,656      575,728    
Total assets   $ 4,654,215      $ 3,978,723    
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
Liabilities             
Interest-bearing liabilities             
Savings and interest-bearing transaction accounts   $ 1,939,497  $ 3,437 0.18%  $ 1,501,093  $ 3,572 0.24%
Time deposits   1,038,246  6,307 0.61%  1,148,072  11,417 0.99%
Total interest-bearing deposits   2,977,743  9,744 0.33%  2,649,165  14,989 0.57%
Federal funds purchased   520  4 0.00%  273  1 0.00%
Securities sold under agreement to repurchase   88,081  424 0.48%  67,040  407 0.61%
FHLB borrowed funds   191,258  3,841 2.01%  136,312  4,364 3.20%
Subordinated debentures   19,938  518 2.60%  39,852  1,774 4.45%
Total interest-bearing liabilities   3,277,540  14,531 0.44%  2,892,642  21,535 0.74%
Non-interest bearing liabilities             
Non-interest bearing deposits  761,540      569,017    
Other liabilities   25,071      22,946    
Total liabilities   4,064,151      3,484,605    
Shareholders' equity   590,064      494,118    
Total liabilities and shareholders' equity   $ 4,654,215      $ 3,978,723    
Net interest spread      5.12%     4.60%
Net interest income and margin - FTE     $ 206,927 5.19%    $ 160,075 4.70%
CONTACT: Brian S. Davis         Chief Accounting Officer &         Investor Relations Officer         Home BancShares, Inc.         (501) 328-4770

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