Home BancShares, Inc. Announces Record Quarterly Profit of $28.4 Million

GlobeNewswire

CONWAY, Ark., July 17, 2014 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (HOMB), parent company of Centennial Bank, today announced a record quarterly profit of $28.4 million, or $0.43 diluted earnings per share for the second quarter of 2014 compared to $17.7 million or $0.31 diluted earnings per share for the same quarter in 2013. The Company increased its second quarter earnings by $10.8 million or 61.0% for the three months ended June 30, 2014 compared to the same period 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 second quarter of 2014 was $0.44 compared to $0.32 diluted earnings per share excluding intangible amortization for the same period in 2013.

"I am pleased to report the Company has again accomplished another record quarter," said John Allison, Chairman. "During the upcoming quarters, we recognize there is a need for organic loan growth. We are encouraged by the opportunities we have in front of us because we currently have the largest unfunded loan pipeline in our history. For the Florida Traditions acquisition, we plan to achieve the anticipated cost savings as quickly as possible in order to maximize the returns to our shareholders."

Randy Sims, Chief Executive Officer, added, "When compared to the second quarter of 2013, we are delighted to report our diluted earnings per share and net interest margin improved 12 cents and 32 basis points, respectively, during the quarter just ended. For the thirteenth consecutive quarter, excluding merger expenses, we have again reported the most profitable quarter in the Company's history. Additionally, two outstanding metrics were a 41.56% core efficiency ratio and a 1.70% return on average assets for the second quarter of 2014. These improvements and metrics reported by the Company during the second quarter of 2014 are impressive."

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 second quarter 2014 impairment testing, there were FDIC loss sharing pools evaluated by the Company which were determined to have a material projected credit improvement. As a result of this improvement, the Company will recognize approximately $23.4 million as an adjustment to yield over the weighted average life of the loans ($3.7 million was recognized during the second quarter of 2014). 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 $17.3 million ($3.0 million was recognized for the second quarter of 2014) and increase our FDIC true-up liability by $1.1 million ($42,000 was recognized for the second quarter of 2014). The $17.3 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 $1.1 million will be expensed over the remaining true-up measurement date as other non-interest expense.

Net interest income for the second quarter of 2014 increased 74.0% to $78.0 million from $44.8 million during the second quarter of 2013. For the second quarter of 2014, the effective yield on non-covered loans and covered loans was 6.08% and 19.38%, respectively. Net interest margin, on a fully taxable equivalent basis, was 5.50% for the quarter just ended compared to 5.18% in the second quarter of 2013, an increase of 32 basis points. The pools which have been determined to have material projected credit improvement as a result of the quarterly impairment testing and the acquisition of Liberty have significantly changed the mix and metrics on the net interest margin since December 31, 2012. Although there have been many changes since 2012, the Company continues to remain focused on expanding its net interest margin through opportunities such as improved pricing on interest-bearing deposits.

The Company experienced a $5.4 million increase in the provision for loan losses for non-covered loans during the second quarter of 2014 versus 2013. This expected increase is not an indication of a decline in asset quality, but primarily a reflection of the migration of the Liberty loans from purchased loan accounting treatment to originated loan accounting treatment. Based upon current accounting guidance the allowance for loan losses is not carried over in an acquisition. As a result, virtually none of the Liberty footprint loans had any allocation of the allowance for loan losses at year end. This is the result of all loans acquired on October 24, 2013 from Liberty being recorded at fair value in accordance with the fair value methodology prescribed in ASC Topic 820. However, as the acquired Liberty loans payoff or renew and the Liberty footprint originates new loan production, it is necessary to establish an allowance which represents an amount that, in management's judgment, will be adequate to absorb credit losses.

The Company reported $11.5 million of non-interest income for the second quarter of 2014, compared to $9.8 million for the second quarter of 2013. The most important components of the second quarter non-interest income were $6.2 million from service charges on deposits accounts, $6.0 million from other service charges and fees, $1.8 million from mortgage lending income, $934,000 from insurance commissions, $859,000 from gain on sale of OREO, $793,000 from other income, $445,000 gain on sale of premises and equipment and $323,000 from trust fees offset by the $6.6 million of net amortization on the FDIC indemnification asset.

Non-interest expense for the second quarter of 2014 was $38.6 million compared to $25.9 million for the second quarter of 2013. These increases are primarily associated with the acquisition of Liberty during the fourth quarter of 2013. For the second quarter of 2014, our core efficiency ratio was 41.56% which is improved from the 45.76% reported for second quarter of 2013.

Financial Condition

Total non-covered loans were $4.13 billion at June 30, 2014 compared to $4.19 billion at December 31, 2013. Total covered loans were $263.2 million at June 30, 2014 compared to $282.5 million at December 31, 2013. Total deposits were $5.19 billion at June 30, 2014 compared to $5.39 billion at December 31, 2013. Total assets were $6.67 billion at June 30, 2014 compared to $6.81 billion at December 31, 2013.

Non-performing non-covered loans were $45.0 million as of June 30, 2014, of which $20.7 million were located in Florida. Non-performing non-covered loans as a percent of total non-covered loans were 1.09% as of June 30, 2014 compared to 0.91% as of December 31, 2013. Non-performing non-covered assets were $66.0 million as of June 30, 2014, of which $26.4 million were located in Florida. Non-performing non-covered assets as a percent of total non-covered assets were 1.04% as of June 30, 2014 compared to 1.07% as of December 31, 2013.

The Company's allowance for loan losses for non-covered loans was $48.2 million at June 30, 2014, or 1.17% of total non-covered loans, compared to $39.0 million, or 0.93% of total non-covered loans, at December 31, 2013. As of June 30, 2014 and December 31, 2013, 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 4.80% and 4.89%, respectively. As of June 30, 2014 and December 31, 2013, the Company's allowance for loan losses for non-covered loans was 107% and 102% of its total non-performing non-covered loans, respectively.

Stockholders' equity was $897.2 million at June 30, 2014 compared to $841.0 million at December 31, 2013, an increase of $56.3 million. Book value per common share was $13.77 at June 30, 2014 compared to $12.92 at December 31, 2013. Tangible book value per common share was $8.83 at June 30, 2014 compared to $7.94 December 31, 2013.

Branches

During the second quarter of 2014, in an effort to achieve efficiencies primarily from the recent acquisitions, the Company closed or merged four Arkansas and two Florida locations. The Company currently has plans for an additional de novo branch location in Naples, Florida, scheduled to open during the third quarter. The Company currently has 83 branches in Arkansas, 50 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, July 17, 2014. Interested parties can listen to this 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: 10048164, which will be available until July 25, 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, 2013 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)







Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30,
(In thousands) 2014 2014 2013 2013 2013






ASSETS










Cash and due from banks $ 122,167 $ 124,662 $ 104,005 $ 77,261 $ 75,148
Interest-bearing deposits with other banks 21,385 89,897 61,529 35,080 97,576
Cash and cash equivalents 143,552 214,559 165,534 112,341 172,724
Federal funds sold 850 22,925 4,275 10,700 2,475
Investment securities - available-for-sale 1,122,803 1,175,827 1,175,484 839,560 736,406
Investment securities - held-to-maturity 205,566 132,363 114,621 9,528 --
Loans receivable not covered by loss share 4,133,109 4,126,564 4,194,437 2,378,838 2,339,242
Loans receivable covered by FDIC loss share 263,157 270,641 282,516 308,072 329,802
Allowance for loan losses (51,173) (48,991) (43,815) (38,748) (41,450)
Loans receivable, net 4,345,093 4,348,214 4,433,138 2,648,162 2,627,594
Bank premises and equipment, net 196,194 196,392 197,224 119,637 119,737
Foreclosed assets held for sale not covered by loss share 20,960 23,484 29,869 14,158 15,985
Foreclosed assets held for sale covered by FDIC loss share 17,196 20,201 20,999 24,320 27,073
FDIC indemnification asset 56,626 73,348 89,611 101,192 116,071
Cash value of life insurance 64,066 63,787 63,501 59,602 59,401
Accrued interest receivable 20,847 21,865 22,944 14,275 14,424
Deferred tax asset, net 73,151 82,886 89,412 46,045 46,655
Goodwill 301,736 301,736 301,736 85,681 85,681
Core deposit and other intangibles 19,984 21,131 22,298 9,655 10,457
Other assets 77,516 82,058 81,215 66,450 56,654
Total assets $ 6,666,140 $ 6,780,776 $ 6,811,861 $ 4,161,306 $ 4,091,337






LIABILITIES AND STOCKHOLDERS' EQUITY










Liabilities




Deposits:




Demand and non-interest-bearing $ 1,129,073 $ 1,057,148 $ 991,161 $ 757,328 $ 733,374
Savings and interest-bearing transaction accounts 2,756,060 2,827,787 2,792,423 1,683,010 1,735,280
Time deposits 1,306,876 1,453,575 1,609,462 808,480 856,581
Total deposits 5,192,009 5,338,510 5,393,046 3,248,818 3,325,235
Federal funds purchased -- -- -- -- --
Securities sold under agreements to repurchase 144,602 137,524 160,984 71,307 73,461
FHLB borrowed funds 349,110 354,935 350,661 270,232 130,251
Accrued interest payable and other liabilities 22,358 20,113 5,389 22,714 25,787
Subordinated debentures 60,826 60,826 60,826 3,093 3,093
Total liabilities 5,768,905 5,911,908 5,970,906 3,616,164 3,557,827






Stockholders' equity




Common stock 651 651 651 563 562
Capital surplus 709,516 708,868 708,058 417,627 416,795
Retained earnings 182,382 158,838 136,386 128,316 114,172
Accumulated other comprehensive income (loss) 4,686 511 (4,140) (1,364) 1,981
Total stockholders' equity 897,235 868,868 840,955 545,142 533,510
Total liabilities and stockholders' equity $ 6,666,140 $ 6,780,776 $ 6,811,861 $ 4,161,306 $ 4,091,337



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) 2014 2014 2013 2013 2013 2014 2013
















Interest income






Loans $ 75,404 $ 75,013 $ 65,338 $ 45,003 $ 44,036 $ 150,417 $ 88,195
Investment securities






Taxable 4,762 4,470 4,760 2,645 2,490 9,232 4,893
Tax-exempt 2,379 2,317 1,554 1,507 1,467 4,696 2,948
Deposits - other banks 29 24 51 19 86 53 184
Federal funds sold 12 16 14 2 6 28 13








Total interest income 82,586 81,840 71,717 49,176 48,085 164,426 96,233








Interest expense






Interest on deposits 3,095 3,384 3,320 1,810 2,129 6,479 4,614
Federal funds purchased -- -- 1 3 -- -- --
FHLB borrowed funds 952 946 915 910 1,012 1,898 2,016
Securities sold under agreements to repurchase 168 182 171 87 86 350 166
Subordinated debentures 328 328 255 16 17 656 247








Total interest expense 4,543 4,840 4,662 2,826 3,244 9,383 7,043








Net interest income 78,043 77,000 67,055 46,350 44,841 155,043 89,190
Provision for loan losses 6,115 6,938 4,330 -- 850 13,053 850
Net interest income after provision for loan losses 71,928 70,062 62,725 46,350 43,991 141,990 88,340








Non-interest income






Service charges on deposit accounts 6,193 5,911 6,001 4,072 4,088 12,104 7,797
Other service charges and fees 5,978 5,686 5,146 3,671 3,479 11,664 6,916
Trust fees 323 436 284 15 17 759 36
Mortgage lending income 1,801 1,513 1,470 1,527 1,619 3,314 2,991
Insurance commissions 934 1,416 778 519 444 2,350 1,123
Income from title services 53 50 122 156 136 103 245
Increase in cash value of life insurance 281 288 235 203 218 569 398
Dividends from FHLB, FRB, Bankers' bank & other 501 316 273 179 401 817 576
Gain on sale of SBA loans -- -- -- 79 -- -- 56
Gain (loss) on sale of premises & equipment, net 445 9 (315) 303 394 454 409
Gain (loss) on OREO, net 859 539 347 777 441 1,398 527
Gain (loss) on securities, net -- -- -- -- 111 -- 111
FDIC indemnification accretion/(amortization), net (6,622) (4,744) (2,949) (3,177) (2,283) (11,366) (4,275)
Other income 793 761 825 994 740 1,554 1,920








Total non-interest income 11,539 12,181 12,217 9,318 9,805 23,720 18,830








Non-interest expense






Salaries and employee benefits 18,813 18,933 19,504 12,981 12,957 37,746 25,909
Occupancy and equipment 6,251 6,226 5,670 4,010 3,894 12,477 7,488
Data processing expense 1,793 1,793 1,538 1,114 1,231 3,586 2,741
Other operating expenses 11,763 12,405 28,162 8,610 7,773 24,168 15,580








Total non-interest expense 38,620 39,357 54,874 26,715 25,855 77,977 51,718








Income before income taxes 44,847 42,886 20,068 28,953 27,941 87,733 55,452
Income tax expense 16,418 15,549 7,118 10,590 10,282 31,967 20,245
Net income $ 28,429 $ 27,337 $ 12,950 $ 18,363 $ 17,659 $ 55,766 $ 35,207



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 and shares in thousands, except per share data) 2014 2014 2013 2013 2013 2014 2013
















PER SHARE DATA














Diluted earnings per common share $ 0.43 $ 0.42 $ 0.19 $ 0.33 $ 0.31 $ 0.85 $ 0.62
Diluted earnings per common share excluding intangible amortization 0.44 0.43 0.21 0.33 0.32 0.87 0.64
Basic earnings per common share 0.44 0.42 0.19 0.33 0.32 0.86 0.63
Dividends per share - common 0.075 0.075 0.075 0.075 0.075 0.150 0.140
Book value per common share 13.77 13.34 12.92 9.69 9.49 13.77 9.49
Tangible book value per common share 8.83 8.38 7.94 7.99 7.78 8.83 7.78








STOCK INFORMATION














Average common shares outstanding 65,140 65,123 62,865 56,256 56,234 65,131 56,228
Average diluted shares outstanding 65,545 65,511 63,234 56,620 56,577 65,523 56,555
End of period common shares outstanding 65,142 65,135 65,082 56,278 56,243 65,142 56,243








ANNUALIZED PERFORMANCE METRICS














Return on average assets 1.70% 1.64% 0.83% 1.80% 1.71% 1.67% 1.70%
Return on average assets excluding intangible amortization 1.83% 1.77% 0.91% 1.89% 1.80% 1.80% 1.79%
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) 3.27% 3.26% 2.86% 3.09% 2.93% 3.27% 2.85%
Return on average common equity 12.96% 13.00% 6.68% 13.63% 13.27% 12.98% 13.47%
Return on average tangible common equity excluding intangible amortization 20.94% 21.48% 10.83% 17.04% 16.65% 21.20% 16.97%
Efficiency ratio 41.09% 42.07% 66.73% 45.67% 44.98% 41.58% 45.50%
Core efficiency ratio 41.56% 41.39% 45.22% 44.76% 45.76% 41.48% 46.07%
Net interest margin - FTE 5.50% 5.48% 5.09% 5.41% 5.18% 5.49% 5.16%
Fully taxable equivalent adjustment $ 1,624 $ 1,591 $ 1,133 $ 1,073 $ 1,051 $ 3,215 $ 2,126
Total revenue 94,125 94,021 83,934 58,494 57,890 188,146 115,063








EARNINGS EXCLUDING






INTANGIBLE AMORTIZATION














GAAP net income available to common shareholders $ 28,429 $ 27,337 $ 12,950 $ 18,363 $ 17,659 $ 55,766 $ 35,207
Intangible amortization after-tax 697 709 740 487 488 1,406 975
Earnings excluding intangible amortization $ 29,126 $ 28,046 $ 13,690 $ 18,850 $ 18,147 $ 57,172 $ 36,182








GAAP diluted earnings per share $ 0.43 $ 0.42 $ 0.19 $ 0.33 $ 0.31 $ 0.85 $ 0.62
Intangible amortization after-tax 0.01 0.01 0.02 -- 0.01 0.02 0.02
Diluted earnings per share excluding intangible amortization $ 0.44 $ 0.43 $ 0.21 $ 0.33 $ 0.32 $ 0.87 $ 0.64








OTHER OPERATING EXPENSES














Advertising $ 581 $ 522 $ 653 $ 363 $ 120 $ 1,103 $ 813
Merger and acquisition expenses 106 849 17,315 1,034 1 955 29
Amortization of intangibles 1,147 1,167 1,218 802 802 2,314 1,604
Electronic banking expense 1,312 1,338 1,458 926 960 2,650 1,823
Directors' fees 206 227 179 188 210 433 400
Due from bank service charges 205 199 179 136 168 404 301
FDIC and state assessment 1,058 1,114 858 684 677 2,172 1,307
Insurance 582 614 756 572 555 1,196 1,121
Legal and accounting 419 417 450 227 394 836 716
Other professional fees 583 507 561 404 490 1,090 963
Operating supplies 515 472 455 309 332 987 675
Postage 327 352 295 212 231 679 438
Telephone 463 454 375 291 291 917 594
Other expense 4,259 4,173 3,410 2,462 2,542 8,432 4,796








Total other operating expenses $ 11,763 $ 12,405 $ 28,162 $ 8,610 $ 7,773 $ 24,168 $ 15,580



Home BancShares, Inc.
Selected Financial Information
(Unaudited)







Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30,
(Dollars in thousands) 2014 2014 2013 2013 2013






BALANCE SHEET RATIOS










Total loans to total deposits 84.67% 82.37% 83.01% 82.70% 80.27%
Common equity to assets 13.5% 12.8% 12.3% 13.1% 13.0%
Tangible common equity to tangible assets 9.1% 8.5% 8.0% 11.1% 10.9%






ALLOWANCE FOR LOAN LOSSES










Non-Covered




Balance, beginning of period $ 44,024 $ 39,022 $ 37,642 $ 40,498 $ 42,302
Loans charged off 2,526 2,424 2,417 5,101 3,361
Recoveries of loans previously charged off 635 488 358 2,245 807
Net loans charged off 1,891 1,936 2,059 2,856 2,554
Provision for loan losses 6,115 6,938 3,439 -- 750
Balance, end of period $ 48,248 $ 44,024 $ 39,022 $ 37,642 $ 40,498






Discount for credit losses on non-covered loans acquired 157,705 164,324 174,637 77,413 80,322
Net charge-offs on loans not covered by loss share to average non-covered loans 0.18% 0.19% 0.22% 0.48% 0.44%
Allowance for loan losses for non-covered loans to total non-covered loans 1.17% 1.07% 0.93% 1.58% 1.73%
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 4.80% 4.86% 4.89% 4.68% 4.99%






Covered




Balance, beginning of period $ 4,967 $ 4,793 $ 1,106 $ 952 $ 3,633
Loans charged off 1,051 -- 287 -- 3,187
Recoveries of loans previously charged off 128 174 29 154 6
Net loans charged off/(recovered) 923 (174) 258 (154) 3,181
Provision for loan losses forecasted outside of loss share 280 -- -- -- --
Provision for loan losses before benefit attributable to FDIC loss share agreements (1,399) -- 3,945 -- 500
Benefit attributable to FDIC loss share agreements 1,119 -- (3,054) -- (400)
Net provision for loan losses -- -- 891 -- 100
Increase (decrease) in FDIC indemnification asset (1,119) -- 3,054 -- 400
Balance, end of period $ 2,925 $ 4,967 $ 4,793 $ 1,106 $ 952






Total allowance for loan losses $ 51,173 $ 48,991 $ 43,815 $ 38,748 $ 41,450






NON-PERFORMING ASSETS




NOT COVERED BY LOSS SHARE










Non-performing non-covered loans




Non-accrual non-covered loans $ 21,900 $ 20,697 $ 15,133 $ 17,187 $ 17,798
Non-covered loans past due 90 days or more 23,081 21,981 23,141 11,248 11,514
Total non-performing non-covered loans 44,981 42,678 38,274 28,435 29,312
Other non-performing non-covered assets




Non-covered foreclosed assets held for sale, net 20,960 23,484 29,869 14,158 15,985
Other non-performing non-covered assets 10 47 281 185 172
Total other non-performing non-covered assets 20,970 23,531 30,150 14,343 16,157
Total non-performing non-covered assets $ 65,951 $ 66,209 $ 68,424 $ 42,778 $ 45,469






Allowance for loan losses for non-covered loans to non-performing non-covered loans 107.26% 103.15% 101.95% 132.38% 138.16%
Non-performing non-covered loans to total non-covered loans 1.09% 1.03% 0.91% 1.20% 1.25%
Non-performing non-covered assets to total non-covered assets 1.04% 1.03% 1.07% 1.15% 1.26%



Home BancShares, Inc.
Loan Information
(Unaudited)







Jun. 30, Mar. 31, Dec. 31, Sep. 30, Jun. 30,
(Dollars in thousands) 2014 2014 2013 2013 2013












LOANS NOT COVERED BY LOSS SHARE










Real estate




Commercial real estate loans




Non-farm/non-residential $ 1,733,029 $ 1,722,910 $ 1,739,668 $ 1,026,937 $ 1,003,391
Construction/land development 603,216 566,205 562,667 314,232 281,994
Agricultural 64,409 74,775 81,618 31,906 31,119
Residential real estate loans




Residential 1-4 family 887,097 890,981 913,332 529,732 528,260
Multifamily residential 218,615 206,348 213,232 117,639 120,899
Total real estate 3,506,366 3,461,219 3,510,517 2,020,446 1,965,663
Consumer 56,197 60,735 69,570 30,478 32,671
Commercial and industrial 447,459 491,525 511,421 268,900 287,351
Agricultural 56,852 44,017 37,129 30,612 26,462
Other 66,235 69,068 65,800 28,402 27,095
Loans receivable not covered by loss share $ 4,133,109 $ 4,126,564 $ 4,194,437 $ 2,378,838 $ 2,339,242


















LOANS COVERED BY LOSS SHARE










Real estate




Commercial real estate loans




Non-farm/non-residential $ 107,171 $ 113,593 $ 117,164 $ 134,843 $ 143,922
Construction/land development 44,763 45,381 48,388 51,492 56,447
Agricultural 1,145 1,184 1,232 1,253 1,784
Residential real estate loans




Residential 1-4 family 91,706 92,918 98,403 102,673 107,612
Multifamily residential 10,002 10,043 10,378 10,525 10,644
Total real estate 254,787 263,119 275,565 300,786 320,409
Consumer 20 16 20 17 20
Commercial and industrial 7,368 6,440 5,852 6,291 8,193
Agricultural -- -- -- -- --
Other 982 1,066 1,079 978 1,180
Loans receivable covered by loss share $ 263,157 $ 270,641 $ 282,516 $ 308,072 $ 329,802



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








Three Months Ended

June 30, 2014 March 31, 2014

Average Income/ Yield/ Average Income/ Yield/
(Dollars in thousands) Balance Expense Rate Balance Expense Rate














ASSETS





Earning assets





Interest-bearing balances due from banks $ 54,726 $ 29 0.21% $ 63,018 $ 24 0.15%
Federal funds sold 23,349 12 0.21% 31,482 16 0.21%
Investment securities - taxable 1,038,011 4,762 1.84% 1,005,313 4,470 1.80%
Investment securities - non-taxable - FTE 287,679 3,889 5.42% 286,328 3,789 5.37%
Loans receivable - FTE 4,403,767 75,518 6.88% 4,427,994 75,132 6.88%
Total interest-earning assets 5,807,532 84,210 5.82% 5,814,135 83,431 5.82%
Non-earning assets 914,388

952,470

Total assets $ 6,721,920

$ 6,766,605








LIABILITIES AND SHAREHOLDERS' EQUITY





Liabilities





Interest-bearing liabilities





Savings and interest-bearing transaction accounts $ 2,808,856 $ 1,227 0.18% $ 2,785,216 $ 1,279 0.19%
Time deposits 1,380,249 1,868 0.54% 1,528,079 2,105 0.56%
Total interest-bearing deposits 4,189,105 3,095 0.30% 4,313,295 3,384 0.32%
Federal funds purchased 110 -- 0.00% 508 -- 0.00%
Securities sold under agreement to repurchase 136,444 168 0.49% 149,352 182 0.49%
FHLB borrowed funds 376,326 952 1.01% 377,326 946 1.02%
Subordinated debentures 60,826 328 2.16% 60,826 328 2.19%
Total interest-bearing liabilities 4,762,811 4,543 0.38% 4,901,307 4,840 0.40%
Non-interest bearing liabilities





Non-interest bearing deposits 1,054,233

1,003,495

Other liabilities 24,832

8,825

Total liabilities 5,841,876

5,913,627

Shareholders' equity 880,044

852,978

Total liabilities and shareholders' equity $ 6,721,920

$ 6,766,605

Net interest spread

5.44%

5.42%
Net interest income and margin - FTE
$ 79,667 5.50%
$ 78,591 5.48%



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








Six Months Ended

June 30, 2014 June 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 $ 58,849 $ 53 0.18% $ 143,153 $ 184 0.26%
Federal funds sold 27,393 28 0.21% 12,931 13 0.20%
Investment securities - taxable 1,021,752 9,232 1.82% 567,059 4,893 1.74%
Investment securities - non-taxable - FTE 287,007 7,678 5.39% 168,945 4,813 5.74%
Loans receivable - FTE 4,415,814 150,650 6.88% 2,673,952 88,456 6.67%
Total interest-earning assets 5,810,815 167,641 5.82% 3,566,040 98,359 5.56%
Non-earning assets 933,324

603,930

Total assets $ 6,744,139

$ 4,169,970








LIABILITIES AND SHAREHOLDERS' EQUITY





Liabilities





Interest-bearing liabilities





Savings and interest-bearing transaction accounts $ 2,797,102 $ 2,506 0.18% $ 1,775,486 $ 1,554 0.18%
Time deposits 1,453,755 3,973 0.55% 943,561 3,060 0.65%
Total interest-bearing deposits 4,250,857 6,479 0.31% 2,719,047 4,614 0.34%
Federal funds purchased 308 -- 0.00% -- -- 0.00%
Securities sold under agreement to repurchase 142,862 350 0.49% 71,140 166 0.47%
FHLB borrowed funds 376,823 1,898 1.02% 130,328 2,016 3.12%
Subordinated debentures 60,826 656 2.17% 15,054 247 3.31%
Total interest-bearing liabilities 4,831,676 9,383 0.39% 2,935,569 7,043 0.48%
Non-interest bearing liabilities





Non-interest bearing deposits 1,029,004

686,636

Other liabilities 16,873

20,757

Total liabilities 5,877,553

3,642,962

Shareholders' equity 866,586

527,008

Total liabilities and shareholders' equity $ 6,744,139

$ 4,169,970

Net interest spread

5.43%

5.08%
Net interest income and margin - FTE
$ 158,258 5.49%
$ 91,316 5.16%

Contact:
Brian S. Davis
Chief Accounting Officer &
Investor Relations Officer
Home BancShares, Inc.
(501) 328-4770

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