Conway, AR – Home BancShares, Inc. (NYSE: HOMB) (“Home” or the “Company”), parent company of Centennial Bank, released quarterly earnings today.

“The fourth quarter was a strong finish to 2024, pushing us across the finish line to our first $400 million year in earnings. I’m always proud of the strength of our company, but I’m especially proud of a quarter where margin is up, legacy loans are up, deposits are up, revenue is up, earnings are up, and we managed to swallow an asset quality cleanup that began with legacy loans from Happy Bank and led to a company-wide cleanup. Our strong balance sheet, capital and loan loss reserve allowed us to make a proactive cleanup that puts this in the rear-view mirror for HOMB and sets us up for an even greater year in 2025,” said John Allison, Chairman and CEO of HOMB.

Net income for the three-month period ended December 31, 2024 was $100.6 million, or $0.51 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 $99.8 million(1) and $0.50 per share(1), respectively, for the three months ended December 31, 2024.

During the quarter ended December 31, 2024, the Company recorded an additional $16.7 million in credit loss expense as a result of Hurricanes Helene and Milton. This provision, along with the $16.7 million provision recorded during the third quarter of 2024, brings our total hurricane reserve to $33.4 million. The two hurricanes spanned across the third and fourth quarters, and the amount of time it takes for customers to settle with insurance will no doubt increase, with two back-to-back events. As of December 31, 2024, the Company had $110.9 million in loans on deferral as a result of the two hurricanes. No additional provision for credit losses on loans was recorded for the quarter ended December 31, 2024, as the current level of reserves was considered adequate for the loan portfolio.

Our net interest margin was 4.39% for the three-month period ended December 31, 2024, compared to 4.28% for the three-month period ended September 30, 2024. The yield on loans was 7.49% and 7.60% for the three months ended December 31, 2024 and September 30, 2024, respectively, as average loans increased from $14.76 billion to $14.80 billion. Additionally, the rate on interest bearing deposits decreased to 2.80% as of December 31, 2024, from 3.02% as of September 30, 2024, while average interest-bearing deposits decreased from $12.87 billion to $12.86 billion.

During the fourth quarter of 2024, the Company paid off its $700.0 million advance from the Federal Reserve’s Bank Term Funding Program (“BTFP”). This improved the net interest margin by six basis points. In addition, during the fourth quarter of 2024, there was $1.5 million of event interest income compared to $573,000 of event interest income for the third quarter of 2024. This was accretive to the margin by two basis points.

Purchase accounting accretion on acquired loans was $1.6 million and $1.9 million for the three-month periods ended December 31, 2024 and September 30, 2024, respectively, and average purchase accounting loan discounts were $19.1 million and $20.8 million for the three-month periods ended December 31, 2024 and September 30, 2024, respectively.

Net interest income on a fully taxable equivalent basis was $219.5 million for the three-month period ended December 31, 2024, and $217.8 million for the three-month period ended September 30, 2024. This increase in net interest income for the three-month period ended December 31, 2024, was the result of a $12.1 million decrease in interest expense, partially offset by a $10.3 million decrease in interest income. The $12.1 million decrease in interest expense was due to a $7.2 million decrease in interest expense on deposits and a $4.8 million decrease in FHLB and other borrowed funds resulting from the payoff of the BTFP advance. The $10.3 million decrease in interest income was primarily the result of a $4.5 million decrease in income from deposits with other banks resulting from the payoff of the BTFP advance and the declining interest rate environment. In addition loan interest income decreased by $3.6 million and investment income decreased by $2.3 million. The overall decrease in interest income and interest expense is primarily due to the declining interest rate environment as well as the reduction in the average interest earning assets and liabilities.

The Company reported $41.2 million of non-interest income for the fourth quarter of 2024. The most important components of fourth quarter non-interest income were $11.7 million from other service charges and fees, $9.9 million from service charges on deposit accounts, $8.4 million from other income, $4.5 million from trust fees, $3.5 million in mortgage lending income, $2.8 million from dividends from FHLB, FRB, FNBB and other, $1.2 million from the increase in cash value of life insurance and $850,000 from the fair value adjustment for marketable securities. This was partially offset by a $2.4 million loss on OREO.

Non-interest expense for the fourth quarter of 2024 was $112.2 million. The most important components of non-interest expense were $60.8 million from salaries and employee benefits, $27.5 million in other operating expense, $14.5 million in occupancy and equipment expenses and $9.3 million in data processing expenses. For the fourth quarter of 2024, our efficiency ratio was 42.24%, and our efficiency ratio, as adjusted (non-GAAP), was 42.00%(1).

Total loans receivable were $14.76 billion at December 31, 2024, compared to $14.82 billion at September 30, 2024. Total deposits were $17.15 billion at December 31, 2024, compared to $16.71 billion at September 30, 2024. Total assets were $22.49 billion at December 31, 2024, compared to $22.82 billion at September 30, 2024.

During the fourth quarter of 2024, the Company had a $59.5 million decline in loans. Our community banking footprint experienced $121.1 million in organic loan growth during the quarter ended December 31, 2024, and Centennial CFG experienced $180.4 million of organic loan decline and had loans of $1.82 billion at December 31, 2024.

Non-performing loans to total loans were 0.67% and 0.68% at December 31, 2024 and September 30, 2024, respectively. Non-performing assets to total assets were 0.63% at both December 31, 2024 and September 30, 2024. Net charge-offs were $53.4 million and $1.5 million for the three months ended December 31, 2024 and September 30, 2024, respectively. As previously noted, during the fourth quarter of 2024, the Company completed an asset quality cleanup project. The charge-off detail by region for the fourth quarter of 2024 can be seen below.

Non-performing loans at December 31, 2024 were $98.9 million, and non-performing assets at December 31, 2024 were $142.4 million. The detail by region can be seen below.

The Company’s allowance for credit losses on loans was $275.9 million at December 31, 2024, or 1.87% of total loans, compared to the allowance for credit losses on loans of $312.6 million, or 2.11% of total loans, at September 30, 2024. As of December 31, 2024 and September 30, 2024, the Company’s allowance for credit losses on loans was 278.99% and 309.16% of its total non-performing loans, respectively. The reduction in the allowance for credit losses reflects the net charge-offs during the quarter as a result of the asset quality cleanup project, partially offset by the additional hurricane provision.

Stockholders’ equity was $3.96 billion at December 31, 2024, which increased approximately $1.2 million from September 30, 2024. The net increase in stockholders’ equity is primarily associated with the $61.8 million increase in retained earnings and $694,000 increase in capital surplus, which was partially offset by the $61.2 million increase in accumulated other comprehensive loss. Book value per common share was $19.92 at December 31, 2024, compared to $19.91 at September 30, 2024. Tangible book value per common share (non-GAAP) was $12.68(1) at December 31, 2024, compared to $12.67(1) at September 30, 2024.

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.

Management will conduct a conference call to review this information at 1:00 p.m. CT (2:00 p.m. ET) on Thursday, January 16, 2025. 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/494803967. 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://whttps://www.netroadshow.com/events/login?show=17d9ca49&confId=75610. 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: 107042. A replay of the call will be available by calling 1-866-813-9403, Passcode: 637168, which will be available until January 23, 2025, 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.

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.

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.

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” 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; 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; the impacts of recent or future adverse weather events, including hurricanes, and other natural disasters; disruptions, uncertainties and related effects on credit quality, liquidity and other aspects of our business and operations that may result from any future public health crises; 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.

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Donna Townsell

Director of Investor Relations

Home BancShares, Inc.

(501) 328-4625

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