Form 10-Q HOME BANCSHARES INC For: Mar 31

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)


☑			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended March 31, 2022


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Transition period from ______ to ______

Commission File Number: 001-41093

HOME BANCSHARES, INC.

(Exact Name of Registrant as Specified in Its Charter)


Arkansas						71-0682831
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

719 Harkrider, Suite 100 ,Conway, Arkansas						72032
(Address of principal executive offices)						(Zip Code)

(501) 339-2929
(Registrant's telephone number, including area code)

Not Applicable
Former name, former address and former fiscal year, if changed since last report

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

HOMB

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:


Large Accelerated Filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

Common Stock Issued and Outstanding: 205,639,194 shares as of May 8, 2022.

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HOME BANCSHARES, INC. FORM 10-Q March 31, 2022

INDEX

		Page No.
Part I:	Financial Information

Item 1:	Financial Statements

	Consolidated Balance Sheets – March 3 1 , 202 2 (Unaudited) and December 31, 20 21	4

	Consolidated Statements of Income (Unaudited) – Three months ended March 3 1 , 202 2 and 20 21	5

	Consolidated Statements of Comprehensive (Loss) I ncome (Unaudited) – Three months ended March 3 1 , 202 2 and 20 21	6

	Consolidated Statements of Stockholders’ Equity (Unaudited) – Three months ended March 3 1 , 202 2 and 202 1	7-8

	Consolidated Statements of Cash Flows (Unaudited) – Three months ended March 3 1 , 202 2 and 20 21	9

	Condensed Notes to Consolidated Financial Statements (Unaudited)	10-49

	Report of Independent Registered Public Accounting Firm	50

Item 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	51-85

Item 3:	Quantitative and Qualitative Disclosures About Market Risk	85-86

Item 4:	Controls and Procedures	86

Part II:	Other Information

Item 1:	Legal Proceedings	87

Item 1A:	Risk Factors	87

Item 2:	Unregistered Sales of Equity Securities and Use of Proceeds	87

Item 3:	Defaults Upon Senior Securities	87

Item 4:	Mine Safety Disclosures	87

Item 5:	Other Information	87

Item 6:	Exhibits	88-89

Signatures		90

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of our statements contained in this document, including matters discussed under the caption “Management's Discussion and Analysis of Financial Condition and Results of Operation,” are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements relate to future events or our future financial performance and include statements about the competitiveness of the banking industry, potential regulatory obligations, our entrance and expansion into other markets, including through prospective or potential acquisitions, our other business strategies and other statements that are not historical facts. Forward-looking statements are not guarantees of performance or results. When we use words like “may,” “plan,” “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. These forward-looking statements involve risks and uncertainties and are based on our beliefs and assumptions, and on the information available to us at the time that these disclosures were prepared. These forward-looking statements involve risks and uncertainties and may not be realized due to a variety of factors, including, but not limited to, the following:

•the effects of future local, regional, national and international economic conditions, including inflation or a decrease in commercial real estate and residential housing values;

•changes in the level of nonperforming assets and charge-offs, and credit risk generally;

•the risks of changes in interest rates or the level and composition of deposits, loan demand and the values of loan collateral, securities and interest-sensitive assets and liabilities;

•disruptions, uncertainties and related effects on credit quality, liquidity, other aspects of our business and our operations as a result of the ongoing COVID-19 pandemic and measures that have been or may be implemented or imposed in response to the pandemic;

•the effect of any mergers, acquisitions or other transactions to which we or our bank subsidiary may from time to time be a party, including our ability to successfully integrate any businesses that we acquire;

•the risk that expected cost savings and other benefits from acquisitions may not be fully realized or may take longer to realize than expected;

•the possibility that an acquisition does not close when expected or at all because required regulatory, shareholder or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all;

•the reaction to a proposed acquisition transaction of the respective companies’ customers, employees and counterparties;

•diversion of management time on acquisition-related issues;

•the ability to enter into and/or close additional acquisitions;

•the availability of and access to capital on terms acceptable to us;

•increased regulatory requirements and supervision that applies as a result of our exceeding $10 billion in total assets;

•legislation and regulation affecting the financial services industry as a whole, and the Company and its subsidiaries in particular, including the effects resulting from the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), recent reforms to the Dodd-Frank Act, legislation and regulations in response to the COVID-19 pandemic and other future legislative and regulatory changes;

•changes in governmental monetary and fiscal policies;

•the effects of terrorism and efforts to combat it;

•political instability;

•risks associated with our customer relationship with the Cuban Embassy and our correspondent banking relationship with Banco Internacional de Comercio, S.A. (BICSA), a Cuban commercial bank;

•adverse weather events, including hurricanes, and other natural disasters;

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•the ability to keep pace with technological changes, including changes regarding cybersecurity;

•an increase in the incidence or severity of fraud, illegal payments, cybersecurity breaches or other illegal acts impacting our bank subsidiary, our vendors or our customers;

•the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in our market area and elsewhere, including institutions operating regionally, nationally and internationally, together with competitors offering banking products and services by mail, telephone and the Internet;

•potential claims, expenses and other adverse effects related to current or future litigation, regulatory examinations or other government actions;

•the effect of changes in accounting policies and practices and auditing requirements, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board, and other accounting standard setters;

•higher defaults on our loan portfolio than we expect; and

•the failure of assumptions underlying the establishment of our allowance for credit losses or changes in our estimate of the adequacy of the allowance for credit losses.

All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this Cautionary Note. Our actual results may differ significantly from those we discuss in these forward-looking statements. For other factors, risks and uncertainties that could cause our actual results to differ materially from estimates and projections contained in these forward-looking statements, see the “Risk Factors” section of our Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 24, 2022.

Table of Contents

PART I: FINANCIAL INFORMATION

Item 1: Financial Statements

Home BancShares, Inc.

Consolidated Balance Sheets


(In thousands, except share data)	March 31, 2022		December 31, 2021
	(Unaudited)
Assets
Cash and due from banks	$	173,134	$	119,908
Interest-bearing deposits with other banks	3,446,324		3,530,407
Cash and cash equivalents	3,619,458		3,650,315
Investment securities – available-for-sale, net of allowance for credit losses	2,957,322		3,119,807
Investment securities — held-to-maturity, net of allowance for credit losses	499,265		—
Total investment securities	3,456,587		3,119,807
Loans receivable	10,052,714		9,836,089
Allowance for credit losses	(234,768)		(236,714)
Loans receivable, net	9,817,946		9,599,375
Bank premises and equipment, net	274,503		275,760
Foreclosed assets held for sale	1,144		1,630
Cash value of life insurance	105,623		105,135
Accrued interest receivable	46,934		46,736
Deferred tax asset, net	116,605		78,290
Goodwill	973,025		973,025
Core deposit and other intangibles	23,624		25,045
Other assets	182,546		177,020
Total assets	$	18,617,995	$	18,052,138
Liabilities and Stockholders’ Equity
Deposits:
Demand and non-interest-bearing	$	4,311,400	$	4,127,878
Savings and interest-bearing transaction accounts	9,461,393		9,251,805
Time deposits	808,141		880,887
Total deposits	14,580,934		14,260,570
Securities sold under agreements to repurchase	151,151		140,886
FHLB and other borrowed funds	400,000		400,000
Accrued interest payable and other liabilities	131,339		113,868
Subordinated debentures	667,868		371,093
Total liabilities	15,931,292		15,286,417
Stockholders’ equity:
Common stock, par value $0.01; shares authorized 300,000,000 in 2022 and 2021; shares issued and outstanding 163,757,908 in 2022 and 163,699,282 in 2021	1,638		1,637
Capital surplus	1,485,524		1,487,373
Retained earnings	1,304,098		1,266,249
Accumulated other comprehensive (loss) income	(104,557)		10,462
Total stockholders’ equity	2,686,703		2,765,721
Total liabilities and stockholders’ equity	$	18,617,995	$	18,052,138