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Form 11-K HOME BANCSHARES INC For: Dec 31

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June 24, 2022 11:00 AM EDT
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________
FORM 11-K
_________________________________
(Mark One)

☑    Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 2021
or
☐    Transition Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the transition period from                      to                     
Commission file number: 000-41093
_________________________________

A.    Full title of the plan and the address of the plan, if different from that of the issuer named below:
HOME BANCSHARES, INC. 401(K) AND EMPLOYEE STOCK OWNERSHIP PLAN

B.    Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
Home BancShares, Inc.
719 Harkrider, Suite 100
Conway, Arkansas 72032



Home BancShares, Inc. 401(k) and Employee Stock Ownership Plan
Form 11-K
Index
 


Report of Independent Registered Public Accounting Firm
The Benefits Sub Committee and Participants
Home BancShares, Inc. 401(k) and Employee Stock Ownership Plan
Conway, Arkansas
Opinion on the Financial Statements
We have audited the accompanying statements of net assets available for benefits of the Home BancShares, Inc. 401(k) and Employee Stock Ownership Plan (the Plan) as of December 31, 2021 and 2020, the related statement of changes in net assets available for benefits for the year ended December 31, 2021, and the related notes (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2021 and 2020, and the changes in net assets available for benefits for the year ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risk of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by the Plan’s management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provided a reasonable basis for our opinion.
Supplemental Information
The supplemental information in the accompanying supplemental schedule of assets (held at end of year) as of December 31, 2021 has been subjected to audit procedures performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is presented for the purpose of additional analysis and is not a required part of the financial statements but included supplemental information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.
/s/ Hancock Askew & Co., LLP
We have served as the Plan’s auditor since 2020.
Savannah, Georgia
June 24, 2022

1
Home BancShares, Inc. 401(k) and Employee Stock Ownership Plan
Statements of Net Assets Available for Benefits

December 31,
20212020
Assets
    Investments, at fair value:
   Money market fund$2,529,467 $2,144,550 
   Mutual funds71,538,028 56,586,420 
   Home BancShares, Inc. common stock25,836,582 20,876,929 
   Total investments, at fair value99,904,077 79,607,899 
    Receivables:
   Notes receivable from participants1,362,835 1,442,855 
   Employer contribution receivable— 78,034 
   Employee contribution receivable— 218,934 
   Total receivables1,362,835 1,739,823 
Liabilities:
   Excess contribution payable256,319 205,444 
Net assets available for benefits$101,010,593 $81,142,278 

See accompanying notes to the Financial Statements.

2
Home BancShares, Inc. 401(k) and Employee Stock Ownership Plan
Statement of Changes in Net Assets Available for Benefits

Year Ended December 31, 2021
Additions to net assets attributed to:
Net appreciation in fair value of investments$11,260,559 
Interest and dividends3,715,023 
Total investment income14,975,582 
Interest income on notes receivable from participants83,998 
Contributions:
Employer2,546,040 
Participant7,663,841 
Rollover2,198,753 
Total contributions12,408,634 
Total additions27,468,214 
Deductions from net assets attributed to:
Benefit payments to participants7,496,763 
Administrative expenses and fees103,136 
Total deductions7,599,899 
Net increase19,868,315 
Net assets available for benefits – beginning of year81,142,278 
Net assets available for benefits – end of year$101,010,593 

See accompanying notes to the Financial Statements.

3
Home BancShares, Inc. 401(k) and Employee Stock Ownership Plan
Notes to Financial Statements
December 31, 2021
1.    Description of the Plan
The following description of the Home BancShares, Inc. 401(k) and Employee Stock Ownership Plan (the “Plan”) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions.
General
The Plan is a defined contribution employee stock ownership plan which covers substantially all employees of Home BancShares, Inc. (the “Company”, “Plan Sponsor”, or “Employer”) and its subsidiary, who have attained age 21. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).
Contributions
Each year participants may contribute a portion of their annual compensation, as defined by the Plan and subject to Internal Revenue Service (the “IRS”) limitations. Participants may also contribute amounts representing distributions from other qualified defined benefit or contribution plans (“rollovers”). Participants are eligible to receive discretionary matching contributions upon meeting eligibility requirements to participate in the Plan. During the year ended December 31, 2021, participants received a match of 50% of the first 6% of their deferrals, in the amount of $2,546,040.
The Employer may also make a discretionary contribution on a pro rata basis for all eligible participants. The Employer did not make a discretionary contribution for 2021. Participants are eligible to share in the allocation of employer contributions, if during the year the participant has been credited with at least 1,000 hours of service and is employed on the last day of the year, (unless termination of employment was a result of retirement, disability, or death).
Participants direct their contributions and employer contributions into various investment options offered by the Plan. One of the investment options is the Employer’s common stock.
Participant Accounts
Each participant’s account is credited with the participant’s contributions and allocations of (a) the Employer’s contribution and (b) Plan earnings and losses, and charged with any benefit payments and administrative expenses, for which they are directly responsible. Plan earnings and losses are allocated based on participant account balances, as defined by the Plan. A participant is entitled to the benefit that can be provided from the individual participant’s vested account.
Payment of Benefits
Upon retirement, disability, death, or termination of employment, the total vested value of a participant’s account that exceeds $5,000 is distributed to the participant or his or her beneficiary, as applicable, in a lump sum of cash unless the participant or the beneficiary elects certain other forms of distribution available under the Plan. If the vested value of a participant’s account is less than $1,000, the total vested balance is distributed as an automatic lump sum payment in cash. For participant accounts greater than $1,000 but not more than $5,000, the vested value of the participant’s account may be rolled into an individual retirement account on behalf of the participant or distributed to the participant or his or her beneficiary, as applicable, in cash. Additionally, a participant may request certain in-service withdrawals, including hardship withdrawals, of all or a portion of his or her vested account balance at any time, subject to certain restrictions and limitations, as defined by the Plan document.
Notes Receivable from Participants
Participants may borrow, from their fund accounts, a minimum of $1,000, up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. A participant may have no more than two loans outstanding at a time. The notes receivable from participants are secured by the balance in the participant’s account and bear a reasonable rate of interest as defined by the Plan. Interest rates on all outstanding loans range from 5.25% to 7.50%. Principal and interest payments occur ratably through regular payroll deductions over a period not to exceed five years, unless the notes receivable were used to purchase a primary residence in which case the note receivable terms may exceed five years.
4
Vesting
Participants are always fully vested in their contributions plus actual earnings thereon. Employer contributions become fully vested after a participant has completed his or her fifth year of service based on a graduated vesting schedule as follows:

Employer
Contributions
Years of ServiceVested Percentage
Less than 10 %
225 %
350 %
475 %
5100 %

Administrative Expenses
Processing fees of the Plan are charged against the individual participant account balance that was responsible for the expense. Administrative expenses are paid by the Plan or may be paid by the Employer at the Employer’s discretion. Administrative expenses paid by the Plan may be allocated to participants on a Pro Rata or Per Capita basis, at the Plan Administrator’s discretion.
Forfeitures
Forfeitures of matching contributions are available to be reallocated as an offset to future discretionary matching contributions or to pay plan administration expenses. Forfeitures of profit-sharing contributions are available to be reallocated as additional profit-sharing contributions. Unallocated forfeitures at December 31, 2021 and 2020 were $0 and $577, respectively. During 2021, forfeitures of approximately $180,000 were used to offset employer contributions and were reallocated back to participants.
Plan Termination
Although it has not expressed any intent to do so, the Plan Sponsor has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of termination of the Plan, all participants would become fully vested in the Employer’s matching portion of their account. Employee contributions and their related earnings are always 100% vested.
2.    Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements were prepared on the accrual basis of accounting in accordance with principles generally accepted in the United States of America (“GAAP”).
Payment of Benefits
Benefit payments are recorded when paid.
Valuation of Investments and Income Recognition
Investments are stated at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Purchases and sales of securities are recorded on a trade-date basis. Dividend income is recorded on the ex-dividend date. Interest income is recorded on the accrual basis. Net appreciation/depreciation includes the Plan’s gains and losses on investments bought and sold as well as held during the year.

5
Notes Receivable
Notes receivable from participants are measured at their unpaid principal balance plus any accrued but unpaid interest. Interest income is recorded on the accrual basis. Related fees are recorded as administrative expenses and are expensed when they are incurred. No allowance for credit losses has been recorded as of December 31, 2021. If a participant ceases to make loan repayments and the plan administrator deems the participant loan to be in default, the participant loan balance is reduced, and a benefit payment is recorded.
Excess Contribution Payable
Amounts payable to participants for contributions in excess of amounts allowed by the IRS are recorded as a liability with a corresponding increase in distributions. The Plan distributed the 2021 excess contributions to the applicable participants prior to March 15th of the subsequent year.
Use of Estimates
In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management of the Plan is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
3.    Fair Value Measurements
FASB ASC 820, Fair Value Measurement, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:
Level  1    Quoted prices in active markets for identical assets or liabilities
Level  2    Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities 
Level  3    Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
The following describes the valuation methodologies used for assets measured at fair value:
•Mutual Funds and Money Market Fund : Valued at the daily closing price as reported by the fund. Mutual funds and money market fund held by the Plan are open-end mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily net asset value (NAV) and to transact at that price. The mutual funds and money market fund held by the Plan are deemed to be actively traded.
•Home BancShares, Inc. common stock: Valued at the closing price reported on the New York Stock Exchange (NYSE).
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
6
The following tables set forth by level, within the fair value hierarchy, the Plan’s assets at fair value as of December 31, 2021 and 2020, respectively:
Investment Assets at Fair Value

December 31, 2021
Level 1Level 2Level 3Total Assets
Mutual funds$71,538,028 ——$71,538,028 
Money market fund2,529,467 ——2,529,467 
Home BancShares, Inc. common stock 25,836,582— —25,836,582 
Total investments at fair value$99,904,077 $— $— $99,904,077 
December 31, 2020
Level 1Level 2Level 3Total Assets
Mutual funds$56,586,420 ——$56,586,420 
Money market fund2,144,550 ——2,144,550 
Home BancShares, Inc. common stock 20,876,929— —20,876,929 
Total investments at fair value$79,607,899 $— $— $79,607,899 
4. Income Tax Status
The individualized plan, adopted by the Employer, obtained its latest favorable determination letter on January 14, 2020, in which the IRS has stated that the Plan, as designed, was in compliance with the applicable requirements of the Internal Revenue Code (IRC). The Plan has been amended since the applicable date of the favorable determination letter. Nevertheless, the Plan administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the IRC.
GAAP requires plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the IRS. The Plan administrator has analyzed the tax positions taken by the Plan and has concluded that as of December 31, 2021, there are no uncertain tax positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by tax jurisdictions; however, there are currently no audits for any tax periods in progress.
5.    Risks and Uncertainties
The Plan primarily invests in various investment securities which are exposed to various risks, such as market and credit risk. Due to the level of risk associated with such investment securities and the level of uncertainty related to changes in the value of such investments, it is at least reasonably possible that changes in risk in the near term could materially affect the participants’ account balances and the amount reported in the statements of net assets available for benefits.
6.    Related-Party and Party-in-Interest Transactions
Centennial Bank’s Trust Department, the trustee of the Plan, is an affiliate of the Plan Sponsor. All transactions in Home BancShares, Inc. common stock qualify as party-in-interest transactions because the Company is the plan sponsor. Notes receivable from participants are also defined by ERISA as party-in-interest transactions.
7.    Reconciliation of Financial Statements to Schedule H of Form 5500
The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500:

December 31,
20212020
Net assets available for benefits per financial statements$101,010,593 $81,142,278 
Excess contribution payable256,319 205,444 
Employer contribution receivable— (78,034)
Employee contribution receivable— (218,934)
Net assets available for benefits per the Form 5500$101,266,912 $81,050,754 
7
The following is a reconciliation of net increase per the financial statements for the year ended December 31, 2021 to Form 5500:

December 31, 2021
Net increase per financial statements$19,868,315 
Excess contribution payable at December 31, 2021256,319
Excess contribution payable at December 31, 2020(205,444)
Employer contribution receivable at December 31, 202078,034
Employee contribution receivable at December 31, 2020218,934
Net increase per Form 5500$20,216,158 
8.    Concentrations
The Plan invests in various investment securities. Home BancShares, Inc. common stock represented approximately 26% of the total investments at both December 31, 2021 and 2020, respectively.
9.    Subsequent Events
The Plan’s management has evaluated subsequent events through June 24, 2022, the date the financial statements were issued. Effective April 1, 2022, pursuant to an Agreement and Plan of Merger, dated as of September 15, 2021, as amended on October 18, 2021 and further amended on November 8, 2021 (the “Merger Agreement”) among the Company, Centennial, the Company’s acquisition subsidiary, HOMB Acquisition Sub III, Inc. (“Acquisition Sub”), Happy Bancshares, Inc. (“Happy”), and its wholly-owned bank subsidiary, Happy State Bank (“HSB”), Acquisition Sub merged with and into Happy and Happy merged with and into the Company, with the Company as the surviving entity (collectively, the “Merger”). HSB also merged with and into Centennial, with Centennial as the surviving entity. Under the terms of the Merger Agreement, the Company issued approximately 42.4 million shares of its common stock. Under the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each outstanding share of common stock of Happy was converted into the right to receive, without interest, 2.17 shares of Company common stock (the “Merger Consideration”). The acquisition did not have an impact on the Plan for the year ended December 31, 2021. The Happy Bancshares, Inc. Employee Stock Ownership Plan with 401(k) Provision was terminated on March 31, 2022 as part of the acquisition. The participants in the Happy Bancshares, Inc. Employee Stock Ownership Plan with 401(k) Provision (the “Happy Plan”) are entitled to a distribution from the Happy Plan due to its termination. Many of the participants in the Happy Plan are now participating in the Plan, and it is anticipated that such participants will rollover their Happy Plan accounts into the Plan during 2022.

8
Home BancShares, Inc. 401(k) and Employee Stock Ownership Plan
EIN: 71-0682831 – Plan #: 002
Form 5500, Schedule H, Line 4i – Schedule of Assets (Held at End of Year)
December 31, 2021

Identity of issue, borrower,
lessor or similar party		Description of investment including maturity date,
rate of interest collateral, par or maturity value		CostCurrent Value
Money market fund
Vanguard Vanguard Federal Money Market**2,529,467
Mutual funds
BairdBaird Core Plus Bond**1,207,176
BlackRock BlackRock 20/80 Target Allocation**659,707
BlackRock BlackRock 40/60 Target Allocation**5,594,385
BlackRock BlackRock 60/40 Target Allocation**2,256,644
BlackRock BlackRock 80/20 Target Allocation**1,455,175
Dodge & Cox Dodge & Cox International Fund**207,509
Fidelity Fidelity Limited Term Government**1,654,456
JanusJanus Small Cap Value**541,204
JP Morgan JP Morgan Emerging Markets**791,709
MFS MFS Growth Fund**3,198,797
MFS MFS Value Fund**2,301,385
PIMCO PIMCO All Asset Institutional**391,192
T. Rowe Price T. Rowe Price Retirement 2010**524,566
T. Rowe Price T. Rowe Price Retirement 2015**1,413,794
T. Rowe Price T. Rowe Price Retirement 2020**2,472,573
T. Rowe Price T. Rowe Price Retirement 2025**4,861,890
T. Rowe Price T. Rowe Price Retirement 2030**3,883,475
T. Rowe Price T. Rowe Price Retirement 2035**4,843,577
T. Rowe Price T. Rowe Price Retirement 2040**2,578,476
T. Rowe Price T. Rowe Price Retirement 2045**4,267,807
T. Rowe Price T. Rowe Price Retirement 2050**2,321,106
T. Rowe Price T. Rowe Price Retirement 2055**2,996,468
T. Rowe Price T. Rowe Price Retirement 2060**872,457
T. Rowe Price T. Rowe Price Small Cap**2,049,147
Vanguard Vanguard S&P 500 Index Fund**5,459,351
Vanguard Vanguard Dividend Growth**3,260,404
Vanguard Vanguard Inflation Protected**465,578
Vanguard Vanguard International Growth**847,540
Vanguard Vanguard Mid Cap Index Fund**2,715,822
Vanguard Vanguard Small Cap Index Fund**1,146,825
Vanguard Vanguard Strategic Equity Inv.**2,879,606
Vanguard Vanguard Total Bond Market**670,782
Vanguard Vanguard Total International Stock Fund**747,445
Total mutual funds71,538,028
Employer stock
*Home BancShares, Inc. Home BancShares, Inc. common stock**25,836,582
Participant loan fund
*Participant loan fundInterest rates 5.25 – 7.50%; maturity dates through 20491,362,835
Total assets$101,266,912 

*    Indicates party-in-interest to the Plan
**    Cost is not applicable for participant-directed investments
9
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustee (or other person who administers the employee benefit plan) has duly caused this annual report to be signed by the undersigned hereunto duly authorized.

 
Home BancShares, Inc. 401(k) and Employee Stock Ownership Plan
 
By:
 
/s/ Brian S. Davis
Date: June 24, 2022
 
 
Brian S. Davis
 
 
Chief Financial Officer and Treasurer of Home BancShares, Inc.

10
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statement No. 333-229805 on Form S-8 of our report dated June 24, 2022, with respect to the financial statements and supplemental schedule of the Home BancShares, Inc. 401(k) and Employee Stock Ownership Plan included in this Annual Report (Form 11-K) for the year ended December 31, 2021.

/s/ Hancock Askew & Co., LLP

Savannah, Georgia
June 24, 2022


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