Record First Quarter Highlights the Stability of HOMB; Strength Is No Accident

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CONWAY, Ark., April 16, 2025 (GLOBE NEWSWIRE) -- Home BancShares, Inc. (NYSE: HOMB) ("Home” or the "Company”), parent company of Centennial Bank, released quarterly earnings today.

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

"This industry boils down to revenue and expenses. The magic is, doing the simple things repeatedly and long enough, creating a compounding effect of success. A record setting first quarter has paved the way for a strong year,” said John Allison, Chairman and CEO of HOMB.

Operating Highlights

Net income for the three-month period ended March 31, 2025 was $115.2 million, or $0.58 diluted earnings per share. Diluted earnings per share of $0.58 was a record for the Company. When adjusting for non-fundamental items, net income and diluted earnings per share on an as-adjusted basis (non-GAAP), were $111.9 million⁽¹⁾ and $0.56 per share⁽¹⁾, respectively, for the three months ended March 31, 2025.

Our net interest margin was 4.44% for the three-month period ended March 31, 2025, compared to 4.39% for the three-month period ended December 31, 2024. The yield on loans was 7.38% and 7.49% for the three months ended March 31, 2025 and December 31, 2024, respectively, as average loans increased from $14.80 billion to $14.89 billion. Additionally, the rate on interest bearing deposits decreased to 2.67% as of March 31, 2025, from 2.80% as of December 31, 2024, while average interest-bearing deposits increased from $12.86 billion to $13.20 billion.

During the first quarter of 2025, there was $1.3 million of event interest income compared to $1.5 million of event interest income for the fourth quarter of 2024. Purchase accounting accretion on acquired loans was $1.4 million and $1.6 million for the three-month periods ended March 31, 2025 and December 31, 2024, respectively, and average purchase accounting loan discounts were $17.5 million and $19.1 million for the three-month periods ended March 31, 2025 and December 31, 2024, respectively.

Net interest income on a fully taxable equivalent basis was $217.2 million for the three-month period ended March 31, 2025, and $219.5 million for the three-month period ended December 31, 2024. This decrease in net interest income for the three-month period ended March 31, 2025, was the result of a $10.0 million decrease in interest income, partially offset by a $7.7 million decrease in interest expense. The $7.7 million decrease in interest expense was due to a $3.8 million decrease in interest expense on deposits and a $3.6 million decrease in FHLB and other borrowed funds resulting from the payoff of the BTFP advance during the fourth quarter of 2024 and the declining interest rate environment. The $10.0 million decrease in interest income was primarily the result of a $7.6 million decrease in loan income, a $1.4 million decrease in investment income and a $965,000 decrease in income from deposits with other banks resulting from the payoff of the BTFP advance and the declining interest rate environment. The overall decrease in interest income and interest expense is primarily due to the declining interest rate environment.

The Company reported $45.4 million of non-interest income for the first quarter of 2025. The most important components of non-interest income were $11.4 million from other income, $10.7 million from other service charges and fees, $9.7 million from service charges on deposit accounts, $4.8 million from trust fees, $3.6 million in mortgage lending income, $2.7 million from dividends from FHLB, FRB, FNBB and other, $1.8 million from the increase in cash value of life insurance and $442,000 from the fair value adjustment for marketable securities. Included within other income was $3.9 million in special income from equity investments.

Non-interest expense for the first quarter of 2025 was $112.9 million. The most important components of non-interest expense were $61.9 million from salaries and employee benefits, $28.1 million in other operating expense, $14.4 million in occupancy and equipment expenses and $8.6 million in data processing expenses. For the first quarter of 2025, our efficiency ratio was 42.22%, and our efficiency ratio, as adjusted (non-GAAP), was 42.84%⁽¹⁾_.

Financial Condition

Total loans receivable were $14.95 billion at March 31, 2025, compared to $14.76 billion at December 31, 2024. Total loans receivable of $14.95 billion were a record for the Company. Total deposits were $17.54 billion at March 31, 2025, compared to $17.15 billion at December 31, 2024. Total assets were $22.99 billion at March 31, 2025, compared to $22.49 billion at December 31, 2024.

During the first quarter of 2025, the Company had a $187.6 million increase in loans. Our community banking footprint experienced $291.5 million in organic loan growth during the quarter ended March 31, 2025, and Centennial CFG experienced $103.9 million of organic loan decline and had loans of $1.71 billion at March 31, 2025.

Non-performing loans to total loans were 0.60% and 0.67% at March 31, 2025 and December 31, 2024, respectively. Non-performing assets to total assets were 0.56% and 0.63% at March 31, 2025 and December 31, 2024, respectively. Net loans recovered were $4.1 million for the three months ended March 31, 2025, and net loans charged-off were $53.4 million for the three months ended December 31, 2024. During the fourth quarter of 2024, the Company completed an asset quality cleanup project which resulted in the significant level of charge-offs. The charge-off detail by region for the quarters ended March 31, 2025 and December 31, 2024 can be seen below.