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When billionaire Warren Buffett speaks, Wall Street tends to pay very close attention. In his nearly six decades as CEO of Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), he’s overseen close to a 5,600,000% cumulative return in his company’s Class A shares (BRK.A). Few money managers have been able to consistently outpace the benchmark S&P 500 (SNPINDEX: ^GSPC) quite like Buffett.

Though riding the Oracle of Omaha’s coattails has been a profitable venture for decades, we’ve witnessed a discernable shift in Buffett’s investing habits over the last two years. Although he’s been a decisive seller of equities of late, there is one stock Berkshire’s chief can’t stop adding to his company’s 43-stock, $318 billion portfolio.

Warren Buffett has quietly become a net seller of stocks

Let me preface this discussion by making one thing clear: Warren Buffett is a long-term optimist when it comes to the U.S. economy and stock market. He’s repeatedly cautioned investors not to bet against America, and wisely realizes that periods of economic growth handily outlast short-lived recessions.

Despite this rosy long-term outlook, the Oracle of Omaha is also an ardent value investor who’s, historically, been unwilling to chase stocks higher when valuations aren’t attractive.

Between Oct. 1, 2022 and June 30, 2024, a span of seven quarters, Buffett and his team oversaw close to $132 billion in net stock sales. A majority of this selling activity can be traced to dumping north of 500 million shares of Apple over a three-quarter stretch. However, Form 4 filings with the Securities and Exchange Commission also show that more than $10 billion worth of Bank of America stock was sent to the chopping block since mid-July.

This persistent selling activity from Berkshire Hathaway’s brightest investment minds is almost certainly a response to the stock market being historically pricey.

On Monday, the S&P 500 and ageless Dow Jones Industrial Average closed at respective all-time highs. What’s more telling is that the S&P 500’s Shiller price-to-earnings (P/E) ratio, which is also known as the cyclically adjusted price-to-earnings ratio (CAPE ratio), hit its highest level of the year.

The Shiller P/E is a valuation tool that takes average inflation-adjusted earnings from the previous 10 years into account. This makes it an excellent apples-to-apples measure of value.

As of the closing bell on Oct. 14, the S&P 500’s Shiller P/E ratio stood at 37.70, which is more than double its average reading of 17.16, when back-tested to January 1871. This also represents the third-highest reading during a continuous bull market.

Story continues

Following the five previous instances, spanning 153 years, where the Shiller P/E surpassed 30, the broad-based S&P 500 and/or Dow Jones Industrial Average eventually shed 20% to 89% of their value. Wall Street simply can’t sustain premium valuations for an extended period of time — and the Oracle of Omaha knows it.

The Oracle of Omaha is piling into a historically cheap legal monopoly

But despite being a big-time seller of stocks for two years, the Oracle of Omaha has managed to unearth at least one value stock.

Following 15 separate Form 4 filings detailing selling activity in Bank of America since mid-July, investors were privy to a Form 4 filing after the closing bell on Oct. 11 that detailed buying activity in satellite-radio operator Sirius XM Holdings (NASDAQ: SIRI). Berkshire’s brightest investment minds spent $86.7 million to purchase an additional 3,564,059 shares from Oct. 9 through Oct. 11, which increased its stake in the company to 32.1%.

This year has been undeniably challenging for Sirius XM, which is contending with a two-quarter streak of declining satellite-radio subscribers. It’s reliant on strong auto sales, and the three-month promotional offer for its satellite-radio services that accompany those sales, to turn promotional listeners into self-pay subscribers. If auto sales fail to impress, Sirius XM may struggle to convert promotional listeners into paying users.

But what Sirius XM does have is a number of clearly visible competitive advantages and a historically cheap valuation that the Oracle of Omaha can’t resist.

The defining trait for Sirius XM is that it’s one of America’s few publicly traded legal monopolies. While being the only licensed satellite-radio operator doesn’t mean the company is devoid of competition, it does lead to significant pricing power. In other words, Sirius XM can increase its subscription prices to ensure that it’s outpacing inflationary pressures.

Beyond just being a legal monopoly, Sirius XM differs from traditional radio operators in a couple of important ways.

For starters, online and terrestrial radio companies bring in almost all of their revenue from advertising. Meanwhile, Sirius XM generated 77% of its net sales from subscriptions and roughly 19% from ads through the first-half of 2024. A primarily subscription-driven model leads to more consistent operating cash flow, and should provide a nice cushion for Sirius XM during short-lived recessions. The same can’t be said for traditional radio companies.

Sirius XM also enjoys some degree of cost predictability, which is not something you’d see from terrestrial radio operators. While royalty expenses and talent acquisition costs are going to vacillate from one quarter to the next, transmission and equipment costs are mostly static, regardless of how many subscribers the company adds. Ideally, this should lead to margin expansion over the long run.

I’d be remiss if I didn’t also mention that Sirius XM has a generous capital-return program. Aside from an existing $1.17 billion share repurchase authorization from its board, the company is doling out an S&P 500-crushing 3.9% yield.

The final piece of the puzzle that’s clearly compelled Buffett to buy shares of this legal monopoly hand over fist is its valuation. Buffett’s purchases last week came with Sirius XM stock at just 7 times forward-year earnings, which is the cheapest it’s been since becoming a public company 30 years ago.

Warren Buffett is a big fan of cheap, time-tested companies with sustainable moats — and that’s precisely what he’s getting with Sirius XM.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $21,122!*

• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,756!*

• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $384,515!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of October 14, 2024

Bank of America is an advertising partner of The Ascent, a Motley Fool company. Sean Williams has positions in Bank of America and Sirius XM. The Motley Fool has positions in and recommends Apple, Bank of America, and Berkshire Hathaway. The Motley Fool has a disclosure policy.

Warren Buffett Is Buying Shares of This Legal Monopoly Hand Over Fist was originally published by The Motley Fool

Semiconductor industry peers Nvidia (NVDA), Broadcom (AVGO) and Monolithic Power Systems (MPWR) have etched their names onto the IBD Breakout Stocks Index. Shaking off Tuesday’s sell-off in chip stocks, Nvidia stock is again teasing a record high as all three chip leaders continue to work on new breakouts. And Taiwan Semiconductor (TSM) just found support above its latest buy zone and is now extended.

But these semiconductor names are just some of the names on this stock screen. Updated weekly, the Investor’s Business Daily Breakout Stocks Index currently features a host of stocks to watch, including two recent initial public offerings that are testing new buy zones: Viking Holdings (VIK) and Rubrik (RBRK).

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Nvidia Stock Rebounding To Lead This Breakout Brigade

The Innovator IBD Breakout Opportunities (BOUT) exchange traded fund tracks companies on the IBD Breakout Stocks Index, which currently includes names like Nvidia, Broadcom and Taiwan Semiconductor. Powered by these leaders, the Breakout ETF launched a breakout of its own on Monday and rose again Wednesday. The ETF allows investors to get in on a wide swath of stocks in or near a buy zone with a single trade.

As Nvidia, Broadcom and Monolithic Power Systems look to shake off Tuesday’s setback and break out, investors should note that each of these moves are from later-stage bases. While such setups can lead to big gains, they do entail more risk than breakouts from early-stage bases.

After finding support at its 50-day moving average earlier this month, Nvidia stock has crafted a third-stage consolidation pattern with a 140.76 entry. Up 3% Wednesday, the artificial intelligence powerhouse currently trades 4% shy of that mark.

Reflecting how stocks often travel in groups, Broadcom stock is teasing a 185.16 buy point in a third-stage pattern as it finds support at its 21-day exponential moving average. Meanwhile, Monolithic Power Systems targets a 959.64 entry in a third-stage base. Following Tuesday’s ASML-driven sell-off in chip stocks, MPWR stock found and held support at its 50-day line on Wednesday.

All three stocks hail from the fabless semiconductor group, which ranks No. 10 among the 197 groups IBD tracks.

See Who Joins Nvidia, Broadcom On The IBD Breakout Stocks Index

Two Breakout IPO Stocks To Watch

Shares of newer initial public offerings can be volatile. Both Viking Holdings and Rubrik reinforce that point. But IPO breakouts can also spark impressive gains for investors that follow sound rules on how to buy stocks and when to sell stocks.

Viking Holdings, which joins Nvidia stock on IBD Leaderboard, had made an impressive — albeit rocky — run since going public in May. It provides destination-focused journeys on rivers, oceans and lakes around the world. Viking has sailed into buy range after weathering a stormy summer.

Earlier this month, Viking Holdings cleared a 37.25 buy point in a first-stage base and remains in buy range. While Nvidia and Broadcom fell Tuesday, shares of VIK rose nearly 2% in above-average volume. Viking Holdings rose again on Wednesday, closing just below the very top of its buy zone.

Cybersecurity firm Rubrik has seen its share of volatility since its IPO in April. But the stock has also shown signs of strength and resilience. Last week, the Palo Alto, Calif.-based company bolted back above its 10-week line. That set up a first-stage base with a buy point of 40. After three down sessions, Rubrik now stands 3% shy of that mark.

IBD Breakout Opportunities ETF

The IBD Breakout Opportunities ETF is from Innovator Capital Management. As with other ETFs, it allows you to invest in the entire index as well as buy individual stocks like Nvidia. Learn more here about the ETF and Innovator.

Follow Matthew Galgani on X (formerly Twitter) at @IBD_MGalgani.

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Most investors inconsistently view quarterly earnings as a catalyst for stock prices upon the news release. They often find themselves trapped in the volatility of sudden moves and face the risk of large—or total, in the case of options—losses if the direction of the stock after the announcement goes the wrong way.

There is a way to somewhat accurately predict where a stock could go after earnings announcements or to see where broader markets are betting these stocks could go on the event. Keeping the saying “it must be expensive for a reason” in mind can be useful for investors in these scenarios, likewise for cheapness. Here are three stocks becoming ‘expensive’ before they report earnings this month and why markets are willing to pay.

Aerospace and defense stock Lockheed Martin Co. LMT, wireless and communications provider T-Mobile US Inc. TMUS, and even technology stock CoStar Group Inc. CSGP are some of the stocks reporting their subsequent quarrel earnings this month, and they all share the common factor of commanding valuation premiums compared to their peers. This is why markets might be willing to overpay for these stocks ahead of their announcements.

Lockheed Martin Positioned for Strong Quarter as Middle East Conflicts Drive Rising Arms Demand

As conflicts in the Middle East arise and escalate, the United States and its military allies will have to call upon domestic arms manufacturers like Lockheed Martin to help control and handle these situations accordingly, creating new demand for contracts in the company.

Investors can see this trend taking on momentum through a government contract database, spotting a new inflow of up to $599 million worth of government contracts going to Lockheed Martin to prepare responses against these conflicts, something markets are starting to bet on as the possibility of optimistic guidance and maybe even an earnings beat.

Knowing that a strong quarter is likely, markets are now willing to pay up to 21.5x the price-to-book (P/B) ratio, which is a significant premium over the rest of the aerospace sector’s average valuation of 5.6x today. The optimism doesn’t stop there for Lockheed Martin stock, though; others on Wall Street share the same bullish view.

Analysts at Citigroup decided to reiterate their “Buy” rating for the stock as recently as October 2024, this time seeing a price valuation of up to $700 a share. To prove these new views right, Lockheed Martin would need to rally by as much as 14.4% from where it trades today, not to mention a new 52-week high price for the company.

Lastly, investors can see signs of bearish capitulation in the face of all this bullish sentiment and evidence, as Lockheed Martin stock’s short interest declined by as much as 18.8% over the past month alone, leaving room for new bulls to come in before the earnings are out.

T-Mobile Stock Gains New Premium as Subscription Business Strengthens

During times of higher inflation, such as today, and especially during economic uncertainty, businesses with subscription-based models tend to do well, considering their predictability and stability in cash flows and profits. Compared to peers like AT&T Inc. T and Verizon Communications Inc. VZ, T-Mobile stands apart in strategy.

Competitors fell behind in investing heavily in fiber communications, which not only eat up a lot of cash but also pose significant weather risk, some of the issues that T-Mobile’s fixed wireless model does not have to endure. Fixed wireless is less capital-intensive and safer, and that superior quality keeps the company a leadership state compared to peers.

This is also why markets are willing to overpay for T-Mobile stock ahead of its earnings announcement. Compared to the rest of the communications industry’s average P/B ratio of 1.4x today, T-Mobile stock commands a premium of 3.9x today. Knowing that the business’ investments are superior to peers and that is drawing more business, markets are rightfully bullish before earnings.

Analysts at Benchmark have recently boosted their price targets for T-Mobile stock as well, this time shooting for $250 a share, which calls for up to 16% upside from where T-Mobile stock trades today.

Double-Digit Upside Ahead for CoStar Group Stock

Combining the power of data and technology to the real estate sector is CoStar’s value proposition for investors, one Wall Street is surely bullish on before the company’s next earnings announcement. Starting with analysts, here’s what they say about the company’s future.

Those at Needham & Co. see CoStar Group stock trading as high as $107 a share, calling for a net upside of 38.4% from today’s stock price, not to mention a new 52-week high. Knowing that the industry is in dire need of data to aid in decision-making during shifting interest rates, markets bet that the stock is going to deliver a strong quarter.

Looking into valuations, CoStar Group stock trades at 145.9x price-to-earnings (P/E) ratio today, compared to the rest of the business services industry’s average 43.0x average P/E today. Another premium to consider ahead of earnings is to be justified by potential financial outperformance.

To close the loop on this view, investors can note CoStar Group stock’s falling short interest, which declined by 4.6% during the past month alone. This shows investors another sign of bullishness through bearish capitulation in the stock recently.

The article “3 Stocks Investors Don’t Want to Miss Ahead of Earnings” first appeared on MarketBeat.

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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

CONWAY, Ark., Oct. 16, 2024 (GLOBE NEWSWIRE) — Home BancShares, Inc. HOMB (“Home” or the “Company”), parent company of Centennial Bank, released quarterly earnings today.

Quarterly Highlights

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

“HOMB was on track to meet or beat expectations in the third quarter when Hurricane Helene hit with three business days left in the quarter. I’m proud of the strength of our balance sheet which allowed us to increase our already strong loan loss reserve amount in order to prepare for what is to come as a result of recent hurricanes in the southeast,” said John Allison, Chairman and CEO of HOMB.

“Our quarter was shaping up very nicely, and I was looking for $0.55 to $0.56 diluted earnings per share and an ROA of 1.96%. But that all changed almost overnight due to circumstances beyond our control. Despite this event, we still had a very strong quarter with strong revenue and PPNR, $0.50 diluted earnings per share and a 1.74% return on average assets,” Allison continued.

Liquidity and Funding Sources

At September 30, 2024, the Company held $2.50 billion in net available internal liquidity. This balance consisted of $1.51 billion in unpledged investment securities which could be used for additional secured borrowing capacity, $718.9 million in cash with the Federal Reserve Bank (FRB) and $270.4 million in other liquid cash accounts.

Consistent with the Company’s practice of maintaining access to significant external liquidity, the Company had $3.15 billion in net available external liquidity as of September 30, 2024. This included $4.80 billion in available liquidity with the Federal Home Loan Bank (FHLB), of which $1.84 billion has been drawn upon in the ordinary course of business, resulting in $2.97 billion in net available liquidity with the FHLB as of September 30, 2024. The $1.84 billion consisted of $600.0 million in outstanding FHLB advances and $1.24 billion used for pledging purposes. The Company also had access to approximately $785.6 million in liquidity with the FRB as of September 30, 2024, of which $700.0 million has been drawn upon in the ordinary course of business from the Bank Term Funding Program (BTFP), resulting in $85.6 million in net available liquidity with the FRB as of September 30, 2024.  As of September 30, 2024, the Company also had access to $55.0 million from First National Bankers’ Bank (FNBB) and $45.0 million from other various external sources.

Overall, the Company had $5.65 billion in net available liquidity as of September 30, 2024, which consisted of $2.50 billion of net available internal liquidity and $3.15 billion in net available external liquidity. Details on the Company’s available liquidity as of September 30, 2024 are included below.

The Company has continued to limit its exposure to uninsured deposits. As of September 30, 2024, the Company held approximately $8.18 billion in uninsured deposits of which $766.2 million were intercompany subsidiary deposit balances and $2.81 billion were collateralized deposits, for a net position of $4.61 billion. This represents approximately 27.6% of total deposits. As of September 30, 2024, net available liquidity exceeded uninsured and uncollateralized deposits by $1.04 billion.

In the event the Company’s $4.61 billion net position of uninsured deposits had been called by depositors on the first day of the third quarter of 2024 and the Company utilized available funding, which remained outstanding during the entire quarter, the Company estimates that interest expense would have increased by approximately $72.3 million for the quarter ended September 30, 2024. The outflow of deposits could have been funded through available sources of liquidity without selling our investment securities. In this event, based on the Company’s profitability level for the quarter ended September 30, 2024, the Company estimates that it would still have achieved return on average assets (ROA) of 1.26% for the quarter ended  September 30, 2024.

Operating Highlights

Net income for the three-month period ended September 30, 2024 was $100.0 million, or $0.50 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 $99.0 million⁽¹⁾ and $0.50 per share⁽¹⁾, respectively, for the three months ended September 30, 2024.

During the quarter ended September 30, 2024, the Company recorded $18.9 million in credit loss expense. The $18.9 million of credit loss expense includes $18.2 million in provision for credit losses on loans. Of the $18.2 million provision for credit losses on loans recorded, $16.7 million was an additional hurricane reserve for loans located in the FEMA disaster areas impacted by Hurricane Helene, which made landfall during the quarter. The additional hurricane reserve had a six cent impact to diluted earnings per share for the quarter. The remaining portion of the provision was related to loan growth. The Company also recorded a $1.0 million provision for credit losses on unfunded commitments due to an increase in the balance of unfunded commitments. In addition, we recorded a $330,000 recovery of credit losses on available for sale investments due to an improvement in the unrealized losses for one of our subordinated debt investments. 

Our net interest margin was 4.28% for the three-month period ended September 30, 2024, compared to 4.27% for the three-month period ended June 30, 2024.  The yield on loans was 7.60% and 7.54% for the three months ended September 30, 2024 and June 30, 2024, respectively, as average loans increased from $14.65 billion to $14.76 billion. Additionally, the rate on interest bearing deposits increased to 3.02% as of September 30, 2024, from 3.00% as of June 30, 2024, while average interest-bearing deposits increased from $12.85 billion to $12.87 billion.

During the third quarter of 2024, there was $573,000 of event interest income compared to $1.7 million of event interest income for the second quarter of 2024.

Purchase accounting accretion on acquired loans was $1.9 million for both three-month periods ended September 30, 2024 and June 30, 2024, and average purchase accounting loan discounts were $20.8 million and $22.8 million for the three-month periods ended September 30, 2024 and June 30, 2024, respectively.

Net interest income on a fully taxable equivalent basis was $217.8 million for the three-month period ended September 30, 2024, and $214.5 million for the three-month period ended June 30, 2024. This increase in net interest income for the three-month period ended September 30, 2024, was the result of a $5.5 million increase in interest income, partially offset by a $2.1 million increase in interest expense. The $5.5 million increase in interest income was primarily the result of a $7.6 million increase in loan interest income, which was partially offset by a $1.7 million decrease in investment income and a $468,000  decrease in income from interest-bearing balances due from banks. The increase in interest income is primarily the result the growth in interest-earning assets and the current high interest rate environment. The $2.1 million increase in interest expense was due to a $2.0 million increase in interest expense on deposits. The increase in interest expense is also a result of the growth of average interest-bearing deposits and the current high interest rate environment.

The Company reported $42.8 million of non-interest income for the third quarter of 2024. The most important components of third quarter non-interest income were $10.5 million from other service charges and fees, $9.9 million from service charges on deposit accounts, $7.5 million from other income, $4.4 million from trust fees, $4.4 million in mortgage lending income, $2.6 million from dividends from FHLB, FRB, FNBB and other, $1.4 million from the fair value adjustment for marketable securities and $1.2 million from the increase in cash value of life insurance.

Non-interest expense for the third quarter of 2024 was $110.0 million. The most important components of non-interest expense were $58.9 million from salaries and employee benefits, $27.6 million in other operating expense, $14.5 million in occupancy and equipment expenses and $9.1 million in data processing expenses. For the third quarter of 2024, our efficiency ratio was 41.42%, and our efficiency ratio, as adjusted (non-GAAP), was 41.66%⁽¹⁾_.

Financial Condition

Total loans receivable were $14.82 billion at September 30, 2024, compared to $14.78 billion at June 30, 2024. Total deposits were $16.71 billion at September 30, 2024, compared to $16.96 billion at June 30, 2024. Total assets were $22.82 billion at September 30, 2024, compared to $22.92 billion at June 30, 2024.

During the third quarter of 2024, the Company experienced approximately $42.5 million in loan growth. Our community banking footprint experienced $131.6 million in organic loan growth during the quarter ended September 30, 2024, and Centennial CFG experienced $89.1 million of organic loan decline and had loans of $2.00 billion at September 30, 2024.

Non-performing loans to total loans were 0.68% and 0.58% at September 30, 2024 and June 30, 2024, respectively. Non-performing assets to total assets were 0.63% and 0.56% at September 30, 2024 and June 30, 2024, respectively. Net charge-offs were $1.5 million and $2.4 million for the three months ended September 30, 2024 and June 30, 2024, respectively.

Non-performing loans at September 30, 2024 were $30.3 million, $40.8 million, $20.0 million, $391,000, $6.8 million and $2.8 million in the Arkansas, Florida, Texas, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $101.1 million. Non-performing assets at September 30, 2024 were $30.4 million, $48.1 million, $33.0 million, $391,000, $6.8 million and $25.5 million in the Arkansas, Florida, Texas, Alabama, Shore Premier Finance and Centennial CFG markets, respectively, for a total of $144.2 million.

The Company’s allowance for credit losses on loans was $312.6 million at September 30, 2024, or 2.11% of total loans, compared to the allowance for credit losses on loans of $295.9 million, or 2.00% of total loans, at June 30, 2024. As of September 30, 2024 and June 30, 2024, the Company’s allowance for credit losses on loans was 309.16% and 342.66% of its total non-performing loans, respectively.

Stockholders’ equity was $3.96 billion at September 30, 2024, compared to $3.86 billion at June 30, 2024, an increase of approximately $104.3 million. The net increase in stockholders’ equity is primarily associated with the $61.2 million increase in retained earnings and $66.9 million reduction in accumulated other comprehensive loss, partially offset by the $26.9 million in stock repurchases. Book value per common share was $19.91 at September 30, 2024, compared to $19.30 at June 30, 2024. Tangible book value per common share (non-GAAP) was $12.67⁽¹⁾ at September 30, 2024, compared to $12.08⁽¹⁾ at June 30, 2024.

Branches

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.

Conference Call

Management will conduct a conference call to review this information at 1:00 p.m. CT (2:00 p.m. ET) on Thursday, October 17, 2024. 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/608252755. 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://www.netroadshow.com/events/login?show=96a4b06e&confId=71177. 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: 892187.  A replay of the call will be available by calling 1-866-813-9403, Passcode: 629464, which will be available until October 24, 2024, 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.

About Home BancShares

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.

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

Non-GAAP Financial Measures

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.

General

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,” “on track” 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.

FOR MORE INFORMATION CONTACT:
Donna Townsell
Director of Investor Relations
Home BancShares, Inc.
(501) 328-4625

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