Impact of Tax Reform on Home BancShares, Inc.

Home BancShares, Inc. (“Home” or “the Company”), parent company of Centennial Bank (“Centennial”), announced recently that as a result of the “Tax Cuts and Jobs Act” (the “TCJA”) that President Donald Trump signed into law on December 22, 2017, the Company will be required to revalue its deferred tax assets and deferred tax liabilities to account for the future impact of lower corporate tax rates on these deferred amounts. The reduction in the federal corporate tax rate will negatively impact Home’s fourth quarter 2017 results but is expected to positively impact Home’s future after-tax earnings.

As of December 31, 2017, the Company performed a preliminary analysis to determine the impact of the revaluation of the deferred tax asset of approximately $113.5 million.  The current impact of this will be a one-time non-cash charge to the income statement of approximately $36.9 million that will reduce Home’s fourth quarter 2017 results.  Under the Company’s analysis, the fourth quarter earnings impact would be approximately $(0.22) per share and the tangible book value impact would be approximately $(0.21) per share based on fourth quarter weighted average diluted shares of approximately 174,348,000 and total shares outstanding of approximately 173,633,000 at year end, respectively. 

“The savings from this historic legislation will improve cash flow and earnings per share beginning in 2018, delivering excellent value-generating opportunities for our Company and ultimately our shareholders,” said John Allison, Chairman.

These preliminary estimates of the impact of tax reform on Home should not be viewed as a substitute for full financial statements prepared in accordance with U.S. generally accepted accounting principles, and are not necessarily indicative of the results to be achieved for any future periods. The estimates have been prepared by management and Home’s independent auditors have not completed their audit or review of such information.

Home BancShares, Inc. is a bank holding company, headquartered in Conway, Arkansas. Our 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, South Alabama and New York City.