Home BancShares, Inc.

Greetings, ladies and gentlemen. Welcome to the Home Bank Shares, Inc. Second Quarter 2026 Earnings Call. The purpose of this call is to discuss the information and data provided in the quarterly earnings release issued after the market closed yesterday. The company presenters will begin with prepared remarks, then entertain questions. Please note, if you would like to ask a question during the question and answer session, please press star, then one on a touchtone phone. If you decide you want to withdraw your question, please press star, then two to remove yourself from the list. The company has asked me to remind everyone to refer to their cautionary note regarding forward-looking statements. You will find this note on page 3 of their Form 10-K filed with the SEC in February 2026. At this time, all participants are in a listen-only mode, and this conference is being recorded. If you need operator assistance during the conference, please press star, then zero. It is now my pleasure to turn the call over to Donna Townsell, Director of Investor Relations.

Thank you. Good afternoon and welcome to our second quarter conference call. With me for today's discussion is our Chairman, John Allison, Stephen Tipton, Chief Executive Officer of Centennial Bank, Kevin Hester, President and Chief Lending Officer, Brian Davis, our Chief Financial Officer, Chris Poulton, President of CCFG, and Scott Walter of Shore Premier Finance. HomeBancShares reported another solid quarter, generating a record net income as adjusted of $128 million, while significantly expanding our balance sheet and maintaining strong profitability. Loan growth, stable margins, and improving book value, underscoring the strength of our franchise. Most importantly, we accomplished all of this while maintaining strong credit discipline and preserving the profitability that has long differentiated our company. Our team is prepared to provide you with more details about the quarter with our opening remarks today coming from our chairman, John Allison.

Well, thanks, Donna. It's been another quarter come and go. The second quarter of 26 was and many more. I'm sure full of records for the record book, shared lots of records for the record book, excuse me. There were a couple of items that I think we should talk about. Number one is our merger with our friends with Mountain Commerce. It's evident that some of our merger earnings came through a little earlier and a little stronger than we anticipated as we felt some of the earnings impact in the first quarter. We got to like that because this trade was non-diluted and therein lies the benefit of a non-diluted trade. is where the two companies should be creating more value together than either company can achieve separately. In our view, the meaning of that is one plus one should equal three, not 1.75. With our deal being a three, both groups immediately start sharing the benefits of their union. In this merger, Mountain Commerce and Home Bank shareholders will equally enjoy the ride together. Perhaps the biggest surprise of the quarter, though, was the surprising long growth with a legacy footprint. We were forecasting a negative $600 million in loans and actually had a plus $26 million. That's a $626 million swing on the loan side. As a result, we will no longer forecast next quarter's loan growth. Obviously, we don't do a very good job of that. The problem is that our customers are really a group of outstanding loyal entrepreneurs that are constantly looking for opportunities that we only learn about most of the time when they need a funding request. Many of them do a deal on the spot, commit to do a deal on Monday and say we'll close on Thursday with cash. The good news is we know their limits and they know our limits. The second quarter performance speaks for itself. During the quarter, we incurred approximately $12.7 million of merger-related expenses. Excluding these expenses, the earnings were, and you're going to get to hear it again, EPS is 64 cents and earnings of $128.1 million after tax. That's an 8.4% increase from last quarter and almost 12% from 6-30-25. In addition, revenue, $295 million at 10.6% from the prior quarter to 266.7. Adjusted pre-tax pre-provision net revenue reached a company record of $171 million. When you adjust for the efficiency ratio, it came out 40.46. Good job by both teams, Mountain Commerce and Home BancShares on the expense side. And it adjusted ROA of 2.09. Stable margin of 4.51, same as last quarter, up six basis points from 630 to 25. And I said good job for MCB and Home on the expense side. On a justice basis, these performance numbers are some of the best our company has ever run. I want to thank all our associates for an amazing quarter, and that includes our new partners, Bill Edwards and his outstanding Tennessee team. We have completed the conversion of our legacy company in June, and I think it went as smooth and as good as it could be expected. Now on to Mountain Commerce. We stepped up stock repurchases during the quarter. From first quarter, we repurchased 500,000 shares, and this quarter, we repurchased 1.5 million. I said our goal was to repurchase over a short period of time the shares that we issued in the Mount Commerce transaction, and we're already approaching the halfway mark. On M&A, we're looking at some other opportunities, but with the non-performing loan that we told you about last quarter, our stock took a drop, even though it was a 2% plus ROA, and again repeating is one of the top most profitable banks in America in the top 10. We bid on a group, we bid on a good opportunity but because our stock was temporarily depressed and we hold our standards high because we do not dilute our shareholders, a bid was not acceptable to that opportunity. We'll hope to revisit that company soon as our stock is recovered. As to the large non-performer, There has been significant movement from last quarter's report, but we stand by our comments that we expect no further loss. The loan was non-performed, and no income was recognized in this quarter for the loan, or this would have even been a stronger quarter. While work remains, we're encouraged by the progress that has been done this quarter. I have to say here that Kevin Hester, David Carter, and Mike Cook I want to thank, special thanks to them. They spent a lot of time on this non-performer. They took the bull by the horns and protected the shareholders of HOME Back shares and thank you guys for a great job. That's a solid testament to the quality, commitment, standards of our people. Mike Cook now taking over the leadership, a while back took over the leadership of the Dallas region. That region now reflects the credit culture of homes operating and underwriting standards. It's certainly nice to have those loan problems for the most part behind us now, but there is some work to be done. However, we think we see the light at the end of the tunnel. In our environment where industry loan growth remains challenging, exceptional loan growth should always be examined carefully. Growth generally comes from a combination of pricing, structure, terms, or credit standards. and when there is robust, standout, extraordinary loan growth in an environment that does not support that kind of loan growth, one should look closely at the right structure and terms. It's extremely important that your team from the top down to the junior lender must have lending experience and not only lending experience but quality lending experience with skin in the game. At home, that starts with me at the top as an asset quality hawk who's spending my sixth Thank you for joining us today. We're excited about that. Glad to be in Rockwell. And this is a new branch, not a replacement. New events included hiring our first in-house counsel, Mr. Jeff Campbell, who will fill the role of corporate counsel. We want to welcome Jeff to the family and look forward to working with him. Donna, I just want to make a quick recap of the quarter, if you'll allow me to do that. and I want to leave this with the investment community. Record adjusted income, record revenue, loan growth from a negative 600 and a $626 million swing, stepped up repurchases from 500,000 to 1.5 million, PPNR, a record 171 million, an adjusted efficiency ratio of 40.46, stable margin of 451, and Mountain Commerce already being a contributor sooner than expected. That has gone well. Continued confidence in Holmes' credit culture. So when you look at the adjusted earnings, the profitability metrics, the efficiency ratio, the stable margin, elevated share repurchase, and strong balance sheet growth, I believe Holmes' second quarter, once again, produced one of the strongest banking performances in America. You know, to your honor, I rest my case. Back to you, Ms. Donna.