Home BancShares, Inc. · NYSE:HOMB
Home BancShares — Merger or Acquisition (September 2021)
22 slides from Home BancShares's merger presentation, September 2021
Slide 1: Home BancShares Announces Acquisition of Happy Bancshares
NASDAQ: HOMB | September 2021 www.homebancshares.com Home BancShares Announces Acquisition of Happy Bancshares Creating a Happy HOMB from Panhandle to Panhandle
Slide 2: Forward Looking Statement
FORWARD LOOKING STATEMENT This presentation contains forward-looking statements which include, but are not limited to, statements about the benefits of the business combination transaction involving Home BancShares, Inc. (“Home”) and Happy Bancshares, Inc. (“Happy”), including the combined company’s
Slide 3: Additional Information and Where to Find It
ADDITIONAL INFORMATION AND WHERE TO FIND IT This presentation may be deemed to be solicitation material in respect of the proposed transaction by Home and Happy. In connection with the proposed acquisition, Home intends to file with the Securities and Exchange Commission (the “SEC”) a Registration S
Slide 4: Creating a Dominant Southern Institution from Panhandle to Panhandle
CREATING A DOMINANT SOUTHERN INSTITUTION FROM PANHANDLE TO PANHANDLE Meaningful Entrance into High-Growth Texas Markets $6.3 billion in total assets #25 ranked by Texas deposits Dominant Panhandle and South Plains market share and an entrance into Dallas/Fort Worth and Austin markets Largest
Slide 5: Expansion into High Growth Texas Markets
EXPANSION INTO HIGH GROWTH TEXAS MARKETS Expansive Geographic Footprint Enhancing Our Presence in High Growth Markets Amarillo Austin Dallas Destin TN NC Amarillo OK NM Little Rock AR SC MS AL GA Dallas TX LA HOMB Fayetteville Fort Myers Fort Smith Lakeland Austin FL Happy Pensacola Bancshares Tampa
Slide 6: Positioned to Benefit from Demographic Growth Trends
POSITIONED TO BENEFIT FROM DEMOGRAPHIC GROWTH TRENDS $24B Deposits: $8.0B Deposits: $5.3B Deposits: $5.4B Total Assets¹ Market Rank: 17 Market Rank: 25 Market Rank: 6 Population: 21.9M Population: 29.6M Population: 3.0M $14B Gross Loans¹ Population Growth: 5.9% Population Growth: 6.8% Population Gro
Slide 7: Proposed Terms of the Transaction
PROPOSED TERMS OF THE TRANSACTION • Home BancShares, Inc. (NASDAQ : HOMB) will be the surviving entity Transaction • 2.17x HOMB shares for each share of Happy Bancshares, Inc. common stock Structure • Options to be rolled into HOMB common stock • Implied Price per Share: $47.24¹ • Aggregate Transact
Slide 8: Rare, Triple Accretive Transaction
RARE, DAY 1 TRIPLE ACCRETIVE TRANSACTION Accretive to EPS Accretive to BVPS Accretive to TBVPS 5.5% 9.2% 5.1% 1.5% 2022E EPS 2023E EPS BVPS TBVPS Accretion1 Accretion Accretion Accretion Robust Capital Positioning and Operating Profile 14.4% 18.9% +90bps CET 1 Ratio at Total Capital Ratio ROATCE Clo
Slide 9: Happy Bancshares Overview – A High Performing Texas Bank
HAPPY BANCSHARES OVERVIEW – A HIGH PERFORMING TEXAS BANK J. Pat Hickman – Chairman, President Headquartered Amarillo, TX Headquartered Canyon, TX and Founder of Happy Bancshares, Inc. Assets $6.3B Chairman of Happy State Bank Assets $6.3B 40+ Years of Banking Experience Gross Loans Gross Loans $3.5B
Slide 10: Granular, Low Cost Deposit Generators
GRANULAR, LOW COST DEPOSIT GENERATORS HOMB HAPPY Pro Forma(1) Interest Interest Interest Bearing Bearing Bearing Non- Non-Time Non- Time Retail 59.2% Time Time Retail Retail 63.0% 61.9% Type of Deposit 4.3% Time Time 5.2% 4.5% $13.9B Jumbo $5.3B Jumbo $19.2B Time² Jumbo Total 3.4% Total Time² Total
Slide 11: Diversified, Commercial-Focused Loan Portfolio
DIVERSIFIED, COMMERCIAL-FOCUSED LOAN PORTFOLIO HOMB HAPPY Pro Forma(1) Energy Other Energy Other Other 2.6% 0.4% Agriculture 0.7% Agriculture 2.3% 1-4 Family Agriculture 1.8% 1-4 Family 1-4 Family 4.7% PPP 1.9% 11.7% 13.1% PPP 12.4% PPP 14.5% 4.5% 4.8% Multifamily 3.5% Multifamily 3.3% Multifamily C
Slide 12: Significant Credit Review and Conservative Credit Mark
SIGNIFICANT CREDIT REVIEW AND CONSERVATIVE CREDIT MARK Select COVID-19 Significant Due Energy Exposure Sensitive Industries Diligence Services Retail Centers $104.3M 45% of Loan Balance Reviewed 12% Energy $78.3M 616 Loans Disposal $78.3M 50% Total Restaurants $37.1M Reviewed 92% of Production Class
Slide 13: The Combination of Shared Values Provides Benefits for All Stakeholders
THE COMBINATION OF SHARED VALUES PROVIDES BENEFITS FOR ALL STAKEHOLDERS Consistent commitment ENVIRONMENTAL, During a pandemic, the $3M IN DONATIONS to COMMUNITY SOCIAL AND combined company during 2020 DEVELOPMENT AND GOVERNANCE efforts contributed 11,500 CORPORATE remain a top priority VOLUNTEER HO
Slide 14: Creating a Dominant Southern Institution from Panhandle to Panhandle
CREATING A DOMINANT SOUTHERN INSTITUTION FROM PANHANDLE TO PANHANDLE With a meaningful entrance into high-growth Texas markets, HOMB now operates in two of the fastest growth states in the U.S. Complementary franchise that is additive to an already top-tier institution Financially compelling low-ris
Slide 15: Benefits of the Combination
BENEFITS OF THE COMBINATION Triple Accretive: Accretive to EPS, BVPS and TBVPS inclusive of more than $50M of transaction costs and the $28M impact of CECL “double count” Conservative Assumptions: credit mark, one-time costs, expense savings and no revenue synergies Well-managed platform with strong
Slide 16: Total Shareholder Return Since HOMB Initial Public Offering
TOTAL SHAREHOLDER RETURN SINCE HOMB INITIAL PUBLIC OFFERING HOMB +605.3% 900.0% S&P 500 +389.2% NASDAQ Bank +102.4% 800.0% Benefits to Happy Shareholders: Will receive a quarterly dividend Immediate liquidity in their stock 700.0% Pledging ability of stock 600.0% 500.0% 400.0% 300.0% 200.0% 100.0% 0
Slide 17: Appendix
APPENDIX 17
Slide 18: Tangible Book Value Per Share at Closing Reconciliation
TANGIBLE BOOK VALUE PER SHARE AT CLOSING RECONCILIATION ~3.0% $0.66 ~1.5% $11.08 $0.21 $10.94 $0.48 $10.79 $0.14 $10.31 $0.15 HOMB Est. HOMB Core Deposit Equity Est. Total TBVPS Net Impact Pro Forma Standalone Growth Est. at Close Intangible Consideration Restructuring Pre - of CECL TBVPS (2Q’21) To
Slide 19: Key Merger Assumptions
KEY MERGER ASSUMPTIONS • HOMB 2021 and 2022 EPS estimates of $1.89 and $1.66, respectively, and 2023 net income estimate of Earnings $278 million Projections1 • Happy net income estimates of $68.3 million and $71.7 million for 2022 and 2023, respectively • Approximately 33% of Happy’s projected expe
Slide 20: Due Diligence Summary
DUE DILIGENCE SUMMARY • Extensive credit diligence consisting of 18 HOMB professionals conducting a deep dive across business, operations and risk • ~$1.6B loans, or 45%, of total loans, were subject to review • 616 loans reviewed • ~2,000 diligence files reviewed consisting of over 56,000 pages Sco
Slide 21: Pro Forma Demographic Highlights
PRO FORMA DEMOGRAPHIC HIGHLIGHTS Meaningful Market Presence in Nearly Half of the Top 20 Growth MSAs in the Southeast and Southwest Sorted by Project ’21-’26 Population Growth 8.52% 8.49% 8.41% 7.93% 7.61% 7.60% 7.51% 7.48% 7.42% 7.30% 7.30% 7.25% 7.09% 7.04% 6.98% 6.98% 6.96% 6.81% 6.79% 6.76% $2.0
Slide 22: Earnings Per Share Reconciliation
EARNINGS PER SHARE RECONCILIATION ($M, except per share values) FY 2022E FY 2023E HOMB's Standalone Net Income to Common Estimate ¹ $268.7 $278.0 Happy's Standalone Net Income to Common Estimate $68.3 $71.7 After-Tax Transaction Adjustm ents: Cost Savings $29.9 $41.0 CDI Amort. Expense, net of Curre
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