Home BancShares Inc.
11/05/2026 | Press release | Distributed by Public on 11/05/2026 06:59
Material Event (Form 8-K)
Item 8.01 Other Events
On November 5, 2026, Home BancShares, Inc. (the "Company") announced that it has received a payment of approximately $80.7 million from the borrower's sale of a portion of the collateral securing the Company's previously disclosed $92.1 million non-performing lending relationship in its Texas market. As of September 30, 2026, the loans comprising this relationship represented approximately 45.9% of the Company's non-performing loans and 37.5% of the Company's non-performing assets.
As previously discussed during the Company's third quarter 2026 earnings call, the resolution of this credit is expected to occur in two phases. The $80.7 million payment completes the first phase of the resolution of this credit. The proceeds received from the sale represented approximately 95% of the appraised value of the collateral sold, which the Company believes lends credence to its underwriting and management of the credit. The payment has been applied to reduce the principal balance of the loans, resulting in a remaining carrying amount of approximately $11.4 million. The remaining balance will continue to be classified as nonaccrual pending completion of the second phase.
Based on the Company's September 30, 2026 balances, the payment reduces the Company's ratio of non-performing loans to total loans by approximately 48 basis points and its ratio of non-performing assets to total assets by approximately 34 basis points, while increasing the Company's allowance for credit losses to non-performing loans ratio by approximately 109 percentage points.
The Company anticipates the second phase of resolving the outstanding credit to be completed during the fourth quarter of 2026 through the borrower's sale of the remaining collateral. If completed as anticipated, the Company expects the borrower to use the proceeds from the second phase to repay the remaining carrying balance of the loans, which may result in the recovery of a portion of the amount of this credit previously charged off in the fourth quarter of 2024. Overall, the Company is very pleased with the initial outcome of the credit resolution and remains optimistic about completing the remaining steps. However, there can be no assurance that the remaining balance of the loans will be repaid within the anticipated timeframe or on the terms currently expected, or at all.
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