Home Bancshares sees Q4 one-time non-cash charge of $36.9M from Tax Act
Home BancShares announced that as a result of the "Tax Cuts and Jobs Act" 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 $113.5M. The current impact of this will be a one-time non-cash charge to the income statement of approximately $36.9M that will reduce Home's fourth quarter 2017 results. Under the company's analysis, the fourth quarter earnings impact would be approximately (22c) per share and the tangible book value impact would be approximately (21c) 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.