Common Stock, Compensation Plans and Other

3 Months Ended

Mar. 31, 2024

Common Stock, Compensation Plans and Other

13. Common Stock, Compensation Plans and Other

Common Stock

The Company’s Restated Articles of Incorporation, as amended, authorize the issuance of up to 300,000,000 shares of common stock, par value $0.01 per share.

The Company also has the authority to issue up to 5,500,000 shares of preferred stock, par value $0.01 per share under the Company’s Restated Articles of Incorporation, as amended.

Stock Repurchases

During the three months ended March 31, 2024, the Company repurchased a total of 1,025,934 shares with a weighted-average stock price of $23.38 per share. Shares repurchased under the program as of March 31, 2024 since its inception total 24,011,649 shares. The remaining balance available for repurchase is 15,740,351 shares at March 31, 2024.

Stock Compensation Plans

The Company has a stock option and performance incentive plan know as the Home BancShares, Inc. 2022 Equity Incentive Plan (the “Plan”). The purpose of the Plan is to attract and retain highly qualified officers, directors, key employees, and other persons, and to motivate those persons to improve the Company’s business results. As of March 31, 2024, the maximum total number of shares of the Company’s common stock available for issuance under the Plan was 14,788,000 shares. At March 31, 2024, the Company had 2,548,186 shares of common stock available for future grants and 5,117,620 shares of common stock reserved for issuance pursuant to the Plan.

The intrinsic value of the stock options outstanding was $8.8 million, which includes the intrinsic value of vested stock options of $7.9 million at March 31, 2024. The intrinsic value of stock options exercised during the three months ended March 31, 2024 was approximately $1.2 million. Total unrecognized compensation cost related to non-vested stock option awards, which are expected to be recognized over the vesting periods, was approximately $2.4 million as of March 31, 2024.

The table below summarizes the stock option transactions under the Plan at March 31, 2024 and December 31, 2023 and changes during the three-month period and year then ended:


	For the Three Months Ended March 31, 2024			For the Year Ended December 31, 2023
	Shares (000)	Weighted- Average Exercisable Price		Shares (000)	Weighted- Average Exercisable Price
Outstanding, beginning of year	2,776	$	20.95	2,971	$	20.45
Granted	—	—		25	22.63
Forfeited/Expired	(19)	22.32		(10)	23.38
Exercised	(188)	17.78		(210)	14.01
Outstanding, end of period	2,569	21.17		2,776	20.95
Exercisable, end of period	1,987	20.65		1,940	20.05

Stock-based compensation expense for stock-based compensation awards granted is based on the grant-date fair value. For stock option awards, the fair value is estimated at the date of grant using the Black-Scholes option-pricing model. This model requires the input of highly subjective assumptions, changes to which can materially affect the fair value estimate. Additionally, there may be other factors that would otherwise have a significant effect on the value of employee stock options granted but are not considered by the model. Accordingly, while management believes that the Black-Scholes option-pricing model provides a reasonable estimate of fair value, the model does not necessarily provide the best single measure of fair value for the Company's employee stock options. There were no options granted during the three months ended March 31, 2024. The fair value of each option granted is estimated on the date of grant using the Black-Scholes option-pricing model based on the weighted-average assumptions for expected dividend yield, expected stock price volatility, risk-free interest rate, and expected life of options granted.

The assumptions used in determining the fair value of the 2024 and 2023 stock option grants were as follows:


	For the Three Months Ended March 31, 2024	For the Year Ended December 31, 2023
Expected dividend yield	Not Applicable	2.98	%
Expected stock price volatility	Not Applicable	27.97	%
Risk-free interest rate	Not Applicable	3.37	%
Expected life of options	Not Applicable	6.5 years

The following is a summary of currently outstanding and exercisable options at March 31, 2024:


Options Outstanding					Options Exercisable
Exercise Prices	Options Outstanding Shares (000)	Weighted- Average Remaining Contractual Life (in years)	Weighted- Average Exercise Price		Options Exercisable Shares (000)	Weighted- Average Exercise Price
$14.00 to $15.99	100	0.79	$	14.71	100	$	14.71
$16.00 to $17.99	87	1.01	17.05		87	17.05
$18.00 to $19.99	736	1.56	18.49		730	18.48
$20.00 to $21.99	261	4.37	20.88		194	20.99
$22.00 to $23.99	1,295	4.40	23.22		805	23.19
$24.00 to $25.99	91	4.15	25.59		71	25.95
	2,570				1,987

The table below summarized the activity for the Company’s restricted stock issued and outstanding at March 31, 2024 and December 31, 2023 and changes during the period and year then ended:


	As of March 31, 2024		As of December 31, 2023
	(In thousands)
Beginning of year	1,429		1,381
Issued	238		261
Vested	(433)		(152)
Forfeited	(18)		(61)
End of period	1,216		1,429
Amount of expense for the three months and twelve months ended, respectively	$	2,008	$	8,016

Total unrecognized compensation cost related to non-vested restricted stock awards, which are expected to be recognized over the vesting periods, was approximately $14.5 million as of March 31, 2024.