SecProbe.io

CORRESP
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corresp

    JOHN K. BAKER

W. CHRISTOPHER BARRIER

SHERRY P. BARTLEY

STEVE BAUMAN

R. T. BEARD, III

C. DOUGLAS BUFORD, JR.

FREDERICK K. CAMPBELL1

MICHELLE H. CAULEY

CHARLES B. CLIETT, JR.5

KEN COOK

DOAK FOSTER1

BYRON FREELAND

ALLAN GATES1

KATHLYN GRAVES

JACK D. GRUNDFEST2

HAROLD W. HAMLIN

JEFFREY W. HATFIELD

L. KYLE HEFFLEY

DONALD H. HENRY

HERMANN IVESTER3

M. SAMUEL JONES III

JOHN ALAN LEWIS

WALTER E. MAY

LANCE R. MILLER

STUART P. MILLER

T. ARK MONROE, III1

ANNE S. PARKER

LYN P. PRUITT

CHRISTOPHER T. ROGERS

JOHN S. SELIG

LEIGH ANNE SHULTS

JEFFREY L. SINGLETON

DERRICK W. SMITH

STAN D. SMITH

MARCELLA J. TAYLOR

JEFFREY THOMAS1

NICHOLAS THOMPSON1

    Law Offices

Mitchell, Williams,

Selig, Gates & Woodyard, p.l.l.c.

425 West Capitol Avenue, Suite 1800

Little Rock, Arkansas 72201-3525

Telephone 501-688-8800

Fax 501-688-8807

—

5414 Pinnacle Point Drive, Suite 500

Rogers, Arkansas 72758-8131

Telephone 479-464-5650

Fax 479-464-5680

WRITER’S DIRECT DIAL

501-688-8804

April 25, 2006

    WILLIAM H.L. WOODYARD, III, P.A.

WALTER G. WRIGHT, JR.

6KYNDA ALMEFTY-HERNANDEZ

LINDSEY K. BELL

P. BENJAMIN COX

COURTNEY C. CROUCH, III

DAVID P. GLOVER

BRIAN HYNEMAN

SHAWN J. JOHNSON

MARGARET A. JOHNSTON

DAVID L. JONES

TONY JUNEAU

TAMLA J. LEWIS

4MARY MICHELLE MAHONY

LANEY GOSSETT MCCONNELL

P. DELANNA PADILLA

JENNIFER E. PELPHREY

JENNIFER R. PIERCE

SHANNON SHORT SMITH

JEFFREY L. SPILLYARDS

7J. RYAN TREDWAY

COUNSEL

1DAVID BOLING

JEFFREY H. DIXON

JOSEPH W. GELZINE

1H. MAURICE MITCHELL

MARSHALL S. NEY

JEAN D. STOCKBURGER

RICHARD A. WILLIAMS, P.A.

1ALSO ADMITTED IN DISTRICT OF COLUMBIA

2ALSO ADMITTED IN COLORADO

3ALSO ADMITTED IN THE U.S. PATENT AND TRADEMARK OFFICE

4ALSO ADMITTED IN TEXAS

5ALSO ADMITTED IN ARIZONA AND TEXAS

6ALSO ADMITTED IN NEW YORK

7ADMITTED IN TEXAS ONLY

ALL OTHERS ADMITTED IN ARKANSAS

    Mr. Mark Webb

    VIA OVERNIGHT COURIER

    Legal Branch Chief

    Division of Corporation Finance

    Mail Stop 0408

    U.S. Securities and Exchange Commission

    100 F Street, NE

    Washington, DC 20549

    Re:

    Home Bancshares, Inc.

    Registration Statement on Form S-1

    File No. 333-132427

    Filed March 14, 2006

    Registration Statement on Form 10

    File No. 000-51904

    Filed April 7, 2006

Dear Mr. Webb:

     Following are responses of Home BancShares, Inc. to the comments contained in the staff’s
letter to Mr. John W. Allison, dated April 13, 2006. For convenient reference, this response
letter duplicates the text of each numbered comment, as well as the headings contained in the
staff’s comment letter.

     Amendment No. 1 to the referenced S-1 Registration Statement has been transmitted via EDGAR on
the date of this response letter. We have included with this letter two copies of

Mitchell, Williams,

Selig, Gates & Woodyard, p.l.l.c.

Mr. Mark Webb

April 25, 2006

Page 2

Amendment No. 1, of which one copy is marked to show changes from the S-1 Registration
Statement as originally filed. Where appropriate, the responses below refer to specific pages or
sections of Amendment No. 1.

Comments and Responses

Table of Contents

     1. Please delete the last sentence in the second paragraph. It is inapproprate to suggest
that you are not responsible for the accuracy of the information in the prospectus.

     Response: The requested change has been made. See the Table of Contents page in Amendment
No. 1.

Summary, page 1

     2. Please revise your discussion of “de novo banks,” on page 1, to explain the term.

     Response: We have clarified the discussion at various places in the prospectus as an aid to
reader understanding of our use of the term “de novo.” See, e.g., pages 1 and 57 of Amendment No.
1.

     3. Please revise the section entitled “Our Market Areas,” on page 4, to update the data from
June 30, 2005 to a more recent date, if possible.

     Response: Our market share data on page 4 are computed based on the “Summary of Deposit”
information compiled by the FDIC and published on its website. See
http://www2.fdic.gov/sod/index.asp. The June 30, 2005, summary data are the most recent available
from the FDIC.

     4. Please revise the section entitled, “The Offering,” on page 6, as follows:

     • Disclose how many of the over 1 million stock options are exercisable; and

     • Disclose that as soon as practicable after the offering is completed, you
intend to convert the preferred stock into over 2 million shares.

     Response: The requested changes have been made. See page 6 of Amendment No. 1.

Mitchell, Williams,

Selig, Gates & Woodyard, p.l.l.c.

Mr. Mark Webb

April 25, 2006

Page 3

Summary Consolidated Financial Data, page 7

     5. We note that you have presented various non-GAAP measures throughout your filing. In all
places within your document where you have included a non-GAAP measure, please include the cross
reference page number to the non-GAAP tabular reconciliation.

     Response: The requested changes have been made throughout Amendment No. 1. See, e.g., the
footnotes added to “Summary Consolidated Financial Data” (page 8) and Tables 20, 21, 22, and 23
(pages 48-49).

Risk Factors, page 9

     6. Please revise the risk factor, on page 13, relating to interest rates as follows:

     • tailor the discussion to apply to your particular loan portfolio, for instance
the extent to which you have long term and short term low interest loans and the extent to
which your loans are fixed or floating rates; and

     • revise the discussion to discuss the recent trends in interest rates to your
particular situation.

     Response: The requested changes have been made. See page 13 of Amendment No. 1.

     7. Please revise the risk factor, on page 14, relating to dilution as follows:

     • quantify the extent of dilution that will result immediately after the offering
when you convert the preferred stock to common; and

     • quantify the extent of dilution that would result if all of the options that
are exercisable after the offering are exercised.

     Response: The requested changes have been made. See page 14 of Amendment No. 1.

Results of Operations as of and for the Years Ended December 31, 2005, 2004, and 2003

Noninterest Income, page 30

     8. We note that in 2005 you recognized a gain of the sale of an equity investment and that
this gain was deferred due to the financing of the purchase price. Please revise here and in your
footnotes to the financial statements to discuss the nature of the transaction and how you
determined the appropriateness of the accounting treatment.

Mitchell, Williams,

Selig, Gates & Woodyard, p.l.l.c.

Mr. Mark Webb

April 25, 2006

Page 4

     Response: Supplementally, we would like to advise you of the circumstances that led to our
accounting treatment of the transaction, before any revisions to the footnotes and financial
statements are made.

     Prior to being acquired by Home BancShares, Community Financial Group had a minority interest
in Capital Bancshares, Inc., a Little Rock based privately held bank holding company. In September
2003, Community Financial Group sold back to Capital Bancshares all its equity investment in
Capital Bancshares, resulting in a gain on sale. Community Bank of Cabot, a wholly owned
subsidiary of Community Financial Group, financed the purchase price for this transaction. SFAS 5
paragraph 17 prevents contingency gains from being recognized, because to do so might result in
recognition of revenue prior to its realization. As a result, Community Financial Group in
September 2003 properly deferred the gain.

     When Home BancShares acquired Community Financial Group in December 2003, it appears this
deferred gain should not have been carried forward to Home BancShares. Because a legal obligation
was not assumed by Home BancShares, EITF 01-03 issue 1 would have required that it be removed as a
contingent gain, thus reducing goodwill in the purchase accounting adjustments. Unfortunately, the
accounting treatment of EITF 01-03 was not realized until 2005 when Capital Bancshares paid off the
loan at Community Bank of Cabot.

     Since the allocation period of one year for SFAS 141 purchase accounting adjustments had
expired, Home BancShares determined that the $465,000 pre-tax gain (2.8% of income before taxes,
and $0.02 per share or 2.4% of diluted earnings per share) was not material to the 2005 financial
statements, and thus recognized it as current period income during 2005.

     Home BancShares used SAB99 for additional guidance in determining the materiality of the gain.
While SAB99 does not provide quantitative thresholds as to materiality, it does give direction to
materiality. It states materiality concerns the significance of an item to users of the financial
statements. As a result, the gain was disclosed on the income statement as gain on equity
investment. We believe that such a non-recurring gain would not be considered material by an
investor.

     As a result, in light of all of the above relevant circumstances, Home BancShares believes
the decision made in 2005 related to this gain was the best alternative for this situation.

Allowance for Loan Losses, page 38

     9. We note that the charge-offs increased by $1.5 million in 2004 compared to 2003, primarily
related to a former loan officer’s portfolio. Please revise to discuss the nature of the
charge-offs and the involvement of the former loan officer in the charged off loans.

Mitchell, Williams,

Selig, Gates & Woodyard, p.l.l.c.

Mr. Mark Webb

April 25, 2006

Page 5

     Response: The requested change has been made. See page 38 of Amendment No. 1.

Executive Compensation and Other Benefits, page 72

     10. Please explain why in 2005 you did not pay any salary or bonus to your Chairman and Chief
Executive Officer but did pay salary and bonuses to the Presidents of your subsidiaries. Please
disclose whether there will be a material change in his compensation for 2006.

     Response: We have added to “Executive Compensation and Other Benefits” a paragraph explaining
Mr. Allison’s position on the payment of salary and bonus, and have disclosed that he has declined
payment of salary and bonus for 2006. See page 73 of Amendment No. 1.

Stock Options/SAR Grants and Aggregated Option/SAR Exercises, page 73

     11. Please disclose the basis for your determination that the “year end price” for your common
stock was $12.67 per share given the fact that there is no public market for your common stock.

     Response: We have revised the prospectus to indicate that our estimate of the year-end value
of a share of our common stock was based on the value imputed from the September 2005 acquisition
of Mountain View Bancshares. See page 74 of Amendment No. 1. Supplementally, you are advised that
the Mountain View Bancshares acquisition was the transaction occurring closest to December 31,
2005, and that the valuation of our common stock issued in that transaction ($12.67 per share on a
split-adjusted basis) was the result of arms-length negotiations between sophisticated, unrelated
parties. Please refer also to our discussion below of related issues in response to comment 25.

Certain Transactions and Business Relationships, page 77

     12. It appears that the acquisitions of Twin City and Marine Bank appear to be transactions
requiring disclosure pursuant to Item 404 of Regulation S-K. Please advise or revise.

     Response: We have added tables to “Certain Transactions and Business Relationships”
disclosing the cash and stock received by our directors and executive officers in connection with
the acquisitions of TCBancorp and Marine Bancorp. See page 78 of Amendment No. 1.

     13. With regard to real estate transactions, the disclosure threshold is the amount of the
transaction ($60,000), not whether an individual affiliate received that much from it. Please
revise.

Mitchell, Williams,

Selig, Gates & Woodyard, p.l.l.c.

Mr. Mark Webb

April 25, 2006

Page 6

     Response: We have made clarifying changes to the disclosure regarding real estate
transactions. See page 78 of Amendment No. 1.

Principal Shareholders, page 78

     14. Please revise the footnote regarding the over seven percent of the shares held in a blind
trust for your former Vice Chairman, Mr. Adcock, to disclose the name of the trustee.

     Response: The requested change has been made. See page 81 of Amendment No. 1.

Lock-Up Agreements, page 96

     15. Please disclose whether the over seven percent of the shares held in a blind trust for
your former Vice Chairman, Mr. Adcock, are subject to the lock-up agreements.

     Response: We have revised “Lock-Up Agreements” to disclose that the shares held in blind
trust for Mr. Adcock are subject to the lock-up agreements. See page 98 of Amendment No. 1.

Home BancShares, Inc. Audited Financial Statements

Report of Independent Registered Public Accounting Firm, page F-3

     16. Please revise your audit opinion to disclose the city and state where the opinion was
issued.

     Response: The requested change has been made. See page F-3 of Amendment No. 1.

Consolidated Statements of Income, page F-5

     17. Please revise your presentation to disclose net income available to common shareholders.

     Response: The requested change has been made. See page F-5 of Amendment No. 1.

Consolidated Statements to Stockholders’ Equity, page F-6

     18. We note that you have a line item in your Accumulated Other Comprehensive Income which is
the “Net change in equity in unconsolidated affiliates accumulated other comprehensive income.”
Please revise to disclose the nature of this line item and the authoritative basis for your
accounting treatment.

Mitchell, Williams,

Selig, Gates & Woodyard, p.l.l.c.

Mr. Mark Webb

April 25, 2006

Page 7

     Response: We have made the requested changes on pages F-6 and F-7, and conforming
changes in the discussion under the caption “Investments in Unconsolidated Affiliates” on
F-13. As the basis for our accounting treatment, we refer to SFAS 115, paragraph 135, which states
as follows:

If a subsidiary or other investee that is accounted for by the equity method is
required to include unrealized holding gains and losses on investments in debt and
equity securities in the stockholders’ equity section of the balance sheet pursuant
to the provisions of Statement 115, the parent or investor shall adjust its
investment in that investee by its proportionate share of the unrealized gains and
losses and a like amount shall be included in the stockholders’ equity section of
its balance sheet.

Note 1: Summary of Significant Accounting Policies

Operating Segments, page F-11

     19. We note that your bank is organized on a subsidiary bank-by-bank basis upon which
management makes decisions about resource allocation and to assess performance, which clearly meets
the definition of a segment under paragraph 10 of SFAS 131. Please revise to provide the
disclosures required by paragraph 25 of the standard. Similarly, revise MD&A to provide a
discussion of your segment results.

     Response: We refer to SFAS 131, paragraph 17, which states as follows:

Operating segments often exhibit similar long-term financial performance if they
have similar economic characteristics. For example, similar long-term average gross
margins for two operating segments would be expected if their economic
characteristics were similar. Two or more operating segments may be aggregated into
a single operating segment if aggregation is consistent with the objective and basic
principles of this Statement, if the segments have similar economic characteristics,
and if the segments are similar in each of the following areas:

     a. The nature of the products and services

     b. The nature of the production processes

     c. The type or class of customer for their products and s