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Home Bancshares (HOMB)
NYSE:HOMB
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Home Bancshares
(NYSE:HOMB)
Rating:75Outperform
Price Target:
$31.00
▲(12.40%Upside)
Home Bancshares (HOMB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.58B
Dividend Yield2.9%
Average Volume (3M)621.29K
Price to Earnings (P/E)13.2
Beta (1Y)0.86
Revenue Growth6.67%
EPS Growth8.50%
CountryUS
Employees2,552
SectorFinancial
Sector Strength73
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.56
Shares Outstanding197,463,930
10 Day Avg. Volume616,854
30 Day Avg. Volume621,292
Financial Highlights & Ratios
PEG Ratio0.00
Price to Book (P/B)1.31
Price to Sales (P/S)0.00
P/FCF Ratio14.19
Enterprise Value/Market Cap0.68
Enterprise Value/Revenue0.74
Enterprise Value/Gross Profit3.54
Enterprise Value/Ebitda1.73
Forecast
1Y Price Target
$31.33Price Target Upside13.60% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Home Bancshares Business Overview & Revenue Model
Company DescriptionHome Bancshares, Inc. (HOMB) is a financial holding company based in Conway, Arkansas. It operates through its wholly owned subsidiary, Centennial Bank, offering a wide range of commercial and retail banking services. The bank primarily focuses on providing personalized banking solutions to individuals, businesses, real estate developers, agricultural enterprises, and municipalities across Arkansas, Florida, Alabama, Texas, and New York. Its core services include savings accounts, checking accounts, time deposits, real estate loans, commercial and agricultural loans, and consumer loans.
How the Company Makes MoneyHome Bancshares makes money primarily through its subsidiary, Centennial Bank, by earning interest on loans and investments, which constitutes the largest portion of its revenue. The bank provides a variety of loan products, including commercial real estate loans, residential real estate loans, construction loans, and consumer loans, each generating interest income. Additionally, the bank earns revenue from service charges and fees related to its deposit accounts, such as overdraft fees, account maintenance fees, and transaction fees. Another significant revenue stream is derived from the sale of investment securities and the provision of other financial services. Key factors contributing to its earnings include its strategic focus on community banking, maintaining strong asset quality, and leveraging a robust network of branches and digital banking platforms to attract and retain customers.
Home Bancshares Earnings Call Summary
Earnings Call Date:Apr 16, 2025
(Q1-2025)
| % Change Since: 6.90%|
Next Earnings Date:Jul 17, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant achievements, including record earnings, strong loan and deposit growth, and improved asset quality. However, these were tempered by challenges such as the expenses related to the Texas lawsuit and the uncertain economic environment. Despite some declines in specific loan portfolios, the overall performance was very strong.Q1-2025 Updates
Positive Updates
Record Quarterly Earnings
Home BancShares reported a record $115.2 million in earnings, translating to $0.58 per share, marking a significant breakout from previous quarters.
Strong Loan and Deposit Growth
The company achieved net loan growth of $187.6 million and increased deposits by over $395 million, bringing total deposits to $17.5 billion.
Improved Asset Quality
Nonperforming loans improved to 0.60% from 0.67%, while nonperforming assets improved to 0.56% from 0.63%. Reserve coverage increased to 312%.
High Capital Ratios
The company reported strong capital ratios with CET1 at 15.4%, leverage at 13.3%, and total risk-based capital at 19.1%.
Expansion in Net Interest Margin
The net interest margin improved to 4.44%, up from 4.39% in the previous quarter and 4.13% in the same quarter last year.
Negative Updates
Impact of Texas Lawsuit
There was a $2 million after-tax expense related to the Texas lawsuit, impacting core earnings for the quarter.
Uncertain Economic Environment
Despite recording strong performance metrics, the company acknowledged that these results were achieved during uncertain economic times.
Challenges in C&I Loan Portfolio
The C&I loan portfolio saw a decline of approximately $100 million, mainly due to exiting single credit broadly syndicated and middle market loans.
Company Guidance
In the Home BancShares, Inc. First Quarter 2025 Earnings Call, the company reported strong financial performance, achieving several record metrics despite economic uncertainties. The bank's earnings were a significant highlight, with a record $115.2 million, translating to $0.58 per share. Core earnings stood at $111.9 million or $0.56 per share. Revenue reached $260.1 million, surpassing the previous quarter by $700,000 and the same quarter last year by $13.1 million. The net interest margin improved to 4.44% from 4.39% in the previous quarter. Net loan growth was robust at $187.6 million, with total loans reaching a record $14.950 billion. Deposits increased by over $395 million, totaling $17.5 billion, resulting in a loan-to-deposit ratio of 85.24%. Asset quality metrics also improved, with nonperforming loans decreasing to 0.60% and reserves covering 312% of nonperforming loans. Capital ratios were strong, with CET1 at 15.4%, leverage at 13.3%, and total risk-based capital at 19.1%. The tangible book value increased to $13.15, and the return on tangible common equity was 18.39%. The company also repurchased around 1 million shares during the quarter and hinted at potential further buybacks and M&A activities, contingent on finding suitable opportunities.Home Bancshares Financial Statement Overview
Summary
Home Bancshares exhibits a robust financial position with strong revenue growth and a solid balance sheet marked by a substantial increase in cash holdings and reduced leverage. Profitability remains high with consistent net income growth, but attention should be paid to declining operating cash flow. Overall, the financial health of the bank is commendable, reflecting a well-managed growth strategy and prudent financial practices.Income Statement
Home Bancshares has demonstrated strong revenue growth, with an impressive increase from $978.3 million in 2023 to $1.3 billion in 2024. The gross profit margin remains robust as gross profit equals total revenue, indicating efficient cost management. While EBIT and EBITDA margins are unavailable for 2024, the net profit margin improved slightly from 40.2% in 2023 to 30.9% in 2024, showcasing solid profitability. The overall growth trajectory is positive, indicating a healthy expansion.78
Positive
Balance Sheet
The bank maintains a strong balance sheet, with a significant increase in cash holdings from $1 billion in 2023 to $3.4 billion in 2024, enhancing liquidity. The debt-to-equity ratio has improved due to the absence of total debt in 2024, compared to $1.7 billion in 2023, reducing leverage risk. With equity increasing to $3.96 billion, the equity ratio remains stable, indicating a solid capital structure. Return on equity remains strong, reflecting efficient use of equity capital.85
Very Positive
Cash Flow
Operating cash flow decreased from $379.7 million in 2023 to $297.1 million in 2024, reflecting changes in working capital management. However, free cash flow remained stable at $297.1 million, supported by no significant capital expenditures. The operating cash flow to net income ratio suggests effective cash generation relative to net income, though the decline in operating cash flow warrants close monitoring for future liquidity management.70
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.34B | 1.30B | 978.26M | 855.20M | 751.98M | 684.56M | Gross Profit |
| 1.07B | 952.60M | 1.06B | 855.20M | 704.54M | 601.58M | EBIT |
| 564.73M | 522.34M | 619.18M | 519.98M | 478.77M | 340.68M | EBITDA |
| 568.14M | 551.54M | 542.81M | 426.43M | 436.26M | 297.79M | Net Income Common Stockholders |
| 417.34M | 402.24M | 392.93M | 305.26M | 319.02M | 214.45M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 0.00 | 3.98B | 1.01B | 4.77B | 6.77B | 3.74B | Total Assets |
| 22.99B | 22.49B | 22.66B | 22.88B | 18.05B | 16.40B | Total Debt |
| 1.20B | 1.04B | 1.74B | 1.09B | 771.09M | 770.33M | Net Debt |
| 1.20B | 129.65M | 740.92M | 365.63M | -2.88B | -493.46M | Total Liabilities |
| 18.95B | 18.53B | 18.87B | 19.36B | 15.29B | 13.79B | Stockholders Equity |
| 4.04B | 3.96B | 3.79B | 3.53B | 2.77B | 2.61B |
| Cash Flow | Free Cash Flow | ||||
| 386.15M | 422.12M | 371.12M | 404.16M | 379.10M | 280.18M | Operating Cash Flow |
| 424.22M | 460.65M | 379.67M | 413.17M | 389.38M | 291.73M | Investing Cash Flow |
| -33.56M | 5.67M | 578.46M | -1.02B | 624.66M | -651.94M | Financing Cash Flow |
| -282.71M | -556.18M | -682.71M | -2.31B | 1.37B | 1.13B |
Home Bancshares Technical Analysis
Negative
27.58
Price Trends
27.65
Negative
28.38
Negative
28.18
Negative
Market Momentum
<0.01
Positive
42.06
Neutral
34.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HOMB, the sentiment is Negative. The current price of 27.58 is below the 20-day moving average (MA) of 28.42, below the 50-day MA of 27.65, and below the 200-day MA of 28.18, indicating a bearish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 42.06 is Neutral, neither overbought nor oversold. The STOCH value of 34.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HOMB.
Home Bancshares Risk Analysis
Home Bancshares disclosed 29 risk factors in its most recent earnings report. Home Bancshares reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Home Bancshares Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $5.58B | 13.18 | 10.63% | 2.90% | 6.67% | 8.50% | |
74 Outperform | $5.69B | 10.51 | 9.90% | 3.67% | 19.04% | ― | |
74 Outperform | $4.81B | 22.00 | 6.63% | 3.21% | 8.10% | 6.95% | |
70 Neutral | $5.00B | 12.43 | 5.48% | 5.16% | 1.48% | -18.84% | |
68 Neutral | $5.16B | 13.06 | 7.30% | 4.20% | 6.39% | 2.93% | |
67 Neutral | $5.09B | 22.01 | 14.60% | 2.02% | 16.01% | 15.70% | |
64 Neutral | $12.77B | 9.71 | 7.85% | 78.06% | 12.07% | -7.97% |
* Financial Sector Average
Performance Comparison
HOMB
Home Bancshares
27.58
5.16
23.02%
CADE
Cadence Bancorporation
30.01
3.57
13.50%
FFIN
First Financial Bankshares
35.56
7.83
28.24%
GBCI
Glacier Bancorp
41.11
5.91
16.79%
UBSI
United Bankshares
35.23
5.03
16.66%
VLY
Valley National Bancorp
8.53
2.12
33.07%
Home Bancshares Corporate Events
Business Operations and StrategyFinancial Disclosures
Home BancShares Reports Record Q1 2025 Net Income
Positive
Apr 16, 2025
Home BancShares reported a record net income of $115.2 million for the first quarter of 2025, with diluted earnings per share reaching $0.58, marking a new high for the company. The results reflect a strategic focus on revenue and expense management, with notable improvements in net interest margin and a decrease in interest expense due to a declining interest rate environment, despite a decrease in interest income.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.