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Home Bancshares (HOMB)
NYSE:HOMB
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Home Bancshares
(NYSE:HOMB)
76Outperform
Home Bancshares (HOMB) vs. S&P 500 (SPY)
Market Cap
$5.50B
Dividend Yield2.71%
Average Volume (3M)1.02M
Price to Earnings (P/E)14.0
Beta (1Y)0.98
Revenue Growth8.83%
EPS Growth3.77%
CountryUS
Employees2,819
SectorFinancial
Sector Strength77
IndustryBanking
Share Statistics
EPS (TTM)2.01
Shares Outstanding198,550,690
10 Day Avg. Volume1,052,029
30 Day Avg. Volume1,019,955
Financial Highlights & Ratios
PEG Ratio3.73
Price to Book (P/B)N/A
Price to Sales (P/S)5.78
Price to Cash Flow (P/CF)18.70
P/FCF Ratio8.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$32.40Price Target Upside17.05% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Home Bancshares Business Overview & Revenue Model
Company DescriptionHome Bancshares (HOMB) is a bank holding company headquartered in Conway, Arkansas, primarily operating through its wholly owned subsidiary, Centennial Bank. The company provides a wide range of commercial and retail banking services to businesses, real estate developers, investors, individuals, and municipalities. It operates in several states across the Southern and Southeastern United States, focusing on delivering a variety of financial products including loans, deposit accounts, and treasury management services.
How the Company Makes MoneyHome Bancshares generates revenue primarily through the interest income earned on loans and investment securities. The company's loan portfolio includes a variety of financial products such as commercial real estate loans, residential real estate loans, construction loans, and consumer loans. Additionally, HOMB earns non-interest income from service charges, fees for various banking services, and mortgage banking activities. Significant partnerships with businesses and municipalities help in expanding its loan and deposit base, contributing to overall earnings. The company's strategic acquisitions also play a vital role in expanding its market presence and customer base, further driving revenue growth.
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 | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 969.02M | 978.26M | 918.88M | 699.78M | 684.56M | Gross Profit |
| 969.02M | 1.06B | 918.88M | 634.82M | 601.58M | EBIT |
| 626.38M | 619.18M | 536.67M | 416.77M | 277.70M | EBITDA |
| 0.00 | 542.81M | 426.43M | 436.26M | 297.79M | Net Income Common Stockholders |
| 402.24M | 392.93M | 305.26M | 319.02M | 214.45M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 3.35B | 1.01B | 4.77B | 6.77B | 3.74B | Total Assets |
| 22.49B | 22.66B | 22.88B | 18.05B | 16.40B | Total Debt |
| 1.04B | 1.74B | 1.09B | 771.09M | 770.33M | Net Debt |
| 129.65M | 740.92M | 365.63M | -2.88B | -493.46M | Total Liabilities |
| 18.53B | 18.87B | 19.36B | 15.29B | 13.79B | Stockholders Equity |
| 3.96B | 3.79B | 3.53B | 2.77B | 2.61B |
| Cash Flow | Free Cash Flow | |||
| 422.12M | 371.12M | 404.16M | 379.10M | 280.18M | Operating Cash Flow |
| 460.65M | 379.67M | 413.17M | 389.38M | 291.73M | Investing Cash Flow |
| 5.67M | 578.46M | -1.02B | 624.66M | -651.94M | Financing Cash Flow |
| -556.18M | -682.71M | -2.31B | 1.37B | 1.13B |
Home Bancshares Technical Analysis
Negative
27.68
Price Trends
29.32
Negative
29.24
Negative
27.26
Positive
Market Momentum
-0.38
Positive
31.24
Neutral
10.61
Positive
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 27.68 is below the 20-day moving average (MA) of 29.49, below the 50-day MA of 29.32, and above the 200-day MA of 27.26, indicating a neutral trend. The MACD of -0.38 indicates Positive momentum. The RSI at 31.24 is Neutral, neither overbought nor oversold. The STOCH value of 10.61 is Positive, 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 30 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 |
|---|---|---|---|---|---|---|---|
76 Outperform | $5.50B | 14.04 | 10.38% | 2.71% | 8.83% | 3.77% | |
76 Outperform | $7.83B | 14.29 | 15.13% | 2.98% | 7.81% | -2.49% | |
70 Outperform | $6.82B | 14.43 | 6.60% | 3.10% | 11.96% | 11.66% | |
68 Neutral | $6.37B | 12.59 | 9.70% | 2.19% | 11.17% | 1.47% | |
64 Neutral | $13.80B | 10.64 | 9.23% | 4.22% | 17.66% | -7.66% | |
61 Neutral | $9.24B | 13.92 | 8.70% | 3.18% | 4.56% | -13.90% |
* Financial Sector Average
Performance Comparison
HOMB
Home Bancshares
27.68
4.54
19.62%
BOKF
Bok Financial
98.85
14.57
17.29%
CFR
Cullen/Frost Bankers
121.84
17.31
16.56%
FHN
First Horizon
18.19
3.99
28.10%
PB
Prosperity Bancshares
70.66
10.15
16.77%
Home Bancshares Earnings Call Summary
Earnings Call Date: Jan 15, 2025 | % Change Since: -4.32% | Next Earnings Date: Apr 17, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong financial performance with record profits and revenue, driven by strategic asset quality improvements and robust deposit growth. However, challenges in the Texas loan portfolio and hurricane-impacted regions posed concerns. The company's strong capital position and liquidity provide a solid foundation for future growth.Highlights
Record-Breaking Profit and Revenue
Home Bancshares reported a $100 million profit for the quarter and a record annual profit of $402.241 million, marking the first year to exceed $1 billion in revenue.
Strong Net Interest Margin
The net interest margin expanded to 4.39% in Q4, with a reported exit margin of 4.42% in December.
Deposit Growth and Liquidity
Total deposits increased by $441 million for the quarter with notable growth in noninterest-bearing balances, strengthening the loan-to-deposit ratio to 86.1%.
Asset Quality Improvement
Conducted a 'Texas cleanup' resulting in a charge-off of $53.394 million, primarily from Texas, with expected recoveries of over $30 million.
Strong Capital Ratios
Reported record CET1 of 15.1% and record risk-based capital of 18.7%, along with a record book value per share of $19.92.
Lowlights
Texas Loan Challenges
A significant portion of the charge-off ($47.6 million) was related to the Texas market, with disputes over a large Texas C&I credit.
Hurricane Impact
Reserved approximately $33 million for potential losses related to hurricanes in Florida, with $110 million in loans under payment deferral.
Early-Stage Past Dues Increase
Early-stage past dues rose by 12 basis points to 1.08%, influenced by a large memory care credit that was extended.
Company Guidance
In the Home Bancshares Q4 2024 earnings call, the company reported a robust financial performance with a net income of $100.6 million for the quarter and a record annual net income of $402.241 million, marking its first year exceeding $1 billion in revenue. The bank maintained a strong net interest margin at 4.9% and saw a return on assets of 1.7%. Despite setting aside a substantial hurricane reserve of $16.7 million, Home Bancshares achieved an EPS of $0.51, which would have been $0.57 without the reserve. The bank's capital ratios were also noteworthy, with a record CET1 ratio of 15.1% and risk-based capital of 18.7%. Home Bancshares demonstrated effective deposit management, with total deposits increasing by $441 million in the quarter, and maintained a low loan-to-deposit ratio of 86.1%. The company's efficiency ratio improved to 42.24% from 46.21% in Q3. Looking forward, the bank is optimistic about continuing its strong performance into 2025, despite potential increases in expenses and challenges in the credit environment.Home Bancshares Corporate Events
Executive/Board Changes
Home Bancshares Chairman Tracy M. French to Retire
Neutral
Feb 28, 2025
On February 27, 2025, Tracy M. French announced his decision to retire from his roles as a director of Home BancShares and Chairman of the Board of Centennial Bank, effective April 17, 2025. He will transition to an advisory role for two years, maintaining his salary but foregoing bonuses and change in control benefits, while adhering to non-compete and confidentiality agreements.
Stock BuybackDividends
Home Bancshares Expands Stock Buyback and Declares Dividend
Positive
Jan 21, 2025
On January 17, 2025, Home BancShares, Inc. announced an increase in the number of shares authorized for repurchase under its stock repurchase program, raising the authorization to 20,000,000 shares, with 13,244,493 shares remaining available for repurchase. Additionally, the company declared a regular quarterly cash dividend of $0.195 per share, payable on March 5, 2025, maintaining consistency with previous quarters. These actions reflect the company’s strategic approach to maintaining shareholder value and financial stability.
Business Operations and StrategyFinancial Disclosures
Home Bancshares Achieves $1 Billion Revenue Milestone
Positive
Jan 15, 2025
Home BancShares, Inc. reported its financial results for the fourth quarter of 2024, achieving notable milestones with $1 billion in revenue and $400 million in earnings for the year. The company completed a significant asset quality cleanup, which included addressing legacy loans from Happy Bank, and made provisions for credit losses due to Hurricanes Helene and Milton. The company also improved its net interest margin by repaying a $700 million Federal Reserve advance, setting a strong foundation for 2025.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.