Home BancShares(HOMB) - 2025 Q4 - Annual Results

Financial Performance - Net income for Q4 2025 was $118.2 million, with an adjusted net income of $117.9 million, reflecting a year-over-year increase of 18% in annual income to $475.4 million[2][12] - Total revenue (net) reached $282.1 million in Q4 2025, up from $258.4 million in Q4 2024, demonstrating consistent quarterly growth throughout the year[3][6] - Diluted earnings per share (DEPS) for Q4 2025 was $0.60, consistent with the adjusted DEPS, marking a significant increase from $0.51 in Q4 2024[3][17] - Net income for the quarter was $118.2 million, down from $123.6 million in the previous quarter, with total net income for the year at $475.4 million[54] - GAAP net income available to common shareholders for the year ended December 31, 2025, was $475,441 thousand, an increase from $402,241 thousand in 2024, reflecting a growth of 18.2%[67] - Total pre-tax net income for Q4 2025 was $153,323,000, up from $129,454,000 in Q4 2024, marking a 18.4% increase[69] Operational Efficiency - The efficiency ratio improved to 39.54% in Q4 2025, indicating effective operational management, with a sub-40% efficiency ratio for the quarter[2][21] - The efficiency ratio improved to 39.54% for the quarter ended December 31, 2025, down from 42.74% in the previous year, indicating enhanced operational efficiency[59] - Non-interest expense for the quarter was $114.4 million, slightly down from $114.8 million in the previous quarter, with total non-interest expense for the year at $458.2 million[54] Loan and Deposit Growth - Loan growth for Q4 2025 was $400.2 million, contributing to total loans receivable of $15.69 billion, a record for the company[2][23] - The Company reported a $400.2 million increase in loans during Q4 2025, with organic loan growth of $164.3 million in community banking and $235.9 million in Centennial CFG, totaling $2.01 billion in loans as of December 31, 2025[24] - Total deposits increased to $17.48 billion at the end of Q4 2025, up from $17.33 billion at the end of Q3 2025[23] - Loans receivable reached $15,686,209 thousand, up from $14,764,500 thousand year-over-year, indicating an increase of about 6.25%[52] - Total deposits rose to $17,479,957 thousand, compared to $17,146,297 thousand in the previous year, marking an increase of approximately 1.94%[52] Asset Quality - Non-performing loans to total loans were 0.54% as of December 31, 2025, down from 0.56% at September 30, 2025, while non-performing assets to total assets also decreased from 0.56% to 0.55% in the same period[25] - The Company's allowance for credit losses on loans was $297.6 million at December 31, 2025, representing 1.90% of total loans, an increase from 1.87% at September 30, 2025[28] - Non-performing loans totaled $85.0 million and non-performing assets were $124.8 million as of December 31, 2025, showing a slight decrease from the previous quarter[28] Capital Management - The company maintained a common equity tier 1 capital ratio of 16.3% and a total risk-based capital ratio of 19.1% as of December 31, 2025[3][23] - Shareholders' equity increased by approximately $81.9 million to $4.30 billion at December 31, 2025, driven by a $77.0 million increase in retained earnings[29] - The book value per common share reached a record $21.88 at December 31, 2025, up from $21.41 at September 30, 2025[29] - The tangible book value per common share increased to $14.60 as of December 31, 2025, compared to $12.68 in 2024, representing a growth of 15.1%[56] Shareholder Returns - The Company repurchased 540,706 shares of common stock during Q4 2025, resulting in a shareholder buyback yield of 0.27%, compared to 0.18% in the previous quarter[31] - A cash dividend of $0.21 per share was declared, reflecting a 5.0% increase from the $0.20 dividend paid in Q3 2025[31] - The company reported a shareholder buyback yield of 1.46% for the year ended December 31, 2025, compared to 1.69% in 2024, indicating a slight decrease in buyback activity[56] Acquisition Plans - The company is set to acquire Mountain Commerce Bancshares, Inc. and its bank subsidiary, with the transaction expected to close in the first half of 2026, pending necessary approvals[35] - The company is in the process of acquiring MCBI, with potential risks including regulatory approvals and integration challenges[45] - The proposed acquisition may incur higher costs than anticipated, influenced by various economic factors[45] - The company anticipates that the benefits from the acquisition may take longer to realize than expected due to market conditions[45] - The company continues to focus on integrating its operations and exploring additional acquisition opportunities to enhance growth[45] Interest Income and Expense - Total interest income for the quarter was $323.6 million, slightly up from $323.5 million in the previous quarter, while total interest income for the year reached $1.3 billion[54] - Net interest income after credit loss expense was $231.6 million for the quarter, compared to $226.2 million in the previous quarter, with a total of $892.4 million for the year[54] - Total interest expense for the quarter was $92.0 million, compared to $97.4 million in the previous quarter, with total interest expense for the year at $386.5 million[54] - The company reported a net interest spread of 3.77% for 2025, up from 3.43% in 2024, indicating better profitability on interest-earning assets[65] Market Performance - Market capitalization at the beginning of Q4 2025 was $5,571,959 thousand, slightly down from $5,613,422 thousand in Q3 2025[73] - The price per share at the beginning of Q4 2025 was $28.30, compared to $28.46 in Q3 2025[73]