Home BancShares(US:HOMB)2023-04-21 01:00Financial Data and Key Metrics Changes - Earnings for the quarter were $103 million or $0.51 per share, with adjusted earnings of $0.54 per share [47] - Return on assets was 1.84%, adjusted to 1.95%, while return on tangible common equity was 19.75%, adjusted to 20.90% [47] - Tangible book value increased by 5.4% from the first quarter, reaching $10.71 [47] - Net interest margin improved to 4.37% from 4.21%, a significant increase from 3.21% a year ago [68] - Total deposits declined slightly less than $500 million in the quarter, marking the lowest decline since the Happy Acquisition [102] Business Line Data and Key Metrics Changes - Loan origination volumes softened to $1.09 billion, with over 75% coming from Community Bank regions [76] - Non-performing loans and non-performing assets remained low at 0.51% and 0.33% respectively [78] - The yield on the loan book increased to 6.64%, up from 6.23% [97] Market Data and Key Metrics Changes - The company reported a quarterly decline in total deposits, which was spread evenly across the past three months [102] - The mix of deposit accounts stands at approximately two-thirds commercial or business and one-third retail, with 80% of accounts being retail [103] Company Strategy and Development Direction - The company aims to maintain strong liquidity and capital ratios, with a total risk-based capital ratio ending at 16.8% [55] - The management is cautious about loan growth, focusing on servicing existing customers and being selective in new lending opportunities [126] - The company is looking for opportunistic acquisitions but remains cautious due to the current market conditions [35][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to weather the current banking crisis, emphasizing strong liquidity and capital [40][64] - There is a belief that the current turmoil in the banking sector may not be over, and the company is prepared to navigate through potential challenges [127] - Management highlighted the importance of protecting existing customer relationships while being cautious about new lending [12][126] Other Important Information - The company has repurchased 590,000 shares during the first quarter and continues to be active under its stock repurchase plan [55] - The allowance for credit losses remains at 2% of loans, providing 388% coverage of non-performing loans [79] Q&A Session Summary Question: How is the company managing deposit outflows? - Management noted that deposit outflows were down about 4.90% through the quarter, the lowest seen in a while, and some deposits have started to flow back in [33] Question: What is the company's outlook on loan growth? - Management indicated that while there is potential for loan growth, they are being very careful and selective in their lending practices [126] Question: How does the company view the current banking crisis? - Management expressed that the crisis is serious and fragile, but the company is well-positioned to handle it due to strong liquidity and capital [12][64]