HOMB - Home Bancshares: Taking Advantage Of Rising Rates

Summary

• Home Bancshares has traditionally been focused on lending at high rates, earning an average interest rate of 5-6% on its loan book even when rates were extremely low.
• HOMB is a safe lender, keeping its leverage low and a large chunk of assets liquid.
• Still, it has been able to maintain ROAAs of around 2%.
• Now, HOMB is focused on taking advantage of rising rates, hopefully deploying its cash, securities, and maturing/floating rate loans at rates that can double pre-tax earnings over the next year.
• Regardless, HOMB is an efficient bank that operates in high-growth environments while making multiple successful acquisitions over its history.

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