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.
For further details see:
Home Bancshares: Taking Advantage Of Rising Rates