Oct 15, 2026 earnings call — Record earnings and shareholder returns
Record earnings of $129.1 million and ROA of 2.11%.
Revenue $0.3B (est $0.3B) · EPS $0.65 (est $0.64)
Key quotes
"For the 3 quarters, we repurchased 3.3 million shares, approximately $94.4 million, with plans to continue stock repurchases during the fourth quarter."
"A key point that differentiates Home from most banks as evidenced by the increase in margin for the quarter is the balance sheet is structured to increase the margin as rates increase."
"We expect these transactions to close this quarter."
Analyst Q&A 9
Net interest margin and loan growth
Q (Wood Lay · KBW): He asked how the recent September Fed hike affected net interest margin and what more hikes would do. He also asked why management sounded more optimistic about loan growth in Q4 and what is driving that growth.
A: Management said core NIM excluding event income averaged 4.5% for the quarter and was 4.55% in September, so there may be some incremental benefit from the September hike. They said their ALCO model shows a 5.6% increase to NII in a +100 basis point scenario. On growth, management said unusual circumstances that caused about $0.5 billion of loan losses are gone and the loan pipeline is filling up across the footprint.
"I guess first part of your question, the core NIM, excluding event income, averaged 4.5% for the quarter, it was 4.55% in September." — John Tipton
Late loan payoffs and Texas credit
Q (Jon Arfstrom · RBC): He asked how large the late payoffs were in the quarter. He also asked about the CCFG nonperforming loan status and the size and expected recovery from the Texas resolutions.
A: They said late-quarter payoffs totaled about $300 million or $400 million, mostly construction and project loans moving to sale or permanent financing. On the CCFG loan, it is a little less than $15 million predevelopment loan in L.A.; management started foreclosure action but have an LOI and are giving the borrower a short period to reinstate. On the large Texas C&I credit, sale #1 should bring in about $85 million and sale #2 about $17.5 million (net roughly $16.5 million), which together should produce about $101 million to $102 million versus a $91 million book balance, implying roughly a $10 million recovery to reserves when closed.
"It was -- I would say the latter part of the quarter was $300 million or $400 million." — Kevin Hester (PRESIDENT)
M&A deal status and payoffs
Q (Brett Rabatin · StoneX Group): He asked whether any of the potential acquisition targets were still possible and if management would relax accretion rules. He also asked whether the payoff headwinds are easing and about demand in Shore Premier.
A: Management said one deal they liked went quiet and another they pulled out of after due diligence; they remain active and ready to do transactions but nothing closed. On payoffs, Kevin said payoffs could be close to last quarter and timing is hard to pin down; Donna said she is seeing better opportunity and expects to overcome payoffs. Chris said payoffs are normal and not elevated in his view.
"So it's something that I think would be good for them and good for us." — John Allison (CHAIR)
Deposit behavior and variable loan mix
Q (Matt Olney · Stephens): He asked what depositor behavior looked like after the recent Fed hike and how management models deposit pass-through (beta). He also asked whether the $7 billion of variable loans includes CCFG and how quickly those reprice.
A: They said competition is fierce and they negotiate case-by-case, modeling roughly 40% beta for checking/savings and 100% for CDs in their planning. The $7 billion figure does include CCFG and includes loans that can adjust in Q3 or Q4; some repricing occurs daily, monthly, or quarterly. About half of the $7 billion (roughly $3.5 billion) is tied to Wall Street Journal Prime and about $3.3 billion or so is tied to SOFR.
"3.5 -- about half of the $7 billion, $3.5 billion is tied to Wall Street Journal Prime and then $3.3 billion or so is tied to SOFR." — John Tipton
Mountain Commerce conversion and buybacks
Q (Michael Rose · Raymond James): He asked if the Mountain Commerce systems conversion changes cost-savings or deal math. He also asked whether management still plans to repurchase the Mountain Commerce-issued shares and about areas of credit concern.
A: They said the conversion is set for November 6 and they expect to begin realizing more cost savings after conversion, with the annualized savings target a little over $5 million. Management confirmed the plan to repurchase the issued shares and said they have bought about 3.7 million so far (including quarter-to-date volumes) and hope to buy roughly another 1 million this quarter. On credit, they said no widespread problems; Texas has been the main cleanup area with a few remaining hotel issues, but overall asset quality is good.
"that's the plan. We're in about, what, 3.3 million so far, and we put about just short of 6 million" — John Allison (CHAIR)
Deposit growth, costs, trust fees, expenses
Q (David Rochester · Cantor): He asked whether deposit growth will return in Q4 and if deposits can fund expected loan growth. He also asked the spot deposit cost and where new money is pricing, plus what drove trust fee volatility and whether expense run rate will hold.
A: They said returning deposit growth is the goal and they have liquidity options including $4.9 billion FHLB capacity and a securities runoff of about $30 million per month, so they are not concerned on liquidity. Total deposit cost averaged 1.83% for the quarter and 1.81% in September, with negotiated CD/money market deals often in the low- to mid-3s and occasional 4%+ offers in the market. Trust fees are seasonal and mortgage/CCFG fees were light this quarter; noninterest income should migrate back toward the recent average near $50 million, and Q4 expense run rate is probably fair to be flattish.
"So total deposit cost end of it, the average 1.83% for the quarter, 1.81% for September." — John Tipton
Deposit rate pass-through (beta)
Q (Edward Najarian · Hovde Group): He asked whether management will raise deposit rates in line with Fed funds (i.e., what deposit beta to expect) or keep deposit rates restrained.
A: Management said if they are forced to raise rates, they will do so. They already passed the recent 25 basis point hike to customers with products loosely indexed to Fed funds and will handle negotiated products on a customer-by-customer basis, passing on roughly 40% or 100% depending on the product.
"We're forced to raise rates, if we're forced, we will." — John Allison (CHAIR)
Credit outlook, provisioning, margins
Q (Brian Martin · Brean Capital): He asked about progress on credits outside the large Texas one and how to think about near-term provisioning. He also asked if margin is stable given deposit cost outlook, and about new loan yields, M&A, and buybacks.
A: They said the large Texas issue is the biggest and they expect to cut that problem in half; other credits have incremental progress but nothing imminent. On provisioning, they expect not to have a provision this quarter and recent recoveries should grow reserve coverage. Margin exited the quarter at 4.55% on a nonevent-income basis and management would be pleased to run around 4.5%; new loan production this quarter averaged about 6.95%, and M&A is being looked at but nothing imminent while buybacks will continue.
"So that's by far the largest one we have, and we'll cut it in half." — Kevin Hester (PRESIDENT)
Closing remarks
Q: There were no further analyst questions; the operator closed the Q&A and turned the call back to management. The caller then provided a short remark.
A: In closing, management thanked participants and said the company has had a good strong year and expects to wrap the year up fairly strong. They said they will talk to investors in 90 days.
"I think things have been -- we've really had a good strong year this year, and I think we're going to wrap the year up fairly strong, too." — John Allison (CHAIR)