Executive Summary

Record quarter: GAAP EPS $0.63 and net income $123.6M driven by 12 bps NIM expansion to 4.56%, best in 12 months, and disciplined expenses; adjusted EPS $0.61. Total revenue (company “Total revenue (net)”) $277.7M; S&P Global revenue actual $274.0M vs $270.0M consensus (beat) . Values with asterisks are from S&P Global estimates data.*
Beats vs Street: Adjusted EPS $0.61 vs $0.597 consensus (beat); revenue $274.0M vs $270.0M (beat), supported by higher loan income and lower interest expense from sub-debt actions and deposit repricing .*
Credit steady/improving: NPLs/loans fell to 0.56% (0.63% prior), NPAs/assets to 0.56% (0.60% prior); ACL/loans 1.87%, coverage of NPLs 335% .
Capital returns and catalysts: Redeemed $140M 2030 sub debt and repurchased $20M of 2032 sub debt (interest expense tailwind into Q4); dividend subsequently raised 5% to $0.21 for December 2025. Management disclosed a signed LOI for an acquisition (size undisclosed) .
Stock reaction context: Despite strong print, management noted sector-driven selling and said shares were down ~3% on the day amid broad bank weakness, framing a potential dislocation for buybacks and M&A currency flexibility .

What Went Well and What Went Wrong

What Went Well

Margin expansion and revenue mix: NIM rose to 4.56% from 4.44% in Q2, with core margin ex-event income 4.53% vs 4.43% in Q2; total company “Total revenue (net)” advanced to $277.7M (from $271.0M) on higher loan yields and lower deposit costs .
Expense discipline and efficiency: Efficiency ratio improved to 40.21% (adjusted 40.95%), best in 12 months; management reiterated tight expense control across regions and aims to trim elevated one-time items .
Credit stabilization: NPAs declined (0.60% → 0.56% of assets) and NPLs fell (0.63% → 0.56% of loans) Q/Q; management expects DFW apartment non-accrual to be sold in Q4 (10% hard deposit received) and does not anticipate additional loss on a large Texas C&I exposure .

What Went Wrong

Loan growth modest and mixed: Loans grew $105.3M Q/Q, with community banking +$164.8M offset by a $59.4M decline at Centennial CFG; management attributed some underperformance to late-quarter payoffs and timing of closings (pushed into Q4) .
Elevated non-interest expense components: Non-interest expense of $114.8M included donations and other items; management targets a move back toward ~$111M as one-time costs abate .
Event-driven non-interest income: Gain on retirement of sub debt ($1.9M), lawsuit recovery ($1.8M), and recoveries on historic losses ($2.0M) boosted other income—good for the quarter but not inherently recurring .

Financial Results

Headline results vs prior periods and estimates

Metric	Q3 2024	Q2 2025	Q3 2025
Company “Total revenue (net)” ($M)	258.0	271.0	277.7
S&P Global Revenue Actual ($M)*	239.1*	266.8*	274.0*
GAAP Diluted EPS ($)	0.50	0.60	0.63
Adjusted Diluted EPS ($)	0.50	0.58	0.61

Notes: S&P Global figures marked with asterisks differ from company “Total revenue (net)” due to methodology/definitions. Values retrieved from S&P Global.*

Q3 2025 vs S&P Global consensus

Metric	Consensus	Actual (S&P)	Surprise
Adjusted EPS ($)	0.5970*	0.61	Beat (~$0.01)*
Revenue ($M)	270.0*	274.0*	Beat (~$4.0M)*

Values retrieved from S&P Global.*

KPIs and margins

KPI	Q3 2024	Q2 2025	Q3 2025
Net Interest Margin (FTE)	4.28%	4.44%	4.56%
Efficiency Ratio	41.42%	41.68%	40.21%
Efficiency Ratio (Adjusted)	41.66%	42.01%	40.95%
ROA	1.74%	2.08%	2.17%
ROA (Adjusted)	1.72%	2.02%	2.10%
ROTCE (Adjusted)	16.09%	17.68%	17.70%

Credit and balance sheet

Metric	Q3 2024	Q2 2025	Q3 2025
Total Loans ($B)	14.82	15.18	15.29
Total Deposits ($B)	16.71	17.49	17.33
NPAs / Assets	0.63%	0.60%	0.56%
NPLs / Loans	0.68%	0.63%	0.56%
ACL / Loans	2.11%	1.86%	1.87%

Segment/portfolio lens (loans)

Community Banking: Q3 organic growth +$164.8M .
Centennial Commercial Finance Group (CCFG): Loans $1.78B, Q/Q -$59.4M; originations ~$400M in Q3 with closings spilling into Q4 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Interest Margin	Near-term	No formal guidance	Management expects relative stability (+/– few bps) even with rate cuts; rapid repricing actions support stability	Maintained (stable outlook)
Operating Expenses	Near-term	Run-rate ~$114–116M recent quarters	Aim to trim toward ~$111M as one-time items roll off; presidents reviewing opportunities	Lower (targeted)
CD Repricing	Next 3 quarters	Not previously specified	~$1.35B maturing at avg 3.67%; management negotiating renewals in mid-3s or lower depending on competition	New detail (potential cost tailwind)
Subordinated Debt Interest Expense	Q4 2025	N/A	Full-quarter benefit from $140M 2030 payoff (late July) plus $20M 2032 repurchase; tailwind to NII/NIM	Lower run-rate
Dividends	Q4 2025	$0.20 (Q3 payment)	$0.21 declared for Dec 3, 2025 (+5%)	Raised
M&A	Forward	Opportunistic	Signed LOI with a multi‑billion asset target; emphasis on balance-sheet marks and AOCI solution	New development

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
NIM & Rate Sensitivity	NIM steady at 4.44% with deposit cost declines; proactive pricing	NIM 4.56%; management expects stability amid cuts; rapid repricing capability	Improving/stable
Loan Growth & Pipeline	Q1: Community +$291.5M, CCFG -$103.9M; Q2: Loans +$228.5M (both segments grew)	Q3: +$105.3M, community +$164.8M, CCFG -$59.4M; timing shifts into Q4; healthy pipelines	Moderate; Q4 set-up
Credit Quality	Q4’24 cleanup drove large charge-offs; Q1 net recoveries; Q2 low NCOs	NPAs/NPLs down; DFW apartment non-accrual sale under contract; Texas C&I watched with no expected loss	Improving/stable
Capital Actions	Ongoing buybacks/dividends	$140M sub debt redeemed; $20M repurchased; CET1 16.1%; TBVPS +69c Q/Q; dividend later increased	Strengthening
Legal/Litigation	Q2 legal claims expense, reimbursements	Partial lawsuit settlement gain; more expected Q4	Resolving
Deposits & Liquidity	Deposit costs trended lower; BTFP runoff	Deposits -$161M Q/Q on tax payments; wholesale deposits only 2.3% of liabilities	Stable core
M&A	Monitoring	Signed LOI; focus on AOCI solutions with strong capital	Accelerating

Management Commentary

“HOMB’s powerful, peer leading margins and efficiencies, coupled with strong revenues, propelled HOMB to another top tier, best in class third quarter performance.” – John Allison, Chairman .
“Margin kicked up 12 basis points to 4.56%, and that's the best it's been in 12 months... Efficiency ratio... best in 12 months at 40.21%.” – John Allison .
“We screen a little asset-sensitive... our job is to react... to get rates down to offset the loan side.” – Stephen Tipton on deposit repricing response to rate cuts .
“Asset quality improved overall again... DFW apartment non‑accrual under an agreement for sale... we still do not believe that there is any additional loss” on a large Texas C&I credit. – Kevin Hester .
“We have signed the letter of intent... It’s someone that we like... good business.” – John Allison on M&A .

Q&A Highlights

NIM outlook: Despite asset sensitivity, management expects relative stability with quick deposit repricing and full-quarter sub-debt benefit in Q4; core margin ex-event income 4.53% in Q3 .
Deposits: Wholesale only ~2.3% of liabilities; focus on core deposit growth across TX and FL; seasonal tax payments drove Q/Q decline .
CDs and funding costs: ~$1.35B CDs mature over next 3 quarters at 3.67% avg; management negotiating down to mid‑3s or lower depending on competition .
Expenses: Q3 included one-time items; leadership targeting lower run-rate near ~$111M over time .
Credit: DFW apartment non‑accrual sale pending (10% deposit), Texas C&I monitored without expected additional loss; NPAs/NPLs improved Q/Q .
M&A: Signed LOI for a multi‑billion asset target; emphasis on AOCI mark/repair with HOMB’s capital .

Estimates Context

Q3 2025: Adjusted EPS $0.61 vs $0.597 consensus (beat), revenue $274.0M vs $270.0M (beat). FY 2025 consensus EPS $2.355 and revenue $1.080B imply continued high performance. Values retrieved from S&P Global.*
Target price consensus $33.13 with 8 estimates provides additional valuation anchor. Values retrieved from S&P Global.*

Key Takeaways for Investors

HOMB continues to deliver top-tier profitability: ROA 2.17%, NIM 4.56%, efficiency ~40%, with improving credit metrics—supporting premium bank multiples .
Beat-and-raise dynamics via controllables: Lower interest expense post sub-debt actions and CD repricing runway should help defend NIM into Q4 despite cuts .
Credit normalization tailwinds: NPAs/NPLs improved Q/Q; pending DFW apartment resolution and strong reserve coverage (ACL/NPL ~335%) reduce tail-risk optics .
Operating leverage remains a lever: Management is pressing expenses lower from $114.8M toward ~$111M, reinforcing best-in-class efficiency .
Capital return flexibility: Higher dividend ($0.21 in Dec) and buybacks coexist with M&A optionality, enabled by strong ROTCE and CET1 16.1% .
M&A optionality is real: Signed LOI signals an active pipeline; HOMB’s balance-sheet capacity to solve AOCI for targets can be a competitive advantage .
Trading setup: Management cited sector-driven weakness on print day despite strength; HOMB’s fundamentals and capital actions provide support on dips .

Additional detail

Operating drivers Q/Q: Net interest income (FTE) increased to $229.1M (from $222.5M) with loan income +$7.5M and interest expense -$1.8M (lower sub-debt and deposits), partially offset by lower income on deposits at other banks .
Non-interest income composition: $51.5M including other income $14.0M, other service charges/fees $12.1M, deposit service charges $10.5M, mortgage $4.7M, trust fees $4.6M; included $1.9M sub-debt retirement gain and $1.8M lawsuit recovery .
Balance sheet: Loans $15.29B (record), deposits $17.33B, assets $22.71B; CET1 16.1%, TCE/TA 13.08%; TBVPS $14.13 (+$0.69 Q/Q) .

Citations

Q3 2025 8‑K press release and financial tables .
Q3 2025 press release (duplicate content) .
Q3 2025 earnings call transcript .
Q2 2025 8‑K press release and financials (trend) .
Q1 2025 press release (trend) .
Dividend increase release Oct 22, 2025 .

S&P Global estimates

Consensus/actuals for EPS and revenue, and target price consensus: Values retrieved from S&P Global.*

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