Earnings call transcript: Home BancShares Q3 2025 beats EPS forecast

Home BancShares Inc., with a market capitalization of $5.2 billion, reported its third-quarter 2025 earnings, exceeding analysts’ expectations with an earnings per share (EPS) of $0.61 against a forecast of $0.60. The company also reported a revenue of $277.7 million, surpassing the anticipated $269.96 million. According to InvestingPro data, seven analysts have recently revised their earnings estimates upward for the upcoming period, suggesting growing confidence in the company’s prospects. Despite the positive earnings, the stock saw a decline of 4.19% in regular trading hours, closing at $27.45, though it showed a slight recovery of 1.24% in premarket trading.

Key Takeaways

• Home BancShares delivered record net income and EPS figures for Q3 2025.
• The company opened a new branch in San Antonio and plans further expansion in Texas.
• Despite strong earnings, the stock price fell by over 4% during regular trading hours.
• The company maintains a strong presence in Texas and Florida, contributing significantly to its loan production.

Company Performance

Home BancShares demonstrated robust performance in Q3 2025, achieving record net income of $123.6 million and a record EPS of $0.63. The company’s strategic focus on expanding its branch network and strengthening core deposit growth has bolstered its financial performance. Home BancShares continues to outperform its peers with a superior net interest margin and efficiency ratio.

Financial Highlights

• Revenue: $277.7 million, surpassing forecast of $269.96 million
• Earnings per share: $0.61, exceeding forecast of $0.60
• Net interest margin: 4.56%, an increase of 12 basis points
• Return on tangible common equity (ROTCE): 18.28%
• Efficiency ratio: 40.21%

Earnings vs. Forecast

Home BancShares reported an EPS of $0.61, slightly above the forecast of $0.60, marking a positive surprise of 1.67%. The revenue of $277.7 million also exceeded expectations, with a surprise of 2.86%. This marks a continuation of the company’s trend of surpassing market expectations.

Market Reaction

Despite the positive earnings report, Home BancShares’ stock fell by 4.19% during regular trading hours, closing at $27.45. However, in premarket trading, the stock showed a modest recovery, increasing by 1.24% to $27.79. The stock’s movement reflects a complex investor sentiment, possibly influenced by broader market conditions or short-term profit-taking.

Outlook & Guidance

Looking ahead, Home BancShares targets $500 million in income for 2026 and is pursuing potential acquisitions. The company has signed a letter of intent for a significant acquisition and expects to continue its stock buyback program. Guidance for future EPS and revenue suggests steady growth, with projections for 2026 slightly above 2025 levels.

Executive Commentary

Chairman John W. Allison emphasized the company’s strength and readiness for strategic transactions, stating, "Strength is no accident," and expressing confidence in maintaining high performance levels. He also highlighted the company’s preparedness for potential mergers and acquisitions.

Risks and Challenges

• Economic downturns could impact loan demand and deposit growth.
• Regulatory changes may affect banking operations and profitability.
• Competition in key markets like Texas and Florida could pressure margins.
• Interest rate fluctuations may impact net interest margin stability.

Q&A

During the earnings call, analysts inquired about the company’s credit quality and potential impacts from a government shutdown. Management expressed confidence in maintaining strong credit quality and indicated minimal expected impact from governmental issues. The loan pipeline remains robust, particularly in Texas and Florida, supporting future growth prospects.

Full transcript - Home BancShares Inc (HOMB) Q3 2025:

Conference Operator: Thank you all for standing by for the Home BancShares, Inc. third quarter 2025 earnings call. Today’s call is going to be starting momentarily. Greetings, ladies and gentlemen. Welcome to the Home BancShares, Inc. third quarter 2025 earnings call. The purpose of this call is to discuss the information and data provided in the quarterly earnings release issued after the market closed yesterday. The company presenters will begin with prepared remarks and then entertain questions. Please note that if you would like to ask a question during the question and answer session, please press star, then one on a touch phone. If you decide you want to withdraw your question, please press star, then two to remove yourself from the list. The company has asked me to remind everyone to refer to their cautionary note regarding forward-looking statements.

You will find this note on page three of their Form 10-K filed with the SEC in February 2025. At this time, all participants are in a listen-only mode, and this conference is being recorded. If you need operator assistance during the conference, please press star, then zero. It is now my pleasure to turn the call over to Donna J. Townsell, Director of Investor Relations.

Donna J. Townsell, Director of Investor Relations, Home BancShares, Inc.: Thank you. Good afternoon and welcome to our third quarter conference call. With me for today’s discussion is our Chairman, John W. Allison, Stephen Tipton, Chief Executive Officer of Centennial Bank, Kevin D. Hester, President and Chief Lending Officer, Brian S. Davis, our Chief Financial Officer, Christopher C. Poulton, President of Centennial Commercial Finance Group, and Scott Walter, Shore Premier Finance. The third quarter was another record-breaking quarter for Home BancShares, Inc., and our team is excited to share the results with you. Opening remarks today will be from our Chairman, John W. Allison.

John W. Allison, Chairman, Home BancShares, Inc.: Thanks, Donna. Welcome to the third quarter 2025 Home BancShares earnings release and conference call. It’s really hard to believe it’s already mid-October, and Home has had another great quarter. I think that’s three in a row. We’ve added some graphs this time, Donna, to our presentation that you’re welcome to look at that run from 9/30/2024 to 9/30/2025, and I think you’ll see in those graphs what we’re seeing here at the company. Just talk about some highlights for the third quarter. We had record net income of $123.6 million, record EPS of $0.63, revenue of $277.7 million, pre-tax, pre-provision net revenue of $162.8 million, P5 NR profit percentage of 58.64%. That’s the best in the last 12 months. That’s not 60%, Stephen, but it’s pretty close to 60%. Pretty proud of that.

Efficiency ratio, some naysayers said it was going up, was down, and the efficiency ratio was the best in 12 months at 40.21%. Margin kicked up a little bit. Some said our margin would go down. Our margin kicked up 12 basis points to 4.56%, and that’s the best it’s been in 12 months. ROTCE continues to remain in the high teens at 18.28%. Just some balance sheet strength highlights. Common equity assets is 18.56%. We continue to grow that. Tangible equity to tangible assets, 13.08%. That continues to grow. Loans hit a record level of $15.18 billion for the quarter. Total stockholders’ equity is $4.09 billion. More good news. The Texas lawsuit has been settled, and we’ve received our first partial payment of the settlement. We expect most of the balance during the fourth quarter. Hopefully, we’ll get it all in this year.

We’ll be lucky if the proceeds will match up with the expensive litigation costs, and that does not include the loss of growth and profits we’ve suffered over the last couple of years. However, we had no intention of just mildly standing by while damage was being done to our company. Management has a fiduciary responsibility to protect the assets of the shareholder, especially when we didn’t do anything to any of those people that participated in this fiasco. I believe because of our conservative nature, we’ve been criticized by some. I think that Home BancShares is not growing fast enough. We don’t really argue at that point, but I have to disagree with that discussion point because timing and discipline matter. Moving too fast or scaling too fast can be fatal. I believe in fixing your existing problems before you make a new move.

That’s exactly what Home has been doing for the past three years, dealing with multiple, distinct, unusual problems that arose in the HAPPI acquisition that led us to filing a 91-page lawsuit, coupled with HAPPI’s asset quality problems. By the way, it’s still a work in progress. AOCI, loss of HAPPI private information, defection, and loss of personnel. Don’t get me wrong. We have some great people at HAPPI, and HAPPI’s performance has rebounded. I have been involved in over 45 deals in my banking career, but never anything of this magnitude. Enough of that. Forget the bad guys. The saddest part is what happened to some HAPPI employee shareholders who, during the merger with Home, in a tax-free exchange, HAPPI shareholders exchanged their private, non-liquid HAPPI stock for Home stock. That is a New York Stock Exchange publicly traded dividend-paying with strong liquidity and a strong balance sheet.

After getting the Home stock, they listened to some snake oil salesman who talked them into selling their home and investing the proceeds into another privately held stupid non-liquid investment. There may be where the biggest lawsuit is, misleading or unsophisticated individuals. It may be too late. Excuse me. It may not be too late. If my information is correct, every one of the investors has lost some money in Home, and we were even forced to use the legal system to protect the assets of our shareholders. As bad as it was, the rest of the company stepped up to help us while we fought the Texas lawsuit and were resolving the issues in front of us before moving to another opportunity. In other words, we waited until we had our arms around multiple problems before we moved again.

During that time, I feel confident we missed several growth opportunities, but we needed to fix what was in front of us first. You can see from the charts we’re back producing top tier, best-in-class numbers once again. We would have been there a couple of years ago had the annoyances of these unusual situations not come up. More good news. During the first quarter of 2025, for all banks over $10 billion, Home ranked number two in the nation in return on assets. During the second quarter of 2025, for all banks over $10 billion, Home ranked number one in the nation in return on assets. During the third quarter of 2025, Home outperformed both our first and second quarter ROI.

It’s early to be able to tell, but we’re expecting to be once again one of the best, if not the best, in the market of all banks over $10 billion. With the performance of the company back producing current leading numbers, we’re ready to move forward and do a large transaction or a couple of smaller transactions. Those of you pushing for growth, the time is right, and we agree with you. I said last quarter I was looking for $500 million in income in 2026. I’m holding that number. So far this year, through three quarters, Home has earned $357.2 million with one quarter left to go. Add a couple of acquisitions and a little growth, and I think the number is achievable and maybe a little better. Last year at this time, we’d earned $302 million.

So far, we’re up about $55 million this year, or 18.21% from last year, with the third quarter showing even stronger earning growth, up 23.6% for Q3 2025, with $123.6 million in income versus Q3 2024 of $100 million. During the fourth quarter, a bank was selling bonds, including a $20 million piece of Home BancShares’ sub debt at a discount and repositioning. They were paying the piper, I guess I say, that they incurred on AOCI losses, and Home was given the opportunity to buy. We did buy that. We bought that $20 million worth of piece, a $20 million piece of our sub debt, and picked up a $1.9 million gain. Nice trade. Being as profitable as Home is allows us to move quickly on opportunities.

During the third quarter, we opened up an exciting new branch in San Antonio, and we met several of the local business people. Great market. We’re wishing Michael Rodriguez, our team leader, and his team in the San Antonio market much success. Strength is no accident. That’s our slogan. Another reason Home has been hesitant on acquisitions is the hesitancy to take Home BancShares’ AOCI problems. We’re expecting many more bank failures than what happened. We were told to keep our powder dry. We missed on that call on bank failures, but the big one, the one that most banks got in trouble, we got that one right, the interest rate call.

Many banks and their shareholders are and will continue to suffer from an earnings perspective because their management made huge mistakes of investing their liquidity into long-term securities and loans during the low-rate environment that we all experienced, and now they must pay the piper. The problem is, how long does it take to fix it? It relates to how long a bank’s duration is on both its loans and securities, whether fixed or variable, five years, ten years, some shorter, some longer. Making the decision at Home not to invest in long-term securities and loans is the single best decision we have ever made, or I have ever made in my 50 years of running companies.

As I said, when a bank gets in that dilemma, their options are do nothing and ride out the duration until the bonds and loans mature, praying all the time that interest rates come down. If they have enough capital, they can sell the bonds and/or loans at the market and reinvest the proceeds and recognize the loss. This can create a capital problem, forcing banks to raise capital by selling more stock. Since banks trade on a multiple of tangible book value, the losses incurred will reduce tangible book value, thus resulting in a lower stock price. The recovery period can be long and painful and sometimes a death sentence, as we saw with the signature by Silicon Valley and Republic. Regardless of the decision that is made, at this point, there is commensurate damage to the balance sheet based on interest rates, duration, and quality.

Regardless of why the bank is trying to recuperate by whatever methods, they are losing years of earnings power. Either way, if they decide to ride it out or recognize an unrecoverable loss in income and tangible book, the loss is a loss regardless of how it’s presented. It reminds me of the Fram oil filter guy quote, "You can pay me now or pay me later." Another analogy is, it reminds me of losing Park Place while playing Monopoly. You never get it back. The whole time watching others that did not make the same mistake, busy sacking up capital as their ship leaves you at the port.

Last option is to find a partner that likes your operation, understands your dilemma, and has lots of capital and is willing to use their capital to mark the balance sheet to take the hit immediately, which allows the company to creep the mark into income over the duration of the paper. A huge example of this is the latest deal that was just done, CMA-Core America, who was acquired, and the stock shot up $11.77 in one day. That was extremely positive for both the buyer and the seller shareholder. There is no easy answer to resolve these mistakes that were made. If your shareholders will ride with you, maybe you live to fight another day. Regardless, it’s not an easy fix. If they don’t want to ride, they sell their stock and invest in companies that are already out there that didn’t have the problem stacking up equity.

Donna, I think that’s pretty much it. The company’s humming along pretty good. I told you last quarter that I hoped that we’d have a deal done this quarter. We probably don’t have one yet, but we’re getting close. Thank you.

Donna J. Townsell, Director of Investor Relations, Home BancShares, Inc.: Okay. Thank you, John. I’m sure when you get a deal, it’ll be the right deal. Patience is a virtue, right? Our next report today comes from Stephen Tipton.

Stephen Tipton, Chief Executive Officer of Centennial Bank, Home BancShares, Inc.: Thanks, Donna. As Johnny mentioned, the third quarter was another strong performance for Home BancShares, Inc. and Centennial Bank and produced records in several areas. Highlighted by strong revenue and continued net interest margin expansion, we were able to produce an adjusted return on assets of 2.10% and adjusted operating earnings per share of $0.61. The reported net interest margin improved to 4.56%, up 12 basis points from Q2, and up 28 basis points from the same period a year ago. The core margin, excluding event income, was 4.53% versus 4.43% in Q2, driven by an increase of two basis points in the overall loan yield and a decline in interest-bearing deposit costs of two basis points. Deposits ended slightly lower in Q3, down $161 million, driven largely by customer tax payments made in July.

We continue to focus our regions on growing core deposits and relationships, evidenced by wholesale deposits only comprising 2.3% of total liabilities. Although the adjusted efficiency ratio improved to 40.95%, our Presidents and leadership group are closely monitoring core expense trends and controlling those in a tight range. Loan production was strong this quarter at nearly $1.3 billion, highlighted by $800 million from the community bank footprint, with more than half coming from our Florida regions. Congratulations to our regional and division Presidents and all of our bankers on another great quarter. With that, I’ll turn it back over to you, Donna.

Donna J. Townsell, Director of Investor Relations, Home BancShares, Inc.: Thank you, Stephen. Next, we will hear from Kevin D. Hester on the lending portfolio.

Kevin D. Hester, President and Chief Lending Officer, Home BancShares, Inc.: Thanks, Donna. Asset quality improved overall again in the third quarter with improvements in NPLs, NPAs, past dues, and total criticized loans. As you know, there’s always good and bad as you work through problem loans. On the good side, I’m pleased to announce that we have the DFW apartment non-accrual loan under an agreement for sale with a hard deposit of over 10% of the purchase price and a closing date in the fourth quarter. However, on the large Texas C&I credit that we charged down year-end, they continue to struggle to recover, and it is entirely possible that it moves to non-accrual before it gets to a resolution. At this time, we still do not believe that there is any additional loss in this relationship.

Despite the headwinds resulting from heavy payoffs in September, we were still able to post loan growth of $105 million for the third quarter, continuing our recent history of linked quarter loan growth. The third quarter of 2025 marks eight times in the last nine quarters in which we have posted organic loan growth. From time to time, we’ve been questioned by analysts and investors about our level of loan growth being less than others that they cover or follow, and we always state that we will take what the market allows. Frothiness in the overall market generally leads to aggressive pricing and leverage by our competitors, and we will not participate in those situations. On the other hand, periods of volatility lead to banks exiting asset classes or markets and generally result in improved pricing and leverage, and we usually fare well during those times.

That said, I would like to take a moment to point out that regardless of which situation that we are in, I believe that we are not given enough credit for whatever level of loan growth that we post. Keep in mind that because we are best in class in both net interest margin and efficiency ratio, our loan growth produces greater results than our peers. We have posted year-to-date loan growth of $522 million, with results in an annualized growth rate of 4.71%. Not a bad number and certainly more than the percentage increase in GDP over that period. However, we operate at a net interest margin of 4.48% and an efficiency ratio of 40% compared to a net interest margin of 3.59% and an efficiency ratio of 55% for all banks from $10 billion to $50 billion.

When you add the effect of our best-in-class NIM to that nominal loan growth number, the impact feels like loan growth of $653 million or 5.89% annualized in terms of our peers. Layer in the effect of our better-than-peer non-interest expense, and that impact grows even further to 6.73%. The point of this analysis is to highlight that lower-performing peers must post much higher nominal loan growth results just to provide the same profitability impact as the 4.71% that we’ve posted year to date. This focus on high performance in all areas, when combined with even reasonable loan growth, is the formula for a best-in-class ROA. Donna, that’s all I have. I’ll give it back to you.

Donna J. Townsell, Director of Investor Relations, Home BancShares, Inc.: Thank you, Kevin. I appreciate the color on that important analysis on loan growth. Now, Christopher C. Poulton will provide an update on Centennial Commercial Finance Group.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Thank you, Donna. Good afternoon. Q3 was quite busy for CCFG, but you might not know it from our asset number. We ended the quarter down about $60 million from Q2 as payoffs slightly outpaced new funding. That masked what was an active quarter for originations with just under $400 million of new loan commitment. There were a couple of loans closed at the end of the quarter that funded post-quarter, and a few loans that we had anticipated to close by quarter end that pushed into Q4. All of that to say we’ve already seen our loan balances bounce back in the first two weeks of October, and based on what we see in the pipeline, I do expect growth from here.

We did and do continue to see positive rotation out of the portfolio, and we have generally been able to replace the loans that pay off with new loans. Through Q3, we originated over $1 billion in new loans, which is a bit ahead of pace for us as we generally do not hit that mark until Q4. I look forward to sharing our Q4 results with you all in the new year. Until then, I’ll hand it back over to you, Donna.

Donna J. Townsell, Director of Investor Relations, Home BancShares, Inc.: Thank you, Chris. Johnny, before we go to Q&A, do you have any additional comments?

John W. Allison, Chairman, Home BancShares, Inc.: No, I don’t. Thank you. I hope everybody looks at the charts. I think you’ll see what we’re seeing or what we’re feeling here at the company. I think the charts speak for themselves, Donna.

Donna J. Townsell, Director of Investor Relations, Home BancShares, Inc.: Okay, we will turn it over to the operator for questions.

Conference Operator: Thank you, Donna. If you would like to ask a question, you can do so by pressing star followed by one on your telephone keypad. If you decide you would like to withdraw your question, please press star then two to remove yourself from the list. When speaking, please remember to pick up your handset before asking a question. We’ll pause here briefly whilst questions are registered. The first question we have on the phone line comes from Dave Roescher with Cantor Fitzgerald. You may proceed.

Hey, Johnny, you highlighted that you guys had some nice NIM expansion this quarter. That looked good. How are you thinking about that trend and the NII trend going forward, just given the September cut we just had and the potential for getting another couple of cuts by year end? Are you expecting that lower rates could put some pressure on that, or do you think that you see more expansion going forward? What’s the NIM sensitivity on that next cut? Thanks.

John W. Allison, Chairman, Home BancShares, Inc.: The world says as rates come down, we’re going to reduce our net interest income. I have to give credit to Stephen Tipton, who deals with that every day, and Kevin D. Hester, who deals with it every day also as he writes the loans. I think they’re on top of that. We react in a hurry when there’s a rate cut. Stephen, we were at a conference, and he left the conference and lowered rates immediately in our company. We react in a hurry. I think you can go back over history and see that Home BancShares has been able to maintain a margin where a lot of people have not because of reaction and how management looks at it. We have about 13, 15, about 15 regions that report upstream, and they move immediately. Those guys know what it is. You don’t have to hold their hand.

You don’t have to rock them in a rocking chair. They know what’s going on, and they react. That team reacts. They already know which moves they’re going to make immediately. It’s already pre-programmed. I probably stole a little Stephen’s thunder here, but I’ll let him take it from here. I’m proud of how we react to those situations.

No, I thank you, David, Stephen. I appreciate what Johnny said and agree. I mean, that credit goes to the Presidents that are out in the field. They’re dealing with the customers, and you know we’re able to very quickly go through our negotiated accounts and lower those where we can. We’ve got rate sheets in all the regions that they go through, and then we’ve got some indexed municipal accounts that are moving as variable rates move. You know we screen a little asset-sensitive, but as Johnny and the group have always said, that kind of goes off the bottle assumptions, and our job is to react to that and try to get rates down to offset the loan side.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Appreciate that color. Maybe just on the deposit side, how are you guys thinking about growth going forward there in a lower-rate environment?

John W. Allison, Chairman, Home BancShares, Inc.: We’ve never seen a CD ad on Home BancShares. We don’t run them. We just run strength ads. We have the ability to pay out all uninsured depositors, and we like that position to be in, and we’ll continue to do that. We paid this quarter, we paid off sub debt, it was $140 million.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: 140 million.

John W. Allison, Chairman, Home BancShares, Inc.: $140 million. We had tax times that came up, so deposits are down a little bit. Plus, we had a little loan growth, about $100 million. Some of those factors impacted. Brian, you got a comment?

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: No, I was just going to say we did the $140 million and then we did another $20 million too.

John W. Allison, Chairman, Home BancShares, Inc.: Yeah, we bought that. We had an opportunity to buy a piece of our sub debt back, and we bought that back at a discount. We liked that move. We’re probably not going to be the high. We’re not going to be the high guy bidding on money. That’s not our game. There’s plenty of money out there if you want it, you can get at a reasonable price. We’re not too concerned about it at that point. Stephen, you got any comment on that?

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Yeah, I think just function of the market that we’re in. Johnny mentioned we just opened the branch in San Antonio a month ago. We’ve got another location east of Dallas that will be open sometime in the first quarter. I saw the market share data came out a couple of weeks ago, and there’s $1.1 trillion in deposits in Texas and $900 billion in deposits in Florida. We’ve got a meaningful presence in both. Great. Appreciate that. Maybe just one last one. How are you guys thinking about the government shutdown? Are you concerned at all about it from a credit perspective? If not, how long would this have to drag on before you guys get more concerned about it? Thanks.

John W. Allison, Chairman, Home BancShares, Inc.: You got us playing new turf here. I don’t know what to think about that. I’ve seen no impact as of yet. I don’t think we’ve seen or felt anything. Maybe it’s good to be in the South and be away from Washington, D.C. You have all those unemployed. I’m sure we got unemployed people in Arkansas as a result of it. I’ll tell you more later. You’ll probably figure it out. We’ll probably all figure it out. It’ll be good or bad, right? I don’t know the answer to that, Dave, we just keep plugging. Kevin, you got any comments? You see anything on your end?

Kevin D. Hester, President and Chief Lending Officer, Home BancShares, Inc.: No, I mean, I haven’t seen anything. We’ve talked about, you know, being able to offer deferments to individuals that are hurt by it. We certainly can and will do that where it’s necessary. Other than that, I mean, I’m not seeing anything. I’ve not felt any issues from the government being shut down for 20-something days.

John W. Allison, Chairman, Home BancShares, Inc.: We see things, we’ll call you, Dave. Is that fair?

Kevin D. Hester, President and Chief Lending Officer, Home BancShares, Inc.: Yeah.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Sounds good. Appreciate it, guys. Thanks again.

John W. Allison, Chairman, Home BancShares, Inc.: Great.

Conference Operator: Your next question comes from Jon Glenn Arfstrom with RBC. You may proceed with your question.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Hey, thanks. Good afternoon.

John W. Allison, Chairman, Home BancShares, Inc.: Hi, John.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Hey there. It’s probably a topical question. I’m not as concerned about it for you guys, but it’s a bloodbath out there in the bank stocks on credit fears. You know, obviously, you put up a great quarter, but your stock’s off. How are you feeling about credit right now? Maybe what you’re seeing on your own credit trends, and then, you know, I know that you guys kicked the tires on a lot of other banks, but what you’re seeing broadly in some of the other banks you look at?

John W. Allison, Chairman, Home BancShares, Inc.: Interestingly enough, we have an asset quality meeting monthly. In that asset quality meeting, we cover every past due or problem loan in the entire company. As you can imagine, more has been focused on the Texas book than it has been the Florida book or the Arkansas book. We go down every loan, and we talk about it, where we are, and what’s happening with it. It’s really pretty interesting. I wrote down, and I write down, John, what I think the loss is on that loan. If I think it’s $1 million, I put down $1 million or $5 million or $10 million, whatever it is, I put it down. The rest of the group does it accordingly too. Stephen does it and Kevin does it. At the end, we look at each other, what did you put down?

I had the lowest amount of dollars in that asset quality meeting that I’ve had since I started that process, and that’s been years ago. From that aspect, I’m pretty proud we got that one Texas credit that we got our eye on. Outside of that, everything’s holding together pretty good. Getting that, having a deal on that piece of property in Texas that Kevin reported earlier, I’m glad to have that. Hopefully, that deal gets closed. We got a 10% deposit, so hopefully that gets done and gets out of the bank. Overall, I could be on that one deal in Texas. I’m a pretty happy camper. I can’t say we’re the exception. I think Jamie Dimon said there’s cockroaches out there, and there always is cockroaches, but you know, there may be. I’m sure there are some cockroaches that we hadn’t seen.

I was amazed at the last asset quality meeting how many dollars I wrote down. I usually write from $15 million to $30 million. It’s possibly, and don’t get me wrong, I exaggerate a little bit, but I just put the maximum amount I think it could be. We usually always beat that if one of those credits happens. Last time, I think I was less than $5 million, John. Kevin, you got any comment?

No, I mean, I can’t, that’s the best color I can give. We go through them at a detailed level and each come up with our own number. You know, I feel like you do. I think we have addressed, we watch all these closely, and things come out of left field at times, but we feel pretty good about where we’re at at this point. Low leverage helps that a lot.

Yeah, I remember back, John, when we didn’t have, we had high leverage, and they pitched us the key. Being in a position with low leverage is pretty sweet.

Yeah. Okay. I’m sure others will ask about M&A, but I’ll go to growth quickly. I hear you guys. I’m probably guilty of pushing you on growth at times. It sounds like you’re more willing to grow. I’m just curious if the pipeline supports it and you’re seeing the kind of loan demand that could push your growth rate a little bit higher. Here I go again, pushing you on growth. Are you seeing the pipelines improve? It sounds like you’re more willing to grow the balance sheet. Is that right?

Kevin D. Hester, President and Chief Lending Officer, Home BancShares, Inc.: I don’t know that it’s that we’re more willing. I think the pipeline is supporting it, particularly right now. I don’t know that it’s necessarily a willingness more than, you know, we’re finding the right deals. We’ve got people in the right places in good markets that have kind of hit their niche. The hard thing to project is that we do a lot of construction. That means there’s a lot of churn in our community bank construction book. Chris’s book is meant to churn, you know, over a three to four-year period anyway. There is a lot of turnover on a quarterly basis, and that’s the hard thing to project. The pipeline has been really pretty strong for several quarters and continues to look that way.

John W. Allison, Chairman, Home BancShares, Inc.: Yeah, it looks like we just missed, we let the grease pig get away from us in the second quarter. Chris did on a big loan. It looks like that loan’s probably going to close. Chris, you want to comment on when you think that might close?

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Certainly. We had one that was scheduled to close at the end of the quarter, and our borrower just needed to delay their purchase a couple of weeks. I think we’re scheduled for Monday right now. That may move around a little bit, but again, that’s more just sort of timing issues. We continue to see good demand. I think that one will probably get done.

John W. Allison, Chairman, Home BancShares, Inc.: Anyway, we were prepared. We thought we were going to be up much stronger than we were, but Chris didn’t get that one closed. I think it’s going to get closed. We’re starting out, we usually start out in the hole. We’re starting out ahead. I don’t know if that means we’ll be behind at the end. Usually, when we start out strong, we get behind at the end. We start out slow, we get strong at the end. We just have to wait and see. You never know what your customer’s thinking. He may be buying, he may be selling, right? You don’t know. He may be working on something for months, and then bang, he just hits it. Hey, we got to do this trade. That happens. That happens a lot. We could have a good run here this quarter. It could be a nice quarter.

They’re good, well-priced loans, and it could give us a little revenue boost.

Okay. All right. Thanks for the help. I appreciate it.

You bet.

Conference Operator: Thank you. We now have Brett D. Rabatin with Hovde Group. Please go ahead.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Hey, good afternoon, everyone. John, he wanted to start, you know, M&A hasn’t really been addressed fully, and I think everybody knows you’re out looking for assets. Can you maybe just talk about your experience here the past quarter? What’s been the impediment? Is it pricing? Is it culture of a seller? Just the pure math. What’s been the impediment? How do you think about the outlook with these stocks a little lower? Obviously, seller expectations are not as variable as the market.

John W. Allison, Chairman, Home BancShares, Inc.: You know how conservative we are. We have to find the right target. To say that we are not in the M&A business, we are. We have signed the letter of intent. We’ll be moving forward on that. It’s someone that we like and runs a good business and has got a good business. We’re excited about that opportunity. I’ll tell you where it is. It’s in the United States, and it’s several billion dollars. You ought to be able to narrow that down. You ought to be able to narrow that down. We have signed the letter of intent, and we have his permission today to say that we’ve done that. That’s about all. You’re not going to get anything else out of me other than that.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: No, that’s helpful, Johnny. It sounds like we got something in the opera. That’s good to hear.

John W. Allison, Chairman, Home BancShares, Inc.: We got.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: I just wanted to hear.

John W. Allison, Chairman, Home BancShares, Inc.: We had the HAPPI mess to deal with, and we got that behind us pretty well. We just don’t move until we, I mean, you just create, if you got a fire out there, put it out. We had all those multiple problems in the HAPPI transaction, and it just didn’t, we got that under wraps right now. It’s time for us to move forward. I agree, we have not moved forward, and I admit that, but we are moving forward.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Okay. The other question I had was just around profitability. You know, in the past two quarters, I think it felt like your profitability had topped out. In this quarter, it moved up again. You know, are we at the peak, do you think, in terms of ROA, ROE, ROTE, just given, you know, the efficiency ratio or any thoughts on profitability and how you see it maybe going into 2026?

John W. Allison, Chairman, Home BancShares, Inc.: Our expenses were up a little bit this quarter. I’ve already commented to Stephen Tipton and Brian S. Davis, and they’re going to work on that. Our expenses were up. We still had some expenses out there that we didn’t need to have. We got to work on that. I don’t think we’re done. No, I don’t think we’re done. You get the expenses back to $111 million, you see what happens, right? That’s more money for us. We’ve kind of had the wind in our back. We’re pretty tough on, if we charge off a loan, we’re pretty tough on staying after them until we get our money. We’ve had the wind fall on the wind in our back. We’ve had some income. We got some this month too. This quarter, haven’t we, Brian?

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Yeah, I mean, we had several things. We had a $2 million recovery, a $1.75 million gain on our lawsuit, and a $1.9 million gain on our sub debt pay down.

John W. Allison, Chairman, Home BancShares, Inc.: We’ll probably have some more recoveries on that lawsuit. I’ll probably put it in reserve just to be on our reserve. We built it a little bit this time. Went from $186 million to $187 million. We’ll probably take that extra money. We don’t have anything that pops its head up to be charged off. We’ll probably put that in reserve.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Okay. Appreciate all the color.

John W. Allison, Chairman, Home BancShares, Inc.: Thank you.

Conference Operator: Thank you. We now have Stephen Kendall Scouten with Piper Sandler on the line.

John W. Allison, Chairman, Home BancShares, Inc.: Hey, good afternoon. Johnny, I kind of want to challenge you that maybe you can’t get expenses down to $111 million just so you get that proof all wrong and get them back there. Do you think there really is $2 million, $3 million to cut if you continue to go to the bank? Do I think there’s $2 million or $3 million that we could gather if we, is that what you said?

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Any expenses that you could cut?

John W. Allison, Chairman, Home BancShares, Inc.: Yeah, because I think you were at, you know, it was $14 million, which is phenomenal still.

Stephen Tipton, Chief Executive Officer of Centennial Bank, Home BancShares, Inc.: Hey, Stephen. This is Stephen. Yeah, there’s a handful of kind of one-time items in this quarter from an expense standpoint. I know we talked a little last quarter around incentives being up in Q2, and they were basically at the same level in Q3 as they were in Q2. There’s obviously some revenue that comes along with that to pay those. Like Johnny said, we’ve got our presidents had a good conversation last week and everybody kind of reviewing their numbers and what opportunities we have to trim where we can.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Hard to beat 41.7% efficiency ratio, but impressive to hear you might be able to get it a little better. That’s encouraging. Maybe on loan growth around Centennial Commercial Finance Group in particular, I’m wondering if Chris could comment on just, you know, obviously we’ve seen a few rate cuts here, and then prospectively we’re going to get a few more of what he would think that could do to loan demand within Centennial Commercial Finance Group. I mean, I think that book is down maybe $400 million or so from its peak when we were in a lower rate environment. Just kind of curious what we think could kind of transpire there.

John W. Allison, Chairman, Home BancShares, Inc.: Chris, that’s yours.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: I was curious what you might say. No, I think lower rate environments generally will be beneficial to us because I think people have sat on the sidelines on some transactions or some projects that just don’t make sense at a higher rate environment. You’d like to think that there stimulates a little bit of demand on some things that maybe don’t pencil out so well in a higher rate environment. I assume we get our fair share of those. In general, I think demand for us has been good. We don’t really chase growth, but if it comes our way, we’ll take it. I do think in general, you see a 100-point decline from where we were. You ought to see a few more deals pencil out a little better.

Stephen Tipton, Chief Executive Officer of Centennial Bank, Home BancShares, Inc.: Got it. Yep, that makes sense. Maybe just last thing for me. I know I think Arfstrom said it earlier, but it’s been kind of a bloodbath out here today. Y’all’s stock is outperforming by, I don’t know, 200 basis points, which probably doesn’t feel that way, but it’s great relative to everyone else. How do you think about using that stock in an M&A transaction versus, you know, using all this excess capital that you have to buy back your own stock? Is it both/and? Do you have a preference on using that currency to buy new assets or just repurchasing your own stock more aggressively?

John W. Allison, Chairman, Home BancShares, Inc.: I think that depends on the stock price. I, you know, we’ll be in the market. Let me say this. Home will be in the market come tomorrow when we’re cleared, right? We’ll be in the market buying stock. You know, when there’s opportunities, you know, when you look at Home, we were second in the nation in ROA in the first quarter and first in the second quarter. We outperformed the first and second quarter. They take us down 3%. If they’re going to take us through the rest of the market, I ought to be down 10%. We’ll come back. Home will come back. Home will bounce back. This is, and all the banks will bounce back at some point in time. Right now, we’re all trading. They’re throwing the baby out with the bathwater.

We just have to, as painful as it is, when you come off of a, you know, you see the performance of the company for the quarter and you come off of that and you get your ass kicked like this. It’s a little frustrating, but it is what it is. There’s a lot of people that are in a lot worse shape than Home BancShares is today. It’s just a little frustrating. We’ll be fine. You know, we’ll be fine. We’ll continue to use our stock for acquisitions, and we’ll continue to buy our stock back. You know, the good news is when you run a 2.12%, 2.17% ROA, you can increase your dividend. You can buy your stock back. You can pull every capital handle that’s out there. Still, as you see, Home has done grow your tangible common equity up pretty strong.

These people running a 0.7% or a 1% ROA, they don’t have the ability to do what Home’s doing. Home has the ability running a 2% ROA to pull every capital handle out there. We can make the decision of which one we want to pull, or we can pull them all. Don’t you agree with that, Stephen?

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Absolutely. You didn’t get a chance to buy it. We’re still cheaper. To your point, congrats on a great quarter. I like the new chart too. I like seeing those nice up into the right lines. Keep up the good work.

John W. Allison, Chairman, Home BancShares, Inc.: Thank you. Appreciate it.

Conference Operator: We now have Matt Olney with Stephens. You may proceed with your question.

Hey, great. Thanks for taking the question. I was encouraged to hear about the lawsuit settlement. I know that’s something you’ve been looking for for a few years now. As far as the impact that had on expenses, were the legal bills still coming through in the third quarter? Was this one of the headwinds that you mentioned in the third quarter? I’m just trying to appreciate if that $111 million goal could be something we could see in the fourth quarter, or could we need a few quarters to get there?

John W. Allison, Chairman, Home BancShares, Inc.: Let’s let Stephen answer that.

Kevin D. Hester, President and Chief Lending Officer, Home BancShares, Inc.: Yeah, that’s Stephen, Matt. There wasn’t much, I’m going to say, $100,000 or so in legal expense related to that suit in the quarter. We had a handful of other kind of one-time items, some donations. We did a nice donation to the City of Kerrville from the flood damage earlier this year. That was in the quarter and a handful of other things. We’re working through all that now. Like Johnny said, a portion of the settlement proceeds were in revenue this quarter, and the rest will be in Q4.

John W. Allison, Chairman, Home BancShares, Inc.: Okay. Our bank in Kerrville raised $250,000 for the tragic flood that killed those little baby girls, and we matched it. We had about a $500,000 donation. We feel good about that.

Yep. Yeah, nice to see. On the M&A strategy, just help us appreciate the size thresholds of those targets. I think, Johnny, you mentioned there could be a larger deal. There could be a few smaller deals. Just help size up for us what a larger deal would be for Home BancShares versus what a series of smaller deals would look like.

You’d buy anything from $25 billion down and anything from a billion dollars up. I can tell you, the attorney’s already fussing at me. I knew this question was coming. I said, "I can handle it." It’s somewhere between 0 and $25 billion, I think. That makes you feel good. I’m not going to go there. We’re going to buy stock. As soon as we can get open, we’re going to buy stock. They said, "You got to be careful." I said, "I’m going to be careful, but I can tell you what we’re going to do." Wall Street knows we’re going to, we always tell them what’s happening. We’re fair with that. We like this operator. I can tell you that. We like the guy. We like this guy. We think he’s done a good job, and we think he’ll be a great partner.

With the strength of having Home BancShares, Inc. balance sheet backing him, I think he’ll do what he needs to do. That’s probably more than I should. The attorney’s making notes of this right now. Everybody’s got drawing their finger across their throat like, "Shut it down," type of thing.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: We will keep an eye on the Home BancShares news in the next few weeks. Hopefully, we will see something good. Thanks for all the comments, guys. Great quarter.

John W. Allison, Chairman, Home BancShares, Inc.: Thanks.

Conference Operator: We now have Catherine Fitzhugh Summerson Mealor with KBW.

Donna J. Townsell, Director of Investor Relations, Home BancShares, Inc.: Hey, good afternoon.

John W. Allison, Chairman, Home BancShares, Inc.: Good afternoon. How are you?

Donna J. Townsell, Director of Investor Relations, Home BancShares, Inc.: I’m great. All right. My last question is just circling back to the margin. I just wanted to see if you could remind us the % of loans that are floating rate that are repriced immediately. My kind of follow-up on the deposit side, I know, Stephen, you talked about $1.1 billion of CDs repricing in the second half of the year. If you could give us a little bit of data around where that’s coming off and coming back on or where you think that’ll happen. I know rates are moving all around.

Stephen Tipton, Chief Executive Officer of Centennial Bank, Home BancShares, Inc.: Sure. On the variable rate side, it’s about $6.3 billion or so. There’s about $3.5 billion that’s tied to Wall Street General Prime, and the rest is tied to SOFR between Chris’s book and the community bank portfolio. That’s what’s moving this quarter and next that we would consider truly variable. On the CD side, we’ve got—let me find my notes here. That’s on the fixed rate side. Give me just a second. Over the next three quarters, our CD book, which is relatively small, is also relatively short, so $1.8 billion or so in total size. We’ve got about $1.35 billion that matures over the next three quarters, and it’s at an average rate of 3.67%. It starts a little bit higher and tails off over the next three quarters. We still have to negotiate, deal with competition.

We’ve got peers in market around our markets that are still north of 4%, which is frustrating. Our group’s done a fantastic job in negotiating those with customers that want to negotiate and able to retain the vast majority of what we have. Whether we can pick up some yield on what’s coming off over the next three quarters, we’ll see just kind of relative to what competition’s doing. I would say broadly, our folks are negotiating down in the mid-threes and lower today.

Donna J. Townsell, Director of Investor Relations, Home BancShares, Inc.: Okay, great. That’s perfect. This is a really nitty question, but the sub debt that you paid off this quarter was, when in the quarter was that? Is some of that reflected in this quarter’s margin, or will that be more fully reflected next quarter?

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: We paid it off in July. It was the HAPPI sub debt that we got that was $140 million, and then we bought back $20 million of our sub debt in September.

John W. Allison, Chairman, Home BancShares, Inc.: The $140 million went out at the end of the quarter.

Donna J. Townsell, Director of Investor Relations, Home BancShares, Inc.: Got it. That’s mostly been in this, that’s mostly in this margin. Got it. Okay. Yeah, that was.

Conference Operator: Thanks so much. Great quarter.

John W. Allison, Chairman, Home BancShares, Inc.: All right. Stephen had some comment for you. No, I was just going to clarify that.

Donna J. Townsell, Director of Investor Relations, Home BancShares, Inc.: Yeah, go ahead.

John W. Allison, Chairman, Home BancShares, Inc.: On the $140 million, we paid off at the very end of July, 1st of August. There’s two-thirds benefit this quarter.

Donna J. Townsell, Director of Investor Relations, Home BancShares, Inc.: Okay. That’s great. Thank you.

John W. Allison, Chairman, Home BancShares, Inc.: Thanks. Appreciate it.

Conference Operator: Thank you. We now have Brian Joseph Martin with Janney Montgomery. You may proceed with your question.

Stephen Tipton, Chief Executive Officer of Centennial Bank, Home BancShares, Inc.: Hey, good afternoon, guys. Hey, Brian. Stephen, maybe just one, just on the margin. It sounded like earlier when you talked about the question about rates being down, it didn’t sound like there was a big concern that the margin was going to fall significantly despite being, as Johnny said, maybe asset-sensitive. I guess, is in general, your expectation if we do see the rate declines that the margin is still relatively stable, kind of where it’s been, absent the movement within that event income line? I know that’s volatile, but it moves around a little bit in the quarters. Just kind of the core exit event income, if we do get a couple of cuts, it sounds like it’s relatively stable, plus or minus a few basis points is still the way to think about the outlook?

Kevin D. Hester, President and Chief Lending Officer, Home BancShares, Inc.: Yeah, I mean, that’s been our message over the last year or so, as you’ve seen rates come down a little bit. I mean, you know, we screen in an ALCO model that our NII goes down 5% or whatever, but you know, that assumes a 40% beta on deposits. Like I said, Johnny’s always said that doesn’t give management credit for what our team does. Like I said earlier, the Presidents have done a great job thus far addressing deposit rates. The daily run rate that we monitor has held in pretty good over the last month since the Fed cut rates.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Okay. Just reminding me, Stephen, I guess, or maybe you said earlier, what’s left on this? In terms of fixed asset repricing in the next couple of quarters or the next 12 months, I guess, what you have in your hands in terms of what opportunities?

Stephen Tipton, Chief Executive Officer of Centennial Bank, Home BancShares, Inc.: Yeah, we’ve got Q4, we have $478 million in fixed-rate loans that mature at an average rate of 6.17%. There should be some lift potentially on those. It kind of depends on what competition does. I think we’ve said before, we’ll defend our balance sheet with competition. There’s about $1.25 billion next year in 2026 that matures at an average rate of 5.5%, basically.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Okay, still a little bit of room on that.

Stephen Tipton, Chief Executive Officer of Centennial Bank, Home BancShares, Inc.: Depending on what happens in that rate environment, some of that could come up potentially.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Gotcha. Okay. Just the last couple, it sounds like near-term, there’s still, it sounds like there’s opportunity on the expense side that, you know, we’re going lower, not higher than at this point, you know, all else equal. That sounds fair. On the fee income side, Brian, I guess, is there, it sounds like there’s an extra $2 million in the fees this quarter that I guess after next quarter, fourth quarter, it’s not sustainable. I don’t know the amount of the settlement that you expect in 4Q versus this quarter. It sounds like there’s a bit more in fourth quarter that is coming. Do the fees kind of back off the run rate they’re at now given, you know, that that gain is kind of a 3Q and 4Q event?

John W. Allison, Chairman, Home BancShares, Inc.: There is about $5.7 million of what I’ll call event income. $1.75 million of that is from the lawsuit, and we’ll have another round of gain from the lawsuit on that for next quarter.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Right. All else equal, the $1.75 doesn’t recur after, you know, I’ll say, beginning 1Q next year. You’re going to have something more in the fourth quarter. It sounds like it’s more than the amount this quarter. After that, that line item specifically normalizes to zero?

John W. Allison, Chairman, Home BancShares, Inc.: It could carry into that. You could have, you know. Got it.

Okay. I think we’re going to get it all this time.

I think you’ll get it all. Okay. I didn’t know if some of it might bleed over into the first quarter.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Okay.

John W. Allison, Chairman, Home BancShares, Inc.: That’s it.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: All right. Stephen, the margin still has a little bit of a tailwind from the sub debt, the full quarter benefit of the sub debt as you go into the fourth quarter, to just kind of start. Is that still correct?

Stephen Tipton, Chief Executive Officer of Centennial Bank, Home BancShares, Inc.: Yeah, that’s fair. Like I said, the timing of when we paid, we paid the HAPPI 140 off was, you know, a third of the way into the quarter already. Q4 will obviously be a full quarter’s.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Yeah, gotcha. Okay. I think, and maybe just the only other item was in terms of just the loan. Kevin, maybe talked about this, just the loan pipeline. Maybe one for you, Stephen, just on the, it sounds like you talked about the origination activity in the quarter. I assume payoffs were pretty significant in the quarter. Maybe just comment where the payoffs were this quarter. It sounds like, just to confirm, Kevin, that the loan pipelines are still pretty healthy and primarily, I’m guessing, in Florida and Texas, but maybe if you just comment a little bit on that.

Stephen Tipton, Chief Executive Officer of Centennial Bank, Home BancShares, Inc.: Hey, Brian, Steve, I’ll give you the numbers real quick and then let Kevin give you the color there. Payoffs were between $750 million and $800 million for the quarter, nothing necessarily out of line with where we’ve been running. The $1.3 billion that I mentioned on production was our origination volume, which, you know, generally about half of that or so is funded at quarter end because of some of the construction type projects that we do. That’s covered there on the payoffs with Kevin.

Kevin D. Hester, President and Chief Lending Officer, Home BancShares, Inc.: Yeah, those payoffs were more heavily weighted towards the end of the quarter. We had a little higher quarter that we were looking at than it actually ended up because of some stuff that, as Johnny said, moved into fourth quarter and then the payoffs that hit into third quarter. You’ll see with us each quarter, it’s a little bit different. You heard Chris’s comments. His third quarter, their book was a little bit down. We got the growth from the community bank market. This quarter, it may, it probably will shape up the opposite. If the deal that he has closes next week, it’s probably going to be flipped the other direction. The good news is we have different levers that get pulled at different times. Certainly, Florida and Texas are the markets where there’s a lot more activity.

We’re plugged into some good areas that tend to see that. I think that’s showing in the pipeline. We’ll continue to play into that.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Gotcha. The community bank pipelines or the markets, Kevin, Texas and Florida is still where it’s maybe a bit more activity than elsewhere?

Kevin D. Hester, President and Chief Lending Officer, Home BancShares, Inc.: Yeah, it’s just where the activity is. I mean, Arkansas does well too. They’re showing growth as well. It’s just there’s just not as many opportunities as there are in the other two states.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Okay. Last one for me, Johnny, just on M&A, in the past, you’ve talked about the opportunities that you may consider, given that maybe they’re a little bit not quite the performance that you guys are up to, just so you can kind of buy something and fix it or get the return on it. Is that still kind of the opportunities you’re looking at in terms of M&A? Kind of a, I don’t want to call it a fixer-upper, but something that you can improve the profitability on. Is that relative to your profitability?

John W. Allison, Chairman, Home BancShares, Inc.: This from an ALCI problem is the only thing we have. It’s a good management team, a good operation. They’re a good company. I just think we give them the opportunity with our balance sheet to do some things they haven’t been able to do. I think that’s a big plus. It’s not a, this one’s not a, only from the fact we’re sharing our balance sheet with them is to help them with their liquidity and their ALCIs. We’ll clean that up. We’ll fix that on day one. You’ll see them coming out. I think you’ll see them coming out pretty strong when we get our arms around it. It’s not a broken company, only from the aspect they got in the ALC, as 95% of all banks did throughout the country. That’s not a, they all got that problem.

Some people, as I said in my opening remarks, some people take their hit and move on down the road. Some people hope that rates come down. Everybody does different things. I said in my prepared remarks, you can hope with somebody that’s got strong capital like Home, and we got the ability to spread that over them and help them with their problem, fix it overnight. That’s what we suspect to do, and that’s what we’ll probably do.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Gotcha. Okay. I appreciate the call, and I look forward to hearing from you guys in the future. Thanks.

John W. Allison, Chairman, Home BancShares, Inc.: Okay, thanks.

Conference Operator: Thank you. Our final question comes from Michael Edward Rose with Raymond James. Please go ahead.

Christopher C. Poulton, President of Centennial Commercial Finance Group, Home BancShares, Inc.: Hey, good afternoon, everyone. Thanks for taking my questions. Maybe just going back to John’s comments and his question. As I think about you guys, and Johnny, I think you’ve mentioned this over the years, you can’t push a rope as it relates to loan growth. You have a lot of banks out there. They’re actively trying to hire, in some cases, record numbers of loan officers and producers. Maybe now is not the time to grow as spreads are going to be under increasing pressure. You do see some softening of some of the economic data, at least. There’s probably some debate there. Now you’ve got credit concerns creeping in. Is maybe now not the time to chase loan growth?

Just following up on that, one other thing that I think you guys haven’t talked a lot about over the years is just hiring plans where a lot of other banks have. Maybe if you can just kind of address that more broadly, not so much from an expectation point of view, but really, is now the right time to actually want to accelerate loan growth here? Thanks.

Kevin D. Hester, President and Chief Lending Officer, Home BancShares, Inc.: Hey, Michael. This is Kevin. I’ll take the last for the first. I think Johnny mentioned on the last call that it’s not been our history to go out and look for. It’s not been part of our real plan to go out and find teams of people and bring over lots of teams outside of a whole bank. Whole bank has been our M&A strategy for, you know, really our life. We’ve been through two long court cases that had, you know, that were part of that. It’s kind of that same mentality. It’s just not something that we’ve done a lot of. Would we do it in certain circumstances? Sure, we would. We’ll do it. We’ll do it the right way. It has to fit our culture. I think that’s probably the bigger thing in all of this is our culture. What does our lending culture look like?

We have one, and we follow it pretty closely. To the degree that a group fits that, we’ll bring them in. It’s not our main strategy. Our strategy has been whole bank. It tends to be things that we can go in and fix because we do a pretty good job of that over the course of our lifetime. I think that’s why you haven’t seen that particular part from us. Is it the time to grow? We’re in some pretty good markets that I think will withstand, you know, any weakness that comes into the market. I like our Texas and Florida markets for.

Conference Operator: We continue to follow our lending strategy and our policy, and if it underwrites well and we like it, we like the people that we do business with, and it results in growth, we’ll do that.

Donna J. Townsell, Director of Investor Relations, Home BancShares, Inc.: All right, great. That’s all I had. Thanks for taking my questions.

John W. Allison, Chairman, Home BancShares, Inc.: Yeah, thank you. Appreciate it.

Stephen Tipton, Chief Executive Officer of Centennial Bank, Home BancShares, Inc.: Thank you. I can confirm that does conclude the question and answer session. I’d like to hand it back to Mr. Allison for some final closing comments.

John W. Allison, Chairman, Home BancShares, Inc.: Thank you. Thanks everyone for joining today. As hard as this entire bunch worked for the last 90 days, it’s not a good day to release earnings, you know, where the world, where people are beating up bank stocks. Home continues to perform, as you’ve seen, year after year, quarter after quarter, and we’ll continue to do that. We’ll continue to perform at a high level, and hopefully with a new acquisition or two, they’ll report, they’ll come in, and shortly it won’t be long, they’ll get to that high level themselves, and we’ll be kicking out some additional income. I couldn’t be more pleased. I’m not pleased with the stock price going down today. As I said, they throw the baby out with the bathwater.

When you report the best ROA in the nation, I would suspect we probably got it, or one of the best, and your stock’s off 3%. As Stephen Kendall Scouten said, he said you’re better than most people. I guess we’re one of the best of the worst today. I do appreciate everyone’s support, and Home will continue to do the right thing month after month and quarter after quarter, and we’ll be standing when others may not. Thank you everyone for your support. We’ll talk to you in 90 days. Donna, you got any comments wrapping up? Stephen, anybody got it? Brian? Kevin, anybody got it? You got a comment on the quarter?

Donna J. Townsell, Director of Investor Relations, Home BancShares, Inc.: No, great quarter. I think we’ve hit all the highlights, and we’ll keep trying to do better.

John W. Allison, Chairman, Home BancShares, Inc.: Yep. Donna, you got any comments, Brian?

Conference Operator: No, I’m good.

John W. Allison, Chairman, Home BancShares, Inc.: You’re good? Nothing. Kevin, you got anything else?

Kevin D. Hester, President and Chief Lending Officer, Home BancShares, Inc.: I’m good.

John W. Allison, Chairman, Home BancShares, Inc.: All right, we appreciate it. Thank you very much. We’ve got an important meeting Friday, and then we’ll be back to work. Our people can rest all day Saturday and Sunday because Monday we’ve got to go back to work. Thanks.

Stephen Tipton, Chief Executive Officer of Centennial Bank, Home BancShares, Inc.: Thank you all for attending the Home BancShares’ fiscal third quarter earnings call. Today’s call has now concluded. Thank you all for your participation, and you may now disconnect.

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