Hot stock to watch: Home Bancshares Inc (NASDAQ: HOMB)

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Home Bancshares Inc (NASDAQ: HOMB) stock rose over 3.6% on 16th July, 2020 (Source: Google finance). Net interest income rose $9.1 million, or 6.5%, to $150.1 million during the second quarter of 2020 as compared to $141.0 million in the first quarter of 2020. Book value per common share improved to $15.09 as of June 30th, 2020 against $14.72 as at March 31, 2020. Tangible book value per common share (non-GAAP) rose to $8.99 as at June 30, 2020 from $8.61 as of March 31, 2020. The firm had $848.6 million of PPP loans as of June 30, 2020 which were 5 basis points dilutive to the NIM. Tier 1 capital was $1.6 billion during the second quarter as compared to total risk-based capital that was $2 billion, and risk-weighted assets were $12.5 billion. Leverage ratio was 10.3%, which is 105% above the well-capitalized benchmark of 5%. Common equity Tier 1 was 12.0%, which is 85% above the well-capitalized benchmark of 6.5%. Tier 1 capital was at 57 basis points to 12.6%, which is 58% above the well-capitalized benchmark of 8%. Total risk-based capital was 16.3%, which is 62% above the well-capitalized benchmark of 10%.

On the other hand, the group’s net interest margin fell to 4.11% during the second quarter of 2020 as compared to 4.22% in the first quarter of 2020. The yield on loans was 5.43% and 5.79% for the three months ended June 30, 2020 and March 31, 2020, respectively, as average loans increased from $11.01 billion to $11.79 billion. The rate on interest bearing deposits fell to 0.64% as of June 30, 2020 from 1.08% as of March 31, 2020, with average balances of $9.51 billion and $8.99 billion, respectively. The firm recorded $11.4 million of total credit loss expense due to the COVID-19 pandemic but Non-performing loans to total loans fell to 0.50% as of June 30, 2020 against 0.53% as of March 31, 2020. The firm recorded a Non-interest expense of $80.2 million during the second quarter of 2020.

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