Expenses were elevated due to a $3.5 million lawsuit settlement but core expenses were around $111.5 million, expected to normalize next quarter.
Home Bancshares reported record earnings of $118.4 million or $0.60 earnings per share in Q2 2025, with a return on assets of 2.08%, slightly up from Q1's $115.2 million and 2.07% ROA.
Loan growth was solid, with CCFG portfolio growing by $122 million in Q2 and total loans funded around $1.1 billion.
Loan loss reserve remained strong at 1.86%, Tier 1 capital at 15.6%, leverage ratio at 13.4%, and total risk-based capital at 19.3%.
Non-GAAP earnings for the first six months of 2025 were $233.6 million, up over 15% from the prior year period.
Tangible common equity grew by $1.36 billion or 11.25% over the past 12 months, from $12.08 billion to $13.44 billion.
The company repurchased over 3 million shares worth about $86 million and paid $150 million in dividends over the past year.
The non-GAAP return on tangible common equity was 18.26%, with GAAP ROTCE at 17.68%.
Strategic Focus on Balance Sheet Remixing and Loan Composition Shift
The company is actively shifting its asset base from lower-yielding residential mortgages to higher-yielding commercial and C&I loans, with over $700 million in C&I growth in H1 2025.
This mix shift is driving record net interest income of $300 million in Q2, the strongest in company history.
The ongoing asset remixing is expected to support profitability and margin expansion, with net interest margin climbing above 3%.
ConnectOne's assets now stand at nearly $14 billion, with $11.2 billion in loans and $11.3 billion of deposits, and a market capitalization exceeding $1.2 billion.
Core deposit growth was strong, including gains in DTA balances from both existing and newly acquired relationships.
Loan-to-deposit ratio improved to 99% at the end of Q2, down from 106% as of March 31.
Loan-to-deposit ratio improved to just below 100%, with expectations to operate around that threshold going forward.
Net interest margin was 3.06% in Q2, with expectations to increase to about 3.25% by year-end and continue expanding through 2026.
Noninterest-bearing demand deposits increased by more than $100 million since March 31, approximately 15% annualized.
Nonperforming asset ratio improved to 0.28% from 0.51% a year ago, and charge-offs remained reasonable at 22 basis points.
Provision for credit losses was $35.7 million in Q2, including a $27.4 million day 1 provision from the merger and an $8.3 million operating provision, higher than usual due to merger-related adjustments.
Tangible common equity ratio stands above 8% at 8.1%, with the bank CET ratio above 12%, slightly down due to the acquisition.
Total deposits were up an annualized 8%, with true core balances increasing by more than $500 million or 17% annualized after factoring in a $200 million decline in brokered deposits.
Dafinchi