Home Bancshares (HOMB) Q2 2026 earnings call transcript

Thank you. Good afternoon, and welcome to our second quarter conference call. With me for today's discussion is our Chairman John Allison, Stephen Tipton, Chief Executive Officer of Centennial Bank, Kevin Hester, President and Chief Lending Officer, Brian Davis, our Chief Financial Officer, Chris Poulton, President of CTFG, and Scott Walter of Shore Premier Finance. HOME BANCSHARES reported another solid quarter, generating a record net income as adjusted of $128 million while significantly expanding our balance sheet and maintaining strong profitability. Lone growth, stable margins, and improving book value underscoring the strength of our franchise. Most importantly, we accomplished all of this while maintaining strong credit discipline and preserving the profitability that has long differentiated our company. Our team is prepared to provide you with more details about the quarter with our opening remarks today coming from our Chairman John Allison.

John Allison Well, thanks, Donna. It's been another quarter come and go. The second quarter of 26 was sure full of records for the record, but sure lots of records for the record, but excuse me. There were a couple of items that I think we should talk about. Number one is our merger with our friends with Mountain Commerce. It's evident that some of our merger earnings came through a little earlier and a little stronger than we anticipated, as we felt some of the earnings impact in the first quarter. We got to like that, because this trade was non-diluted, and therein lies the benefit of a non-diluted trade. A successful merger is where the two companies should be creating more value together than either company can achieve separately.

In our view, the meaning of that is 1 plus 1 should equal 3, not 1.75. With our deal being a 3, both groups immediately start sharing the benefits of their union. In this merger, Mountain Commerce and HOME BANC SHAREHOLDERS will equally enjoy the ride together. Perhaps the biggest surprise of the quarter, though, was the surprising loan growth for the legacy footprint. We were forecasting a negative $600 million in loans and actually had a plus $26 million. That's a $626 million swing on the loan side. As a result, we will no longer forecast next quarter's loan growth. Obviously, we don't do a very good job of that. The problem is that our customers are really a group of outstanding loyal entrepreneurs that are constantly looking for opportunities that we only learn about most of the time when you need a funding request.

Many of them do a deal on the spot, commit to do a deal on Monday, and say we'll close on Thursday with cash. The good news is we know their limits and they know our limits. The second quarter performance speaks for itself. During the quarter, we incurred approximately $12.7 million of merger-related expenses. Excluding these expenses, the earnings were, and you're going to get to hear it again, EPS of 64 cents and earnings of $128.1 million after times. That's an 8.4% increase from quarter to last quarter and almost 12% from 6, 30, to 25. In addition, revenue, $295 million at 10.6% from the prior quarter to $266.7. Adjusted pre-tax, pre-provision net revenue reached a company record of $171 million.

When you adjust for the efficiency ratio, it came out 40.46. Good job by both teams, Mountain Commerce and HOME BANCSHARES on the expense side. And it adjusted ROA of 2.09. Stable margin of 4.51, same as last quarter, up six basis points from 6.30 to 25. And I said good job for MCB and HOME on the expense side. On a justice basis, these performance numbers are some of the best our company has ever run. I want to thank all our associates for an amazing quarter, and that includes our new partners, Bill Edwards, and his outstanding Tennessee team.

We have completed the conversion of our legacy company in June, and I think it went as smooth and as good as it could be expected. Now on to Mountain Commerce. We stepped up stock repurchases during the quarter. From the first quarter, we repurchased 500,000 shares, and this quarter, we repurchased 1.5 million. I said our goal was to repurchase, over a short period of time, the shares that we issued in the MAP Commerce transaction, and we're already approaching the halfway mark. On M&A, we're looking at some other opportunities, but with the non-performing loan that we told you about last quarter, our stock took a drop, even though it was a 2% plus ROA. And again, repeating is one of the top most profitable banks in America in the top ten.

We bid on a good opportunity, but because our stock was temporarily depressed, and we hold our standards high because we do not dilute our shareholders, our bid was not acceptable to that opportunity. We will hope to revisit that company soon as our stock is recovered. As to the large non-performer, there has been significant movement from last quarter's report, but we stand by our comments that we expect no further loss. The loan was non-performed and no income was recognized in this quarter for the loan, or this would have even been a stronger quarter. While work remains, we're encouraged by the progress that has been done this quarter. I have to say here that Kevin Hester, David Carter, and Mike Cook, I want to thank a special thank for them.

They spent a lot of time on this non-performer. They took the bull by the horns and protected the shareholders of HOME BANC SHARES, and thank you guys for a great job. That's a solid testament to the quality, commitment, standards of our people. Mike Cook now taking over the leadership of the Dallas region. That region now reflects the credit culture of HOME's operating and underwriting standards. It's certainly nice to have those loan problems for the most part behind us now, but there is some work to be done. However, we think we see the light at the end of the tunnel. In our environment where industry loan growth remains challenging, exceptional loan growth should always be examined carefully.

Growth generally comes from a combination of pricing, structure, terms, or credit standards. And when there is robust, standout, extraordinary loan growth in an environment that does not support that kind of loan growth, one should look closely at the right structure and terms. It's extremely important that your team from the top down to the junior lender must have lending experience. And not only lending experience, but quality lending experience with skin in the game. At home, that starts with me at the top as an asset quality hawk who's spending my sixth decade in the lending process. We believe in quality lending. I have been involved in over 50 M&A deals. Happy was certainly the most difficult. But even with all the problems associated with the acquisition, we have worked our way through those problems with a good partnership of HAPI and HOME employees together.

We opened a new branch in Rockwell, Texas, led by Kane Pierce. We're excited about that. Glad to be in Rockwell, and this is a new branch, not a replacement. The events included hiring our first in-house counsel, Mr. Jeff Campbell, who will fill the role of corporate counsel. We want to welcome Jeff to the family and look forward to working with him.

Donna, I just want to make a quick recap of the quarter, if you'll allow me to do that. And I want to leave this with the investment community. The record adjusted income, record revenue, loan growth from a negative 600 and a $626 million swing, stepped up repurchases from 500,000 to 1.5 million, PPNR a record 171 million, an adjusted efficiency ratio of 40.46, stable margin of 451, and Mountain Commerce, Already being a contributor, sooner than expected, that has gone well.

Continued confidence in HOME's credit culture. So when you look at the adjusted earnings, the profitability metrics, the efficiency ratio, the stable margin, elevated share repurchase, and strong balance sheet growth, I believe HOME's second quarter once again produced one of the strongest banking performances in America. You know your honor, I rest my case. Back to you, Ms. Donna.

Okay. Well, thank you, Johnny. It was another amazing quarter. And our next report will come from Stephen Tipton.

Thanks, Donna. As Johnny mentioned, the second quarter of 2026 was a strong showing with the inclusion of Mountain Commerce Bank in Tennessee and a little organic loan growth from Legacy Centennial Bank. Adjusted earnings, particularly excluding merger expenses, were $128.1 million, producing a 2.09% return on assets, the same as last quarter, and a 16.82% return on tangible common equity, which is on a TCE ratio of 13.22%. The reported net interest margin was 4.51%, in line with Q1, all while adding $1.5 billion in loans and deposits from Tennessee. The core margin, excluding event income, was 4.47%, and in line with where we got it to on the call in April. The overall loan yield, excluding event income, averaged 6.96% and exited the quarter at 6.99%, while interest-bearing deposit costs averaged 2.38% and exited the quarter the same at 2.38%.

Total deposit costs were 1.85% in Q2 and exited the quarter at 1.84%. Strong non-interest income was a highlight for the quarter at over $53 million. Higher loan recovery income, fee income at CCFG, and increases from our SBIC investments were the primary drivers and got us back to levels we saw in quarters 2, 3, and 4 of 2025.

Switching to the balance sheet, legacy deposit balances declined in Q2 by $179 million as a result of tax payments and seasonal outflow in April. Worth noting, deposit balances increased by $86 million in May and over $200 million in June to end the quarter at $19.1 billion. Loan production rebounded in the second quarter to just over $1.4 billion, with nearly $1 billion of that production coming from the community bank footprint.

Switching to capital, we repurchased 1.5 million shares of stock during the quarter for a total of $40.4 million. As of June 30th, we have over 15 million shares remaining available for repurchase under our current authorization and nearly $450 million in cash at the parent company. Tangible book value per share grew 45 cents to $15.32, or an annualized increase of 12.1%. Capital levels remain extremely strong with common equity tier 1 capital ending at 16 and total risk capital at 19 and reserved total loans of 1 We proud of the second quarter results here at HOME particularly with the inclusion of our partners at Mountain Commerce and look forward to the second half of 2026 With that said I will turn it back over to you Dawn Thank you, Stephen.

And to close out our prepared remarks, Kevin Hester has a lending report.

Thanks, Donna. As Johnny noted, we found a way to post marginal organic growth in loans in the second quarter, which looked very difficult to do. Which looked very difficult when we talked 90 days ago. This included flipping what was an anticipated large payoff early in the quarter into a hold with even a slight increase, which put us on a good path for the rest of the quarter. In last quarter's remarks, I mentioned that Q3 payoffs appeared high as well, and that is still the case. In fact, the gap is higher now than it was 90 days ago. Johnny joked about us not being very good at forecasting, and we discussed on the last call some of the reasons why early projections can be skewed toward declines.

That said, we have work to do in order to post loan growth in this quarter. Regarding Johnny's comments about loan growth in general, we are seeing loan rates from the competitors creep lower and lower, while probabilities for the next Fed interest rate move are up rather than down. We will continue to maximize loan opportunities while trying to protect our strong NIM so that we can continue to post best-in-class profitability.

Asset quality remains solid with an eight-basis point drop in non-performing loans and a four-basis point drop in non-performing assets. Early-stage past dues remained under 50 basis points, and loan loss reserve coverage of non-performing loans improved to 177%. As others have said, we began the quarter with the Mountain Commerce Bank acquisition, and from a lending perspective, the combination has gone very smoothly.

The similarity of their markets and their lending philosophy to ours will result in a shorter learning curve and earlier meaningful contribution. On that note, Donna, I'll send it back to you.

Thank you, Kevin. Johnny, unless you have additional comments, I think we're ready for Q&A.

I do want to talk about loans a little bit. On Wednesday's loan committee, we approved about $350 million worth of loans. So, you know, that's primarily the hits coming from our South Florida group that really have a lot of things going on. JC and David and their teams are doing an outstanding job in Florida. So there's $350 million worth of just, you think, I knew those were coming. I didn't know that we were coming this quarter. So one of them we've been working on for several years, and it's going to be the best and most fabulous project ever built in Miami, Florida. So we're excited about being in that loop with that team of people, and it's a fantastic facility that's being constructed, and it is one of our customers.

So we just have more. They have lots probably the second half. They said the second half they're going to bring even more. So that's pretty exciting from that aspect. Some of this is construction, so they put their money in first, but it is loan growth that's coming down the pipe for us before long. Anyway, you never know from one day to the other. As I said, our FBO guy bought another FBO thing, and we didn't know he was on that transaction. Kevin just visited with another one. Anyway, we're working on it. It's hard to, as I said, it's like catching a greased pig in a ditch. You think you got him, and he gets away from you.

Maybe we'll catch him this quarter. That's all I got to say. Donna, I'm ready for Q&A if the rest of us.

Okay, operator, we'll turn it back over to you.

Well, we have probably more going on in the Florida market right now than we've ever had going on in that market. It is quite explosive. We have been working on some of the projects. We had basically billions of dollars worth of opportunities that are going to come our way. It may be the next 60 days. It may be six months, but they're coming. Those projects are coming from our long-term customers in that market, so it's just hard to tell when they pull the trigger. But overall, I'm pretty optimistic. You know, we were down, going to be down $600 million. We ended up moving up $26 million. And that happened just all of a sudden. It just, it came in and it fed, it's kind of surprising.

So, you know, we're not very good at projecting future loan growth. Seems like when I say we're going to have it, we don't. When we say we're not going to have it, we do. So I'm pretty much, I think it's going to be to keep it at where it is. I think we've got to work hard, but I don't think it's a problem with that. We had our lenders conference in Florida recently, and I told the group, I said, we're down, projected to be down X number of dollars. I need y'all to step up. So I don't know if they just reached in their pocket and brought some stuff that they were going to bring next quarter in, but it all came in pretty fast, pretty quick, including a $100 million piece of credit, another $40 million piece of credit, some really good customer credit.

We don't sacrifice quality and margin for loan growth. So we're not going to do that, and we didn't in this cycle.

Kevin, you got any comment? No, it's all fair. Payoffs are where they are, and we outran them this quarter, and we'll continue to try to do that. Will that happen every quarter? We don't know until it happens.

So the answer is you're still confused. We did our job.

Chris Poulton, I think last quarter he also talked about maybe some paydowns in Q2 and Q3. Those balances are a little bit lower, but any help on what you're seeing in the pipeline there and kind of expectations for activity in your business?

Well, we did get the paydown this quarter that we had anticipated, and yet we were still kind of flat, which means we had good production. I think we've originated $800 million, $900 million so far this year. I think that still looks pretty good for us as we continue. It's a pretty good number run rate for us. So I think like Johnny said, you know, things, we work on some things, they go away. Sometimes we let them go away and, and sometimes they come back. We're seeing a number of things come back our way. We say, if you love somebody, set them free. We let them go and test out the market and come back, and sometimes we can work a transaction out.

I'll be making a West Coast swing, I think, next week and have a whole bunch of things lined up that were things we probably worked on several months ago that now they want to sit down and talk. So I feel good about there being opportunities out there. You know, like Johnny said, will they come in in the next couple of weeks or the next couple of months? I think we'll see. I don't see anything different now than I did before about our opportunity to be able to get, you know, get transactions on our terms, you know, if we're patient. I just think it's always about being patient here.

Thank you, Brett. This is Steven. I can take the last first. Yeah, I guess our alcohol bottle shows almost a 6% increase in an up 100 basis point environment. So, yes, if that did move a quarter or a half, I think it's a net positive for us. On the deposit side, our folks have done a great job in negotiating rates on money markets and CDs. We're seeing competition in the 4 plus percent range. I think most recently half of our CD materials automatically renew at our lower rates, and the other half they negotiated in about the 3.5% range. So they've done a good job there working relationships to keep what we have. And then through loan committees and our presidents, that's folks out pushing opportunities for deposit growth.

I mean, at 451 reported and 447 without an income, I think we keep it in that range. We would be pleased.

Hi Brett, this is Steven again. Yeah, as I mentioned in my comments, there were a handful of items that were up in Q2 from Q1. I think on the call last quarter we talked about non-interest income was about as low as it could be at, you know, 44 million adjusted for the marketable securities. We're about 52 and a half, 53 adjusted for that this quarter. Some of that's wealth management. Like you said, trust, financial services are in alignment with Ameriprise. They're kind of hitting their stride and both of those areas are doing well, so some of that should continue. The loan recoveries, some of Chris' fee income and CTE that comes when payoffs are a little higher.

I think our view is if you look at the last five quarters, it averages about $50 million over the past five quarters. That's kind of where we would expect things to be over the long term. The first quarter was kind of an anomaly. We normally have much more income there. We didn't get it. We didn't get the kick that we normally get. That happens maybe one quarter out of four annually, and sometimes not, but that was just, revenue was down as a result of that. We got no kick, just nothing. But 50 is a good number, somewhere in that number, give or take 50.

As we're going through the quarter, first month, second month, and third month together, I could feel the income by looking at the income statement that we're getting extra income from somewhere, and it had to be coming from there, basically. So some of it was improvement at home, but a lot of it was coming from them. I really didn't expect that. I guess I was shocked by the fact I didn't expect that kick that quick. We convert in November, and that's about a $5.5 million, $6 million savings to the company that we'll pick up at that point in time. I think I wasn't prepared for it that quick, and I saw the numbers and the revenue numbers and all of it coming together and just was extremely pleased with what I was seeing on the daily reports.

I mean, if you remember, we run a daily P&L statement here, and you begin to see it, and you think, where did that come from and how did that happen? And it was just all positive. That's basically it, Michael. So I felt it over the quarter, day by day as we operate.

I can agree with that we could have better loan growth. I don't want to talk about what other people are doing because it sounds like I'm throwing stones, But we're seeing some ridiculous stuff being done by some people in the marketplace. And it's just really frustrating. We're not going to do that. You know, we got all the capital. We got tons of capital. We got it's a it's a powerful earnings machine. And we're going to continue to do what's what's right. And we're not going to get off into chasing chasing rainbows. So we've never done that. We're not going to start doing it now. I mean, we're seeing structure in terms that, I mean, they're just ridiculous.

We're seeing that. So we're not going to do that. We're going to continue to, as I said, keep the quality, the margin, and stability. We're going to price that over loan growth. So could we get loan? It might get loan growth. Hell, it's nothing to loan growth. You can get all you want. Give it away, change the terms and structure, and you can load the wagon. You can just absolutely load the wagon. And, you know, that doesn't mean that it's going to long term be good. You can look at the asset quality of home over the past, since we've been public, basically, and look at the quality of what we produce. And we'll continue to do that.

We're not going to change. We're not going to run off into the sun. I got people pushing me to lower our standards and go do that. And they can do that after I'm gone. After I retire, I go to the house. They can do that. They're not going to do it while I'm gone.

What was the drink we had here before with Michael? Slurpees. The quarter was so good, I told him before. He should have had Slurpees this quarter with Michael. I'll wind it up for you next quarter. How about that?

Just one follow-up on that, just in the absence of loan growth, just assuming that the compensation I will now turn the call over to the HOME BANCSHARES in the next quarter. We are going to buy back the numbers of shares we issued in Mountain Commerce. So you probably will look for opportunities. They gave us a great opportunity last quarter. That's when we stepped up and bought a buck because they took us down and gave us, I think our average is 25 bucks or something, Stephen? No, 25? Stephen. 26. So that was a great opportunity for us. So if in fact we get an opportunity, we'll be extremely aggressive. But it is our intention to buy that back because it is our intention to do another M&A deal.

On the hills of Mount Commerce.

All right, thank you. Appreciate it.

Well, you know, time raises all ships or whatever they say. Rising time raises all ships. Well, we're seeing that in the marketplace right now. It's pretty good space. Bank space is a pretty good place to be. I'm going to say, you know, if we, the last bill when our stock was down and we bet on and I understand that they wanted a better trade, had they taken that, they'd be up 25% today. You know, so it's all basically the same. It's how many of their shares for our shares and what that trade means. And we're not seeing a lot of M&A out there right now. People are looking at their balance sheet and are thinking about, is this a diluted, diluted, diluted transaction?

So we're not seeing a lot of that, and we're certainly not going to do that. I'm having people say, well, Johnny, with your currency right now, you could go buy this and that and this and that if you just take a little dilution. Well, we don't dilute. That's what the world would like for us to do. And then they could say, well, hell, they diluted that last deal. So anyway, we don't do that. We'll continue to do what we're doing. I think there's opportunities out there in the marketplace, but the deals either work or they don't work, as I've said in the past. They're either creative, creative, creative, or they, you know, our stock's back up close to two times tangible book now, so that gives us the ability to move up and make somebody happy if they want a better price.

You know, it could be, you know, you trade with somebody last month, and they get the stock, and it's up, I don't know, 30% since then. So, you know, it just depends. Timing means so much, as you know. Timing is the key to where their stock is, where our stock is, and if it works or it doesn't work.

And what does hold tight, you know, we hold tight on it's worked for this company for the last 25 years to hold tight on underwriting and hold tight on acquisitions to do the right thing. So I think we could see a stock market turnaround here for too long. We got things are not as strong as they have been, but I don't think it'll be bank stocks. I don't think it'll be HOME.

I kind of went around the horn there, but I don't know if I answered anything that you asked or not.

Well, I think somewhere in that range is fair. We got, you know, what do we have, $12 million? What do we come out of? If you take the 12-7 out, it's about 1-22-7, which I think is kind of last quarter where we said, you know, with Mountain Commerce, their current experience for under 8, where we would land, and then, you know, once we get converted in November, we'll begin, or we will get, you know, a good portion of those cost savings out at that time. So we'll see a little benefit from that in Q4, and then obviously all of it next year. I mean, we think about how efficient HOME operated, and then you add Mt.

Commerce, how efficient Bill operated, his group, and then we're going to get some additional savings. We're getting some income, and we should get some additional savings coming up here pretty quick. So I'm optimistic we can hang in that range in 120.

Hey, this is Kevin. Last quarter's number was a billion dollars, a little bit over a billion dollars. This quarter could be there. It's a little early, but it could be scheduled for that.

I think it's exactly the way.

This is the toughest time in the bank space is rates are going down or going up. It's better for us if they go up, but when they start down, when the rates start down, then people try to jump ahead of, I will tell you, you can cut the rate of a point and a half or so and cut a deal with somebody and tie it up. Going up is a lot easier than going down. This is a battle. You take one customer at a time and you fight the battle. In our history, the third or fourth time we've fought that battle and we'll continue to fight the battle this time. But it's not necessarily all right.

I mean, the structure of some of these deals and the loan-to-cost or loan-to-value ratios have kind of gone out of whack. It reminds me of around late 2000, 2004, 2005, you know, 2004, 2005, when people were doing stupid stuff. So we're seeing some of that in the marketplace. And that'll come home to haunt people, I believe. We're just not going to play the game. We don't have to. We got a good machine that's generating really good solid income, and the difference between a record month and not a record month is how much risk we want to take, and we're not big risk takers.

All right. Thank you very much. We appreciate it.

I'll let Stephen cover the yields. He had those in his – we were talking about those before the meeting. I think he's got those written down. I'll let him cover those.

But, I mean, we are seeing some things in the fives, the high fives, the mid fives. And as Johnny said it not just rate It is rate and structure in the same deals You know you can kind of get by with giving rate or you can give a little structure you get your rate and get your risk covered We're seeing it both ways and that's the challenge is that you give rate and structure away. Like Johnny said, it's easy to grow if you're willing to do that. That's simple. Anybody can do that.

Matt, we were at about 63 quarters, 675, 676 on production in the second quarter.

We don't see much on structure because I think the deals tend to be a little bit more bespoke. And so, you know, we do see, you know, we see price over the last couple of years. We've seen price probably come down, you know, 50 basis points or so overall, I think, in the market. Sometimes it comes down a little more. We see price, I would say, a lot more in two areas. One, construction. Every once in a while, you get some folks stepped in and just get really aggressive on construction. Again, not necessarily on a lot higher leverage and on recourse side, but you do see every once in a while somebody will step up and get pretty aggressive on price for a few months.

And they generally do that, and then they fill up and they go away for a little while. And then on the facilities side as well, I think that's where we probably see most of the structure. These were, I think, folks that are getting into that facility space might underestimate how much structure they're going to need. But otherwise, I think it's just a normal kind of thing where every once in a while somebody's got to put some money out and burn a hole in their pocket and they get aggressive.

Thanks, Matt.

I think that's fine. You know, again, we're going to benefit, you know, call it half a million dollars a month, give or take, you know, post-conversion with NCV. And Bill's done a great job, Bill and Kevin both have seen some cost savings opportunities along the way already. But the bulk of that comes out November, December, and then we'll have our typical kind of beginning of the year, merit raises and those kinds of things. That'll help off that.

We modeled 20%, which was about 5.5 million annually. Okay, and the bulk of that comes in the fourth quarter, or post fourth quarter? Correct. Correct.

I'm not going to do that. I'm not going to do sizing or geography. But I like the people, and I like the company, and I like their geography. So I'm going to go back and revisit that. I've sent them the information to the call and actually I called them afterwards. I said I couldn't get there because I was deluding myself because they had my stock down to 170 or something, Steven, some number. So I said it wouldn't work for me. So he said that didn't work for us and I said I understand. But we're going to go back and revisit that if they're interested and see if we can put something together that makes some sense.

So it's another nice trade, it appears to me. A good little bank and similar to Mountain Commerce to me in lots of respects. Not the same geographic area, but...

I don't see any difference. We stand by what we said before. There's no longer, no more on the larger one. There's no loss coming. We're not going to take any loss. So we stand by that. Outside of that, we cleaned up the little stuff this quarter, and we just tend to pack at it a little bit if there's one or two that sticks their head up. But we're mostly through that. I'm not looking for anything any different on the charge-offs. It may be better from here on than what it has been. But it's where it is or a little better. That's what I think. There's nothing coming that anybody's concerned about.

And on that large... It's good. It's actually good. It's actually good right now.

That's really up to the other side of the fence sometimes. We can see that, but we're not walking away. We expect to collect everything that we have out there, and we're not going to accept anything different.

I really don't see any changes. It might get better from here, quite honestly.

Yeah, it's closer to six, but we had almost three million of that was specific reserves on loans that we charged off. We had matched up to specifics. So if you take that out, then it was really just a normal quarter. We're actually, it's really a marked improvement in asset quality here. You should have no concerns about asset quality.

It's where it was. It's a little less than $100 million. It's still where it was, but that's one that we have seen some movement on. And if reasonable heads stay together, we'll wrap that up. And if they don't, then we'll fight the battle. So there you go.

Yeah, there's certainly opportunity on the deposit side with Tennessee. They've got about $300 million in CDs that mature in the second half of the year that we should get some marked improvement on yield there or potential at some role loss. Yeah, as we've always said, I would say competition is probably the biggest threat, particularly on the deposit side. We've got a billion and a quarter in CDs that mature in the second half of this year, that's in the mid threes. Like I said earlier, we've done a good job and been kind of in or below that range on where we've renewed, but if competition forces that higher, that's probably a risk. But our folks have done a great job and expect that to continue.

That's right. Yeah.

Thank you very much.

Afternoon, Kathryn.

Yeah, that increase was about $2.4 million for those equity investments that we have.

Well, we did have our purchase accounting accretion go up $2.5 million, and $1.5 million of that was just related to Mountain Commerce. The rest of it would have been from holder stuff paying off.

Well, if the payoffs stop, you know, if the amount of commerce would be the same next quarter, I guess, as we were this quarter. The other, if we get the payoffs, you know, that's the key. About $900,000, that was payoffs, early payoffs on loans that we generated the income. It does happen periodically. It might happen next quarter, too. Yeah, you never know. Usually, there's always something paying off.

Correct.

Thank you very much. Appreciate it. It was a great quarter for us. Thank you.

Thanks, everyone, for your participation today. Thanks for supporting HOME BANC SHARES. We work at it. Even though we had a 2% ROA in one of the top ten in the nation in the first quarter, we felt like we didn't do a very good job. So we work hard at it, and we'll continue to work hard at it, as you know. And hopefully things will settle down in the marketplace and we'll have more loans and generate more income. And that's our game is to continue to grow the company over a period of time through both growth, organic growth and M&A. And we hope to be able to tell you about another deal before long. So thanks, everyone.

We look forward to visiting with you in the future.