Home Bancorp Q2 2025 Earnings Report

Home Bancorp EPS Results

• Actual EPS: $1.45
• Consensus EPS: $1.24
• Beat/Miss: Beat by +$0.21
• One Year Ago EPS: N/A

Home Bancorp Revenue Results

• Actual Revenue: $37.07 million
• Expected Revenue: $32.07 million
• Beat/Miss: Beat by +$5.00 million
• YoY Revenue Growth: N/A

Home Bancorp Announcement Details

• Quarter: Q2 2025
• Date: 7/21/2025
• Time: After Market Closes
• Conference Call Date: Tuesday, July 22, 2025
• Conference Call Time: 11:30AM ET

Home Bancorp (NASDAQ:HBCP) operates as the bank holding company for Home Bank, National Association that provides various banking products and services in Louisiana, Mississippi, and Texas. It offers deposit products, including interest-bearing and noninterest-bearing checking, money market, savings, NOW, and certificates of deposit accounts. The company also provides various loan products comprising one-to four-family first mortgage loans, home equity loans and lines, commercial real estate loans, construction and land loans, multi-family residential loans, commercial and industrial loans, and consumer loans. In addition, it invests in securities; and offers credit cards and online banking services. Home Bancorp, Inc. was founded in 1908 and is headquartered in Lafayette, Louisiana.

Home Bancorp Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Reported Q2 net income of $11.3 million or $1.45 per share, with net interest margin expanding to 4.04% and ROA improving to 1.31%.
• Negative Sentiment: Loan balances grew just 3% due to slower commercial construction activity and $20 million in paydowns, and without rate cuts loan growth may remain at the low end of the 4–6% guidance.
• Positive Sentiment: Core deposits rose at an 11% annualized rate, with noninterest-bearing deposits up 6% to 27% of total, helping drive the loan-to-deposit ratio toward the 90–92% target.
• Neutral Sentiment: Nonperforming assets increased to 0.73% of total assets ($25.4 million) due to four downgraded loans totaling $18 million, but management expects no material losses given conservative underwriting and low LTVs.
• Positive Sentiment: Since Q2 2019, tangible book value per share grew at an 8% CAGR, EPS at 10.2%, dividends are up 27%, and the bank has repurchased 17% of shares while maintaining strong capital ratios.

Presentation

[Operator]

Good morning, ladies and gentlemen, and welcome to the Home Bancorp Second Quarter twenty twenty five Earnings Conference Call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded.

[Operator]

I would now like to turn the conference over to Homebound Corp's Chairman, President and CEO, John Bordelon and Chief Financial Officer, David Kirkley. Please go ahead, mister Kirkley.

[David Kirkley, Senior EVP & CFO at Home Bancorp]

Thank you, Natasha. Good morning, and welcome to Home Bank's second quarter two thousand twenty five earnings call. Our earnings release and investor presentation are available on our website. I'd ask that everyone please refer to the disclaimer regarding forward looking statements in the investor presentation and our SEC filings. Now I'll hand it over to John to make a few comments about the second quarter. John?

[John Bordelon, Chairman, President & CEO at Home Bancorp]

Thanks, David. Good morning, and thank you for joining our earnings call today. We appreciate your interest in HomeBank and we as we discuss our results, expectations for the future, and our approach to creating long term shareholder value. Yesterday afternoon, we reported second quarter net income of 11,300,000.0 or a dollar 45 per share, up 8¢ from the first quarter and 43¢ from a year ago.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

Net interest margin expanded for the fifth consecutive quarter to four point o 4%, and our ROA increased by two basis points to 1.31%. The second quarter's margin expansion was primarily driven by an eight basis point increase in earning asset yields, stable interest bearing deposit costs, loan growth, and a 6% increase in noninterest bearing deposits. Loans grew by 17,300,000.0 in the second quarter or about 3%. Second quarter growth was negatively impacted by slower commercial construction activity and pay downs, which was about $20,000,000 in the second quarter. We think growth will pick back up if we get one or two cuts in the second half of the year, but without those cuts, we think loan growth will come in at the lower end of our 4% to 6% guidance.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

We do expect loan yields to continue to tick higher as new originations come in around 7.4%, replacing maturing loans. We've maintained pricing discipline on new loans to ensure the bank receives a proper risk adjusted return, which we prioritize over growth. Deposits increased at an 11% annual rate in the second quarter as we continue to focus on funding our loan growth with core deposits and reducing our loan to deposit ratio to get to our 90 to 92% target range. Noninterest bearing deposits increased by 41,900,000.0 and remained at 27% of total deposits at the end of the quarter. Classified and nonperforming loans increased primarily due to four loans downgraded during the quarter totaling 18,000,000.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

We aren't expecting to incur any losses due to the relatively low loan to value, our conservative underwriting standards, and proactive credit management. As a reminder, you can see on Slide 16, our net charge offs have averaged about six basis points over the last six plus years. M and A activity nationwide has picked up over the past couple of months, which is great to see. While we have not ahead of transactions in 02/2022, we have evaluated multiple opportunities and remain committed to finding partners that are good long term fit for HomeBank and its shareholders. Our solid capital levels, improving valuation, stellar relationship with our regulators, and successful experience in executing prior acquisitions puts us in position to capitalize when the right opportunity is built.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

We feel very good about HomeBank's outlook and our ability to continue to deliver on our own high expectations. We have very talented leadership throughout the bank with decades of experience and a strong track record of performing above our peers in all economic environments. With that, I'll turn it back over to David, our chief financial officer. Thanks, John. Slide five in our investor presentation has a summary of the last six quarters.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

Net income totaled 11,300,000.0, a 3% increase from the prior quarter and a 39% increase from a year ago. NIM has continued to increase and, as Don mentioned, is now above 4%. We posted a 4.04% NIM in Q2, which was a 13 basis point increase from the prior quarter. As a result of NIM expansion and earning asset growth, net interest income increased to 33,400,000.0 in the second quarter from 31,700,000.0 in q one. Originations remain solid, but the pace of loan growth declined quarter over quarter to 3% annualized due mainly to higher paydowns in the construction and CRE portfolios.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

As John mentioned earlier, we're seeing less volume in new construction projects. The contractual rate on new loan originations was 7.44% in Q2, which continues to support an expanding NIM as lower yielding loans reprice. Slides fourteen and seventeen provide additional details on cash flows from our loan and investment securities portfolio. We expect to see margin and revenue growth here as close to half of our investment portfolio is projected to be paid off over the next three years with a roll off yield of 2.56. Slides fifteen and sixteen of our investor presentation provide some additional detail on credit.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

We had $335,000 in net charge offs in the quarter related to smaller consumer and C and I loans with the largest being about a $150,000. Year to date, our net charge off for loans is very low three basis points. Second quarter nonperforming assets increased 4,000,000 to 25,400,000.0 or 0.73% of total assets. This increase was primarily due to the downgrade of four relationships and partially offset by paydowns. The largest is a 3,900,000.0 acquired CRE relationship in Houston with an approximate 50% loan to value that was previously categorized as substandard.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

We feel we have sufficient collateral on these loans and do not anticipate any material principal losses as we work to resolve them. Total criticized loans at quarter end were 51,600,000.0, an increase of 14,400,000.0 or 1.87% of loans, up from 1.36% in the first quarter. Three CRE three CRE loans located in New Orleans and Houston made up the majority of the these increases. The highest loan to value of these three credits is 68%. Our allowance for loan loss ratio was stable for the first quarter at 1.21%.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

The cost of interest bearing liabilities decreased three basis points to 2.71% as strong deposit growth allowed us to pay down more expensive short term advances. Interest bearing deposit costs increased one basis point in Q2 due to changes in deposit mix, and we think they'll stabilize at this level until we get some Fed rate cuts. The cost of CDs declined 14 basis points to 3.86% even as balances increased $64,000,000 during the quarter. We are keeping CD terms short with 58% of our CD portfolio maturing in the next six months and ninety five percent over a one year period, so we will have the opportunity to react quickly if and when rates decline. Noninterest bearing deposits, which comprise 27% of total deposits, increased 42,000,000 in q two and $50,000,000 year to date.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

Our overall cost of deposits in q two was 1.84%, a decline of one basis point quarter over quarter. Slide 22 of the presentation has some additional details expenses. First quarter noninterest income was $3,700,000 which was in line with expectations. We expect noninterest income to be between 3,600,000.0 and $3,800,000 over the next two quarters. Noninterest expenses increased by $828,000 to $22,400,000 primarily due to compensation related expenses.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

Comp and benefits were up $670,000 in Q2 as annual raises took effect April 1. Other non interest expense increased $980,000 due to a $987,000 write down of SBA receivables acquired from Texan Bank. We have been working through the SBA procedures for recovery and are still in the appeals process, but the timing and probability of recovery are unknown at this time. We have no further SBA receivables from acquisitions, and there were no loan charge offs as the loans associated with these receivables were foreclosed and sold prior to the acquisition. That expense was offset by a $970,000 reversal in provision for unfunded commitments.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

This reversal was due primarily to a reduction in construction commitments as several projects paid off or went permanent and a reduction in the average life of our loan portfolio. Noninterest expense is expected to be between 22,500,000.0 and $23,000,000 per quarter for the remainder of the year. We took advantage of share price volatility earlier in the quarter to repurchase a 147,000 shares at an average price of $43.72. We have about 391,000 shares remaining on our buyback plan that was approved by the board in April. Slide twenty three and twenty four summarize the impact our capital management strategy has had on Home Bank.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

Since 02/2019, we grew tangible book value per share at an 8% annualized growth rate, while growing tangible book value per share adjusted for AOCI at 9.4%. Over the same period, we also increased our annual EPS at a 10.2% growth rate. We've increased our dividend per share about 27% and repurchased 17% of our shares. And we've done this while maintaining robust capital ratios. This positions us to be successful in varying economic environments and to take advantage of any opportunities as they arise.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

And with that, operator, please open the line for Q and A.

[Operator]

Thank you. All right. We will now begin the question and answer session. To ask a question, you may press star then one on your touch tone phone. If you're using a speaker phone, please pick up your handset before pressing the key.

[Operator]

To withdraw your question, please press star then 2. Taking the first question. First question comes from Steven Scouten with Piper Sandler. Please go ahead.

[Stephen Scouten, MD & Senior Research Analyst at Piper Sandler Companies]

Hey. Good morning, guys. Hey.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

How are you? Good.

[Stephen Scouten, MD & Senior Research Analyst at Piper Sandler Companies]

On on loan growth trends, can you give a little more color about what you're seeing in terms of existing loan pipelines, kinda how that compares maybe to earlier in the year? And how how you're thinking about the need for rate cuts to drive incremental demand? Is there just a lot of a lot of projects that are just waiting on the sidelines, waiting for 50 or 100 basis points to cut? Or or what kind of gives you the confidence there from a loan demand perspective?

[John Bordelon, Chairman, President & CEO at Home Bancorp]

I definitely think there is some demand that's waiting for lower interest rates. It's hard to gauge exactly what what that volume will be. But, you know, in the first and second quarter, we had some paydowns of loans, which which hurt our growth rate. We thought it would be closer to 5% or 6% instead of maybe 4% or 3% even in this quarter. So paydowns are a great thing for the customer.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

They're not exactly the the best thing for the bank, but it's been consistent. I wouldn't say it's been robust, but it's been very consistent through the quarter. And I think, you know, if there's any hope of of growing that, I think it's gonna be based upon a lower interest rate. No question.

[Stephen Scouten, MD & Senior Research Analyst at Piper Sandler Companies]

Okay. Got it. And then for you guys from an NII dollars perspective, how do you think about the best case scenario from a rate environment perspective? I mean, you're still slightly asset sensitive, but theoretically, NII should take down a little bit with rate cut, presuming it it happens that way in in reality. But but, potentially, it sounds like better growth.

[Stephen Scouten, MD & Senior Research Analyst at Piper Sandler Companies]

So how do you think about the best case scenario for you guys in the rate?

[John Bordelon, Chairman, President & CEO at Home Bancorp]

So the best case is a little bit more steepness in the rate curve if we get 25, 50 basis points of rate cut. We're still able to generate a growing NIM in this rate environment. The ability for us to price loans where we're pricing them today and raise funds at where we're raising them today still supports an expanding NIM, albeit at a slower pace than we've been growing the past couple of quarters. But we still see earning asset yields repricing, the investment portfolio being able to add some new higher yielding investments as well as the repricing loans. So I think net interest income will continue to increase a little bit further down the road as well as NIM has the opportunity to increase if rates stay where they are today.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

Couple of other points to that. We have maintained our bulk of our CD portfolio in very short term CD. So the the turnover of that and reduction based upon rate cuts will will come relatively quickly. And then the other side, which David alluded to is as we have considerable amount of loans that are repricing from May maybe the fours or fives, though, even with rate cuts, they'll still be going up in rates. So we we should be able to offset the decline in in some assets by the increase in the others.

[David Kirkley, Senior EVP & CFO at Home Bancorp]

So Yeah. Yeah. I'd like to add on on top of that to John. If you look at slide 20 of our slide deck, when rates started being cut by the Fed back in q three 'twenty four, our loan yield was 6.43%. And despite the amount of rate cuts that we had, we were able to offset the reduction in our loan yields that are variable by having new repricing come on.

[David Kirkley, Senior EVP & CFO at Home Bancorp]

So we had three quarters of stable loan yields despite 100 basis point rate cuts. So we're still able to reprice our loan portfolio in a manner given albeit a 50 to 75 basis points of rate cuts. Still have the ability to reprice our overall loan portfolio yield higher, which offsets some rate reductions.

[Stephen Scouten, MD & Senior Research Analyst at Piper Sandler Companies]

Got it. All really helpful color. And just last thing for me, new CDs versus the CDs as they roll off, what what's kind of the spread there between the on off yield you're starting to it?

[David Kirkley, Senior EVP & CFO at Home Bancorp]

So the weighted average renewal slash new CD rate is around 3.85%. New customer CDs are coming in around 4.1%.

[Stephen Scouten, MD & Senior Research Analyst at Piper Sandler Companies]

Okay. And and what's the balance of what you see from us? I mean, I would assume new CDs are a much smaller percentage of versus what's renewing every quarter. Is that the right way to think about it?

[David Kirkley, Senior EVP & CFO at Home Bancorp]

I'm sorry.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

Could you Yeah. Definitely, the the bulk of that is renewals. We're maintaining about 90% of our existing CDs at renewal.

[Stephen Scouten, MD & Senior Research Analyst at Piper Sandler Companies]

Okay. Great. Thanks for all the color and the comments this morning, guys. Appreciate it. Great quarter.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

Thank you, Scott.

[David Kirkley, Senior EVP & CFO at Home Bancorp]

Thanks.

[Operator]

Thank you. And the next question comes from Joe Yankunis with Raymond James. Please go ahead.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

Good morning.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

Hey. Good morning, Joe.

[David Kirkley, Senior EVP & CFO at Home Bancorp]

Hey, Joe.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

So the Houston franchise continues to be a growth driver for the company.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

And, you know, at the same time, you discussed plans to upgrade your branch footprint. In the aggregate, how much more productive do you think these new branch locations will be?

[John Bordelon, Chairman, President & CEO at Home Bancorp]

Well, it's gonna be hard to tell on the deposit side. The the group that we pulled out of another bank has already been productive. So nothing changes except for the location. I think they'll be considerably productive.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

But our hope is that with the full service branch, we're able to attract more more deposits, especially for the commercial customers. Who right now, it's very difficult because we have to travel halfway across Houston to be able to make the deposits. So it will be very, very convenient for our team to bring in much more on the deposit side while they're also looking out to to bring in some loan customers.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

I appreciate that. And then just kinda sticking with deposits there. So deposit growth is really strong in the quarter, you know, particularly on the DDA front. Several banks that have reported earnings so far have noted increased competition for deposits. Can you talk about if there's been any, you know, change in strategy to growing DDA balance, you know, may have led to the success in this course?

[John Bordelon, Chairman, President & CEO at Home Bancorp]

Yeah. I I think, you know, just the group we're talking about that we pulled out eighteen months ago in Houston, we told them, we don't care if you don't bring a loan in, you know, and our focus needs to be on on core deposit growth. So we have focused on that. We've changed our incentive plan over the last three years to pay more out for core deposits than we paid for loan growth.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

And the third aspect of that, which I think is helping also is we are slowing down our loan growth in the non occupied CRE, which are big transactions, low deposits. So that has been something that's really eaten up our deposits. And we're if we're gonna attain our 90% to 92% loan to deposit ratio, we're going to have to slow down a little bit on some of those larger loan relationships that don't carry much in deposit.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

Appreciate that. And just kind of last one for me here. Just into the NIM, you know, were there any one timers that might have accelerated NIM expansion in the quarter? And then do you have a sense what the NIM was for the month of June?

[John Bordelon, Chairman, President & CEO at Home Bancorp]

NIM was right at right at four zero four, I believe, four zero five for in June.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

See that's the backside.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

I'm sorry. The first question was?

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

You know, if there was any, you know, one time that they might have accelerated.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

Oh.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

No. There there was not. You know, when loans slipped to non accrual, you have a little bit of a reversal. So that was a little bit of a negative to NIM, but there was no onetime adjustments that really impacted NIM in any capacity in an upward trajectory.

[Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial]

All right. Perfect. I appreciate taking my questions.

[David Kirkley, Senior EVP & CFO at Home Bancorp]

No problem, Angel.

[Operator]

Thank you. Again, if you have a question, please press then 1. The next question comes from Freddie Stickland with HealthServe Group. Please go ahead, Freddie.

[Feddie Strickland, Director at Hovde Group]

Hey. Good morning, John and David. Just wanted to touch on the NIM discussion one more time. Is the new expansion from repricing loans maybe a little slower next quarter just given looking at flat 14 of your deck, and you have a weighted average rate, I think, at 7.42%. I think you said 7.44.

[Feddie Strickland, Director at Hovde Group]

So what's what was going on this quarter? So does that maybe slow down a little bit in the third quarter, but maybe pick back up in the fourth quarter when you've got, I think, 5.82% as we have the rates.

[David Kirkley, Senior EVP & CFO at Home Bancorp]

Yeah. I think I need to update this slide a little bit to segregate variable rate loans that are kind of the lines that are that are maturing and take out the and segregate those into just variable versus fixed. But we are going to see a little bit of a slowdown in repricing. I think you're actually going to in Q4, you're going to see a good bit more repricing opportunities come through. So you might have a little bit of a slowdown in Q3, but I think Q4 and beyond, you're going to have more repricing opportunities for fixed rate loans that are maturing.

[Feddie Strickland, Director at Hovde Group]

I got it. I appreciate the clarification. That makes sense on the fixed versus adjustable in that column there.

[David Kirkley, Senior EVP & CFO at Home Bancorp]

Yes. The way we at it, Betty, is we made a lot of when rates dropped in 2021, that's when we did a lot of five year balloons. And so most of those should be worked through at the lower rate and increasing their rates by the end of 'twenty six. I think if you through the slide deck, you can see a little bit more color on loan segments, and you can see the C and I portfolio on Slide 12.

[David Kirkley, Senior EVP & CFO at Home Bancorp]

A good chunk of that is repricing, and that's once again mostly revolving lines that are just going to renew.

[Feddie Strickland, Director at Hovde Group]

Understood. And just shifting gears to capital here. You increased the dividend, you executed share repurchases at a pretty good price, particularly considering where the stock is today. It seems like M and A conversations are picking up a little bit here. Can can you refresh us on your criteria for M and A?

[Feddie Strickland, Director at Hovde Group]

What size you're looking for, geographies? Any particular characteristics for potential partners?

[David Kirkley, Senior EVP & CFO at Home Bancorp]

Yeah. I think the last couple of years, we we've been kinda hamstrung as far as what we could look at. Pretty small because it was probably gonna be a a cash deal with our stock trading of a 105% of tangible. So now that we're moving up to a 140, if we can sustain that, I I think it opens up the door for us to look at a little bit larger. Our our mindset has been pretty much like, you know, $3.50 to a billion, but we've not really looked at a whole lot of banks over 500,000,000 in the last two years.

[David Kirkley, Senior EVP & CFO at Home Bancorp]

So this would open up that door a little bit, maybe get us up to a a billion or in that area.

[Feddie Strickland, Director at Hovde Group]

And and is it mostly in Texas, John?

[John Bordelon, Chairman, President & CEO at Home Bancorp]

Actually, we've had conversations in Louisiana and Texas. I'd say the bulk were in Texas. Yes.

[Feddie Strickland, Director at Hovde Group]

Perfect. I'll step back. Thanks for taking my question.

[Stephen Scouten, MD & Senior Research Analyst at Piper Sandler Companies]

Thank you. Thanks, Bob.

[Operator]

Thank you. This concludes our question and answer session. I'd like to turn the conference back over to John for any closing remarks.

[John Bordelon, Chairman, President & CEO at Home Bancorp]

Well, thank you all for joining us today. We look forward to speaking to many of you in the coming days and weeks. Hope you have a wonderful week, and thank you for looking into Home Bancorp. Have a good day.

[Operator]

Your conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Participants

Executives

• David Kirkley, Senior EVP & CFO
• John Bordelon, Chairman, President & CEO

Analysts

• Stephen Scouten, MD & Senior Research Analyst at Piper Sandler Companies
• Joseph Yanchunis, Senior Equity Research Associate at Raymond James Financial
• Feddie Strickland, Director at Hovde Group