Financial Performance - Net income for the three months ended September 30, 2025, was $12,357 thousand, up 30.5% from $9,437 thousand in the same period of 2024[12]. - Earnings per share (EPS) for the third quarter of 2025 was $1.60, an increase of 34.4% compared to $1.19 in the third quarter of 2024[12]. - Net income for the nine months ended September 30, 2025, was $34,651,000, an increase from $26,754,000 for the same period in 2024, representing a growth of approximately 29.4%[22]. - Comprehensive income for the three months ended September 30, 2025, was $14,959 thousand, compared to $19,499 thousand in the same period of 2024[15]. - Cash dividends declared per common share increased to $0.29 for the third quarter of 2025, up from $0.25 in the same quarter of 2024[12]. - Cash dividends declared increased to $0.83 per share in 2025, compared to $0.75 per share in 2024, reflecting a commitment to returning value to shareholders[19]. Asset and Deposit Growth - Total assets increased to $3,494,074 thousand as of September 30, 2025, compared to $3,443,668 thousand at December 31, 2024, reflecting a growth of 1.5%[10]. - Total deposits increased to $2,975,503 thousand as of September 30, 2025, up 7% from $2,780,696 thousand at December 31, 2024[10]. - Total cash and cash equivalents at the end of September 30, 2025, were $189,324,000, up from $135,877,000 at the end of September 30, 2024, indicating a significant increase in liquidity[22]. - The balance of retained earnings as of September 30, 2025, was $275,912,000, an increase from $251,692,000 as of September 30, 2024, indicating growth in shareholder equity[19]. Loan and Credit Quality - The total loans as of September 30, 2025, were $2,705,895,000, a slight decrease from $2,718,185,000 as of December 31, 2024[47]. - The allowance for loan losses decreased slightly to $32,827 thousand from $32,916 thousand, indicating a stable credit quality[10]. - The company reported a provision for loan losses of $654,000 for the nine months ended September 30, 2025, down from $1,542,000 in the same period of 2024, suggesting improved asset quality[22]. - Nonaccrual loans totaled $28,948,000 as of September 30, 2025, compared to $13,582,000 on December 31, 2024, indicating a significant rise[65]. - Total past due loans reached $31,879,000 as of September 30, 2025, up from $20,601,000 on December 31, 2024, marking a 54.8% increase[62]. Investment Securities - The Company reported total available for sale investment securities of $383,340,000 as of September 30, 2025, down from $402,792,000 as of December 31, 2024, representing a decrease of approximately 4.8%[34]. - The effective duration of the Company's investment securities portfolio was 3.5 years as of September 30, 2025, compared to 3.9 years as of December 31, 2024[35]. - The Company’s U.S. agency mortgage-backed securities had an amortized cost of $277,168,000 and a fair value of $257,870,000 as of September 30, 2025, indicating an unrealized loss of $19,629,000[34]. - The total financial assets carried at fair value on a recurring basis were $385,126 as of September 30, 2025, compared to $406,059 as of December 31, 2024, showing a decrease of 5.2%[113][114]. Derivative Instruments and Debt - The Company issued $55,000,000 in subordinated debt on June 30, 2022, with a fixed interest rate of 5.75% until June 30, 2027[100]. - Interest rate swaps recognized a gain of $120,000 in Other Comprehensive Income (OCI) for the three months ended September 30, 2025, with $514,000 reclassified into income[92]. - The maximum term extensions for one-to four-family first mortgages were 60 months for the nine months ended September 30, 2025[78]. - The carrying value of the 5.75% Fixed-to-Floating Rate Subordinated Notes was $54,621,000 at September 30, 2025, slightly up from $54,459,000 at December 31, 2024[101].

Core Viewpoint - Home Bancorp (HBCP) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of changing earnings estimates, which are strongly correlated with near-term stock price movements [3][5]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [3]. Home Bancorp's Earnings Outlook - The recent upgrade for Home Bancorp reflects an improvement in its underlying business, supported by rising earnings estimates [4]. - For the fiscal year ending December 2025, Home Bancorp is expected to earn $5.74 per share, with a 3.7% increase in the Zacks Consensus Estimate over the past three months [7]. Zacks Rank System - The Zacks Rank system classifies stocks based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [6]. - Home Bancorp's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [9].

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Financial Data and Key Metrics Changes - The company reported a net income of $12.4 million or $1.59 per share, which is an increase of $0.14 per share from the previous quarter and $0.41 from a year ago [3][9] - The net interest margin (NIM) expanded for the sixth consecutive quarter to 4.1%, and return on assets increased by 10 basis points to 1.41% [3][4] - The efficiency ratio improved and is now below 60%, with revenues growing twice as fast as expenses [4][9] Business Line Data and Key Metrics Changes - Loans decreased by $58 million in the third quarter due to higher payoffs and paydowns, primarily from long-term customers selling their businesses or properties [4][5] - Deposits increased by 9% annualized in the third quarter, with a total increase of 17% over the last nine quarters [6][9] - Nonperforming loans increased in 2025, but charge-offs remain low, averaging about six basis points over the last six years [7][11] Market Data and Key Metrics Changes - The company expects loan growth to be more moderate at 1% to 2% in 2025, down from an earlier expectation of 4% to 6% [5][6] - The loan-to-deposit ratio is now 91%, positioning the company well for future loan growth [6][31] Company Strategy and Development Direction - The company maintains loan structure discipline and prioritizes risk-adjusted returns over growth [5][6] - There is a focus on building franchise value and leveraging acquisition experience as M&A activity accelerates nationwide [7][9] - The company has increased dividends per share by 36% and repurchased 17% of its shares outstanding while maintaining robust capital ratios [15] Management's Comments on Operating Environment and Future Outlook - Management noted that customers are waiting for lower rates before proceeding with financing projects, impacting near-term growth [5][6] - The company is optimistic about maintaining or slightly increasing NIM despite potential Fed rate cuts [20][21] - Management expressed confidence in the company's future and ability to meet high standards, citing a strong senior leadership team with extensive experience [8][9] Other Important Information - Noninterest income for the third quarter was $3.7 million, in line with expectations, and is projected to remain stable in the coming quarters [14][15] - Noninterest expenses increased to $22.5 million, also in line with expectations, and are expected to remain stable [15] Q&A Session Summary Question: NIM trajectory and peak expectations - Management indicated that increased asset sensitivity is due to cash on hand, and they expect to keep NIM flat or grow a couple of basis points [20][21] Question: Loan growth guidance and pipeline comparison - Management noted a decline in new loan originations in Q3 but anticipates a healthier portfolio in Q4, with hopes for a strong first quarter if rate cuts occur [23][24] Question: Deposit competition and betas - Management stated that deposit betas are expected to be less than peers, and competition has eased compared to previous quarters, allowing for better retention of customers [29][30]

Company Overview - Home Bancorp's total assets reached $3.5 billion as of September 30, 2025[10] - The company has 43 locations across Southern Louisiana, Western Mississippi, and Houston[10] - Institutional ownership stands at 48%, while insider/ESOP ownership is at 12% as of October 17, 2025[10] Financial Performance - Net income for Q3 2025 was $12357 thousand, with diluted EPS at $159[14] - Net interest income for Q3 2025 reached $34106 thousand[14] - The net interest margin (NIM) for Q3 2025 was 410%[14] - Return on average assets (ROA) for Q3 2025 was 141%[14] - Return on tangible common equity (ROATCE) for Q3 2025 was 150%[14] Loan Portfolio - Total loans amounted to $27 billion[10] - The loan portfolio experienced a (1)% annualized growth rate YTD 2025[31] - Houston market loans showed a 9% annualized growth rate YTD[31] Deposits - Total deposits reached $30 billion[10] - Non-interest bearing deposits represent 27% of the deposit composition[73] - The company's deposit base has an annualized growth rate of 9% in 2025[73]

Core Insights - Home Bancorp (HBCP) reported revenue of $37.84 million for the quarter ended September 2025, reflecting an 11.1% increase year-over-year [1] - Earnings per share (EPS) reached $1.59, up from $1.18 in the same quarter last year, with a surprise of +16.06% over the consensus estimate of $1.37 [1] - The reported revenue exceeded the Zacks Consensus Estimate by +1.73% [1] Financial Performance Metrics - Total nonperforming loans amounted to $29.52 million, surpassing the average estimate of $23.04 million from two analysts [4] - Total nonperforming assets were reported at $30.91 million, compared to the average estimate of $25.1 million [4] - Net Interest Margin stood at 4.1%, aligning with the average estimate [4] - Total Average Interest-Earning Assets were $3.26 billion, slightly below the average estimate of $3.27 billion [4] - Annualized YTD net loan recoveries (charge-offs) to average loans were at -0%, compared to the estimated 0.1% [4] - Efficiency Ratio was reported at 59.5%, better than the estimated 61.4% [4] - Total Noninterest Income reached $3.74 million, exceeding the average estimate of $3.65 million [4] - Net Interest Income was $34.11 million, above the average estimate of $33.53 million [4] Stock Performance - Home Bancorp's shares have returned -8.7% over the past month, while the Zacks S&P 500 composite increased by +1.1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Core Insights - Home Bancorp (HBCP) reported quarterly earnings of $1.59 per share, exceeding the Zacks Consensus Estimate of $1.37 per share, and up from $1.18 per share a year ago, representing an earnings surprise of +16.06% [1][2] - The company achieved revenues of $37.84 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.73% and increasing from $34.07 million year-over-year [2] - Home Bancorp has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.34 on revenues of $37.3 million, and for the current fiscal year, it is $5.54 on revenues of $147.3 million [7] - The estimate revisions trend for Home Bancorp was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Banks - Southeast industry, to which Home Bancorp belongs, is currently ranked in the top 31% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

[Third Quarter 2025 Earnings Announcement](index=1&type=section&id=Third%20Quarter%202025%20Earnings%20Announcement) Home Bancorp, Inc. announces strong financial results for Q3 2025, with increased net income, diluted EPS, and a 7% dividend hike [1.1 Executive Summary](index=1&type=section&id=1.1%20Executive%20Summary) Home Bancorp, Inc. achieved strong financial results in the third quarter of 2025, with net income and diluted earnings per share increasing quarter-over-quarter, alongside a 7% increase in quarterly dividends | Metric | Q3 2025 | Q2 2025 | QoQ Change | | :--- | :--- | :--- | :--- | | Net Income | $12.4 Million | $11.3 Million | Increased $1.1 Million | | Diluted EPS | $1.59 | $1.45 | Increased $0.14 | | Quarterly Dividend | Increased 7% | - | - | [1.2 CEO Commentary](index=1&type=section&id=1.2%20CEO%20Commentary) John W. Bordelon, President and CEO, stated that third-quarter results reflect the company's continued strength and stability, with improved deposit growth reducing the loan-to-deposit ratio to the 91% target despite slower loan originations, while financial performance remained strong with a 1.41% ROA and a 6 basis point NIM expansion to 4.10% - The company's third-quarter results reflect **continued strength and stability**[2](index=2&type=chunk) - Loan origination slowed, but **improved deposit growth** reduced the **loan-to-deposit ratio to the 91% target**[2](index=2&type=chunk) | Metric | Q3 2025 | QoQ Change | | :--- | :--- | :--- | | Return on Assets (ROA) | 1.41% | - | | Net Interest Margin (NIM) | 4.10% | Expanded 6 basis points | | Loan-to-Deposit Ratio | 91% | Reduced to target level | - Credit metrics show an increase in **nonperforming and criticized loans**, but the company does not anticipate losses and is focused on **proactively identifying and resolving problem loans**[2](index=2&type=chunk) [1.3 Third Quarter 2025 Key Highlights](index=1&type=section&id=1.3%20Third%20Quarter%202025%20Key%20Highlights) In Q3 2025, total loans decreased by 2.1%, while total deposits grew by 2.3%; net interest income increased by 2%, and net interest margin expanded to 4.10%, despite an increase in nonperforming assets, the company recorded a $229,000 reversal of provision for credit losses | Metric | As of Sep 30, 2025 | QoQ Change | | :--- | :--- | :--- | | Total Loans | $2.7 Billion | Decreased $58.6 Million (2.1%) | | Total Deposits | $3.0 Billion | Increased $67.3 Million (2.3%) | | Net Interest Income | $34.1 Million | Increased $755,000 (2%) | | Net Interest Margin (NIM) | 4.10% | Expanded from 4.04% last quarter | | Total Nonperforming Assets | $30.9 Million (0.88% of total assets) | Increased from $25.4 Million (0.73% of total assets) last quarter | | Provision for Credit Losses | Reversal of $229,000 | Improved from $489,000 provision last quarter | [Detailed Financial Review](index=2&type=section&id=Detailed%20Financial%20Review) This section provides an in-depth analysis of the company's financial performance, covering loans, credit quality, investments, deposits, net interest income, noninterest income and expense, capital, and shareholder returns [2.1 Loans](index=2&type=section&id=2.1%20Loans) As of September 30, 2025, total loans were $2.7 billion, a 2.1% decrease from June 30, 2025, primarily due to slower originations and higher-than-expected repayments, with the average loan yield increasing by 3 basis points quarter-over-quarter to 6.53% | Metric | As of Sep 30, 2025 (in thousands) | As of Jun 30, 2025 (in thousands) | Change Amount (in thousands) | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Total Real Estate Loans | $2,262,616 | $2,311,874 | $(49,258) | (2)% | | Total Other Loans | $443,279 | $452,664 | $(9,385) | (2)% | | **Total Loans** | **$2,705,895** | **$2,764,538** | **$(58,643)** | **(2)%** | | Average Loan Yield | 6.53% | 6.50% | Increased 3 basis points | - | - The decrease in loans is primarily attributable to **slower loan originations** and **higher-than-usual repayments**[5](index=5&type=chunk) [2.2 Credit Quality and Allowance for Credit Losses](index=2&type=section&id=2.2%20Credit%20Quality%20and%20Allowance%20for%20Credit%20Losses) As of September 30, 2025, total nonperforming assets (NPAs) increased to $30.9 million, representing 0.88% of total assets, mainly due to five loan relationships being placed on nonaccrual status; the company recorded a $229,000 reversal of provision for credit losses in Q3, compared to a $489,000 provision in the prior quarter, with total allowance for credit losses at $32.8 million, or 1.21% of total loans | Metric | As of Sep 30, 2025 | As of Jun 30, 2025 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Nonperforming Assets (NPAs) | $30.9 Million | $25.4 Million | Increased $5.5 Million | 22% | | NPAs as % of Total Assets | 0.88% | 0.73% | Increased 0.15% | - | | Net Loan Charge-offs | $376,000 | $335,000 | Increased $41,000 | 12.2% | | Provision for Credit Losses | Reversal of $229,000 | Provision of $489,000 | Improved $718,000 | - | | Total Allowance for Credit Losses | $32.8 Million | $33.4 Million | Decreased $0.6 Million | (1.8%) | | Allowance for Credit Losses as % of Total Loans | 1.21% | 1.21% | No change | - | - The increase in nonperforming assets is primarily due to **five loan relationships totaling $9.4 million** being placed on nonaccrual status, partially offset by repayments[6](index=6&type=chunk) Loan Portfolio Credit Quality Classification (as of Sep 30, 2025) | Classification | Pass (in thousands) | Special Mention (in thousands) | Substandard (in thousands) | Total (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Real Estate Loans | $2,207,966 | $3,067 | $50,576 | $2,262,616 | | Other Loans | $436,220 | $0 | $7,059 | $443,279 | | **Total** | **$2,644,293** | **$3,959** | **$57,643** | **$2,705,895** | [2.3 Investment Securities](index=3&type=section&id=2.3%20Investment%20Securities) As of September 30, 2025, the company's total investment securities portfolio was $384.4 million, a 3% decrease from the prior quarter, with net unrealized loss positions improving from $30.2 million to $26.5 million, and an effective duration of 3.5 years | Metric | As of Sep 30, 2025 | As of Jun 30, 2025 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Total Investment Securities Portfolio | $384.4 Million | $394.5 Million | Decreased $10.1 Million | (3)% | | Net Unrealized Loss | $26.5 Million | $30.2 Million | Improved $3.7 Million | - | | Effective Duration | 3.5 Years | 3.6 Years | Decreased 0.1 Years | - | | Securities Purchases | $4.3 Million | $4.5 Million | Decreased $0.2 Million | (4.4%) | - The company made **no securities sales** during the third and second quarters[10](index=10&type=chunk) Investment Securities Portfolio Composition (as of Sep 30, 2025) | Type | Amortized Cost (in thousands) | Fair Value (in thousands) | | :--- | :--- | :--- | | Total Available-for-Sale Securities | $409,842 | $383,340 | | Total Held-to-Maturity Securities | $1,065 | $1,066 | | **Total** | **$410,907** | **$384,406** | - As of September 30, 2025, approximately **36% of the investment securities portfolio** was pledged to secure public deposits[12](index=12&type=chunk) [2.4 Deposits](index=4&type=section&id=2.4%20Deposits) As of September 30, 2025, total deposits were $3.0 billion, a 2% increase quarter-over-quarter, with non-maturity deposits growing by 3% to $2.1 billion, and the average rate on interest-bearing deposits increasing by 5 basis points to 2.57% | Metric | As of Sep 30, 2025 (in thousands) | As of Jun 30, 2025 (in thousands) | Change Amount (in thousands) | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Total Deposits | $2,975,503 | $2,908,234 | $67,269 | 2% | | Non-Maturity Deposits | $2.1 Billion | - | Increased $52.6 Million | 3% | | Average Rate on Interest-Bearing Deposits | 2.57% | 2.52% | Increased 5 basis points | - | Deposit Type Changes (in thousands) | Deposit Type | As of Sep 30, 2025 | As of Jun 30, 2025 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Demand Deposits | $801,974 | $796,844 | $5,130 | 1% | | Savings | $200,135 | $204,191 | $(4,056) | (2)% | | Money Market | $499,404 | $463,332 | $36,072 | 8% | | NOW Accounts | $641,204 | $625,793 | $15,411 | 2% | | Certificates of Deposit | $832,786 | $818,074 | $14,712 | 2% | | **Total Deposits** | **$2,975,503** | **$2,908,234** | **$67,269** | **2%** | Deposit Customer Type Breakdown | Customer Type | As of Sep 30, 2025 | As of Jun 30, 2025 | | :--- | :--- | :--- | | Consumer | 52% | 52% | | Small Business | 39% | 38% | | Public Funds | 6% | 7% | | Brokered | 3% | 3% | | **Total** | **100%** | **100%** | - As of September 30, 2025, total uninsured deposits were **$894.8 million**, with public funds exceeding FDIC insurance limits being **fully collateralized**[16](index=16&type=chunk) [2.5 Net Interest Income and Net Interest Margin](index=5&type=section&id=2.5%20Net%20Interest%20Income%20and%20Net%20Interest%20Margin) Net Interest Margin (NIM) increased by 6 basis points quarter-over-quarter to 4.10% in Q3 2025, driven by higher average yields on interest-earning assets and lower average balances and costs of interest-bearing liabilities, while the average cost of interest-bearing deposits rose by 5 basis points, primarily due to shifts to higher-cost CDs and money market accounts | Metric | Q3 2025 | Q2 2025 | Change | | :--- | :--- | :--- | :--- | | Net Interest Margin (NIM) | 4.10% | 4.04% | Increased 6 basis points | | Average Cost of Interest-Bearing Deposits | 2.57% | 2.52% | Increased 5 basis points | | Average Balance of Other Interest-Earning Assets | $99.7 Million | $71.1 Million | Increased $28.6 Million (40%) | | Average Balance of FHLB Advances | $39.4 Million | $114.0 Million | Decreased $74.6 Million (65%) | | Loan Accretion Income on Acquired Loans | $347,000 | $356,000 | Decreased $9,000 (3%) | - NIM growth was primarily due to **higher average yields on interest-earning assets** and **lower average balances and costs of interest-bearing liabilities**[17](index=17&type=chunk) - The increase in deposit costs was mainly due to a **shift to higher-cost Certificates of Deposit and Money Market accounts**, coupled with a **reduction in lower-cost checking and savings accounts**[18](index=18&type=chunk) [2.6 Noninterest Income](index=5&type=section&id=2.6%20Noninterest%20Income) Total noninterest income for Q3 2025 was $3.7 million, a 1% increase quarter-over-quarter, primarily driven by higher service charges and fees, gains on loan sales, and other income, partially offset by a decrease in bank card fees | Metric | Q3 2025 | Q2 2025 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Total Noninterest Income | $3.7 Million | $3.7 Million | Increased $22,000 | 1% | | Service Charges and Fees | Increased $63,000 | - | - | - | | Gains on Loan Sales | Increased $30,000 | - | - | - | | Other Income | Increased $25,000 | - | - | - | | Bank Card Fees | Decreased $104,000 | - | - | - | [2.7 Noninterest Expense](index=5&type=section&id=2.7%20Noninterest%20Expense) Total noninterest expense for Q3 2025 was $22.5 million, a 1% increase quarter-over-quarter, mainly due to the absence of a prior quarter's reversal of provision for credit losses on unfunded commitments and higher salaries and benefits, partially offset by decreases in other expenses and data processing and communication costs | Metric | Q3 2025 | Q2 2025 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Total Noninterest Expense | $22.5 Million | $22.4 Million | Increased $124,000 | 1% | | Reversal of Provision for Credit Losses on Unfunded Commitments | None | $970,000 Reversal | Increased $970,000 | - | | Salaries and Benefits Expense | Increased $209,000 | - | - | - | | Other Expenses | Decreased $956,000 | - | - | - | | Data Processing and Communication | Decreased $72,000 | - | - | - | [2.8 Capital Position](index=5&type=section&id=2.8%20Capital%20Position) As of September 30, 2025, total shareholders' equity was $423.0 million, a 3% increase quarter-over-quarter, primarily due to company earnings and a reduction in accumulated other comprehensive loss on available-for-sale investment securities, partially offset by shareholder dividends, with both the Tier 1 leverage ratio and total risk-based capital ratio improving | Metric | As of Sep 30, 2025 | As of Jun 30, 2025 | Change Amount | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Total Shareholders' Equity | $423.0 Million | $408.8 Million | Increased $14.2 Million | 3% | | Tier 1 Leverage Capital Ratio (Preliminary) | 11.90% | 11.47% | Increased 0.43% | - | | Total Risk-Based Capital Ratio (Preliminary) | 15.24% | 14.66% | Increased 0.58% | - | - The increase in shareholders' equity was primarily due to **$12.4 million in company earnings** and a **reduction in accumulated other comprehensive loss** on available-for-sale investment securities, partially offset by shareholder dividends[23](index=23&type=chunk) [2.9 Dividend and Share Repurchases](index=5&type=section&id=2.9%20Dividend%20and%20Share%20Repurchases) The Board of Directors declared a 7% increase in the quarterly cash dividend to $0.31 per share; during Q3, the company repurchased 100 shares of common stock at an average price of $52.29 per share, with 390,972 shares remaining under the 2025 repurchase plan, and book value per share and tangible book value per share at $54.05 and $43.29, respectively, as of September 30, 2025 | Metric | Q3 2025 | | :--- | :--- | | Quarterly Cash Dividend | $0.31/share (Increased 7% from prior quarter) | | Common Stock Repurchased | 100 shares | | Average Repurchase Price | $52.29/share | | Shares Remaining Under 2025 Repurchase Plan | 390,972 shares | | Book Value Per Share (as of 9/30/2025) | $54.05 | | Tangible Book Value Per Share (as of 9/30/2025) | $43.29 | [Supplemental Information](index=6&type=section&id=Supplemental%20Information) This section provides additional context, including details on the earnings conference call, reconciliation of non-GAAP financial measures, and important forward-looking statements [3.1 Conference Call Details](index=6&type=section&id=3.1%20Conference%20Call%20Details) Company management will host a conference call on Tuesday, October 21, 2025, at 10:30 AM CDT to discuss Q3 2025 results, with investor presentations and replays available on the company's investor relations website - The conference call will be held on **Tuesday, October 21, 2025, at 10:30 AM CDT**[27](index=27&type=chunk) - The investor presentation and a replay of the call will be available on **Home Bancorp, Inc.'s investor relations website**[27](index=27&type=chunk)[28](index=28&type=chunk) [3.2 Non-GAAP Reconciliation](index=6&type=section&id=3.2%20Non-GAAP%20Reconciliation) This press release includes non-GAAP financial information used by management to analyze performance and provide a comprehensive understanding of the company's financial condition and operating results, noting that non-GAAP information should not replace GAAP financials and may not be comparable to other companies' disclosures - Company management uses **non-GAAP financial information** to analyze performance and believes it is helpful for a **comprehensive understanding of the company's financial condition and operating results**[29](index=29&type=chunk) Non-GAAP Financial Measures Reconciliation (in thousands, except per share data) | Metric | Sep 30, 2025 | Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Reported Net Income | $12,357 | $11,330 | $10,964 | $9,673 | $9,437 | | Non-GAAP Tangible Income | $12,569 | $11,543 | $11,195 | $9,923 | $9,687 | | Total Assets | $3,494,074 | $3,491,455 | $3,485,453 | $3,443,668 | $3,441,990 | | Non-GAAP Tangible Assets | $3,409,860 | $3,406,973 | $3,400,702 | $3,358,624 | $3,356,629 | | Total Shareholders' Equity | $423,044 | $408,818 | $402,831 | $396,088 | $393,453 | | Non-GAAP Tangible Shareholders' Equity | $338,830 | $324,336 | $318,080 | $311,044 | $308,092 | | Return on Average Equity | 11.78% | 11.24% | 11.02% | 9.71% | 9.76% | | Return on Average Tangible Common Equity (Non-GAAP) | 15.02% | 14.48% | 14.25% | 12.70% | 12.90% | | Common Equity Ratio | 12.11% | 11.71% | 11.56% | 11.50% | 11.43% | | Tangible Common Equity Ratio (Non-GAAP) | 9.94% | 9.52% | 9.35% | 9.26% | 9.18% | | Book Value Per Share | $54.05 | $52.36 | $50.82 | $48.95 | $48.75 | | Tangible Book Value Per Share (Non-GAAP) | $43.29 | $41.54 | $40.13 | $38.44 | $38.17 | [3.3 Forward-Looking Statements](index=7&type=section&id=3.3%20Forward-Looking%20Statements) This press release contains forward-looking statements that are inherently subject to risks and uncertainties, which could cause actual results to differ materially from expectations, and the company undertakes no obligation to update these statements to reflect events or circumstances occurring after their release - Forward-looking statements are inherently subject to **risks and uncertainties** that could cause **actual results to differ materially from expectations**[31](index=31&type=chunk) - Risk factors include **elements of risk in the loan portfolio**, **risks related to deposit activities**, **level of allowance for credit losses**, **growth strategy risks**, **geographic concentration of business**, **reliance on management team**, **market interest rate risks**, and **regulatory and competitive risks**[31](index=31&type=chunk) - The company undertakes **no obligation to update forward-looking statements** to reflect events or circumstances occurring after their release[31](index=31&type=chunk) [Financial Statements](index=8&type=section&id=Financial%20Statements) This section presents the company's condensed financial statements, including the statements of financial condition, income, and summary financial information, along with detailed net interest margin and credit quality tables [4.1 Condensed Statements of Financial Condition](index=8&type=section&id=4.1%20Condensed%20Statements%20of%20Financial%20Condition) As of September 30, 2025, the company reported total assets of $3.494 billion, total liabilities of $3.071 billion, and total shareholders' equity of $423.0 million Condensed Statements of Financial Condition (in thousands) | Metric | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | $189,324 | $112,595 | $135,877 | | Loans, Net of Unearned Income | $2,705,895 | $2,764,538 | $2,668,286 | | Allowance for Credit Losses | $(32,827) | $(33,432) | $(32,278) | | **Total Assets** | **$3,494,074** | **$3,491,455** | **$3,441,990** | | Deposits | $2,975,503 | $2,908,234 | $2,777,487 | | Federal Home Loan Bank Advances | $3,059 | $88,196 | $38,410 | | **Total Liabilities** | **$3,071,030** | **$3,082,637** | **$3,048,537** | | **Total Shareholders' Equity** | **$423,044** | **$408,818** | **$393,453** | [4.2 Condensed Statements of Income](index=9&type=section&id=4.2%20Condensed%20Statements%20of%20Income) For Q3 2025, the company reported net interest income of $34.106 million, net income of $12.357 million, and diluted earnings per share of $1.59, showing significant growth in net income and EPS compared to the prior year Condensed Statements of Income (in thousands, except per share data) | Metric | Q3 2025 | Q2 2025 | Q3 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Interest Income | $49,222 | $48,629 | $47,379 | $145,052 | $136,963 | | Total Interest Expense | $15,116 | $15,278 | $16,997 | $45,846 | $48,287 | | **Net Interest Income** | **$34,106** | **$33,351** | **$30,382** | **$99,206** | **$88,676** | | (Reversal of) Provision for Credit Losses | $(229) | $489 | $140 | $654 | $1,542 | | Total Noninterest Income | $3,738 | $3,716 | $3,692 | $11,463 | $10,996 | | Total Noninterest Expense | $22,531 | $22,407 | $22,258 | $66,517 | $64,934 | | Income Tax Expense | $3,185 | $2,841 | $2,239 | $8,847 | $6,442 | | **Net Income** | **$12,357** | **$11,330** | **$9,437** | **$34,651** | **$26,754** | | Diluted Earnings Per Share | $1.59 | $1.45 | $1.18 | $4.41 | $3.34 | [4.3 Summary Financial Information](index=10&type=section&id=4.3%20Summary%20Financial%20Information) This section provides a summary of key financial data, including earnings, average balance sheet figures, per-share data, and selected ratios, with Q3 2025 showing a Return on Assets (ROA) of 1.41%, Return on Equity (ROE) of 11.78%, and Net Interest Margin (NIM) of 4.10% Earnings Data (in thousands) | Metric | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :--- | :--- | :--- | :--- | | Net Interest Income | $34,106 | $33,351 | $30,382 | | Net Income | $12,357 | $11,330 | $9,437 | Average Balance Sheet Data (in thousands) | Metric | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :--- | :--- | :--- | :--- | | Total Assets | $3,467,070 | $3,474,762 | $3,405,083 | | Total Loans | $2,743,695 | $2,764,065 | $2,668,672 | | Total Deposits | $2,918,938 | $2,863,683 | $2,730,568 | | Total Shareholders' Equity | $416,239 | $404,367 | $384,518 | Per Share Data | Metric | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :--- | :--- | :--- | :--- | | Diluted Earnings Per Share | $1.59 | $1.45 | $1.18 | | Period-End Book Value Per Share | $54.05 | $52.36 | $48.75 | | Period-End Tangible Book Value Per Share | $43.29 | $41.54 | $38.17 | Selected Ratios | Metric | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :--- | :--- | :--- | :--- | | Return on Average Assets (ROAA) | 1.41% | 1.31% | 1.10% | | Return on Average Equity (ROAE) | 11.78% | 11.24% | 9.76% | | Net Interest Margin (NIM) | 4.10% | 4.04% | 3.71% | | Efficiency Ratio | 59.54% | 60.45% | 65.32% | | Tier 1 Leverage Capital Ratio | 11.90% | 11.47% | 11.32% | | Total Risk-Based Capital Ratio | 15.24% | 14.66% | 14.74% | | Tangible Common Equity Ratio (Non-GAAP) | 9.94% | 9.52% | 9.18% | | Return on Average Tangible Common Equity (Non-GAAP) | 15.02% | 14.48% | 12.90% | [4.4 Consolidated Net Interest Margin Tables](index=12&type=section&id=4.4%20Consolidated%20Net%20Interest%20Margin%20Tables) This section provides a detailed consolidated net interest margin analysis, including average balances, interest income/expense, average yields/rates for interest-earning assets and interest-bearing liabilities, and trends in net interest spread and net interest margin Consolidated Net Interest Margin (Three Months) | Metric | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :--- | :--- | :--- | :--- | | **Interest-Earning Assets:** | | | | | Average Balance of Loans (in thousands) | $2,743,695 | $2,764,065 | $2,668,672 | | Loan Interest Income (in thousands) | $45,607 | $45,287 | $43,711 | | Average Loan Yield | 6.53% | 6.50% | 6.43% | | Average Balance of Investment Securities (in thousands) | $411,889 | $426,601 | $454,024 | | Investment Securities Interest Income (in thousands) | $2,504 | $2,596 | $2,677 | | Average Investment Securities Yield | 2.45% | 2.45% | 2.38% | | **Interest-Bearing Liabilities:** | | | | | Average Balance of Interest-Bearing Deposits (in thousands) | $2,128,540 | $2,087,781 | $1,989,182 | | Interest-Bearing Deposit Interest Expense (in thousands) | $13,805 | $13,142 | $13,908 | | Average Interest-Bearing Deposit Rate | 2.57% | 2.52% | 2.78% | | Average Balance of FHLB Advances (in thousands) | $39,445 | $114,023 | $56,743 | | FHLB Advances Interest Expense (in thousands) | $412 | $1,239 | $572 | | Average FHLB Advances Rate | 4.12% | 4.30% | 3.99% | | **Net Interest Spread (TE)** | **3.26%** | **3.21%** | **2.80%** | | **Net Interest Margin (TE)** | **4.10%** | **4.04%** | **3.71%** | Consolidated Net Interest Margin (Nine Months) | Metric | Sep 30, 2025 | Sep 30, 2024 | | :--- | :--- | :--- | | **Interest-Earning Assets:** | | | | Average Balance of Loans (in thousands) | $2,750,985 | $2,641,414 | | Loan Interest Income (in thousands) | $134,926 | $126,277 | | Average Loan Yield | 6.49% | 6.30% | | Average Balance of Investment Securities (in thousands) | $425,915 | $463,333 | | Investment Securities Interest Income (in thousands) | $7,764 | $8,205 | | Average Investment Securities Yield | 2.45% | 2.38% | | **Interest-Bearing Liabilities:** | | | | Average Balance of Interest-Bearing Deposits (in thousands) | $2,085,330 | $1,964,095 | | Interest-Bearing Deposit Interest Expense (in thousands) | $39,569 | $39,174 | | Average Interest-Bearing Deposit Rate | 2.54% | 2.66% | | Average Balance of FHLB Advances (in thousands) | $110,858 | $58,309 | | FHLB Advances Interest Expense (in thousands) | $3,583 | $1,765 | | FHLB Advances Average Rate | 4.27% | 4.01% | | **Net Interest Spread (TE)** | **3.19%** | **2.80%** | | **Net Interest Margin (TE)** | **4.02%** | **3.67%** | [4.5 Summary Credit Quality Information Tables](index=14&type=section&id=4.5%20Summary%20Credit%20Quality%20Information%20Tables) This section provides detailed credit quality information, including nonaccrual loans, nonperforming assets, allowance for credit losses, net charge-offs, and various credit quality ratios, with total nonperforming assets at $30.906 million and allowance for credit losses at $32.827 million as of September 30, 2025 Credit Quality (in thousands) | Metric | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :--- | :--- | :--- | :--- | | Total Nonaccrual Loans | $29,467 | $23,340 | $18,055 | | Total Nonperforming Loans | $29,522 | $23,352 | $18,089 | | Foreclosed Assets and ORE | $1,384 | $2,077 | $267 | | **Total Nonperforming Assets** | **$30,906** | **$25,429** | **$18,356** | | Nonperforming Assets as % of Total Assets | 0.88% | 0.73% | 0.53% | | Nonperforming Loans as % of Total Loans | 1.09% | 0.84% | 0.68% | Allowance for Credit Losses (in thousands) | Metric | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :--- | :--- | :--- | :--- | | Beginning Balance | $33,432 | $33,278 | $32,212 | | (Reversal of) Provision for Credit Losses | $(229) | $489 | $140 | | Net Charge-offs | $(376) | $(335) | $(74) | | **Ending Balance** | **$32,827** | **$33,432** | **$32,278** | | Allowance for Credit Losses on Unfunded Commitments | $1,730 | $1,730 | $2,460 | | **Total Allowance for Credit Losses** | **$34,557** | **$35,162** | **$34,738** | Credit Quality Ratios | Metric | Sep 30, 2025 | Jun 30, 2025 | Sep 30, 2024 | | :--- | :--- | :--- | :--- | | Allowance for Credit Losses to Nonperforming Assets | 106.22% | 131.47% | 175.84% | | Allowance for Credit Losses to Nonperforming Loans | 111.20% | 143.17% | 178.44% | | Allowance for Credit Losses to Total Loans | 1.21% | 1.21% | 1.21% | | Total Allowance for Credit Losses to Total Loans | 1.28% | 1.27% | 1.30% | | Year-to-Date Net Charge-offs to Average Loans | (0.04)% | (0.03)% | (0.04)% | - Nonaccrual loans are those **90 days or more past due**, unless they are well-secured and in the process of collection[50](index=50&type=chunk) - The allowance for credit losses on unfunded commitments is recorded in **accrued interest payable and other liabilities** on the condensed statements of financial condition[51](index=51&type=chunk)

Core Viewpoint - Home Bancorp (HBCP) is expected to report a quarterly earnings per share of $1.37, marking a 16.1% increase year-over-year, with revenues projected at $37.2 million, reflecting a 9.2% increase compared to the same period last year [1]. Earnings Estimates - There has been no revision in the consensus EPS estimate for the quarter over the last 30 days, indicating stability in analysts' forecasts [2]. - Revisions to earnings estimates are crucial as they serve as indicators for predicting investor actions regarding the stock [3]. Key Financial Metrics - Analysts estimate 'Total nonperforming loans' at $23.04 million, up from $18.09 million a year ago [5]. - The consensus for 'Total nonperforming assets' is $25.10 million, compared to $18.36 million last year [5]. - The average prediction for 'Net Interest Margin' is 4.1%, an increase from 3.7% year-over-year [5]. - 'Total Average Interest-Earning Assets' is projected to be $3.27 billion, up from $3.20 billion in the same quarter last year [6]. - The 'Efficiency Ratio' is expected to reach 61.4%, improving from 65.3% a year ago [6]. - 'Total Noninterest Income' is forecasted at $3.65 million, slightly down from $3.69 million in the same quarter last year [7]. - 'Net Interest Income' is projected to be $33.53 million, compared to $30.38 million a year ago [7]. Market Performance - Home Bancorp shares have remained unchanged over the past month, contrasting with the Zacks S&P 500 composite's +1% movement, and the company holds a Zacks Rank 3 (Hold), indicating expected performance in line with the overall market [7].

[Cover Page and General Information](index=1&type=section&id=Cover%20Page%20and%20General%20Information) The company is designated as an accelerated filer with **7.82 million** common shares outstanding as of July 31, 2025 - The company is designated as an accelerated filer[3](index=3&type=chunk) - As of July 31, 2025, the company had **7,824,751 common shares** outstanding[3](index=3&type=chunk) Registered Securities Information | Title of each class | Trading symbol(s) | Name of each exchange on which registered | | :--- | :--- | :--- | | Common Stock | HBCP | NASDAQ Stock Market | [Table of Contents](index=2&type=section&id=Table%20of%20Contents) The report is divided into two parts: financial information and other information, covering consolidated financial statements, management's discussion, market risk, controls, legal proceedings, risk factors, and exhibits - The report is divided into two main parts: Part I for financial information and Part II for other information[4](index=4&type=chunk)[5](index=5&type=chunk) - Financial information includes consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures[5](index=5&type=chunk) - Other information covers legal proceedings, risk factors, equity security sales, defaults, mine safety disclosures, and exhibits[5](index=5&type=chunk) [Glossary of Defined Terms](index=3&type=section&id=Glossary%20of%20Defined%20Terms) This section explains abbreviations and defined terms used in the report, such as ACL, ALL, and AOCI, and clarifies the meaning of 'we,' 'our,' or 'us' - The glossary explains abbreviations and defined terms used in the report, such as ACL (Allowance for Credit Losses), ALL (Allowance for Loan Losses), and AOCI (Accumulated Other Comprehensive Income)[7](index=7&type=chunk)[8](index=8&type=chunk) - 'We,' 'our,' or 'us' refer to Home Bancorp, Inc. and its consolidated subsidiaries[7](index=7&type=chunk) [PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the company's unaudited consolidated financial statements as of June 30, 2025, including balance sheets, income statements, comprehensive income, equity changes, cash flows, and related notes on accounting policies, investments, and fair value measurements [Consolidated Statements of Financial Condition](index=4&type=section&id=Consolidated%20Statements%20of%20Financial%20Condition) As of June 30, 2025, total assets increased to **$3.49 billion**, deposits grew **4.6%** to **$2.91 billion**, and shareholders' equity rose **3.2%** to **$409 million** compared to December 31, 2024 Consolidated Statements of Financial Condition Key Data | Metric | June 30, 2025 (thousand dollars) | December 31, 2024 (thousand dollars) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 3,491,455 | 3,443,668 | 1.4% | | Cash and Cash Equivalents | 112,595 | 98,548 | 14.3% | | Net Loans | 2,731,106 | 2,685,269 | 1.7% | | Total Deposits | 2,908,234 | 2,780,696 | 4.6% | | Short-term FHLB Advances | 75,000 | 137,220 | -45.3% | | Long-term FHLB Advances | 13,196 | 38,326 | -65.6% | | Total Shareholders' Equity | 408,818 | 396,088 | 3.2% | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Net income for the three months ended June 30, 2025, was **$11.33 million**, up **39.6%**, with diluted EPS of **$1.45**, driven by increased net interest income and reduced provision for loan losses Consolidated Statements of Income Key Data (Three Months) | Metric | June 30, 2025 (thousand dollars) | June 30, 2024 (thousand dollars) | Change (%) | | :--- | :--- | :--- | :--- | | Total Interest Income | 48,629 | 45,458 | 7.0% | | Total Interest Expense | 15,278 | 16,065 | -4.9% | | Net Interest Income | 33,351 | 29,393 | 13.5% | | Provision for Loan Losses | 489 | 1,261 | -61.2% | | Noninterest Income | 3,716 | 3,755 | -1.0% | | Noninterest Expense | 22,407 | 21,808 | 2.7% | | Income Tax Expense | 2,841 | 1,961 | 44.9% | | Net Income | 11,330 | 8,118 | 39.6% | | Diluted Earnings Per Share | 1.45 | 1.02 | 42.2% | | Cash Dividends Per Share | 0.27 | 0.25 | 8.0% | Consolidated Statements of Income Key Data (Six Months) | Metric | June 30, 2025 (thousand dollars) | June 30, 2024 (thousand dollars) | Change (%) | | :--- | :--- | :--- | :--- | | Total Interest Income | 95,830 | 89,584 | 7.0% | | Total Interest Expense | 30,730 | 31,290 | -1.8% | | Net Interest Income | 65,100 | 58,294 | 11.7% | | Provision for Loan Losses | 883 | 1,402 | -37.0% | | Noninterest Income | 7,725 | 7,304 | 5.8% | | Noninterest Expense | 43,986 | 42,676 | 3.1% | | Income Tax Expense | 5,662 | 4,203 | 34.7% | | Net Income | 22,294 | 17,317 | 28.7% | | Diluted Earnings Per Share | 2.82 | 2.16 | 30.6% | | Cash Dividends Per Share | 0.54 | 0.50 | 8.0% | [Consolidated Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income for the three months ended June 30, 2025, significantly increased to **$13.92 million**, primarily due to a substantial rise in unrealized gains on available-for-sale investment securities Consolidated Statements of Comprehensive Income Key Data (Three Months) | Metric | June 30, 2025 (thousand dollars) | June 30, 2024 (thousand dollars) | Change (thousand dollars) | | :--- | :--- | :--- | :--- | | Net Income | 11,330 | 8,118 | 3,212 | | Unrealized gain on available-for-sale investment securities | 3,810 | 36 | 3,774 | | Unrealized (loss) gain on cash flow hedges | (529) | (284) | (245) | | Tax effect | (689) | 52 | (741) | | Other comprehensive income (loss), net of tax | 2,592 | (196) | 2,788 | | Comprehensive Income | 13,922 | 7,922 | 6,000 | Consolidated Statements of Comprehensive Income Key Data (Six Months) | Metric | June 30, 2025 (thousand dollars) | June 30, 2024 (thousand dollars) | Change (thousand dollars) | | :--- | :--- | :--- | :--- | | Net Income | 22,294 | 17,317 | 4,977 | | Unrealized gain on available-for-sale investment securities | 10,822 | (3,125) | 13,947 | | Unrealized (loss) gain on cash flow hedges | (1,343) | 194 | (1,537) | | Tax effect | (1,990) | 616 | (2,606) | | Other comprehensive income (loss), net of tax | 7,489 | (2,315) | 9,804 | | Comprehensive Income | 29,783 | 15,002 | 14,781 | [Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Total shareholders' equity increased **3.2%** to **$408.8 million** as of June 30, 2025, driven by net income and reduced accumulated other comprehensive losses, partially offset by dividends and share repurchases - Total shareholders' equity was **$408.8 million** as of June 30, 2025, an increase of **$12.7 million** from **$396.1 million** as of December 31, 2024[18](index=18&type=chunk)[20](index=20&type=chunk) - The increase in shareholders' equity was primarily attributable to **$22.3 million** in net income and **$7.5 million** in other comprehensive income, partially offset by **$14.3 million** in common stock repurchases and **$4.3 million** in cash dividends[20](index=20&type=chunk) Summary of Changes in Shareholders' Equity (Six Months) | Item | June 30, 2025 (thousand dollars) | December 31, 2024 (thousand dollars) | | :--- | :--- | :--- | | Common Stock | 78 | 81 | | Additional Paid-in Capital | 166,576 | 168,138 | | Retained Earnings | 265,817 | 259,190 | | Accumulated Other Comprehensive Loss | (22,493) | (29,982) | | Total Shareholders' Equity | 408,818 | 396,088 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities was **$21.3 million**, while investing activities used **$28.9 million** and financing activities provided **$21.6 million**, resulting in a **$14.0 million** net increase in cash Consolidated Statements of Cash Flows Key Data (Six Months) | Cash Flow Type | June 30, 2025 (thousand dollars) | June 30, 2024 (thousand dollars) | | :--- | :--- | :--- | | Net cash from operating activities | 21,325 | 25,293 | | Net cash from investing activities | (28,864) | (57,973) | | Net cash from financing activities | 21,586 | 70,311 | | Net change in cash and cash equivalents | 14,047 | 37,631 | | Cash and cash equivalents at end of period | 112,595 | 113,462 | - In the first half of 2025, cash outflows from investing activities decreased, primarily due to redemptions of available-for-sale securities and a reduction in net loan originations[23](index=23&type=chunk) - In the first half of 2025, cash inflows from financing activities decreased, mainly due to net repayments of FHLB advances and increased common stock repurchases[23](index=23&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed notes to the unaudited consolidated financial statements, covering basis of presentation, recent accounting pronouncements, investment securities, EPS, credit quality, derivatives, long-term debt, and fair value measurements [1. Basis of Presentation](index=10&type=section&id=1.%20Basis%20of%20Presentation) This note outlines the preparation of unaudited consolidated financial statements in accordance with Form 10-Q and Regulation S-X, confirming all necessary adjustments are included and no significant changes to accounting policies occurred - The financial statements are prepared in accordance with Form 10-Q and Regulation S-X, including all normal recurring adjustments deemed necessary by management[25](index=25&type=chunk) - Operating results for the interim periods are not necessarily indicative of results for the entire fiscal year[25](index=25&type=chunk) - The company has not made any significant changes to the critical accounting policies disclosed in its annual report as of December 31, 2024[27](index=27&type=chunk) [2. Recent Accounting Pronouncements](index=10&type=section&id=2.%20Recent%20Accounting%20Pronouncements) This section details the adoption of ASU 2023-07 and ASU 2023-09 in 2025, which had no material impact, and notes ASU 2024-03 may affect future disclosures, while ASU 2023-06 and ASU 2025-03 are not expected to have a significant impact - The adoption of ASU 2023-07 (Improvements to Reportable Segment Disclosures) and ASU 2023-09 (Improvements to Income Tax Disclosures) had no material impact on the consolidated financial statements[29](index=29&type=chunk)[30](index=30&type=chunk) - ASU 2024-03 (Statement of Comprehensive Income—Disaggregation of Expenses Disclosure) requires disaggregation of certain expenses in the notes to financial statements, and the company is evaluating its impact on disclosures[32](index=32&type=chunk) - ASU 2023-06 and ASU 2025-03 are not expected to have a material impact on the consolidated financial statements[31](index=31&type=chunk)[33](index=33&type=chunk) [3. Investment Securities](index=11&type=section&id=3.%20Investment%20Securities) As of June 30, 2025, available-for-sale investment securities had a fair value of **$393.5 million** with **$30.4 million** in unrealized losses, primarily long-term, which management does not consider credit-related Investment Securities Portfolio (June 30, 2025) | Security Type | Amortized Cost (thousand dollars) | Unrealized Gains (thousand dollars) | Unrealized Losses (thousand dollars) | Fair Value (thousand dollars) | | :--- | :--- | :--- | :--- | :--- | | **Available-for-Sale:** | | | | | | U.S. agency mortgage-backed securities | 280,484 | 248 | 21,807 | 258,925 | | Collateralized mortgage obligations | 68,080 | 1 | 1,466 | 66,615 | | Municipal bonds | 53,240 | — | 6,298 | 46,942 | | U.S. government agencies | 16,863 | — | 525 | 16,338 | | Corporate bonds | 4,985 | — | 343 | 4,642 | | **Total Available-for-Sale** | **423,652** | **249** | **30,439** | **393,462** | | **Held-to-Maturity:** | | | | | | Municipal bonds | 1,065 | 1 | — | 1,066 | | **Total Held-to-Maturity** | **1,065** | **1** | **—** | **1,066** | - As of June 30, 2025, **235 debt securities** had unrealized losses, representing **7.5%** of their amortized cost, with **224** of these in a loss position for over 12 months; management does not consider these to be credit losses and has not recorded an allowance for credit losses[40](index=40&type=chunk) - As of June 30, 2025, the effective duration of the company's investment securities portfolio was **3.6 years**, down from **3.9 years** as of December 31, 2024[36](index=36&type=chunk) [4. Earnings Per Share](index=14&type=section&id=4.%20Earnings%20Per%20Share) For the three months ended June 30, 2025, basic EPS was **$1.47** and diluted EPS was **$1.45**, both higher than the prior year, with similar growth for the six-month period Earnings Per Share Data | Metric | June 30, 2025 (Three Months) | June 30, 2024 (Three Months) | June 30, 2025 (Six Months) | June 30, 2024 (Six Months) | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to common shareholders (thousand dollars) | 11,330 | 8,118 | 22,294 | 17,317 | | Weighted average common shares outstanding (thousand shares) | 7,707 | 7,972 | 7,828 | 7,978 | | Diluted weighted average common shares outstanding (thousand shares) | 7,781 | 8,019 | 7,903 | 8,029 | | Basic earnings per share | 1.47 | 1.02 | 2.85 | 2.17 | | Diluted earnings per share | 1.45 | 1.02 | 2.82 | 2.16 | - For the three months ended June 30, 2025, **6,897 common stock options** were not included in the diluted EPS calculation as their effect was antidilutive[45](index=45&type=chunk) [5. Credit Quality and Allowance for Credit Losses](index=15&type=section&id=5.%20Credit%20Quality%20and%20Allowance%20for%20Credit%20Losses) As of June 30, 2025, total loans reached **$2.76 billion**, up **1.7%**, while the total allowance for credit losses was **$35.2 million**; nonperforming loans significantly increased to **$23.3 million**, primarily due to loan downgrades Loan Portfolio Composition | Loan Type | June 30, 2025 (thousand dollars) | December 31, 2024 (thousand dollars) | Change (%) | | :--- | :--- | :--- | :--- | | Total real estate loans | 2,311,874 | 2,269,934 | 1.8% | | Total other loans | 452,664 | 448,251 | 1.0% | | **Total Loans** | **2,764,538** | **2,718,185** | **1.7%** | Allowance for Credit Losses (ACL) Summary | Metric | June 30, 2025 (thousand dollars) | December 31, 2024 (thousand dollars) | | :--- | :--- | :--- | | Total allowance for loan losses | 33,432 | 32,916 | | ACL for unfunded loan commitments | 1,730 | 2,700 | | **Total Allowance for Credit Losses** | **35,162** | **35,616** | - As of June 30, 2025, total nonperforming loans were **$23.3 million**, a significant increase from **$13.6 million** as of December 31, 2024, primarily due to four loan relationships becoming nonperforming during 2025[66](index=66&type=chunk)[148](index=148&type=chunk) - As of June 30, 2025, total substandard loans were **$49.8 million**, an increase of **39.2%** from **$35.8 million** as of December 31, 2024[145](index=145&type=chunk)[148](index=148&type=chunk) - As of June 30, 2025, total foreclosed assets and ORE were **$2.1 million**, slightly higher than **$2.0 million** as of December 31, 2024[82](index=82&type=chunk) [6. Derivatives and Hedging Activities](index=27&type=section&id=6.%20Derivatives%20and%20Hedging%20Activities) The company uses interest rate derivatives, primarily swaps, for cash flow hedging of floating-rate liabilities, with designated derivative assets valued at **$1.88 million** as of June 30, 2025, while non-designated derivatives serve client needs with minimized company risk - The company uses interest rate derivatives to stabilize interest expense and manage interest rate fluctuation risk, primarily through interest rate swap agreements for cash flow hedges of floating-rate liabilities[86](index=86&type=chunk) Fair Value of Derivative Financial Instruments | Derivative Type | June 30, 2025 (thousand dollars) | December 31, 2024 (thousand dollars) | | :--- | :--- | :--- | | **Designated as Hedging Instruments:** | | | | Interest rate swaps - floating rate liabilities (asset) | 1,881 | 3,241 | | **Not Designated as Hedging Instruments:** | | | | Interest rate contracts (asset) | 279 | 26 | | Interest rate contracts (liability) | 310 | 42 | | Risk participation agreements (liability) | 1 | — | | **Net Derivative Assets** | **2,160** | **3,267** | | **Net Derivative Liabilities** | **311** | **42** | - As of June 30, 2025, accumulated unrealized gains on derivative instruments (net of tax) were **$1.36 million**, down from **$2.42 million** as of December 31, 2024[91](index=91&type=chunk) - The company estimates that an additional **$1.40 million** in interest expense will be reclassified from accumulated other comprehensive income within the next twelve months[87](index=87&type=chunk) [7. Long-term Debt and Borrowings](index=30&type=section&id=7.%20Long-term%20Debt%20and%20Borrowings) Long-term debt includes **$55 million** in subordinated notes due 2032, with a carrying value of **$54.6 million** as of June 30, 2025; total FHLB advances significantly decreased to **$88.2 million** from **$175.5 million** at year-end 2024 - On June 30, 2022, the company issued **$55 million** of **5.75%** fixed-to-floating rate subordinated notes due 2032, intended as Tier 2 capital for regulatory purposes[102](index=102&type=chunk) Summary of Long-term Debt and Borrowings | Debt Type | June 30, 2025 (thousand dollars) | December 31, 2024 (thousand dollars) | | :--- | :--- | :--- | | Subordinated debt, net | 54,567 | 54,459 | | Other borrowings | 5,539 | 5,539 | | Short-term FHLB advances | 75,000 | 137,220 | | Long-term FHLB advances | 13,196 | 38,326 | | **Total FHLB Advances** | **88,196** | **175,546** | - As of June 30, 2025, the company had an additional **$1.20 billion** in available FHLB advances[106](index=106&type=chunk) [8. Fair Value Measurements and Disclosures](index=31&type=section&id=8.%20Fair%20Value%20Measurements%20and%20Disclosures) The company categorizes fair value measurements into three levels, with available-for-sale securities and derivatives primarily Level 2; non-recurring measurements for individually evaluated loans and ORE are typically Level 3, relying on unobservable inputs like appraisals and discounted cash flows - Fair value measurements are categorized into three levels: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable inputs)[111](index=111&type=chunk) Assets Measured at Fair Value on a Recurring Basis (June 30, 2025) | Asset Type | Total (thousand dollars) | Level 1 (thousand dollars) | Level 2 (thousand dollars) | Level 3 (thousand dollars) | | :--- | :--- | :--- | :--- | :--- | | Available-for-sale securities | 393,462 | — | 393,462 | — | | Derivative assets | 2,160 | — | 2,160 | — | | **Total** | **395,622** | **—** | **395,622** | **—** | Assets Measured at Fair Value on a Nonrecurring Basis (June 30, 2025) | Asset Type | Total (thousand dollars) | Level 1 (thousand dollars) | Level 2 (thousand dollars) | Level 3 (thousand dollars) | | :--- | :--- | :--- | :--- | :--- | | Individually evaluated loans | 2,811 | — | — | 2,811 | | Foreclosed assets and ORE | 2,077 | — | — | 2,077 | | **Total** | **4,888** | **—** | **—** | **4,888** | - Fair value measurements for individually evaluated loans and foreclosed assets and ORE primarily use third-party appraisals and discounted cash flows, involving unobservable inputs such as collateral values, market discounts, and estimated costs to sell[122](index=122&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses the company's financial condition and operating results for the period ended June 30, 2025, including forward-looking statements, an executive overview, detailed financial analysis, liquidity management, and critical accounting estimates [Forward-Looking Statements](index=36&type=section&id=Forward-Looking%20Statements) This section cautions that statements regarding future plans, objectives, or financial performance are forward-looking and subject to risks and uncertainties, and the company undertakes no obligation to update them - Forward-looking statements are based on management's current information, estimates, and assumptions, and are influenced by current economic conditions[129](index=129&type=chunk) - Actual results may differ materially from expectations due to various risks and uncertainties, including loan activity, credit quality, interest rates, real estate values, economic conditions, and regulatory changes[129](index=129&type=chunk) - The company undertakes no obligation to update these forward-looking statements to reflect future events or circumstances[129](index=129&type=chunk) [EXECUTIVE OVERVIEW](index=36&type=section&id=EXECUTIVE%20OVERVIEW) The company achieved **$11.3 million** net income in Q2 2025, up **39.6%**, with diluted EPS of **$1.45**, and **$22.3 million** net income for H1, up **28.7%**, with improved net interest margin despite rising nonperforming assets Q2 and H1 2025 Performance Overview | Metric | 2025 Q2 | 2024 Q2 | Change (%) | 2025 H1 | 2024 H1 | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Income (million dollars) | 11.3 | 8.1 | 39.6% | 22.3 | 17.3 | 28.7% | | Diluted EPS (dollars) | 1.45 | 1.02 | 42.2% | 2.82 | 2.16 | 30.6% | | Total Assets (billion dollars) | 3.5 | N/A | 1.4% (vs Dec 2024) | N/A | N/A | N/A | | Total Loans (billion dollars) | 2.8 | N/A | 1.7% (vs Dec 2024) | N/A | N/A | N/A | | Provision for Loan Losses (thousand dollars) | 489 | 1,261 | -61.2% | 883 | 1,402 | -37.0% | | Nonperforming Assets (million dollars) | 25.4 | N/A | 62.9% (vs Dec 2024) | N/A | N/A | N/A | | Total Deposits (billion dollars) | 2.9 | N/A | 4.6% (vs Dec 2024) | N/A | N/A | N/A | | Net Interest Margin | 4.04% | 3.66% | +38 bps | 3.98% | 3.65% | +33 bps | | Average Rate on Interest-Bearing Deposits | 2.52% | 2.69% | -17 bps | 2.52% | 2.60% | -8 bps | | Total Interest Expense (thousand dollars) | 15,278 | 16,065 | -4.9% | 30,730 | 31,290 | -1.8% | - The increase in nonperforming assets was primarily due to three loan relationships classified as substandard in 2024 and moved to nonaccrual in 2025, and three loan relationships downgraded to substandard and moved to nonaccrual in 2025[131](index=131&type=chunk) [FINANCIAL CONDITION](index=37&type=section&id=FINANCIAL%20CONDITION) This section analyzes the company's financial position, covering loan portfolio, allowance for credit losses, asset quality, investment securities, funding sources (deposits, subordinated debt, FHLB advances), shareholders' equity, and regulatory capital ratios [Loans, Allowance for Credit Losses and Asset Quality](index=37&type=section&id=Loans,%20Allowance%20for%20Credit%20Losses%20and%20Asset%20Quality) As of June 30, 2025, total loans reached **$2.8 billion**, up **1.7%**, with an allowance for loan losses of **$33.4 million**; nonperforming loans surged **71.7%** to **$23.4 million**, and substandard loans increased **39.2%** to **$49.8 million** Loan Portfolio Composition and Changes | Loan Type | June 30, 2025 (thousand dollars) | December 31, 2024 (thousand dollars) | Change (thousand dollars) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | One-to-four family first mortgage loans | 504,145 | 501,225 | 2,920 | 0.6% | | Home equity loans and lines of credit | 81,178 | 79,097 | 2,081 | 2.6% | | Commercial real estate | 1,218,168 | 1,158,781 | 59,387 | 5.1% | | Construction and land | 324,574 | 352,263 | (27,689) | (7.9)% | | Multi-family residential | 183,809 | 178,568 | 5,241 | 2.9% | | Commercial and industrial | 421,997 | 418,627 | 3,370 | 0.8% | | Consumer loans | 30,667 | 29,624 | 1,043 | 3.5% | | **Total Loans** | **2,764,538** | **2,718,185** | **46,353** | **1.7%** | - As of June 30, 2025, the total allowance for loan losses was **$33.4 million**, representing **1.21%** of total loans, consistent with December 31, 2024[139](index=139&type=chunk) - Total nonperforming loans increased from **$13.6 million** as of December 31, 2024, to **$23.4 million** as of June 30, 2025, a **71.7%** increase, primarily due to four loan relationships becoming nonperforming[148](index=148&type=chunk) Nonperforming Assets Composition | Nonperforming Asset Type | June 30, 2025 (thousand dollars) | December 31, 2024 (thousand dollars) | | :--- | :--- | :--- | | Total nonaccrual loans | 23,340 | 13,582 | | Accruing loans 90 days or more past due | 12 | 16 | | Foreclosed assets and ORE | 2,077 | 2,010 | | **Total Nonperforming Assets** | **25,429** | **15,608** | [Investment Securities](index=41&type=section&id=Investment%20Securities) As of June 30, 2025, the total investment securities portfolio was **$394.5 million**, a **2.3%** decrease from year-end 2024, with net unrealized losses on available-for-sale securities decreasing to **$30.2 million**, and effective duration falling to **3.6 years** - The total investment securities portfolio was **$394.5 million**, a decrease of **$9.3 million (2.3%)** from December 31, 2024[154](index=154&type=chunk) - Net unrealized losses on the available-for-sale investment securities portfolio decreased from **$41.0 million** as of December 31, 2024, to **$30.2 million** as of June 30, 2025[154](index=154&type=chunk) - The effective duration of the investment securities portfolio decreased from **3.9 years** as of December 31, 2024, to **3.6 years** as of June 30, 2025[154](index=154&type=chunk) [Funding Sources](index=41&type=section&id=Funding%20Sources) As of June 30, 2025, total deposits grew **4.6%** to **$2.9 billion**, with time deposits up **11.5%**, while the average rate on interest-bearing deposits decreased **17 bps**; FHLB advances significantly reduced to **$88.2 million** due to repayments Deposit Composition and Changes | Deposit Type | June 30, 2025 (thousand dollars) | December 31, 2024 (thousand dollars) | Change (thousand dollars) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Noninterest-bearing demand deposits | 796,844 | 733,073 | 63,771 | 8.7% | | Savings deposits | 204,191 | 210,977 | (6,786) | (3.2)% | | Money market deposits | 463,332 | 457,483 | 5,849 | 1.3% | | NOW accounts | 625,793 | 645,246 | (19,453) | (3.0)% | | Time deposits | 818,074 | 733,917 | 84,157 | 11.5% | | **Total Deposits** | **2,908,234** | **2,780,696** | **127,538** | **4.6%** | - The average rate on interest-bearing deposits for the second quarter of 2025 was **2.52%**, a decrease of **17 basis points** from the second quarter of 2024[159](index=159&type=chunk) - Total FHLB advances decreased from **$175.5 million** as of December 31, 2024, to **$88.2 million** as of June 30, 2025, primarily due to the repayment of BTFP borrowings and a reduction in short-term FHLB advances[164](index=164&type=chunk)[165](index=165&type=chunk) - As of June 30, 2025, total uninsured deposits were **$887.9 million**, up from **$813.6 million** as of December 31, 2024[160](index=160&type=chunk) [Shareholders' Equity](index=42&type=section&id=Shareholders'%20Equity) Total shareholders' equity increased **3.2%** to **$408.8 million** as of June 30, 2025, driven by net income and reduced accumulated other comprehensive losses, with both company and bank regulatory capital ratios exceeding requirements - Total shareholders' equity increased from **$396.1 million** as of December 31, 2024, to **$408.8 million** as of June 30, 2025, a **$12.7 million (3.2%)** increase[166](index=166&type=chunk) - The increase in shareholders' equity was primarily attributable to **$22.3 million** in net income and a reduction in accumulated other comprehensive losses on available-for-sale investment securities, partially offset by cash dividends on common stock and share repurchases[166](index=166&type=chunk) Company and Bank Regulatory Capital Ratios (June 30, 2025) | Capital Type | Company Actual Ratio | Bank Actual Ratio | Regulatory Minimum (Basel III) | To Be Well Capitalized | | :--- | :--- | :--- | :--- | :--- | | Tier 1 Risk-Based Capital | 11.99% | 13.45% | 8.50% | N/A | | Total Risk-Based Capital | 15.08% | 14.66% | 10.50% | N/A | | Tier 1 Leverage Capital | 10.23% | 11.47% | 4.00% | N/A | | Common Equity Tier 1 Capital (Bank) | N/A | 13.45% | 7.00% | 6.50% | [LIQUIDITY AND ASSET/LIABILITY MANAGEMENT](index=43&type=section&id=LIQUIDITY%20AND%20ASSET/LIABILITY%20MANAGEMENT) The company manages liquidity through deposits, loan amortizations, and FHLB borrowing capacity, while asset/liability management optimizes net interest income via interest rate sensitivity analysis and uses interest rate swaps to mitigate risk, with disclosures on unfunded commitments - The company primarily obtains funds through deposits, loan amortizations, loan prepayments, investment securities maturities, and funds provided by operations[169](index=169&type=chunk) - As of June 30, 2025, total time deposits maturing within the next 12 months amounted to **$781.9 million**[170](index=170&type=chunk) Impact of Interest Rate Changes on Net Interest Income (June 30, 2025) | Interest Rate Change (basis points) | Estimated Change in Net Interest Income (%) | | :--- | :--- | | +200 | 3.8% | | +100 | 2.0% | | -100 | (2.4)% | | -200 | (5.2)% | Commitments for Unfunded Loans and Letters of Credit | Commitment Type | June 30, 2025 (thousand dollars) | December 31, 2024 (thousand dollars) | | :--- | :--- | :--- | | Standby letters of credit | 6,121 | 6,502 | | Available portion of lines of credit | 469,065 | 488,930 | | Undisbursed portion of loans in process | 72,543 | 76,424 | | Loan commitments | 155,614 | 161,482 | [RESULTS OF OPERATIONS](index=44&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's operating results for Q2 and H1 2025, detailing net income, provision for loan losses, net interest income, noninterest income, noninterest expense, and income tax expense, along with year-over-year changes and driving factors [Net Income and Provision for Loan Losses](index=44&type=section&id=Net%20Income%20and%20Provision%20for%20Loan%20Losses) Net income for Q2 2025 was **$11.3 million**, up **39.6%**, with diluted EPS of **$1.45**; H1 net income was **$22.3 million**, up **28.7%**, with diluted EPS of **$2.82**, and loan loss provisions were **$489 thousand** and **$883 thousand** respectively, driven by loan growth - Net income for the second quarter of 2025 was **$11.3 million**, a **39.6%** increase year-over-year; diluted EPS was **$1.45**, up **42.2%**[182](index=182&type=chunk) - Net income for the first half of 2025 was **$22.3 million**, a **28.7%** increase year-over-year; diluted EPS was **$2.82**, up **30.6%**[183](index=183&type=chunk) - For the second quarter and first half of 2025, the company recorded provisions for loan losses of **$489 thousand** and **$883 thousand**, respectively, primarily due to loan growth[184](index=184&type=chunk) [Net Interest Income](index=45&type=section&id=Net%20Interest%20Income) Net interest income for Q2 2025 was **$33.4 million**, up **13.5%**, and for H1 was **$65.1 million**, up **11.7%**, with improved net interest margin and yield, driven by higher earning asset yields and lower funding costs - Net interest income for the second quarter of 2025 was **$33.4 million**, a **13.5%** increase year-over-year; for the first half, it was **$65.1 million**, up **11.7%**[186](index=186&type=chunk) - The net interest margin (tax-equivalent) for the second quarter of 2025 was **3.21%**, and the net interest yield was **4.04%**, both higher than the prior year period[185](index=185&type=chunk)[187](index=187&type=chunk) Net Interest Income Variance Analysis (2025 vs 2024) | Item | Due to Rate Change (thousand dollars) | Due to Volume Change (thousand dollars) | Total Change (thousand dollars) | | :--- | :--- | :--- | :--- | | **Three Months** | | | | | Total interest income | 1,482 | 1,689 | 3,171 | | Total interest expense | (1,508) | 721 | (787) | | **Increase in Net Interest Income** | **2,990** | **968** | **3,958** | | **Six Months** | | | | | Total interest income | 2,915 | 3,331 | 6,246 | | Total interest expense | (1,281) | 721 | (560) | | **Increase in Net Interest Income** | **4,196** | **2,610** | **6,806** | [Noninterest Income](index=48&type=section&id=Noninterest%20Income) Noninterest income for Q2 2025 was **$3.7 million**, down **1.0%**, mainly due to reduced other income (lack of derivative fee income), partially offset by higher service charges; H1 noninterest income was **$7.7 million**, up **5.8%**, driven by increased loan sale gains and service fees - Noninterest income for the second quarter of 2025 was **$3.7 million**, a **1.0%** decrease year-over-year, primarily due to a **$143 thousand** reduction in other income (absence of derivative fee income), partially offset by a **$106 thousand** increase in service charges and fees[195](index=195&type=chunk) - Noninterest income for the first half of 2025 was **$7.7 million**, a **5.8%** increase year-over-year, primarily due to a **$278 thousand** increase in gains on sale of loans (mainly SBA loan sales) and a **$161 thousand** increase in service charges and fees, partially offset by a **$46 thousand** decrease in other income[196](index=196&type=chunk) [Noninterest Expense](index=48&type=section&id=Noninterest%20Expense) Noninterest expense for Q2 2025 was **$22.4 million**, up **2.7%**, driven by higher other expenses, compensation, and foreclosed assets, partially offset by a reversal of unfunded loan commitment credit losses and reduced professional services; H1 saw similar trends with a **3.1%** increase - Noninterest expense for the second quarter of 2025 was **$22.4 million**, a **2.7%** increase year-over-year, primarily due to an **$852 thousand** increase in other expenses (SBA receivable guarantee write-offs), a **$534 thousand** increase in salaries and employee benefits, and a **$330 thousand** increase in foreclosed assets, partially offset by an **$836 thousand** reversal of the allowance for credit losses on unfunded loan commitments and an **$185 thousand** decrease in professional services fees[197](index=197&type=chunk) - Noninterest expense for the first half of 2025 was **$44.0 million**, a **3.1%** increase year-over-year, primarily due to a **$1.0 million** increase in salaries and employee benefits, an **$821 thousand** increase in other expenses, and a **$492 thousand** net increase in foreclosed assets, partially offset by an **$836 thousand** reversal of the allowance for credit losses on unfunded loan commitments[198](index=198&type=chunk) [Income Taxes](index=48&type=section&id=Income%20Taxes) Income tax expense for Q2 2025 was **$2.8 million** and for H1 was **$5.7 million**, both increasing year-over-year due to higher taxable income, with effective tax rates of **20.0%** and **20.3%** respectively - Income tax expense for the second quarter of 2025 was **$2.8 million**, compared to **$2.0 million** in the prior year period[199](index=199&type=chunk) - Income tax expense for the first half of 2025 was **$5.7 million**, compared to **$4.2 million** in the prior year period[199](index=199&type=chunk) - The increase in income tax expense was primarily due to growth in taxable income[199](index=199&type=chunk) - The effective tax rates for the second quarter and first half of 2025 were **20.0%** and **20.3%**, respectively, higher than the **19.5%** in the prior year period[200](index=200&type=chunk) [CRITICAL ACCOUNTING ESTIMATES](index=49&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) Management considers the allowance for credit losses policy the most critical accounting estimate, determined by continuous evaluation of the loan portfolio and reasonable forecasts of future credit losses, considering economic conditions and asset quality changes, subject to regulatory review - Management considers the allowance for credit losses policy to be the most critical accounting policy in the presentation of the financial statements[203](index=203&type=chunk) - The amount of the allowance for credit losses reflects management's ongoing evaluation of expected credit losses over the life of the loan portfolio[203](index=203&type=chunk) - The estimation process considers relevant information from internal and external sources, including past events, current conditions, and reasonable and supportable forecasts of future losses, with qualitative adjustments[203](index=203&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the company's 2024 10-K annual report for market risk disclosures, with additional information for June 30, 2025, included in Item 2's 'Liquidity and Asset/Liability Management' section - Quantitative and qualitative disclosures about market risk primarily refer to the relevant sections in the company's 2024 10-K annual report[204](index=204&type=chunk) - Additional market risk information as of June 30, 2025, is included in Item 2, 'Liquidity and Asset/Liability Management'[204](index=204&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management assessed the effectiveness of disclosure controls and procedures as of the reporting period end, concluding they are effectively designed and operated, with no significant internal control changes during the quarter - The company's management evaluated the effectiveness of disclosure controls and procedures and concluded they are effectively designed and operated[205](index=205&type=chunk) - Disclosure controls and procedures are designed to ensure that information required to be recorded, processed, summarized, and reported is done so on a timely and accurate basis in accordance with SEC rules and regulations[205](index=205&type=chunk) - No significant changes in internal control occurred during the second quarter of 2025[206](index=206&type=chunk) [PART II - OTHER INFORMATION](index=50&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) There are no legal proceedings requiring disclosure during this reporting period - Not applicable[207](index=207&type=chunk) [Item 1A. Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors disclosed in the 2024 10-K annual report were identified during this reporting period - There have been no material changes to the risk factors disclosed in the company's 2024 10-K annual report during this reporting period[208](index=208&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q2 2025, the company repurchased **147,243 common shares** at an average price of **$43.72** per share, with **391,072 shares** remaining available under the 2025 repurchase plan as of June 30, 2025 Common Stock Repurchases in Q2 2025 | Period | Total Shares Repurchased | Average Price Paid Per Share (dollars) | Total Number of Shares Purchased as Part of Publicly Announced Plans | Maximum Number of Shares That May Yet Be Purchased Under the Plans | | :--- | :--- | :--- | :--- | :--- | | April 1 – April 30, 2025 | 126,503 | 42.57 | 126,503 | 411,812 | | May 1 – May 31, 2025 | — | — | — | 411,812 | | June 1 – June 30, 2025 | 20,740 | 50.78 | 20,740 | 391,072 | | **Total** | **147,243** | **43.72** | **147,243** | **391,072** | - On April 21, 2025, the company approved a new stock repurchase plan (2025 Repurchase Plan) authorizing the repurchase of up to an additional **400,000 shares**[210](index=210&type=chunk) [Item 3. Defaults Upon Senior Securities](index=50&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during this reporting period - Not applicable[211](index=211&type=chunk) [Item 4. Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) There were no mine safety disclosures during this reporting period - Not applicable[211](index=211&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, terminated, or modified Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025 - No directors or executive officers of the company adopted, terminated, or modified any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025[212](index=212&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the report, including the indenture for subordinated notes, CEO and CFO certifications, and XBRL data files - Exhibits include the indenture dated June 30, 2022, for the **5.75%** fixed-to-floating rate subordinated notes[216](index=216&type=chunk) - Exhibits also include Rule 13(a)-14(a) certifications by the Chief Executive Officer and Chief Financial Officer, as well as Section 1350 certifications[216](index=216&type=chunk) - XBRL-related documents (Instance Document, Schema Document, Calculation Linkbase Document, Definitions Linkbase Document, Label Linkbase Document, Presentation Linkbase Document) are also filed as exhibits[216](index=216&type=chunk) [SIGNATURES](index=53&type=section&id=SIGNATURES) The report is signed by John W. Bordelon, David T. Kirkley, and Mary H. Hopkins, with all signatures dated August 1, 2025 - The report is signed by John W. Bordelon (Chairman, President, and Chief Executive Officer), David T. Kirkley (Senior Executive Vice President and Chief Financial Officer), and Mary H. Hopkins (Senior Vice President and Director of Financial Management of Home Bank, N. A.)[221](index=221&type=chunk) - All signatures are dated August 1, 2025[221](index=221&type=chunk)