Home Bancorp(HBCP) - 2024 Q4 - Annual Report

Banking Operations - The Company operates 18 banking offices in Acadiana, four in Baton Rouge, six in Greater New Orleans, six in the Northshore region, three in Natchez, and six in Houston, Texas[31]. - Since its IPO in October 2008, the Company has acquired six financial institutions, with the latest acquisition of Friendswood Capital Corporation completed on March 26, 2022[31]. Competition - The Company faces significant competition from larger banks, credit unions, mortgage-banking companies, and financial technology companies in originating loans and attracting deposits[31]. Capital Requirements - As of December 31, 2024, the Bank exceeded all regulatory capital requirements, with Tier 1 capital ratio at 11.38%, Tier 1 common equity ratio at 13.28%, and total risk-based capital ratio at 14.51%[52]. - The common equity Tier 1 capital requirement is at least 4.5% of risk-weighted assets, while the leverage capital requirement is at least 4.0% of adjusted total assets[49]. - The Company must maintain a capital conservation buffer greater than 2.5% of risk-weighted assets to make capital distributions and pay discretionary bonuses without restriction[49]. - The Bank must submit a capital restoration plan within 45 days if deemed undercapitalized, and as of December 31, 2024, it was classified as a well-capitalized institution[57]. - The Bank's ability to pay dividends is limited to 100% of net income for the year-to-date plus retained net income for the two preceding years, provided it remains well-capitalized[61]. Regulatory Environment - The Dodd-Frank Act permanently increased deposit insurance to $250,000 for most separately insured deposit relationships[45]. - The FDIC assesses deposit insurance premiums based on the average total assets reduced by the amount of average tangible equity[46]. - The Company qualifies for an exclusion from the Volcker Rule restrictions due to its total consolidated assets being$10 billion or less[42]. - The Economic Growth, Regulatory Relief and Consumer Protection Act provides regulatory relief for community banks, including modifications to certain financial reform rules[35]. - The federal banking agencies have issued guidance focusing on risk management practices for concentrations in commercial real estate lending[65]. Financial Resources - As of December 31, 2024, the Bank had $175.5 million in Federal Home Loan Bank (FHLB) advances and$1.1 billion available on its line of credit with the FHLB[68]. - The Bank is required to maintain FHLB stock of at least 0.4% of its total assets, and as of December 31, 2024, it held $8.6 million in FHLB stock, complying with this requirement[69]. Compliance and Ratings - The Bank received a "Satisfactory" rating under the Community Reinvestment Act in its most recent federal examination[60]. - The Bank has established anti-money laundering compliance programs to prevent the use of the financial system for illegal activities[67]. Cybersecurity - The new cybersecurity rules require the Bank to notify its primary federal regulator of significant cybersecurity incidents within 36 hours[73]. - The Securities and Exchange Commission mandates registrants to disclose material cybersecurity incidents and their impact on operations[74]. Reserve Requirements - The Federal Reserve Board's reserve requirement ratio was reduced to zero percent effective March 26, 2020, and remained at zero percent as of December 31, 2024[70].