Home Bancorp (HBCP) Q3 2025 Earnings Transcript

Core Insights - Home Bank has maintained a disciplined loan structure, prioritizing risk-adjusted returns over growth, with a notable 9% annualized increase in deposits in Q3 and a 17% increase over the last 9 quarters [1] - The bank's net income for Q3 was reported at $12.4 million, reflecting a 9% increase from the previous quarter and a 31% increase year-over-year, with an expanding net interest margin (NIM) of 4.10% [4][7] - Loan growth expectations have been moderated to 1% to 2% for 2025, down from an earlier forecast of 4% to 6%, due to customer hesitance in moving forward with projects amid anticipated rate cuts [2] Financial Performance - Revenue growth has outpaced expense growth, with revenues increasing twice as fast as expenses over the last couple of years [3] - Nonperforming loans increased to $30.9 million, representing 88 basis points of total assets, primarily due to downgrades in five relationships [9] - The bank's efficiency ratio improved to below 60%, indicating better operational efficiency [4] Loan and Deposit Dynamics - The loan-to-deposit ratio stands at 91%, positioning the bank favorably for future loan growth [1][25] - Noninterest income for Q3 was $3.7 million, aligning with expectations, while noninterest expenses rose to $22.5 million [13] - The cost of interest-bearing liabilities decreased to 2.69%, aided by strong deposit growth [11] Credit Quality and Management - The bank's charge-offs remain low, averaging about 6 basis points over the last six years, with proactive credit management in place [5] - A negative provision expense of $229,000 was recorded due to declines in loan balances, indicating confidence in reserves [11] - The bank is optimistic about managing nonperforming assets, with expectations of no material losses from downgraded loans [20][21] Strategic Outlook - Home Bank has a strong leadership team with a cumulative experience of 981 years, which supports its confidence in navigating various economic climates [5] - The bank has grown tangible book value per share at a 9.5% annualized rate since 2019, alongside an 11.2% growth in EPS [14] - The bank is well-positioned to capitalize on M&A opportunities as activity accelerates nationwide [5]