Home Bancorp(US:HBCP)2026-01-27 17:30Financial Data and Key Metrics Changes - In Q4 2025, the company reported a net income of $11.4 million, or $1.46 per share, which is a record for the company and represents a 29% increase from 2024 earnings per share [3][4] - The net interest margin (NIM) for Q4 was 4.06%, up from 3.82% in Q4 2024, while the return on assets (ROA) increased to 1.29% from 1.12% year-over-year [4][7] - Loans grew by $38 million in Q4, or 6% annualized, while deposits increased by 7%, or $192 million, during the same period [4][11] Business Line Data and Key Metrics Changes - The Texas franchise has shown strong performance, with loans growing at a 15% annual rate since entering the market in 2022, now representing 20% of the loan portfolio [5][6] - Non-performing loans increased in 2025, but charge-offs remained low, averaging about 6 basis points over the last six years [6][10] Market Data and Key Metrics Changes - Average non-interest bearing deposits increased by $3 million in Q4 and $40 million in 2025, representing 27% of total deposits [11] - The cost of interest-bearing deposits decreased by 6 basis points in Q4 and 15 basis points since Q4 2024, with an overall cost of deposits at 1.84% [12] Company Strategy and Development Direction - The company plans to focus on deposit growth to build franchise value and increase profitability when loan growth returns to historical rates [5][6] - The company is optimistic about M&A opportunities in 2026, with a focus on smaller banks, potentially half their size or less [37][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic challenges and maintain high standards in credit management [6] - There are no negative comments from customers across different markets, indicating a generally positive outlook despite national economic concerns [28] Other Important Information - Noninterest income was $4 million, slightly above expectations, and is expected to increase in the coming quarters [12] - The company has increased its quarterly dividends per share by 55% to $0.31 and repurchased 17% of its shares since 2019 [13] Q&A Session Summary Question: Concerns about Class 5 and NPAs trajectory - Management acknowledged the slow resolution of certain credits but expects to resolve some properties by February, indicating potential for NPAs to decrease [19][20] Question: Loan pipeline composition - Management noted that while there were payoffs in 2025, they anticipate less of that in 2026, which could support loan growth [25] Question: SBA business growth potential - Management indicated that the SBA business could see growth as interest rates decrease, although it may require further investment [35] Question: M&A as a capital deployment priority - Management confirmed that M&A is a priority, with a focus on smaller banks as opportunities arise [36][37] Question: Loan growth capacity and expectations - Management expects mid-single digit loan growth for 2026, potentially increasing if interest rates decrease [49] Question: NIM trajectory and rate sensitivity - Management projected NIM could increase to 4.1-4.15% throughout the year, despite some competitive pressures on deposit rates [52][54]