Home Bancorp(US:HBCP)2026-01-27 17:32Financial Data and Key Metrics Changes - The company reported fourth quarter net income of $11.4 million, or $1.46 per share, which is a record for the company and 29% higher than 2024 earnings per share [2][3] - The fourth quarter net interest margin (NIM) was 4.06%, up from 3.82% in the fourth quarter of 2024, and return on assets (ROA) was 1.29%, compared to 1.12% a year ago [3][6] - Loans grew by $38 million in the fourth quarter, or 6% annualized, while deposits increased by 7%, or $192 million [3][9] Business Line Data and Key Metrics Changes - The Texas franchise has seen loans grow at a 15% annual rate since entering the market in 2022, now representing 20% of the loan portfolio [4][5] - Non-performing loans increased in 2025, but charge-offs remain low, averaging about 6 basis points over the last six years [5][8] Market Data and Key Metrics Changes - Average non-interest bearing deposits increased by $3 million in the fourth quarter and $40 million in 2025, representing 27% of total deposits [9] - The cost of interest-bearing deposits decreased by 6 basis points in the fourth quarter and 15 basis points since the fourth quarter of 2024, with an overall cost of deposits at 1.84% [10] Company Strategy and Development Direction - The company intends to focus on deposit growth to build franchise value and increase profitability when loan growth returns to historical rates [4] - The company is optimistic about M&A opportunities in 2026, looking for potential acquisitions of banks around half its size [34][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's future, noting that they do not foresee an economic-driven downturn despite some non-performing assets [17][25] - The company expects loan growth in 2026 to be in the mid-single digits, contingent on interest rate movements [3][46] Other Important Information - Noninterest income was $4 million, slightly above expectations, and is expected to increase to between $3.8 million and $4 million in the coming quarters [10] - The company has increased its quarterly dividends per share by 55% to $0.31 and repurchased 17% of its shares since 2019 [11] Q&A Session Summary Question: When do you think we might see a shift in the trajectory of Class 5 and NPAs? - Management indicated that the process can take time, especially in Louisiana and Mississippi, but expects some properties in Texas to be resolved by February [16][20] Question: Is the loan pipeline looking different from what's on the books today? - Management noted that while there were payoffs in 2025, they hope to see less of that in 2026, indicating potential for loan growth [21][23] Question: How is the SBA business expected to perform in 2026? - Management anticipates that the SBA business will pick up with lower interest rates, although it may not be significant immediately [32] Question: What are the capital deployment priorities regarding M&A? - Management is optimistic about M&A opportunities in 2026, particularly as their stock price improves [34][36] Question: How should we think about the size of the bond portfolio in 2026? - Management expects the investment portfolio to increase by about $15 million to $20 million, maintaining its percentage of assets [37] Question: What is the outlook for NIM and rate sensitivity? - Management projects NIM to increase to 4.1-4.15% throughout the year, with a stable outlook despite potential rate cuts [49][50]