HOME BANCORP, INC. HBCP

Home Bank announced a significant leadership change, separating the CEO and President roles. John Bordelon will remain CEO, focusing on corporate strategy, capital planning, and shareholder relations. Darren Guidry, previously Chief Risk Officer and Chief Credit Officer, has been appointed President, responsible for day-to-day execution of strategic priorities and driving performance. This restructuring aims to sustain the bank's next phase of growth and maintain strong discipline in credit quality and risk management.

The bank achieved its highest quarterly net interest income in its 118-year history at $35.8 million, with NIM expanding 8 basis points to 4.24%. This expansion was primarily driven by higher yields on the earning asset portfolio, with loan yields increasing 5 basis points to 6.46%. The cost of interest-bearing liabilities remained flat at 2.3%, and the overall cost of deposits was stable at 1.66%, reflecting the strength of the core deposit franchise. Management expects further NIM expansion in Q3 and Q4 FY26 before moderating in Q1 FY27.

Loans grew by $50.7 million, an approximate 7% annualized rate, recovering from a slight contraction in Q1. The Houston market, including the new Tomball branch, continues to be a strong growth driver, growing at a 9% annualized rate year-to-date. Total deposits grew by $42.1 million, or 6% annualized, bringing total deposits to $3.1 billion and maintaining the loan-to-deposit ratio within the 90% to 92% target range. Noninterest-bearing demand deposits increased by $5.1 million and represent 27% of total deposits.

While net charge-offs remained extremely low at 6 basis points annualized, total criticized loans increased to $95.8 million (3.45% of total loans). This was mainly due to 6 relationships migrating to the special mention category and a $7.4 million increase in substandard loans, including a $12.4 million C&I credit. Nonperforming loans declined to $26.4 million (0.95% of total loans) due to the transfer of $10 million to OREO. Management is actively monitoring these credits and expects over $30 million in special asset resolutions by year-end, including a significant portion in Q3.

Home Bancorp's capital ratios remain strong, with a Tier 1 leverage ratio of 12.1% and a total risk-based capital ratio of 15.6%. Tangible book value per share increased to $47.02, up over 13% from a year ago. The company declared a quarterly cash dividend of $0.32 per share, an increase of $0.01. Management highlighted a history of increasing adjusted tangible book value per share at 9.7% annualized and EPS at over 11% annualized since 2019, alongside repurchasing approximately 17% of shares outstanding.

The bank continues to view M&A as a primary use of capital, maintaining 'dry powder' for the right partner, despite a quieter M&A landscape in recent months. While buybacks have been selective due to stock price performance, the company evaluates them regularly. The callable sub debt in 2027, with a 5.75% coupon rate, is also noted as a potential capital management option, depending on the M&A environment.