HOME BANCORP, INC. (HBCP) Q4 2024 Earnings Summary

Executive Summary

• Net income of $9.7M and diluted EPS of $1.21 in Q4 2024, up 3% QoQ, with net interest margin expanding 11 bps to 3.82% on lower funding costs and stable asset yields .
• Loans grew 2% QoQ to $2.72B (7% annualized), while deposits were essentially flat at $2.78B; NPAs fell 15% QoQ to $15.6M (0.45% of assets), reflecting improved credit performance .
• Dividend increased 4% QoQ to $0.27 per share; management reiterated confidence in continued NIM and earnings expansion in 2025, supported by repricing and CD rate reductions .
• Street consensus (S&P Global) for EPS/revenue was unavailable; beat/miss vs estimates cannot be determined. Expect near-term catalysts from NIM trajectory, credit improvement, and strategic Houston branch expansion .

What Went Well and What Went Wrong

What Went Well

• NIM expanded for the third consecutive quarter to 3.82% as cost of interest-bearing liabilities fell 15 bps and CD rates declined 26 bps QoQ; net interest income rose 4% to $31.6M .
• Loan growth accelerated late in the quarter to 7.5% annualized, driving 2% QoQ growth to $2.72B; originations carried a 7.75% blended yield, ~130 bps above portfolio yields .
• Credit metrics improved: NPAs down $2.7M QoQ to 0.45% of assets; allowance coverage stable at 1.21% of loans; notable upgrade of a $3.2M C&I credit .
  • “We remain confident in our outlook and think that NIM and earnings will continue to expand in 2025.” – John Bordelon .

What Went Wrong

• Noninterest income slipped 2% QoQ to $3.63M on lower gains on sale of loans and bank card fees; gains on sale of assets offset partially .
• Provision for loan losses increased to $873K (from $140K in Q3), reflecting loan growth; net charge-offs rose to $235K .
• Securities AFS unrealized loss widened to $41.0M (from $32.2M), with AOCI drag; market value of AFS decreased by $8.8M in Q4; investment portfolio effective duration extended to 3.9 years .

Financial Results

Loan portfolio breakdown (QoQ):

Key KPIs:

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We remain confident in our outlook and think that NIM and earnings will continue to expand in 2025.” – John Bordelon .
• “We saw a 15 bps decrease in the cost of interest-bearing liabilities… supporting an 11 bps increase in NIM… net interest income was $31.6M.” – David Kirkley .
• “$555M or 76% of CDs mature in the next 6 months… weighted average 4.48%, ~40 bps above Q4 origination rates.” – David Kirkley .
• “We plan to open a new branch in Northwest Houston… LPO will convert to full-service; occupancy expense falls after exiting Texan HQ lease.” – Management .
• “Initiative to change customer behavior to reduce reliance on branches… potential branch consolidations if adoption improves.” – John Bordelon .

Q&A Highlights

• NIM outlook: Management expects further NIM expansion in both base case and slight rate-cut scenarios due to higher loan repricing and lower CD costs; cautious on money market rate reductions .
• Deposit betas: Non-maturity betas to decline more slowly (didn’t raise as much as competitors); CD market showing some rising pricing pressure, but overall NIM expansion still expected .
• Expenses: 3.5% increase in 2025 NIE; April 1 raises; no expected lumpiness; occupancy down due to lease exit; behavior-change initiatives may enable branch rationalization .
• Loan mix and competition: Focus on C&I for full relationships; pricing stabilized as yield curve steepened; anticipate loan yield expansion as back-book reprices .
• Fee income: SBA/mortgage gain-on-sale expected to uptick from 2024; treasury management fees growing with C&I focus; regulatory scrutiny (CFPB/OCC) on fees noted .

Estimates Context

• S&P Global consensus estimates for Q4 2024 (EPS, revenue) were unavailable at time of analysis due to data access limitations; as a result, beat/miss determinations vs Street cannot be provided. Management’s execution narrative (NIM expansion, loan growth, and credit improvement) supports constructive estimate trajectories near term .

Key Takeaways for Investors

• NIM expansion with deposit cost tailwinds and higher-yield originations is the primary driver for near-term earnings momentum; watch CD repricing cadence and money market rate actions .
• Credit quality remains strong with declining NPAs and minimal net charge-offs; allowance coverage stable, reducing downside risk in a soft-landing scenario .
• Loan growth reaccelerated late Q4; 2025 growth guided at 4%–6% with C&I focus that can deepen deposit relationships and fee opportunities .
• Capital return balanced: dividend up to $0.27 and opportunistic buybacks with ~312k shares remaining under plan; TBV/share compounding continues .
• Securities AOCI remains a watch item (unrealized loss $41.0M); duration manageable; liquidity robust with $1.36B available sources .
• Tactical catalyst: Northwest Houston branch launch (late 2025) and potential branch optimization via digital adoption could enhance operating leverage .
• Trading implications: Earnings visibility tied to NIM trajectory and deposit cost normalization; monitor CD market competition and regulatory developments on fees .

Notes:
- All financials and commentary sourced from Q4 2024 Form 8-K, press release, investor presentation, and Q4/Q3/Q2 earnings call transcripts with citations per cell/statement.
- Street consensus (S&P Global) unavailable; beat/miss vs estimates not determined.