Home Bancorp, Inc. (HBCP) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights strong financial performance with increased deposit growth, decreased net charge-offs, and a reduction in the cost of interest-bearing deposits. Positive outlooks for loan growth and M&A activities, along with stable NIM, further support a positive sentiment. Although there are concerns about NPAs and the SBA business, the overall sentiment remains optimistic. The combination of these factors suggests a positive stock price movement.
Key Financial Performance
Net Income (Q4 2025) $11.4 million or $1.46 per share, a 21% increase year-over-year. The increase was due to strong loan growth and deposit performance, despite an 8% decrease from the prior quarter due to higher provision expenses.
Net Income (Full Year 2025) $46 million or $5.87 per share, a record high and 29% higher than 2024. The increase was attributed to strong financial performance across loans and deposits.
Net Interest Margin (Q4 2025) 4.06%, up from 3.82% in Q4 2024. The increase was driven by higher yields on interest-earning assets.
Return on Assets (ROA, Q4 2025) 1.29%, up from 1.12% in Q4 2024. The improvement was due to better asset utilization and profitability.
Loan Growth (Q4 2025) $38 million or 6% annualized. Growth was driven by strong December originations, despite elevated payoffs and paydowns.
Deposit Growth (2025) 7% or $192 million, with strong growth in demand deposits and low-cost money market accounts. This helped reduce the loan-to-deposit ratio to 92% from 98% in 2024.
Net Charge-Offs (2025) $908,000, 3 basis points of total loans, and $128,000 less than 2024. The decrease reflects strong credit management and conservative underwriting.
Nonperforming Assets (Q4 2025) $36.1 million or 1.03% of total assets, an increase of $5.2 million due to downgrades in two relationships, partially offset by paydowns.
Cost of Interest-Bearing Deposits (Q4 2025) 1.84%, a decrease of 6 basis points from the prior quarter and 15 basis points year-over-year. The reduction was due to recent Fed rate cuts.
Noninterest Income (Q4 2025) $4 million, slightly above expectations of $3.6 million to $3.8 million, driven by better-than-expected performance in noninterest revenue streams.
Noninterest Expenses (Q4 2025) $23 million, an increase of $515,000 from the prior quarter, in line with expectations, due to annual raises and new projects.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Texas market expansion: The Texas franchise, now in its fourth year, has grown loans at a 15% annual rate since 2022, representing 20% of the loan portfolio. The company plans to open a new full-service branch and close the loan production office in Houston in Q1 2026.
Loan growth: Loans grew by $38 million in Q4 2025, a 6% annualized increase. The pipeline is building, and paydowns are slowing, with expected mid-single-digit growth in 2026.
Deposit growth: Deposits grew by 7% ($192 million) in 2025, with strong growth in demand deposits and low-cost money market accounts. The loan-to-deposit ratio was reduced to 92% from 98%.
Net interest margin (NIM) and return on assets (ROA): Q4 2025 NIM was 4.06%, and ROA was 1.29%, both higher than Q4 2024. Year-over-year, 2025 NIM increased by 32 basis points to 4.03%, and ROA increased by 25 basis points to 1.33%.
Credit quality: Net charge-offs in 2025 were $908,000 (3 basis points of total loans), with nonperforming assets increasing to $36.1 million (1.03% of total assets). Conservative underwriting standards and proactive credit management are expected to maintain low charge-offs.
Cost of deposits: The cost of interest-bearing deposits decreased by 6 basis points in Q4 2025 and by 15 basis points year-over-year, with an overall cost of 1.84% in Q4 2025.
Capital management strategy: Since 2019, the company has grown per share tangible book value at a 9.6% annualized rate and EPS at an 11.5% annualized rate. Quarterly dividends per share increased by 55%, and 17% of shares were repurchased, maintaining robust capital ratios.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Loan Growth: Loan growth in 2025 was below historical trends, and while paydowns appear to be slowing, this could still impact future growth expectations.
Nonperforming Loans: Nonperforming loans increased in 2025, with a notable $4.1 million relationship involving townhome development loans in Houston being downgraded. Although no material losses are expected, this poses a risk to asset quality.
Net Income Decline: Fourth quarter net income decreased by 8% from the prior quarter due to an increase in provision expense related to loan growth.
Interest Rate Environment: The repricing of variable rate loans following three Federal Reserve rate cuts in September led to a decrease in loan yields, which could impact net interest margins.
Provision Expense: Provision expense increased by $709,000 from the prior quarter, reflecting potential risks in the loan portfolio.
Noninterest Expenses: Noninterest expenses increased by $515,000 in the fourth quarter and are expected to rise further due to annual raises and new projects, potentially impacting profitability.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Loan Growth: Loan growth in 2026 is expected to be in the mid-single digits as the pipeline builds and paydowns slow.
Texas Market Expansion: The company plans to open a new full-service branch in the Houston market in the first quarter of 2026, replacing the existing loan production office. The lending team hired in late 2023 is expected to increase productivity.
Net Interest Margin (NIM) Expansion: Cash flows from the loan and investment securities portfolio are expected to support NIM expansion in 2026. 41% of loans with a blended rate of 5.7% are expected to reprice or refinance over the next 3 years, and half of the investment portfolio is expected to mature with a roll-off yield of 2.56%, below current available yields.
Deposit Cost Reductions: The cost of deposits is expected to decrease further in the first quarter of 2026 as recent Federal Reserve rate cuts are reflected in deposit pricing.
Noninterest Income: Noninterest income is projected to increase to between $3.8 million and $4 million over the next several quarters.
Noninterest Expenses: Noninterest expenses are expected to range between $22.5 million and $23 million in the first quarter of 2026, increasing to between $23.3 million and $23.7 million thereafter due to annual raises and new projects.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Quarterly Dividend Increase: Increased quarterly dividend per share by 55% to $0.31 per share since 2019.
Share Repurchase Program: Repurchased 17% of shares since 2019 as part of capital management strategy.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:When might we see a shift in the trajectory of Class 5 and NPAs as you work through some of these credits?
A:John Bordelon explained that it takes time, especially for credits in Louisiana and Mississippi. Texas properties typically move faster, with a timeline of about 60 days or less. He mentioned that two subdivision properties in Texas should be sold by February 3, and another facility in Texas is expected to sell soon. David Kirkley added that one property worth $5.5 million should be resolved by February.
Q:Can NPAs come down about $5.5 million if nothing else comes on?
A:John Bordelon stated that they hope so, as the property should sell relatively quickly unless delayed by permits or other factors.
Q:Does the loan pipeline makeup look meaningfully different from what's on the books today?
A:John Bordelon noted that there were payoffs and paydowns in the portfolio due to higher rates and business sales. He expects less of this in 2026, which should support loan growth.
Q:What are you hearing from customers in different parts of the footprint, such as New Orleans versus Houston?
A:John Bordelon mentioned that they are not hearing anything negative in their markets. With rates and the yield curve coming down, the outlook is leaning positive, though national economic concerns remain.
Q:Will the SBA business be a driver of growth in 2026, or will it require more investments?
A:John Bordelon explained that the SBA business has been slow to develop due to higher rates, but with lower rates, it should pick up, though not significantly until rates drop further.
Q:Would you characterize M&A as a top capital deployment priority, and how has the pace of conversations changed recently?
A:John Bordelon stated that M&A is a priority, especially with their stock price improving. They are optimistic about 2026 M&A and are looking at deals involving banks with assets of $1.5 billion or less.
Q:What would a larger M&A deal look like in terms of size or geography?
A:John Bordelon mentioned they are considering banks with assets of $1.5 billion or less.
Q:How should we think about the size of the bond portfolio in 2026?
A:David Kirkley expects the bond portfolio to remain at 11%-12% of assets, with an increase of $15 million to $20 million on a par basis.
Q:Are there opportunities to add to the Texas team given the M&A environment, or is there enough capacity to grow?
A:John Bordelon stated that they retained all staff from the Texan acquisition, added three more people, and are building a new branch in Northwest Houston to support growth.
Q:What is the overall loan growth capacity for 2026?
A:John Bordelon expects mid-single-digit growth, with potential for higher growth if interest rates drop, particularly in the second half of the year.
Q:What is the trajectory of the NIM, and what is the scale of potential upside?
A:David Kirkley explained that NIM was 4.08% in December and is expected to increase to 4.1%-4.15% throughout 2026. He noted that CD repricing will positively impact NIM over time.
Q:How should we think about the balance sheet's rate sensitivity and its impact on NIM?
A:David Kirkley clarified that the balance sheet is asset-sensitive, and even with a 100 basis point rate cut, NIM should remain stable. He also noted that CD repricing provides a lagged benefit to NIM.
Q:Review of Unclear Management Responses
A:Management avoided providing a direct answer to the question about the specific timeline for resolving NPAs and Class 5 credits, as they cited various factors like permits and lawsuits that could cause delays. Additionally, the response about the SBA business lacked clarity on the level of investment required for growth.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Bank Yesterday
Bank share
Loans origination
NIM ROA
ROA Loans
ROA NIM
Texas franchise
account success
bank trend
banker branch
branch loan
credit Slide
demand deposit
deposit franchise
digit loan
down paydowns
expect Home
franchise operation
income share
lending Texas
level peer
loan production
loan success
market loan
market service
office Houston
office lending
offs underwriting
operation banker
origination payoff
paydowns digit
payoff down
peer bank
production office
profitability
standard
HBCP Transcript
Home Bancorp, Inc. (HBCP) Q4 2025 Earnings Call Transcript
Positive1-27
The earnings call highlights strong financial performance with increased deposit growth, decreased net charge-offs, and a reduction in the cost of interest-bearing deposits. Positive outlooks for loan growth and M&A activities, along with stable NIM, further support a positive sentiment. Although there are concerns about NPAs and the SBA business, the overall sentiment remains optimistic. The combination of these factors suggests a positive stock price movement.
Home Bancorp, Inc. (HBCP) Q3 2025 Earnings Call Transcript
Positive10-21
The earnings call reveals strong financial performance, with net income and NIM growth, solid ROA, and a favorable efficiency ratio. Despite a decline in loans, deposit growth and a stable loan-to-deposit ratio indicate good positioning for future growth. Shareholder returns are strong with dividend increases and share repurchases. The Q&A suggests management is optimistic about maintaining NIM and resolving nonperforming assets, despite some vagueness. Overall, the positive financial metrics and shareholder returns outweigh concerns, suggesting a positive stock price movement in the near term.
Home Bancorp, Inc. (HBCP) Q2 2025 Earnings Conference Call Transcript
Unknown7-23
The earnings call summary presents a mixed picture. Financial performance shows stable NIM and deposit growth, but loan growth is below expectations due to paydowns. The Q&A reveals management's cautious optimism but highlights uncertainties like interest rate dependency and unclear M&A strategies. The share repurchase plan and dividend growth are positive, but the increase in nonperforming assets raises concerns. Overall, the sentiment is balanced, with positive and negative elements, leading to a neutral prediction for the stock price movement.
Earnings call transcript: Home Bancorp Q1 2025 earnings beat expectations
Positive4-22
The earnings call shows strong financial performance with a 20% YoY increase in net income and EPS, a 21% dividend hike, and a new share repurchase plan, indicating shareholder value enhancement. The net interest margin improved, and noninterest expenses decreased, reflecting operational efficiency. Despite some concerns about specific loan sectors, management's optimism about NIM growth and asset sensitivity in rate cuts suggest a positive outlook. The Q&A revealed minor uncertainties but didn't significantly alter the positive sentiment. Overall, these factors suggest a likely stock price increase in the 2% to 8% range.
HBCP Slides
HBCP Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
