HBCP - Earnings call 4 2023 | Home Bancorp, Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Home Bancorp Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Home Bancorp's Chairman, President and CEO, John Bordelon; and Chief Financial Officer, David Kirkley. Mr. ahead. go please Kirkley,

David Kirkley

Good Earnings welcome Call. Ross. Fourth Home Quarter XXXX morning, you, to and Bank's Thank

refer regarding Our available presentation I'd please on release in our the earnings and website. ask investor our SEC that the statements in forward-looking presentation filings. are to investor disclaimer everyone

John it few make comments about Now I'll to hand the over to a quarter. John?

John Bordelon

your today. off David. for as our joining value. earnings creating appreciate call you well. Bancorp morning, started Home long-term morning thank I in and Good your we Thank results you, our hope Home and shareholder interest We approach BanCorp's discuss describe to

Home Bank's to ability our strong in demonstrated navigate markets. XXXX successfully volatile performance

both fourth we grew and the profitability. quarter, loans improved credit deposits, During and strong reported

million X after the first $XX million increased in $XXX loans quarters. increasing quarter, the For

in growth our regions, all was XXXX contributions with which XX%. in including saw we expectation grew loan X.X% Our and from newest market, Houston line

performance ago pleased entered are we with acquisition the in Bank. the Texan with Houston, which We years X into of

We outperformed quarter X.X%. there end in the branches expectations, of above the in quarter. resulted ratio as saw following opportunities resulting banking and it target plan a team is first in of first slightly the deposit fourth relocate year the $XX increase continue XXXX. of This our range. we The of and deposits third half outflows half, of increase quarter a increased generation which million strong has second in for $XX upper the replaced commercial half XX.X%, to loan-to-deposit in end year-over-year believe still good the are Houston in we invest Fourth a to We growth. added in million

appears of slightly cost asset increases Net to stabilizing pace steadily to slow. to margin as interest deposit increase and the decreased be was continue yields X.XX%

Financial I'll that, turn Chief over our David, it Officer. With to

David Kirkley

from equity XX.X%. the quarter X.XX% on $XXX,XXX or assets income on third per $X.XX was interest the deposit that share referenced. was Fourth tangible Net $X.XX as $XXX,XXX share increasing quarter. $X.X and by of was net common John and interest The John. declined increasing by per by Return Thanks, income costs income declined offset return million or average

income on decreased decline the per current year loan still due expect sales. expected, quarter fees SBA the those to it's fees. generate in to noninterest the the project environment, in from approximately third rate of difficult now SBA As the but business to gains $XXX,XXX in timing We

mentioned, NIM As by points basis quarter. declined John the X fourth in

around see fees the loan little payoffs. NIM on bit bounced can the from quarter the early and from during XX, basis Slide a margin benefited of the you recognition monthly As X points December

cautiously expect we're additional pressure that we We on some optimistic stabilizing. to but close are NIM,

and cycle target beta historic rate At our this of beta XX% Slide range statistics shows over of deposit X.XX%, current compared deposit of XX the cost is our deposits upper limit XX% X.X%. and the is last to cycles. interest-bearing our about X XX% Fed of has funds that the

EDA ] [ represent deposits and there of total Although our still was cost QX noninterest to the higher-yielding of migration still XX% some X.XX%. deposits, is deposits, in

the X.X%, less in loan expectations. than growth X%, or to annual our an million with anticipated, quarter slowed fourth growth line of As was $XX in resulting in which

XXXX, in growth we yields. impact activity strong, remains and and pipeline expect to could but Fed recognize loan both that X% Our X% growth

estimates into of a and provision slide and strong. $X.X expense basis We quarter provide prior XX nonperforming a loan XX points $XXX,XXX remains additional moved some fourth on million loans Page quarter of growth, as foreclosed deck to quarter in declined of points due it recorded loans total slower XX we to the charge-offs in the basis on which credit, net of primarily from OREO. loan detail Fourth loan $XXX,XXX. very and our prepayment about XX

and points by improved and total for and and adequately now only annualized. points were of our to the declined were net the the is charge-offs the into for loan million Total assets we X have Total loans. of million XXXX performance. loan third quarter that Criticized was charge-offs less not we during loans total than nonperforming to decreased $X Based of do are appraisal, $X.X recognize or or Net loans. from basis $XXX,XXX $XX.X moved The of X.X% basis not quarter recent assets. quarter about due million the XX basis paydowns on X collateralized, points decrease any expect losses. OREO, loan loans to

comp $XXX,XXX $XXX,XXX decreased expense also quarter. came the and to the from insurance prior the about mostly declining reduction last benefits related last during lower the health tax expense from year. million from lower decline care due a This to quarter. quarter expected Shares costs with of was than $X.X Noninterest in

be between million $XX.X in the quarters. and to expense noninterest $XX.X expect We and first second million

Bank. grown on summarizes includes tangible our annually, XX Since it's X.X% the and strategy Slide book which capital the of impact value in adjusted Home cash XXXX, per impact acquisition a management had XXXX. share has

XX% of per ratio share time, During fourth maintaining commitment our creating approved quarterly a target repurchased and long-term of our like to the these a per payout XX%. generally dividend our to about while a that demonstrate that outstanding We've shares to dividend increased consolidated value. ratio and of on capital from think shareholder a XXXX, X% share repurchase we've try to share actions $X.XX since XX.X%. basis all CETX $X.XX We'd quarter plan,

the that, you Q&A? for open can please line With Ross,

Operator

begin Instructions] Dick Graham comes Piper question-and-answer session. Sandler. will our from [Operator from now And first We the question

Graham Dick

start at but David, did benefited there? margin, on little prepayment you the a I'm that were some bit looking just now, wanted to X.X% mentioned XX. say Slide margin I know at it of that December fees you in from just and I

David Kirkley

loans little bit additional the showing in of some prepayments $XX,XXX trend NIM, monthly that but on definitely a like was fee weren't income We Graham. expecting. generated there over that we Yes, some unexpected

on And does it on that I monthly not annual calculation so impact out. point or a why NIM basis, and quarterly to wanted that's while it it's big a

would it December that without been So X.XX% have recognition. fee in about

Graham Dick

That's great.

excluding stabilization costs factor signs faster loans. did? outlook on that I in I you NIM what the saves that, be little looks the transaction that you when couple and even continued guess, I the deposit all so I next grow month have as some you quarters? And for your showing month of What's on bit some And improvement, definitely been any of margin, kind -- made over guess, in guess, a BTFP creep guess, of there. sort over just those up then to might of

John Bordelon

think great in XXXX. I difference the

portfolio our of have little We more maturing. a bit security

So a bit, CD had side, will growth last the and of we'll but on lot pace not growth that did the still we little we we over that be us, in think, CDs which in some We slowdown to there, in see help a NIM, we'll XXXX. the year. a turning also think

ago. So were with double higher that what much of and more X the X, lot loans repricing they cases, years a rates, X, at than in

and a So then yes, latter the slight probably a year. quarter hope we all first part the in have in to not of hopefully growth told, stabilization, if decline

David Kirkley

think, Yes. with John, agree what XXX% Graham, I I said. with John

of then NIMs ago, expectation going rate that were with the couple a it increasing then to quarters, are and little recent or a the of instead of right X optimistic was change in towards but of flatlined definitely we out, think bit will of XXXX end I a for bottoming lot into for a expectations, bottom 'XX. of away, the or that out to kind increasing start increase starting kind quarter about

Graham Dick

Okay.

to it that So And of cuts. and next kind question. rate into -- my goes when comes

longer increase in curve that environment, is the saying expectations not in you would actually cut beneficial higher the it to I are guess? a be you rate So as as into for

David Kirkley

is I to a any big spread still you rate and pick. want -- think between difference Fed funds curve or the the curve that the treasury yield there's

they decline your that X.X, loan originating to for rates, the on loan are bit with going the CDs. yields spreads so little you're or X.XX and rates And of thirsty longer-term of kind lowers and that your a recent still customers kind be X,

still that couple for a some cutting, a that little that's NIM pressure. going starts rate to off or to increase have of bit will going that Fed add Until fend or the the change So so we're next rapidly to see in it's to really hard meaningfully quarters.

Graham Dick

And bow guess to put it. Okay. just a on I

should of the pretty you benefit book does how given So You're asset guess, liability-sensitive, per rate, much correct? right? if guys, the and fixed side is rates, on cut -- se, the that Fed I

John Bordelon

I so, yes. think would

Graham Dick

OREO, to tend lot just I just a around improved Okay. know Great. question metrics but of sneak you And I have this in. looks pretty if one it some in of pretty substantially else then front, markets credit. could seeing the I a operating your cautious on John, had more that front this to from be like their looks pretty borrowers but that you're you in? moved good. health What quarter. financial on are just terms the generally, I know and you everything

John Bordelon

high statements even all we're XXXX. as financial seeing such, annual costs decline, have of borrowing Checking for though been not significant a

impact, negative in change making ] anything a successful little forbid bit. seeing payment not I'm from the would being So a [ that them

even financial we're the environment So interest so higher that, strong. of a in -- it longevity that very and statements say looking on bringing new the customers we're are the rate not at we're cause to might seeing not still

yet. deterioration signs as of no So of

Operator

Rabatin question comes from Hovde And Brett our from next Group.

Brett Rabatin

the guide. some to full and [ of to you talk first to and start expense then what I on quarter if mid-single you ] quarter in terms I outlook of about maybe an just in that first for XX.X% that Could correct, digit that merit in assume -- you, have expenses the increases Can on I growth? is heard XX.X% low increase the year? FICO be quarter. was wanted

John Bordelon

with all There's little bit the a of time, couple pressure of years last in inflation especially the such. and been

turnover. little We will be of our bit a rightsizing where areas higher we've had some

competitive areas. we're trying to So in those remain

little other team more that probably far people. side comp, add increase XXXX X the But Houston, going in in in in as significant create a additions. biggest to We've other X that's a normal. concerned So the the is comp managers bit increase as on added markets. yes, relationship number We is than did not

the on late So year. came in those

people is full expense comp the the had. of part the year of we've effect that a So

-- We to are with have sure make leaders had some other those those some fill to have positions we I'll XXXX. be now, that that empty meeting that positions we team people right in

David Kirkley

So parts noninterest lowered also expense had a the Brett, in which little QX, bit. some we moving

chunk lower much than believe. in insurance mentioned, anticipated was $X.X of we came year. that and was A big I about down this As benefits million, group health comp

bank the less Our and pharmaceutical about in plans and year health HR about XXXX. last care Director, for $XXX,XXX our we with and health flat expense came switched plans insurance than

So QX in taken and we bit of based came expense -- tax good that little bit. the in less were a as for QX. banks in QX those $XXX,XXX that comes a lowered shares in tax expenses as about by rebates some end into expense back Louisiana Also, QX

lower year. And was a for so that bit than the we anticipated little

of in QX, million $XX So expecting then that we expense into are to go kind in about lowered rate April our run employees. raises noninterest QX X for and our effect $XX.X million

uptick And so see in an that. you'll

in So that will QX. range range million to $XX.X increase that that

Brett Rabatin

Okay.

David Kirkley

Sorry, $XX.X $XX.X in QX then sorry. million in QX into and million $XX to million

Brett Rabatin

What's I your like to a some Perfect. thoughts share but level for we getting out, relative the and get are the higher. marks, possibilities more buyback then capital? we're It figured X% right the and any there's any a like And -- the worries. target optimistic. no little you little then thoughts -- right capital if going sounds mentioned M&A? possible the plan? buyback seems capital to CETX, what's assume ratios people And It are on Yes, on

David Kirkley

Yes.

part first pared the We of in significantly QX. really the question. buyback take that me Let down

was I think of and XX,XXX a back at to XX,XXX only weighted shares $XX. buying cost that average

share If we program and share comfortable the buyback during little the take capital advantage year. do of this are growing advantage pricing backed price, off in bit. we it And the if of With the feel prices in the take with poised of comes down to it we'll decline, environment. run-up a

John Bordelon

on to prepared look back in would ready does I'm M&A. very some that, We're that sure to getting we the look we're be moves if is hoping potential there. not the of make some in But if heavy spur going half that that realm. Surely, some opportunities first to are at Fed out year discussions. will forward definitely

that It's like with. team a would them. making of have they that as matter We we sure list of up target like us we just much like people a to as

of be So 'XX should M&A. I pretty heavy think end 'XX and

Operator

from Joe question next Raymond James. our Yanchunis from comes And

Joseph Yanchunis

of has should amount we margin. many of forward finer your How up and margin back model the how a rate to coming with cuts over will to you rate put a curve of the cuts in So baked think kind The certainly point the it, how each years. couple behave cut? next decent on have

David Kirkley

we XXXX. believe going I'm happen, what lot cuts necessarily to consensus to that's throughout for X rate more I I So I saying do. what, attention but budgeted say was from economists, I'd a that's guess, that than general not

will in the we decline and keep with with ability our the of have start flat the with margin forward QX general starting we think curve XXXX a We consensus. provide pressure to the QX. generally to half So cost that increasing went -- for deposit first will

has be up -- positive ending think XXXX. So into we can NIM

John Bordelon

indication I seems behavior deposits I based are other they our to also, -- banks that see of down. that the the any rates to so moves, CD keep lower their we're think upon an think banks a to important regions and good And for cost it short once really is going that's bring in Fed high. factor rates that going don't be with their of outliers

do may in or year. move, see move don't move of the Fed even in they does So I if a we sometime decline in during anticipation perhaps CD slight anticipate a costs once

Joseph Yanchunis

to your XXXX. It Got there balances at? mature schedule kind Is and are maturity off can provide it. comment. color of any of just XX% then you in rate in piggyback like set kind on the CDs what And terms of running that of off looks they're at

John Bordelon

months. we months, different We've had months, there. lot X X-month a have XX X-month put to or a of that We and XX spectrums out had we've

have a 'XX, think bit, that probably we've So than remainder we changing the it stay around that would months. moved kind little X would wouldn't I of meaning longer maturity. maybe or X short, we of relatively anything

in So put eggs it's not do want X to -- basket. our we of all

to So period. we're X helps. spread XX-month trying and that that between out the the Hope

Joseph Yanchunis

outlook kind I growth And your one mid-single-digit of you loan me Absolutely. in last reiterate heard the for here. 'XX. then

would we've to So heard that about management you this over that occur, -- so, the past week of to a come expect talked teams occurring year. number mild loan a were or recession have if And where growth from?

David Kirkley

people have to XXXX in people office Well, hired X% and grew main some we've we I back about and that Houston we think the hired, C&I hired here the you year. Acadiana, in at we've lenders, of -- look last and in our all the C&I ones

itself think lot that the little 'XX. coming a optimistic still and that's think bit We in have able growth had do may the probably about economy, an been very that rates. even there, maintaining that's decline C&I in area. especially where potentially 'XX 'XX we for a we in CRE, has in where But growth whole be So and that a we area declining of to grow at not high that

Operator

This to concludes our John would turn question-and-answer call [Operator back to for I closing over like Instructions] the remarks. session.

John Bordelon

Once joining day. again, Thank an us look today. many look coming in great all days speaking you a We and you Have thank forward for to to to weeks the XXXX. outstanding of forward and you.

Operator

for This you attending conference presentation. now has Thank today's concluded.

disconnect. now may You

Home Bancorp (HBCP) 23 Jan 242023 Q4 Earnings call transcript