HBCP - Earnings call transcript Q3 2024

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Operator

Good morning, ladies and gentlemen, and welcome to the Home Bancorp's Third Quarter 2024Earnings 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. Kirley, please go ahead.

David Kirkley

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

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

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

John Bordelon

discuss for interest Thank per nice improvement call a today. earnings future for joining from in Bank approach long-term you, Home our results. to David. expectations or net was Good reported shareholder morning, and of our as our quarter's and value. $X.XX last we appreciate $X.X which million the third you your results, income thank creating share, We quarter We strong

increasing in trend that X assets third was Return points pressure We're optimistic was impacted and and also continue will expand on $XX XX funds. to paydown rate to growth second X.XX%. our by points continued quarter quarter. million cuts the basis basis on increased the the the from margin as Fed loans. reduced of the in third of C&I Loan interest a cost X.X% Net slowed the medical quarter, up

and had impact could lead years to X-plus sustained we last some November in optimistic and originations. said demand clarity markets. As quarter, that a on in We're in higher a rates our of demand has material loan rate loan cuts pickup

X% we yields an soft the to demand the growth reprices. the our environment, at rate to higher demand in opportunity book to third in last, loan our current to fourth, end on Based XXXX seeing saw the X% of we lower we and which expecting in asset the quarter low don't we Even we're fixed are naturally finish as drive expect have think guidance.

adjust lower with rates Deposits a will checking after we're have interest-bearing that and cuts coming to the in similar cut market were accounts. money CD Money increased rate X% million growth impact. of September, or market quick $XX optimistic most rate annualized, from and future the

provide some funding of drive few the and our over asset higher reduce quarters. our repricing the everyone will to David on our next to more asset a and give costs details yields sense potential liability

frustrating It continue years perform economic good hasn't well, continues been very over because cycles. Bank's the has Home to exists responded strong Bank feel variety we X outlook the that This last performance of and frustration about a to in have accordingly. demonstrated and Home market

such relationships things customer control But can we and control, our the providing and existing culture. we'll maintaining we on conservative can't as service, exceptional credit the focus that market, expanding so with new customers

Chief value long our confident over are it I'll to term, our Home David, to Bank. continue that, approach Officer. at In we build back will the that turn shareholder With Financial

David Kirkley

John. Thanks,

benefit net yields in points up the We basis from increased average continue on by continued in increases yield interest while outpaced on The liabilities the X.XX% This quarter. funding XX to $XX.X to increases interest-earning dynamic which by increased X.XX%. to points see to costs quarter. basis interest-bearing to million, X in the asset average increased yield previous income, third assets $XXX,XXX

ratio opportunities slower near-term to we loans loan million XX.X%. lower believe reprice. $XX combined have or slowed to to Despite spread growth, deposits growth, As loan million provision contributed quarter we the $X reduced the slower annualized loan The loan and about John X% increase as $XXX,XXX. pick that some during mentioned, up to of a growth the with in loan-to-deposit loss our

X.X%, rate loan market to with rate a yields portfolio origination is average our is our rate environment loans of the competitive above rate XX% favorably fixed which fixed continually weighted is The and loan we're and originating portfolio. volatile, compares of yields X.XX%.

floating we to downward rate to now fixed climbing, that our increases while on NIM be provide we protection should asset loans, some in rates of yield appear rate think yields slowed So were in it when mix decreasing environment. a

we our costs what few of next happens the also reduce stabilize market with liability have opportunity depending, quarters, or to in We think rates. course, an

approximately have the $XXX rate a or with We about weighted X next XX% months maturing million average CDs of of X.XX%. in

New CD XX least rates from lower. origination points October are basis at

in X.XX% BTFP portfolio may $XXX some have and also you composition down We X Slide million our changes. January. of borrowings loan maturing notice breaks

collateral and in or X on new to C&I decrease detail portfolios. XX to opposed to additional origination shifts additional updates CRE presentation of of in some actual increase due loan on systems provides in credit. Slides The and X our XX [ mortgages to and are as X was the the ] investor through activity. percentage family and details provide XX Slides our CRE our quoting

by loans $XX.X loans. quarter total X.XX% of Nonperforming increased or $X.X only the in third million to million

the allowance Our income on noninterest X.XX%. for and was additional from some XX loan Slide of presentation at has the ratio stable second loss details expenses. quarter

quarters. which slightly noninterest quarter decreased with expectations. the $X.X increased be line million was Third billion to in next million and expense over by $X.X Noninterest X $X.X to $XXX,XXX should and between income $XX.X million,

core expenses $XX.X next X noninterest million between quarters. expect during to We and be million $XX the

of of price XX,XXX AOCI. XX% at repurchased equates book We in shares excluding which tangible an the $XX.XX to quarter, value, average third

share, of which increased midpoint our the per $X.XX dividend close target gets of to our to us also XX.X% by to XX% We earnings. of payout dividend $X.XX ratio

on Bank the summarizes management strategy impact capital has years. few our the Home XX last had over Slide

and same the growth years, a X.X% Over we at annualized also growth we the value adjusted EPS tangible increased X rate. per a at grew last period, share rate, annualized book X.X% over

during XX% share time XX% the by same and our dividends of period. per increased our repurchased We've shares

robust ratios, a this they in and arise. any successful we've of positions opportunities us And economic advantage while capital done be take to maintaining to which environment varying as

that, line Q&A. open please the operator, With for

Operator

first comes go ahead. Feddie question Your Instructions] [Operator from please Strickland,

Feddie Strickland

to showing, of annualized a rate get loan I rate little see on in get single-digit opening XX bit wanted Just touched something Fed but mid- to comments, series funds this year? we the start growth. we series to throughout into to point as growth see we if high John, with you mean, I 'XX maybe I a a you cuts if futures as start of are loan basis your more think can a return cuts like mean

John Bordelon

Absolutely.

I think shrink the most obvious one begun new slowed have to X as significantly. is the X That's portfolio. originations to

XX-year the mortgage With going climbed higher have up, the into rates Xs.

not had think wanting I a but builder product And put so there. to the is out impact, much too negative that's

with help industry. the that the So would I definitely the end, know that rate on mortgage will, long with the cuts

that, just have see economically customers going commercial rates as far what's many do the pause United on going just are to our momentarily other As loans, throughout of where where they're going, believe stop States. and I to

they least in kind of anticipating second XXX that but quarter prudent point it's think that first, I we've hesitate they basis should that dropped assuming I'm up, do shortly rate. back at pick So that

Feddie Strickland

Got it. of drive mean touched just going bit a That's there helpful. and good haven't you that forward? Houston the commercial geographically, Or And in of expect yet. do is growth still footprint I you the some then other parts that maybe New Orleans opportunities

John Bordelon

question. the Houston, with Lafayette. company some are markets in No strongest Other of but X come periodically markets. the strength the is improvement, and markets in those Orleans New Surely,

Feddie Strickland

nonaccrual more those the was credit I for were into the could ask shifting about seem put you. relationships on quarter. that category. you same And wanted if this that I substandard a little just the talk to ones to second. Got in And to bit migrate are wondering construction a

John Bordelon

Yes.

-- are rental problems is, the we It's properties the rented. the think, University. where properties area It's a So and Charles this with in around disagreement being and no a property. with still And it just the credit XX off I the X disagreement St. have there's owners. with Avenue, different New of stems from so Orleans Tulane -- partners

We are heading of share for sales.

all X of think I dates properties. for sales there are share these different

then at are January. the the and then think I November and And first this month of end ones

So we all free of should that. properties. equity the about million There's $X in completely of be

a we on those. sale of share all So out taken being of anticipate

Operator

please from from Joseph line the next ahead. Your of Yanchunis, go

Joseph Yanchunis

Yes.

appreciate here. in to color back a the So what quarter, also payoffs to to to loan headwind that of of if start but accelerate, would a kind loan trying get payoffs loans and lead curious to to the CRE fall. And loan would for lending on if better idea an reclassification kind the I growth, of know, be was gross the rates I circle production categories. I'm of just want minute, on opportunities

to of Just little trying get kind that. color on a more

John Bordelon

looking We're that up...

David Kirkley

of QX a prior paydowns or X% during million new is equal $XX average than quarter, quarter, in those rate less in highest did the [ of the XX have payoffs about coming higher little about were We probably We originations. levels new ] bit QX, originations on since around which principal and in weighted 'XX.

quarter. that paydowns was stymied experienced, this some Joe, which sorry, our X higher that there question growth another in So I'm as of we've well? past

Joseph Yanchunis

how see offset headwind. just you payoffs opportunities was as -- of Well, will I kind rate-cutting we a lending move into that incremental environment wondering behaving

John Bordelon

they opened $XX not payoff line a of performed they as that about a And wanted. The -- that PPE. -- in up other million really hospital gloves basically, have C&I major new well it's manufacturing came as and not has

paid the They X%. had cash. or of off just they us us X% excess instead So paying

kind one-off of betting a I'm that's any fact, afternoon. X expect we new this don't in So seeing, But more. we are that opportunities

One done. rates, be we're lower The with an projects at to looking afternoon. the facility. that think is construction do and I So there's is other going existing this X more

second So There's not have first similar that and question. probably do payout $XX look it has no to quarter, had it's slowed. million predict. we to really but very hard -- think I the to

down book as And was it Our as probably settle we slower the presidency will down new as construction things first rates take in again. over, off is second anticipate second and takes than where quarter. and in quarter go

Joseph Yanchunis

you've over believe your look And how deposit of just competition it. behave on does do moving piggybacking and will Can continue think to and forward? about see the to like How remains down demand we term, of deposit alluded kind of you And flipping muted in you betas if pricing? off do you talk near the kind NII Got relatively way kind to, around of should pricing. as in What deposits. pressure trajectory the about markets? kind that, loan

John Bordelon

rates. have follow comment up their on believe and let I -- banks suit of that and the a make all David markets do that. most dropped in our followed I'll

seeing whatever. pull rates, We're their some banks. of that. But little be with other search brokerage are houses people not but those out CDs may in not a seeing bit We for necessarily or

most as So the of their lower doing we're are costs. to deposit players doing and trying

cuts by the with our down to should So bring the Fed, we costs. think to I ability continue additional see

X.XX% throughout down significantly, year, for of coming would that today in ] rate the first not at Our quarter. X this highest if anticipate remainder is [ we and months, the surely

David Kirkley

XX, Slide CDs on notice funds of cost quarter-over-quarter. cost flat our at of you'll look you if Joe, Yes, were

you CD rate look from the compared actually at rate the June yield. down about to XX points spot If spot we're September, of on basis

play our So yields out And that in slide in on you'll QX. in Slide NIM see look you uptick at XX, if you'll September. see

So CD we are pricing a lower to bit. ability good the our seeing

been competitors CD and out, the cuts pointed our money John have as And cuts mostly rate announcement. market aggressive after in Fed rate

As I earlier. the in -- about talked

some rates, than our portfolio have variable Our loan we less competitors. rate in our loan of

loan So competitors of next negatively not as other quarters. some as yields cuts of continue our rate down as should impacted the our be couple

September. bit from despite September in up on more rate loans the actually little that, context XX a you points rate give was spot on basis basis to cut point X June To

loan due So we rates. a coming coming due, have rate fixed lower of and lot at opportunities they're

to those a of loans future. being the offset cuts bit higher, So some which reprice should the in of some able rate

Joseph Yanchunis

of here. Slide And that. with XX kind sticking appreciate I just

in Do You have BTFP going plan to that? backfill to have a kind mature the January. you of funding that's

David Kirkley

options. looking We're the in

I borrow the and think go some no some going advances given of looking overnight. divvy to X that rate kind term to with impact between some we be at if We're maybe cuts, as funding. on options money to had we're really overnight in up that as out well

John Bordelon

the little carrying bit what's over knowing cash been excess quarter, deposit not happen exactly flow. to with a we've going just of And

Joseph Yanchunis

will X in week past talked the it's slip occur? XXXX, leverage banks just year. here. over early I something that could know but next Is some I generating positive more if And believe Okay. for you operating about have

David Kirkley

deposit Look, and loan the there's opportunity least Joe, very think NIM. think should our stabilization our at we're we in we that good with a I the Yes. book see spot book in

reprice to expect we're the off of next well. deposit behavior some We us tick of able be and up NIM for based to on the over going that loans the quarters ability to as couple

John Bordelon

most will costs. damage throughout rates, think, I cuts would yields XXXX, I severity our the exceed us loan cause cuts, think the NIM, our methodically, or speed if to The be able deposit of of they is the then the to reduced the what

So quarters December, to start points in NIM basis up a take, if point, and for it XX they in David's to our again. may drop XX then November back couple of

Operator

comes Your next from ahead. Strickland go with Feddie Hovde question Group. Please

Feddie Strickland

happen last goes basically was of follow-up if sensitivity John, after in the happening versus margin. like potentially on that between quick to your we down, all question or just it the last that time? once shock be which down over having XXX, a at It that the difference appears scenario reality, NII saying what disclosure that is have gradually rate sounds current comment that is

that react. you're kind able And to is of takes puts and the there

loans. versus it hitting takes between the great the You've all hitting got over you that sensitivity deposits sort some and once disclosures and of that just of what rate they're could at and manage actually are repricing what floating loans actually we some course Is the happen of see your puts and 'XX? repricing can

David Kirkley

Yes. out behavior deposit now The big with problem rate well I as that Home as Bank we're is as having banks other think figuring cuts. right

rate have cut when lower lot this 'XX market And the XX of of their little continued and think that points, they bit. think basis cuts a 'XX, reacted expectation. rate rate basically CD XXX into basis people expected then, of past I a with I to end were another and by cut rates able moderated expectations since the announced points

maybe our balance to to retain those deposits like cuts. grow how able across on with much where months prices really rate our rates couple upward cuts feel cuts. to some too CD right much to they're next reductions we're and there of going deposit going with over to there that the regards our so how the was dependent that we're I may of rate pressure the be competitors and when finding customers And expectations on expecting on rapid is market react be deposit occur

stabilization the So cuts or some when announced. not rate beta further I think there is be may high as being are

John Bordelon

much decision now. pretty right we're drove our how our on CDs pricing That

of markets. that one the We our a have on rate in X-month a is higher all of

in XX, not we So little XX, David's high Do we not a we exactly we November. do here sure comments of to that stay wanted to do we're bit because going do happen anything. do what's do

the We're how just anticipate able to down. do the measure and we to we rate to So move be going market ability far that see can go.

Feddie Strickland

expenses. helpful. there. And on last me, appreciate X Got guidance it. just That's follow-up for near-term too, the I

or the Just whether of that maybe in or curious new could merit system anything 'XX increases something. if road, there's in later the technology any acceleration, core cause on investment or it's new sort horizon down

in on expenses the up could cause 'XX? Just of curious if anything half tick horizon there's little to a bit that materially back the

David Kirkley

annual take X. raises have April Yes. We generally that effect

time expense period. So comp benefit that you'll and see uptick in an during

those right right course jumping budget out are the through material no expenditure process are going out capital things. now the of are there a ordinary are We of for objects standpoint. the There that and now evaluating

John Bordelon

so saves But not as as I they as impactful would so cost am be those normally. rates merit looking for to, aren't

Operator

This John concludes question-and-answer for session. turn like any back I remarks. conference our closing would to over the to

John Bordelon

in the wonderful to joining us coming you to of I have many hope again, Once weekend. for and all today. forward you. We a speaking you you look thank days, Thank

Operator

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

You may now disconnect.

Home Bancorp (HBCP) 18 Oct 242024 Q3 Earnings call transcript