HBCP - Earnings call transcript Q4 2024

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Operator

Good morning, ladies and gentlemen, and welcome to the Home Bancorp's Fourth Quarter 2024 earnings. [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. Kirkley, please go ahead.

David Kirkley

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

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

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

John Bordelon

CDs. discuss to thank driven We our our $X.X share, increase expansion with earnings quarter per yields call Bank deposits, snowy Therefore, growth year, Louisiana. net too appreciate resulting Thanks, decline strong December, loan total have future to growth to from customers interest ], approach XXXX, X.X% of January, quarter's change the early in of growth on our an million XXXX loan picked as of in of Originations with grew expectations growth and money and will interest-bearing point first David. X.X%, X.X%. basis noninterest-bearing X% expect annualized loan XX% we income Noninterest-bearing assets it's drove third $X.XX guidance. by quarter. of our slight today to of from the in loans a year in and XX the by in shareholder growth deposits between results, at joining fourth and were X.XX%. was to a we in slightly push Good remained $XX for in margin cost XXXX. Deposits the the and creating deposits strong of but interest in of November in stable [ loan-to-deposit up quarter you the for XXXX into quarter down few fourth October, to net CRE, or accounts make which year-end. morning, but coming interest-earning value. Yesterday multifamily Home increase (sic) your and continue XXXX were reported ratio. After loan but helped liabilities, our consecutive NIM the in slow our million most construction market from afternoon, most up long-term flat moving Fourth average a and grow last the in in X% for the weeks we fourth a expanding

We to branch checks unless going for to not deal help strategic you in But new there. know a to boxes. valuable opportunities look at Houston, open expansion. all a as which the Northwest it probably now, by we're do plan do should the continue We building we're franchise develop

As at we beginning a hired team and in XXXX, great making a Northwest progress the of Houston reminder, developing commercial relationships. they're

to success and ability As I Bank's very good perform. we quarter, in said last outlook that. about demonstrates We our think XXXX our Home feel

continue remain Our the Officer. and that to maintaining customers bank. and that, turn it expand outlook our our I'll and back focus We solid of demonstrates expanding and strength will our continues in service, to on customer Financial NIM culture to David, shareholder existing value relationships build confident our think with earnings and Chief credit in over new XXXX. With

David Kirkley

NIM. cost XX first the incrementally last again. not basis or of years, year, income, John a $X.X in basis of fourth in quarter, was the invert funding does million an half the the we After decrease think mentioned, supported quarter, point liabilities yield X.X $XX.X an as the have increasing in the to increase over net interest million bring we assuming of previous down quarter It from John. supported X% quarter. We the saw opportunity point the which, which the third in curve healthy consecutive costs also increase Thanks, for XX interest-bearing increasing fourth of a

have which months X.XX%, basis X rate about with We or weighted points of XX a $XXX CDs million average next rates. of is the XX% in above maturing approximately QX origination

easing nonmaturity deposits As we to XX betas, quarter, right their weighted as the quickly you low see XX that CD in you so Slide by points process haven't cycle blended on shows the rate The rate are funding we already making in is X.XX%. rates fourth on we the progress table can reduced reduce It basis XX, average and were Slide we're on our good able can see already as bottom also deposit of rates. at early shows there.

the also yields see were X.XX% a from quarter-over-quarter on of did quarter at at of boost yield X.XX% prior the advances. off assets quarter. loan flat advances by the basis X point the relationship in that in of loan recognition December. paid nonperforming X.XX% cuts $XXX,XXX rate income a FHLB short-term Yields million We lower-cost from of BTFP on points a fourth loan earning Fed. XXX despite $XXX replaced of also flat Reported in We were basis

portfolio Fed and yield protection rates steepening cuts expanding is of provides has also expansion curve fixed provided slowed and an protection. which but from rate asset yield supports prepayment loan yield when Our now the should offer rising, increases some XX% The spread were NIM.

with November fourth points had $X.X which XXX in ratio the John XX.X%. Slides X.XX% Credit X total current which loan originations and X our basis our in remains 'XX a X.XX% $X.X As loss portfolio of than to upgrade to to points C&I originations million quarter The XX originations nonperforming X of fourth strong $XXX,XXX blended higher assets loan presentation December. quarter mentioned, increased of higher of of loan a basis and picked the loan-to-deposit and followed yield. increase provision contributed The loan. charge-offs XXXX. basis was XX points and quarter assets. million Fourth yield million points in an primarily in basis net about is up decreased $XX million decline of $XX.X XXXX, in provides or detail some The due additional credit. to on of very

should ratio expenses. to income be million $XX.X noninterest million X.XX%. Slide next expense and from to quarter additional at X which with $XX,XXX decreased over stable noninterest loan the some quarters. third $X.X the allowance slightly of million quarter loss was Our presentation Fourth the XX was income Noninterest has details on for expectations. and $X.X million, in increased $X.X by between line and

repurchased management by at on Home reductions still and of We compensation some XXXX. XXXX repurchase Most will shares volatility expect to be has occupancy Bank. warrants be our noninterest in X,XXX technology-related expenses offset expenses. We of plan active will quarter, X.X% shares XXX,XXX XX in fourth increase strategy XX and increases but the had we be in the by will in have only the impact buyers capital market it. Slide on and and summarize

at per value growing Over the we years, X.X%. rate tangible X per share value at while a tangible growth annualized grew AOCI X.X% last adjusted book book share for

ratios. open while We've us an we per take repurchased advantages growth Over economic done increased positions shares. in maintaining please capital may this for to And opportunities our that, our line varying rate. increased EPS at successful by be also of operator, X.X% Q&A. share XX% environments arise. With that the This robust any and and to we've annualized period, the same dividends XX% of total

Operator

[Operator Instructions] James. Joe is Your from first question Raymond from Yanchunis

Joseph Yanchunis

static your throughout neutral XXXX. any into of little as dig I rate could to kind balance you that a include on your posture. hoping know was Is rate inclusive does I being thoughts your environment? a expand that more that sheet for expectation more of So Or shift cuts? NIM in the

appreciated. any would that Just you be could color of kind give on

John Bordelon

loans a case I rate Yes. to the expand and as in bit slight both mean, CD to base opportunity we environment, our We little the -- portfolio higher. reprice NIM reprice a And do expect continue to lower. has cut

portfolio, that of of is money as we any much on the our have reprice bit. The and don't don't still to Fed have higher portfolio pick loan from market to opportunity loans, maturing rates rate weren't pick overly those we As fact so loan costs the reprice the lower loans some much liabilities bottom declining line get sheet amount on than a is we some on to investment we and being we the have have our yields portfolio higher have line QX, investment we and with the -- not significant the able bottom from higher a We mix up yields balance variable but as mentioned, really many of little of it's in and bit opportunity little aggressive cuts. But rate pressure of our just mix just a right up. the cutting now. a in

Joseph Yanchunis

we think we that Okay. I betas appreciate that money Kind And of kind as well and down your your loan-to-deposit the of in didn't uptick about cadence put your talked year? your as as response, really XQ. market move given then should in remarks the how in in ratio, prepared rates you throughout rate you about that.

David Kirkley

Yes.

a of managing nonmaturity some our deposit here money slower bit was money in did I those some maybe having a actively think really rates That DDA leaving decline high half rates higher timing once on some opposed runoffs. In market raise customers that because competitors XXXX. just the again, market significant we accounts. as our impact the and ability to rates, deposit CD we We may of December, pockets have We as towards be our little do had have function the deposit back a on as and lower and can a them. incrementally the of didn't little we're of bit them more of we without really see a reduce side there betas to bank. still noninterest

rightsize we that about money a more ended to bit optimistic are have the better little be to at we a we're So than And year-end. loan ratio on bit perhaps going markets. what aggressive deposit may little

a rising bit are a little CD little market competition, the We seeing more prices in space. CD bit

XXXX. originations, cognizant that. be uptick will that pretty are are we we NIM an with new expanding still throughout CD So of in confident Even

Joseph Yanchunis

Right. And X more then I for that. just me here. appreciate

outlook your Northwestern opening is in growth assume noninterest to Houston And decrease X.X%? branch that's occupancy when the would And expected your into I why to of of lead a other expense? expense So branch baked that open?

David Kirkley

Okay.

was X actually lease our We in the there's and from to headquarters. acquisition that got that. So of of our corporate their Texan September last -- out parts 'XX, lease Bank

we're evaluating I'm we LPO chunk, a -- occupancy was until clear, convert opening we're reduce more sizable going that's Northwest to the reduction we Houston, expense options. an expense do locations. a to be don't branch. see 'XX. And in We're and to have there, Houston, in why we're And at going half just service occupancy that where sorry, just that currently a 'XX. that is back anticipate to in evaluating full And And Northwest towards So the 'XX. we looking help which

Operator

Your question next Feddie Strickland Instructions] from Group. [Operator from is Hovde

Feddie Strickland

you and cut adjustments gave. to overall like detail the branch may appreciate I April the of? the here. you Is beyond question year, there. opening LPO the huge X any expense be just throughout the in salary the make for expense which continue account the to that in sounds wanted as year already Just sense not it But on there have lumpiness later a

David Kirkley

said effect Not specifically, it, as we -- said April X. take you raises

going -- that to quarter. that in looks are be right you're I expect appear have do the planned that throughout now I'm QX. don't lumpiness. projects uptick an to in some don't significant see something -- a baked impact is So to up, but any really, would have to will We come going we foresee But sure that or anything any year.

John Bordelon

on bringing we're they do. changing behavior late XXXX change the degree that that on And -- result to initiatives branches the fourth the of brought end quarter behavior. on is of and actually that in utilizing of customer focusing One

XX% the X We that of where a check. check a have depositing are or we're right branches transactions cashing now analyzing

change close would potentially if reduce So our expense our some can can base surely positive we then the as customer impact branches. base, have a of we behaviors on that and

technology. our that's working initiative how to going the work hard more we're very we'll we're habits on. Not XXXX, that far utilize an customers So hard of to get but change in sure to

Feddie Strickland

Got And just helpful. loans. switch No, to you. wanted to that's

loans for pipeline? to mix of opportunity if what term, Will you of wondering similar in where you it do quarter? And about longer could kind most did be sort talk this have you a growth? the you see what Just the

John Bordelon

Well, lot C&I. a we're on focusing

is probably We our less multifamily occupied. done. nonowner in have C&I leadership have and more more done towards XXXX, But little historically we loans than dedicated a

if So you be the in of brought the to last relationship going C&I-type managers all And our forward focus I in that going at think we've have years, the lenders. markets. that's all look been X

deposit It's of relationship. the the So It's opportunities space. it want that's provider wide deposit focus where variety a we either. whole and it because not brings a lending in to a in has

to So focus. our that's be going

Feddie Strickland

like if well, mean, what you're we just book then of the on think And given Was in it here, any pressures you makes pricing in production. loan keep the new wondering you the up keep Understood. of pushing that That some guys and mind? sense. or sounds can whether some anything I side could yields need on talk as back new repricing seeing there's competitive incremental or changes competition, about to quarter-to-quarter that, loan some the any like side entrants you

John Bordelon

I think third a rates of side when stabilized the quarter. in long a pressure went of pricing as dropping back somewhat little little yield up has the the bit. was curve fourth there bit of Then in were kind quarter,

basis think cut. baked XX point we So pricing of in if to prime, we're rate I do -- XXXX in, have off we

little So the we're and out script But going what for bit we'll yield come in a what's part, higher David down in still there. a have that to 'XX for has currently. the 'XX see most will pointed than it rates us mature anticipating as

still loan rate we're that for So looking expansion.

Feddie Strickland

for tougher maybe there last you the income on on talk guide noninterest we just sale from versus And question expect you about know core wonder appreciate fee I stuff, it's a can in on of how do fees me. you environment bit income Can little of that gain talk time? the coming mix if pipelines over Understood. I for growth. gain about little quarters? and see a future but kind where sale

John Bordelon

push little CFPB That's in deposit OCC what what of push fee is to Yes. regard. the comes standpoint. Most difficult from from side. that CFPB to We're income our not down a the sure probably going is from down, going

So you in there's of comments? potential fees. have But any problems some other do those

David Kirkley

Yes.

has sales. increasing uptick SBA been So that loan been sales is and successful at that We the loan we've anticipate management pretty charger fee do income fees. some from And of the mortgage some in volatile XXXX. our

As out, more lot been of John as driven of lenders our management a further the C&I and operating development has and platform that accounts past year-over-year from the that well. a there's years, nice over over to couple C&I couple getting years, and pointed expect and that focus the increased increases are we we've continue treasury hiring space past

Operator

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

John Bordelon

us of joining for you We for many to a coming days. you thank Have the great with Bancorp. look thank again, forward Once your in And today. day. speaking you interest in Home

Operator

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

lines. disconnect now may You your

Home Bancorp (HBCP) 28 Jan 252024 Q4 Earnings call transcript