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Home Bancorp (HBCP) Q2 Earnings call transcript Jul 18, 2024

AInvestFriday, Jul 19, 2024 11:50 am ET
1min read

In Home Bank's Q2 2024 earnings call, Chairman, President, and CEO, John Bordelon, and Chief Financial Officer, David Kirkley, provided insights into the bank's performance, strategic initiatives, and expectations for the future. The call highlighted a focus on loan growth, stabilizing net interest margin (NIM), and community banking, along with updates on credit quality and capital management.

Loan Growth and Stabilizing NIM

Home Bank reported a net income of $8.1 million or $1.02 per share, with a slight improvement in the net interest margin (NIM) at 3.66%. The bank added $39.7 million of loans in the second quarter, with growth in all sectors except for construction and land loans. Despite the slowdown in loan pipeline due to the higher interest rates, Home Bank anticipates 2024 loan growth to be between 4% and 6%. The bank's loan-to-deposit ratio increased to 97.7%, reflecting the loan growth and relatively stable deposits.

Credit Improvements and Community Banking

Despite the negative headlines, Home Bank reported improvements in credit quality, with a $5 million construction loan moving from nonperforming to performing and a nonperforming multifamily loan resolved without any principal loss. The bank's focus on community banking and building relationships with known borrowers in familiar markets is a key strategy for maintaining a strong risk-adjusted return.

Capital Management and Outlook

Home Bank's capital management strategy has been instrumental in its growth, with adjusted tangible book value per share increasing by 58% since 2018 and a 67% increase in dividends since 2016. The bank's robust capital ratios position it well for success in any economic environment.

Looking Ahead

The bank's cautious optimism for NIM stabilization and potential increases, coupled with loan growth and a focus on C&I business, are key drivers for Home Bank's future performance. The bank's ability to maintain and attract deposits, especially in the face of competition, is a critical factor in its success. As the economic outlook evolves, Home Bank's strategic initiatives and focus on community banking will continue to shape its growth and financial health.

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