Home Bancorp Q1 2025 slides: earnings jump 17%, NIM expansion continues

Introduction & Market Context

Home Bancorp Inc. (NASDAQ:HBCP) released its Q1 2025 earnings presentation on April 22, 2025, revealing continued momentum in financial performance following a strong 2024. The Lafayette, Louisiana-based regional bank reported significant improvements in profitability metrics, balance sheet growth, and credit quality, building on the positive trends highlighted in its Q4 2024 earnings call.

With total assets reaching $3.5 billion as of March 31, 2025, Home Bancorp continues to strengthen its position across its Southern Louisiana, Western Mississippi, and Houston markets through its network of 43 locations. The company’s market capitalization stood at $340 million as of April 17, 2025, with ownership consisting of 47% institutional investors and 13% insider/ESOP holdings.

Quarterly Performance Highlights

Home Bancorp reported net income of $10.96 million for Q1 2025, representing a 16.8% increase from $9.39 million in Q4 2023. Diluted earnings per share rose to $1.37, up from $1.17 in the prior-year period, continuing the earnings momentum from Q4 2024 when the company reported EPS of $1.21.

Net interest income increased to $31.75 million, up from $29.28 million, while the net interest margin expanded to 3.91%, compared to 3.69% a year earlier. This marks the third consecutive quarter of NIM expansion, validating management’s outlook from the Q4 2024 earnings call where they anticipated continued margin improvement throughout 2025.

As shown in the following quarterly financial highlights chart, the company also improved its efficiency ratio to 60.4 from 62.9, indicating better operational performance:

The balance sheet showed healthy growth, with total assets increasing to $3.49 billion from $3.32 billion, loans growing to $2.75 billion from $2.58 billion, and deposits rising to $2.83 billion from $2.67 billion. The tangible common equity ratio improved to 9.4 from 8.7, reflecting the company’s strengthening capital position.

Loan Portfolio and Credit Quality

Home Bancorp’s loan portfolio demonstrates significant diversification across both loan types and geographic markets. As of March 31, 2025, the portfolio composition shows a balanced mix with commercial real estate owner-occupied loans representing the largest segment at 26%, followed by 1-4 family mortgages at 18% and commercial real estate non-owner-occupied at 17%.

The following chart illustrates the company’s loan portfolio composition and market diversification:

The Houston market continues to be a growth driver for the company, with a 21% annualized growth rate mentioned in the presentation. This aligns with management’s strategic focus on the Houston market highlighted in their Q4 2024 earnings call, where they discussed plans to open a new branch in Northwest Houston by late 2025.

Credit quality remains strong, with the allowance for loan losses (ALL) increasing to $33.3 million as of March 31, 2025. The following chart shows the changes in ALL over time:

Nonperforming loans stood at $19.0 million or 0.69% of total loans as of March 31, 2025, while criticized loans decreased to $37.2 million from $43.7 million a year earlier. The company’s conservative credit culture continues to be evident in its credit quality metrics:

Deposit Base and Funding

Home Bancorp’s deposit base shows healthy geographic diversification, with Acadiana representing 54% of total deposits, followed by New Orleans (14%), Houston (11%), and Northshore (10%). The average deposit size is $34,077, with non-interest bearing deposits comprising 27% of the total deposit base.

The following chart illustrates the company’s deposit trends and composition:

Regarding liquidity, the presentation reveals that uninsured deposits amount to approximately $645 million, representing 23% of total deposits. Importantly, the coverage of uninsured deposits stands at a robust 187%, indicating strong liquidity position. Total (EPA:TTEF) primary funding sources amount to $1.21 billion, while total primary and secondary liquidity reaches $1.26 billion.

Capital Management and Shareholder Returns

Home Bancorp continues to demonstrate its commitment to shareholder returns through dividends and share repurchases. The company announced a cash dividend of $0.27 per share payable on May 16, 2025, up from $0.25 in the previous period. This continues the trend of dividend growth highlighted in the Q4 2024 earnings article, which noted that the company had raised its dividend for 11 consecutive years.

Additionally, the board approved a new share repurchase plan for 400,000 shares, providing flexibility for capital management. The company’s tangible book value per share has grown at a 7.7% CAGR since 2019, reflecting consistent value creation for shareholders.

The following chart illustrates the company’s dividend growth and capital management activities:

Home Bancorp maintains strong capital ratios, with Tier 1 leverage capital at 11.5% and Common Equity Tier 1 capital at 13.3% as of March 31, 2025, well above regulatory requirements:

Strategic Initiatives and Outlook

The Q1 2025 presentation reinforces Home Bancorp’s strategic focus on disciplined growth, both organic and through acquisitions. Since 2010, the company has completed six acquisitions, contributing to its asset growth CAGR of 12.3% as of March 31, 2025.

The company continues to emphasize its expansion in the Houston market, which now represents 20% of its loan portfolio and 11% of deposits. This aligns with management’s comments during the Q4 2024 earnings call about opening a new branch in Northwest Houston and the success of the commercial team hired in that region at the beginning of 2024.

Home Bancorp positions itself as a conservative, well-managed institution with a strong capital position that enables continued growth. The company’s focus on relationship banking, particularly in the C&I lending space, supports its strategy of building comprehensive customer relationships rather than just transactional lending.

With its strong Q1 2025 performance, Home Bancorp appears well-positioned to continue executing on its strategic initiatives while delivering value to shareholders through both growth and capital returns.

Full presentation:

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