Company Overview and History
Home Bancorp Inc. (HBCP) is a regional bank holding company headquartered in Lafayette, Louisiana, with a strong presence across south Louisiana, west Mississippi, and east Texas. The company's primary subsidiary, Home Bank, N.A., has been providing banking services to individuals and businesses in its markets for over a century, building a reputation for exceptional customer service and prudent risk management.
Founded in 1903 as Home Building & Loan Association, the company underwent a transformation in 2008 when it converted to a national bank charter and completed its initial public offering, marking the beginning of its journey as a publicly traded entity. Since then, Home Bancorp has strategically expanded its footprint through a series of well-executed acquisitions, broadening its geographic reach and enhancing its product and service offerings.
Growth Strategy and Acquisitions
Home Bancorp's growth strategy has been characterized by a series of strategic acquisitions that have significantly expanded its presence in key markets. In 2010, the bank expanded into the Northshore of Lake Pontchartrain region through the FDIC-assisted acquisition of Statewide Bank. The following year, in 2011, the bank further extended its reach into the Greater New Orleans region through the acquisition of GS Financial Corporation. In 2014, Home Bancorp made a significant move into west Mississippi with the acquisition of Britton Koontz Capital Corporation.
The company's expansion continued in 2015 with the acquisition of Louisiana Bancorp, Inc., which strengthened its position in the Greater New Orleans region. In 2017, Home Bancorp focused on expanding its presence in the Acadiana market through the acquisition of St. Martin Bancshares. Most recently, in 2022, the bank made a strategic entry into the Houston, Texas region by acquiring Friendswood Capital Corporation. These acquisitions have not only expanded Home Bancorp's geographic footprint but have also contributed to its growth in assets, deposits, and lending capabilities.
Resilience and Adaptability
Throughout its history, Home Bancorp has demonstrated resilience in the face of industry challenges, including regulatory changes, economic fluctuations, and intense competition. The company's ability to navigate these challenges while consistently growing its branch network and customer base across south Louisiana, west Mississippi, and east Texas is a testament to its strong management and adaptable business model.
Loan Portfolio and Asset Quality
One of the key factors contributing to Home Bancorp's success is its diversified loan portfolio, which includes commercial real estate, commercial and industrial, residential mortgage, and consumer loans. As of December 31, 2024, the company's loan portfolio totaled $2.72 billion, reflecting a 5.3% year-over-year growth. This growth was primarily driven by increases in commercial real estate, construction and land, and multi-family residential loans, which collectively accounted for 64.5% of the total loan portfolio.
Home Bancorp's focus on commercial lending has been a strategic priority, as these loans typically generate higher yields and shorter maturities compared to residential mortgages. The company's efforts to expand its commercial banking relationships have paid off, with commercial and industrial loans now comprising 15.4% of the total loan portfolio. This diversification has helped the bank weather economic cycles and maintain strong asset quality, with a non-performing asset ratio of just 0.45% as of the end of 2024.
The company's loan portfolio is diversified across several key segments. One-to four-family first mortgage loans comprise the largest component, accounting for $501.23 million or 18.40% of the total loan portfolio as of December 31, 2024. Commercial real estate (CRE) loans represent the second largest segment, totaling $1.16 billion or 42.60% of the loan portfolio. Commercial and industrial (C&I) loans were the third largest segment, amounting to $418.63 million or 15.40% of the portfolio.
The bank also maintains a portfolio of construction and land (C&D) loans, which totaled $352.26 million or 13.00% of total loans. Multi-family residential loans comprised $178.57 million or 6.60% of the loan portfolio. Home equity loans and lines of credit totaled $79.10 million or 2.90% of the loan portfolio. The remainder of the loan portfolio consists of $29.62 million in consumer loans.
Deposit Franchise
The company's robust deposit franchise is another key competitive advantage. As of December 31, 2024, Home Bancorp had $2.78 billion in total deposits, with a strong mix of low-cost core deposits, including non-interest-bearing demand deposits, which accounted for 26.4% of the total. The bank's ability to attract and retain a stable deposit base has provided it with a reliable source of funding to support its lending activities.
Financials
Home Bancorp's financial performance has been consistently strong, with the company reporting net income of $36.4 million, or $4.55 per diluted share, for the fiscal year ended December 31, 2024. This represents a 9.5% decrease from the previous year's net income of $40.2 million, or $4.99 per diluted share, primarily due to an increase in the provision for loan losses and higher noninterest expenses.
The company's net interest margin (NIM), a key profitability metric, expanded for the third consecutive quarter in the fourth quarter of 2024, reaching 3.82%. This improvement was driven by a decline in the cost of interest-bearing liabilities, coupled with stable yields on interest-earning assets. Home Bancorp's focus on managing its funding costs and optimizing its asset mix has enabled it to consistently maintain a healthy NIM, which was 3.71% for the full year 2024, down from 3.89% in the prior year.
For the fiscal year 2024, Home Bancorp reported annual revenue of $184.77 million and annual net income of $36.43 million. In the most recent quarter (Q4 2024), the company generated revenue of $34.07 million and net income of $9.44 million. The company reported strong loan growth of 7.5% in Q4 2024 on an annualized basis, contributing to 5.3% loan growth for the full year 2024.
Liquidity and Capital Management
Home Bancorp's commitment to creating shareholder value is evident in its robust capital position and active capital management strategies. As of December 31, 2024, the company's total risk-based capital ratio was 14.51%, well above the regulatory minimum, providing it with the flexibility to pursue growth opportunities and return capital to shareholders. In 2024, the company repurchased 124,630 shares of its common stock at an average price of $37.79 per share, underscoring its confidence in the long-term prospects of the business.
Furthermore, Home Bancorp has a track record of rewarding shareholders through regular dividend payments. The company recently increased its quarterly dividend by 4% to $0.26 per share, marking the sixth consecutive year of dividend increases. Over the past five years, the company has grown its dividend per share by 20%, demonstrating its commitment to delivering consistent returns to its investors.
As of December 31, 2024, Home Bancorp reported cash holdings of $98.55 million and an available credit line of $1.1 billion, providing ample liquidity to support its operations and growth initiatives.
Future Outlook
Looking ahead, Home Bancorp remains well-positioned for continued growth and success. The company's experienced management team, diversified business model, and strong capital position provide it with the resources necessary to navigate the evolving financial landscape. While the banking industry faces various challenges, such as rising interest rates, regulatory changes, and competition from fintech disruptors, Home Bancorp's proven ability to adapt and execute its strategic initiatives positions it as a compelling investment opportunity for investors seeking exposure to a well-managed regional banking franchise.
For 2025, Home Bancorp expects loans to grow between 4-6%, in line with its performance in 2024. The company anticipates continued expansion of its net interest margin and earnings. Non-interest expenses are projected to increase by 3.5% in 2025, with most of the increases in compensation and technology-related expenses, offset by reductions in occupancy expenses. Non-interest income is expected to be between $3.6 million and $3.8 million over the next two quarters.
Home Bancorp primarily operates in the Acadiana, Baton Rouge, Greater New Orleans, and Northshore of Lake Pontchartrain regions of Louisiana, the Natchez region of Mississippi, and the Houston region of Texas. This geographic diversification provides the company with exposure to multiple markets and helps mitigate concentration risk.
As Home Bancorp continues to execute its growth strategy and maintain its focus on operational efficiency, it is well-positioned to capitalize on opportunities in its markets and deliver long-term value to its shareholders.