Q2 2026 Home Bancorp Inc Earnings Call

July 21, 2026

Speaker #1: Good morning, ladies and gentlemen, and welcome to the Home Bancorp's Q2 2026 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Operator: Good morning, ladies and gentlemen, welcome to the Home Bancorp's Q2 2026 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would like to turn the conference over to Home Bancorp's Chairman and CEO, John Bordelon, President Darrin Guidry, and Chief Financial Officer David Kirkley. Please go ahead, Mr. Kirkley.

Speaker #1: After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to HOME BANCORP's Chairman and CEO, John Bordelon, President Darren Gidry, and Chief Financial Officer, David Kirkley.

Speaker #1: Please go ahead, Mr. Kirkley.

Speaker #2: Thank you, Ina. Good morning, and welcome to Home Bancorp's Q2 2026 earnings call. Our earnings release and investor presentation are available on our website.

David T. Kirkley: Thank you, Ena. Good morning, welcome to Home Bank's Q2 2026 Earnings Call. Our earnings release and investor presentation are available on our website. I'd ask that everyone please refer to the disclaimer regarding forward-looking statements in the investor presentation and our SEC filings. I'll hand it over to John to make a few comments about the second quarter. John?

David Kirkley: Thank you, Ena. Good morning, welcome to Home Bank's Q2 2026 Earnings Call. Our earnings release and investor presentation are available on our website. I'd ask that everyone please refer to the disclaimer regarding forward-looking statements in the investor presentation and our SEC filings. I'll hand it over to John to make a few comments about the second quarter. John?

Speaker #2: I'd ask that everyone please refer to the disclaimer regarding forward-looking statements in the investor presentation and our SEC filings. I'll now hand it over to John to make a few comments about the second quarter.

Speaker #2: John?

Speaker #3: Thanks, David. Good morning, everyone, and thank you for joining our earnings call today. We appreciate your interest in HOME BANCORP as we discuss our results, expectations for the future, and our approach to creating long-term shareholder value.

John W. Bordelon: Thanks, David. Good morning, everyone. Thank you for joining our earnings call today. We appreciate your interest in Home Bank as we discuss our results, expectations for the future, and our approach to creating long-term shareholder value. Before I discuss our Q2 results, I want to take a moment to introduce Darrin Guidry as Home Bank's new President. Darrin has served as our Chief Risk Officer since 2022, and prior to that, Chief Credit Officer beginning in 2013, and Chief Lending Officer since he came to the bank in 1993. His deep knowledge of our business, our customers, and our markets makes him exceptionally well-suited for this expanded role. By separating the CEO and President roles, we are creating a leadership structure designed to sustain our next phase of growth.

John Bordelon: Thanks, David. Good morning, everyone. Thank you for joining our earnings call today. We appreciate your interest in Home Bank as we discuss our results, expectations for the future, and our approach to creating long-term shareholder value. Before I discuss our Q2 results, I want to take a moment to introduce Darrin Guidry as Home Bank's new President. Darrin has served as our Chief Risk Officer since 2022, and prior to that, Chief Credit Officer beginning in 2013, and Chief Lending Officer since he came to the bank in 1993. His deep knowledge of our business, our customers, and our markets makes him exceptionally well-suited for this expanded role. By separating the CEO and President roles, we are creating a leadership structure designed to sustain our next phase of growth.

Speaker #3: Before I discuss our second quarter results, I want to take a moment to introduce Darren Gidry as Home Bancorp's new President. Darren has served as our Chief Risk Officer since 2022, and prior to that, as Chief Credit Officer beginning in 2013, and Chief Lending Officer since he came to the bank in 1993.

Speaker #3: His deep knowledge of our business, our customers, and our markets makes him exceptionally well-suited for this expanded role. By separating the CEO and President roles, we are creating a leadership structure designed to sustain our next phase of growth.

Speaker #3: As CEO, I will remain focused on overall corporate strategy, capital planning, and shareholder relations, while Darren will lead the day-to-day execution of our strategic priorities.

John W. Bordelon: As CEO, I'll remain focused on overall corporate strategy, capital planning, and shareholder relations, while Darrin will lead the day-to-day execution of our strategic priorities. He'll be working closely with our executive leadership team to drive performance across the organization while maintaining our strong discipline in credit quality, risk management, and customer service. We are enthusiastic about this transition and confident it will serve our shareholders, employees, and customers well for years to come. Now turning to Q2 results. Yesterday afternoon, we reported Q2 net income of $11.6 million, or $1.48 per diluted share. Earnings per share increased 2% from Q1 and were up from $1.46 per share a year ago. Net interest margin expanded to 4.24% in Q2 and return on assets increased to 1.31%.

John Bordelon: As CEO, I'll remain focused on overall corporate strategy, capital planning, and shareholder relations, while Darrin will lead the day-to-day execution of our strategic priorities. He'll be working closely with our executive leadership team to drive performance across the organization while maintaining our strong discipline in credit quality, risk management, and customer service. We are enthusiastic about this transition and confident it will serve our shareholders, employees, and customers well for years to come. Now turning to Q2 results. Yesterday afternoon, we reported Q2 net income of $11.6 million, or $1.48 per diluted share. Earnings per share increased 2% from Q1 and were up from $1.46 per share a year ago. Net interest margin expanded to 4.24% in Q2 and return on assets increased to 1.31%.

Speaker #3: He'll be working closely with our executive leadership team to drive performance across the organization while maintaining our strong discipline and credit quality. Risk management and customer service.

Speaker #3: We are enthusiastic about this transition and confident it will serve our shareholders, employees, and customers well for years to come. Now, turning to second quarter results.

Speaker #3: Yesterday afternoon, we recorded second quarter net income of $11.6 million, or $1.48 per diluted share. Earnings per share increased 2% from the first quarter and were up from $1.46 per share a year ago.

Speaker #3: Net interest margin expanded to 4.24% in the second quarter and returned on assets increased to 1.31%. Net interest income increased to $35.8 million in the second quarter and was the highest quarterly net interest income in HOME BANCORP's 118-year history.

John W. Bordelon: Net interest income increased to $35.8 million in Q2 and was the highest quarterly net interest income in Home Bank's 118-year history. This continued net interest income growth and margin expansion was driven by higher yields on our earning asset portfolio and stable funding costs. Our cost of deposits was stable at 1.66% for the quarter, which is one of the lowest in our peer group and reflects the continued strength of our core deposit franchise. Loans grew by $50.7 million in Q2 or approximately 7% annualized, which was a nice recovery from the slight contraction we saw in Q1. Our Houston market continues to lead the way, growing at a 9% annualized rate year to date. The Tomball branch in northwest Houston, which opened in Q1, is gaining momentum and building its customer base.

John Bordelon: Net interest income increased to $35.8 million in Q2 and was the highest quarterly net interest income in Home Bank's 118-year history. This continued net interest income growth and margin expansion was driven by higher yields on our earning asset portfolio and stable funding costs. Our cost of deposits was stable at 1.66% for the quarter, which is one of the lowest in our peer group and reflects the continued strength of our core deposit franchise. Loans grew by $50.7 million in Q2 or approximately 7% annualized, which was a nice recovery from the slight contraction we saw in Q1. Our Houston market continues to lead the way, growing at a 9% annualized rate year to date. The Tomball branch in northwest Houston, which opened in Q1, is gaining momentum and building its customer base.

Speaker #3: This continued net income and net interest income growth, as well as margin expansion, was driven by higher yields on our earning asset portfolio and stable funding costs.

Speaker #3: Our cost to deposits was stable at $1.66% for the quarter, which is one of the lowest in our peer group and reflects the continued strength of our core deposit franchise.

Speaker #3: Loans grew by 50.7 million in the second quarter, or approximately 7% annualized, which was a nice recovery from the slight contraction we saw in the first quarter.

Speaker #3: Our Houston market continues to lead the way, growing at a 9% annualized rate year to date. The time tom ball branch in Northwest Houston, which opened in the first quarter, is gaining momentum and building its customer base.

Speaker #3: We believe the pipeline we have been building will support continued mid-single-digit loan growth in the second half of the year, but predicting when our customers will make decisions about financing has become challenging.

John W. Bordelon: We believe the pipeline we have been building will support continued mid-single digit loan growth in the H2, but predicting when our customers will make decisions about financing has become challenging. Total deposits grew by $42.1 million or 6% annualized in Q2, which kept our loan-to-deposit ratio in the middle of its 90 to 92 target range. The quality and stability of our deposit base remains one of Home Bank's most important competitive advantages. We continue to work our problem credits to resolution. There does not appear to be any specific industry-related stress, but more individual customers are struggling in this economy. Substandard loans increased during the quarter, primarily due to one C&I loan to a manufacturing company, which is paying as agreed and has a very strong guarantor.

John Bordelon: We believe the pipeline we have been building will support continued mid-single digit loan growth in the H2, but predicting when our customers will make decisions about financing has become challenging. Total deposits grew by $42.1 million or 6% annualized in Q2, which kept our loan-to-deposit ratio in the middle of its 90 to 92 target range. The quality and stability of our deposit base remains one of Home Bank's most important competitive advantages. We continue to work our problem credits to resolution. There does not appear to be any specific industry-related stress, but more individual customers are struggling in this economy. Substandard loans increased during the quarter, primarily due to one C&I loan to a manufacturing company, which is paying as agreed and has a very strong guarantor.

Speaker #3: Total deposits grew by $42.1 million, or 6% annualized, in the second quarter, which kept our loan-to-deposit ratio in the middle of its 90 to 92 target range.

Speaker #3: The quality and stability of our deposit base remains one of HOME BANCORP's most important competitive advantages. We continue to work our problem credits to resolution.

Speaker #3: There does not appear to be any specific industry-related stress, but more individual customers are struggling in this economy. Substandard loans increased during the quarter, primarily due to one CNI loan to a manufacturing company which is paying as agreed and has a very strong guarantor.

Speaker #3: We continue to work through our classified assets toward improvement, as some of the loans are refinanced elsewhere, businesses are sold, or some loans are moved to real estate-owned, and eventually the assets are sold.

John W. Bordelon: We continue to work through our classified assets toward improvement as some of the loans are refinanced elsewhere, businesses are sold, or some loans are moved to real estate owned and eventually the asset is sold. We anticipate that 14 loans with balances of approximately one-third of our classified assets will be rectified and removed off the bank's balance sheet by year-end. Our net charge-offs remain extremely low at just six basis points annualized, and we remain confident that our conservative underwriting and proactive management of challenged loans will minimize any losses we ultimately incur. Over the past two years, the financial transformation at Home Bank has been significant. Net interest margin has expanded approximately 58 basis points since Q2 2024.

John Bordelon: We continue to work through our classified assets toward improvement as some of the loans are refinanced elsewhere, businesses are sold, or some loans are moved to real estate owned and eventually the asset is sold. We anticipate that 14 loans with balances of approximately one-third of our classified assets will be rectified and removed off the bank's balance sheet by year-end. Our net charge-offs remain extremely low at just six basis points annualized, and we remain confident that our conservative underwriting and proactive management of challenged loans will minimize any losses we ultimately incur. Over the past two years, the financial transformation at Home Bank has been significant. Net interest margin has expanded approximately 58 basis points since Q2 2024.

Speaker #3: We anticipate that 14 loans, with balances of approximately one-third of our classified assets, will be rectified and removed from the bank's balance sheet by year-end.

Speaker #3: Our net charge-offs remain extremely low at just 6 basis points annualized, and we remain confident that our conservative underwriting and proactive management of challenged loans will minimize any losses we ultimately incur.

Speaker #3: Over the past two years, the financial transformation at Home Bancorp has been significant. Net interest margin has expanded approximately 58 basis points since the second quarter of 2024.

Speaker #3: Net interest income has increased by more than 7% year over year. And tangible book value per share has grown more than 13% from a year ago to $47.02.

John W. Bordelon: Net interest income has increased by more than 7% year-over-year, and tangible book value per share has grown more than 13% from a year ago to $47.02. These improvements reflect the benefits of our disciplined balance sheet management, the strength of our core deposit franchise, and the earning power of our loan portfolio. We believe we are well positioned to continue delivering strong, sustainable results. With that, I will turn it back over to David, our Chief Financial Officer.

John Bordelon: Net interest income has increased by more than 7% year-over-year, and tangible book value per share has grown more than 13% from a year ago to $47.02. These improvements reflect the benefits of our disciplined balance sheet management, the strength of our core deposit franchise, and the earning power of our loan portfolio. We believe we are well positioned to continue delivering strong, sustainable results. With that, I will turn it back over to David, our Chief Financial Officer.

Speaker #3: These improvements reflect the benefits of our disciplined balance sheet management, the strength of our core deposit franchise, and the earning power of our loan portfolio.

Speaker #3: We believe we are well-positioned to continue delivering strong, sustainable results. With that, I'll turn it back over to David, our Chief Financial Officer.

Speaker #2: Thanks, John. Please feel free to refer to the investor presentation we have provided as I discuss the company's second quarter financial performance. Net interest income totaled $35.8 million in the second quarter, an increase of $1.3 million from the first quarter, and a $2.5 million increase from a year ago.

David T. Kirkley: Thanks, John. Please feel free to refer to the investor presentation we have provided as I discuss the company's Q2 financial performance. Net interest income totaled $35.8 million in Q2, an increase of $1.3 million from Q1 and a $2.5 million increase from a year ago. NIM expanded eight basis points to 4.24% in Q2, driven by loan yields increasing five basis points to 6.46%, while our cost of interest-bearing liabilities remained flat at 2.38%. Slide 14 details the repricing and maturity profile of our loan and investments portfolio. We continue to see opportunities to increase yields on maturing and repricing loans. Our investment portfolio, with a weighted average rate of 2.61% and significant cash flows expected over the next three years, also presents meaningful reinvestment opportunity at current yields that are substantially above the roll-off rate.

David Kirkley: Thanks, John. Please feel free to refer to the investor presentation we have provided as I discuss the company's Q2 financial performance. Net interest income totaled $35.8 million in Q2, an increase of $1.3 million from Q1 and a $2.5 million increase from a year ago. NIM expanded eight basis points to 4.24% in Q2, driven by loan yields increasing five basis points to 6.46%, while our cost of interest-bearing liabilities remained flat at 2.38%. Slide 14 details the repricing and maturity profile of our loan and investments portfolio. We continue to see opportunities to increase yields on maturing and repricing loans. Our investment portfolio, with a weighted average rate of 2.61% and significant cash flows expected over the next three years, also presents meaningful reinvestment opportunity at current yields that are substantially above the roll-off rate.

Speaker #2: NIM expanded 8 basis points to 4.24% in the second quarter, driven by loan yields increasing 5 basis points to 6.46%, while our cost of interest-bearing liabilities remained flat at 2.38%.

Speaker #2: Slide 14 details the repricing and maturity profile of our loan and investment portfolio. We continue to see opportunities to increase yields in maturing and repricing loans.

Speaker #2: Our investment portfolio, with a weighted average rate of 2.61%, and significant cash flows expected over the next three years, also presents meaningful reinvestment opportunities at current yields that are substantially above the roll-off rate.

Speaker #2: Yield on earning assets increased 7 basis points quarter over quarter, and we believe future repricing opportunities will support room for additional NIM expansion. Deposit growth continues to be a key strength.

David T. Kirkley: Yield on earning assets increased seven basis points quarter-over-quarter, and we believe future repricing opportunities will support room for additional NIM expansion. Deposit growth continues to be a key strength. As shown on Slide 18, total deposits grew to $3.1 billion, with core deposit growth of $46.6 million during the quarter, more than offsetting a modest decline in Certificates of Deposit. Non-interest-bearing demand deposits increased $5.1 million during the quarter and continue to represent 27% of total deposits. The average cost of interest-bearing deposits declined to 2.28% in Q2, reflecting both the benefit of deposit mix improvement and the repricing of matured CDs at lower rates.

David Kirkley: Yield on earning assets increased seven basis points quarter-over-quarter, and we believe future repricing opportunities will support room for additional NIM expansion. Deposit growth continues to be a key strength. As shown on Slide 18, total deposits grew to $3.1 billion, with core deposit growth of $46.6 million during the quarter, more than offsetting a modest decline in Certificates of Deposit. Non-interest-bearing demand deposits increased $5.1 million during the quarter and continue to represent 27% of total deposits. The average cost of interest-bearing deposits declined to 2.28% in Q2, reflecting both the benefit of deposit mix improvement and the repricing of matured CDs at lower rates.

Speaker #2: As shown on slide 18, total deposits grew to $3.1 billion, with core deposit growth of 46.6 million during the quarter, more than offsetting a modest decline in certificates of deposit.

Speaker #2: Non-interest-bearing demand deposits increased $5.1 million during the quarter and continued to represent 27% of total deposits. The average cost of interest-bearing deposits declined to 2.28% in the second quarter, reflecting both the benefit of deposit mix improvement and the repricing of matured CDs at lower rates.

Speaker #2: While we've been pleased with our success in driving down deposit costs by 37 basis points since the recent peak in Q3 of 2024, we don't expect further material declines.

David T. Kirkley: While we've been pleased with our success in driving down deposit costs, down by 37 basis points since the recent peak in Q3 of 2024, we don't expect further material declines. Slides 15 and 16 provide additional detail on credit quality. Non-performing loans declined during the quarter from $35.8 million to $26.4 million or from 1.31% to 95 basis points of total loans. This was primarily driven by the transfer of approximately $10 million of non-performing loans into OREO. Total non-performing assets were $39.2 million or 1.09% of total assets as foreclosed asset balances increased due to the foreclosure of multiple properties, with the largest being $2.6 million. We provisioned $762,000 in Q2, down from $922,000 in Q1.

David Kirkley: While we've been pleased with our success in driving down deposit costs, down by 37 basis points since the recent peak in Q3 of 2024, we don't expect further material declines. Slides 15 and 16 provide additional detail on credit quality. Non-performing loans declined during the quarter from $35.8 million to $26.4 million or from 1.31% to 95 basis points of total loans. This was primarily driven by the transfer of approximately $10 million of non-performing loans into OREO. Total non-performing assets were $39.2 million or 1.09% of total assets as foreclosed asset balances increased due to the foreclosure of multiple properties, with the largest being $2.6 million. We provisioned $762,000 in Q2, down from $922,000 in Q1.

Speaker #2: Slides 15 and 16 provide additional detail on credit quality. Non-performing loans declined during the quarter from $35.8 million to $26.4 million, or from 1.31% to 95 basis points of total loans.

Speaker #2: This was primarily driven by the transfer of approximately $10 million of non-performing loans into OREO. Total non-performing assets were $39.2 million, or 1.09% of total assets, as foreclosed asset balances increased due to the foreclosure of multiple properties, with the largest being $2.6 million.

Speaker #2: We provisioned $762,000 in the second quarter, down from $922,000 in the first quarter. The allowance for loan losses stands at $34 million, or 1.22% of total loans, and we are comfortable with our reserve levels given the composition and risk profile of the portfolio.

David T. Kirkley: The allowance for loan losses stand at $34 million or 1.22% of total loans, and we are comfortable with our reserve levels given the composition and risk profile of the portfolio. Total criticized loans increased during the quarter to $95.8 million or 3.45% of total loans, primarily due to the migration of six relationships into the special mention category and a $7.4 million increase in substandard loans. Substandard loans increased during the quarter primarily due to the downgrade of a $12.4 million C&I credit, which was partially offset by almost $10 million transfer from substandard to OREO and paydowns. We are actively monitoring these credits and believe our proactive approach to credit management will continue to limit actual loss exposure. Slide 22 provides detail on non-interest income and expenses.

David Kirkley: The allowance for loan losses stand at $34 million or 1.22% of total loans, and we are comfortable with our reserve levels given the composition and risk profile of the portfolio. Total criticized loans increased during the quarter to $95.8 million or 3.45% of total loans, primarily due to the migration of six relationships into the special mention category and a $7.4 million increase in substandard loans. Substandard loans increased during the quarter primarily due to the downgrade of a $12.4 million C&I credit, which was partially offset by almost $10 million transfer from substandard to OREO and paydowns. We are actively monitoring these credits and believe our proactive approach to credit management will continue to limit actual loss exposure. Slide 22 provides detail on non-interest income and expenses.

Speaker #2: Total criticized loans increased during the quarter to $95.8 million, or 3.45% of total loans, primarily due to the migration of six relationships into the special mention category and a $7.4 million increase in substandard loans.

Speaker #2: Substandard loans increased during the quarter primarily due to the downgrade of a $12.4 million CNI credit, which was partially offset by almost $10 million in transfers from substandard to OREO and paydowns.

Speaker #2: We are actively monitoring these credits and believe our proactive approach to credit management will continue to limit actual loss exposure. Slide 22 provides detail on noninterest income and expenses.

Speaker #2: Non-interest income totaled $3.9 million in the second quarter, up $181,000 from the first quarter. We continue to expect quarterly non-interest income to be in the range of $3.8 million to $4.1 million.

David T. Kirkley: Non-interest income totaled $3.9 million in Q2, up $181,000 from Q1. We continue to expect quarterly non-interest income to be in the range of $3.8 to 4.1 million. Non-interest expense totaled $24.6 million in Q2 and an increase of $1.6 million from Q1. The increase was primarily driven by compensation and benefit expense of $1.3 million and a $331,000 increase of foreclosed asset expense. Due to elevated expenses working through foreclosed assets, we expect non-interest expenses will be in a range of $24 to 24.8 million over the next several quarters. Slides 23 and 24 summarize our capital position and the progress of our capital management strategy.

David Kirkley: Non-interest income totaled $3.9 million in Q2, up $181,000 from Q1. We continue to expect quarterly non-interest income to be in the range of $3.8 to 4.1 million. Non-interest expense totaled $24.6 million in Q2 and an increase of $1.6 million from Q1. The increase was primarily driven by compensation and benefit expense of $1.3 million and a $331,000 increase of foreclosed asset expense. Due to elevated expenses working through foreclosed assets, we expect non-interest expenses will be in a range of $24 to 24.8 million over the next several quarters. Slides 23 and 24 summarize our capital position and the progress of our capital management strategy.

Speaker #2: Non-interest expense totaled $24.6 million in the second quarter, an increase of $1.6 million from the first quarter. The increase was primarily driven by compensation and benefit expense of $1.3 million and a $331,000 increase in foreclosed asset expense.

Speaker #2: Due to elevated expenses working through foreclosed assets, we expect non-interest expenses will be in the range of $24.0 to $24.8 million over the next several quarters.

Speaker #2: Slides 23 and 24 summarize our capital position and the progress of our capital management strategy. Tangible book value per share increased to $47.02, up from $46.04 in the first quarter and up more than 13% from a year ago.

David T. Kirkley: Tangible book value per share increased to $47.02, up from $46.04 in Q1, and up more than 13% from a year ago. Since 2019, we have increased adjusted tangible book value per share at an annualized rate of approximately 9.7%, increased EPS at a more than 11% annualized rate, and increased our quarterly dividend by almost 50%. We have also repurchased approximately 17% of shares outstanding since 2019. Capital ratios remain strong with a Tier 1 leverage ratio of 12.1% and a total risk-based capital ratio of 15.6%. Lastly, we declare a quarterly cash dividend of $0.32 per share, an increase of $0.01 from last quarter. With that, operator, please open the line for Q&A.

David Kirkley: Tangible book value per share increased to $47.02, up from $46.04 in Q1, and up more than 13% from a year ago. Since 2019, we have increased adjusted tangible book value per share at an annualized rate of approximately 9.7%, increased EPS at a more than 11% annualized rate, and increased our quarterly dividend by almost 50%. We have also repurchased approximately 17% of shares outstanding since 2019. Capital ratios remain strong with a Tier 1 leverage ratio of 12.1% and a total risk-based capital ratio of 15.6%. Lastly, we declare a quarterly cash dividend of $0.32 per share, an increase of $0.01 from last quarter. With that, operator, please open the line for Q&A.

Speaker #2: Since 2019, we have increased adjusted tangible book value per share at an annualized rate of approximately 9.7%, increased EPS at a more than 11% annualized rate, and increased our quarterly dividend by almost 50%.

Speaker #2: We have also repurchased approximately 17% of shares outstanding since 2019. Capital ratios remained strong, with the Tier 1 leverage ratio at 12.1% and the total risk-based capital ratio at 15.6%.

Speaker #2: Lastly, we declare a quarterly cash dividend of $0.32 per share, an increase of a penny from last quarter. And with that, operator, please open the line for Q&A.

Speaker #3: Thank you. We will now begin the question-and-answer session. To ask a question, you may press star, then 1 on your touch-tone phone.

Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Thank you. Your first question comes from the line of Joseph Yanchunis from Raymond James. Please go ahead.

Speaker #3: If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster.

Speaker #3: Thank you. And your first question comes from the line of Joe Yanchunis from Raymond James. Please go ahead.

Speaker #4: Good morning.

Joseph Yanchunis: Good morning.

Joe Yanchunis: Good morning.

Speaker #2: Good morning, Joe.

John W. Bordelon: Good morning, Joe.

John Bordelon: Good morning, Joe.

Speaker #5: Good morning, Joe.

Speaker #4: So, thanks for taking my questions. I was hoping to start with the NIM. You know, the margins expanded, you know, 18 basis points over the past couple of quarters.

David T. Kirkley: Thanks for taking my questions. I was hoping to start with the NIM. The margins expanded 18 bps over the past couple quarters, well above that 4.10% to 4.15% range you had previously outlined. As we look ahead, when do you expect the benefit from fixed rate asset repricing to begin to moderate? I think you're going to see a couple of basis points increase, I think in Q3 and a little bit into Q4. You're still having some lower yielding loans roll off in a size and manner that we'll continue to see loan yields increase. In Q2, new loan originations came on at a little bit north of 6.6%. That still leaves the room for repricing opportunities. I think after Q4 and into Q1 of 2027, I think that's when you'll see some moderation.

Joe Yanchunis: Thanks for taking my questions. I was hoping to start with the NIM. The margins expanded 18 bps over the past couple quarters, well above that 4.10% to 4.15% range you had previously outlined. As we look ahead, when do you expect the benefit from fixed rate asset repricing to begin to moderate?

Speaker #4: Well above that 410 to 415 range you had previously outlined. You know, as we look ahead, when do you expect the benefit from fixed-rate asset repricing to begin to moderate?

Speaker #2: I think you're going to see a couple of basis points increase. I think in Q3 and a little bit into Q4, you're still having some lower-yielding loans roll off in a size and manner that will continue to see loan yields increase.

John Bordelon: I think you're going to see a couple of basis points increase, I think in Q3 and a little bit into Q4. You're still having some lower yielding loans roll off in a size and manner that we'll continue to see loan yields increase. In Q2, new loan originations came on at a little bit north of 6.6%. That still leaves the room for repricing opportunities. I think after Q4 and into Q1 of 2027, I think that's when you'll see some moderation.

Speaker #2: In the second quarter, new loan originations came on at a little bit north of 6.6%. So that still leaves room for repricing opportunities.

Speaker #2: I think after Q4 and into Q1 of '27, that's when you'll see some moderation.

Speaker #4: Got it. That was very helpful. And then shifting over to loans. So loan growth, you know, really accelerated nicely this quarter. You know, how much of that improvement reflected stronger customer demand versus, you know, seasonality or lower payoff activity?

Joseph Yanchunis: Got it. That was very helpful. Then shifting over to loans. Loan growth really accelerated nicely this quarter. How much of that improvement reflected stronger customer demand versus seasonality or lower payoff activity? Then also, on the last quarter call, you mentioned your pipeline had increased by about $30 million sequentially. Can you provide an update on where the pipeline stands today, and how you're thinking about conversion for those into funded loans in the H2?

Joe Yanchunis: Got it. That was very helpful. Then shifting over to loans. Loan growth really accelerated nicely this quarter. How much of that improvement reflected stronger customer demand versus seasonality or lower payoff activity? Then also, on the last quarter call, you mentioned your pipeline had increased by about $30 million sequentially. Can you provide an update on where the pipeline stands today, and how you're thinking about conversion for those into funded loans in the H2?

Speaker #4: And then also, you know, on the last quarter call, you mentioned that your pipeline had increased by about $30 million sequentially. Can you provide an update on where the pipeline stands today and how you're thinking about, you know, conversion for those into funded loans in the back half?

Speaker #2: Yeah, I think through most of '25, we did have some payoffs, especially in the third quarter of '25. And that happened also in the first quarter.

John W. Bordelon: Yeah. I think through most of 2025, we did have some payoffs, especially in Q3 of 2025. That happened also in Q1. We're seeing less payoffs in Q2, and that's just a seasonal thing that we don't know. We do have some classified assets that Darrin will talk about. We anticipate some of those going away, which will hurt our overall loan growth. Our pipeline, I think, remains consistent. While not robust, it remains consistent. We should be able to generate loan production. It's just a matter of how much of our loans are paid off because of them being bad assets moving somewhere else or whatever.

John Bordelon: Yeah. I think through most of 2025, we did have some payoffs, especially in Q3 of 2025. That happened also in Q1. We're seeing less payoffs in Q2, and that's just a seasonal thing that we don't know. We do have some classified assets that Darrin will talk about. We anticipate some of those going away, which will hurt our overall loan growth. Our pipeline, I think, remains consistent. While not robust, it remains consistent. We should be able to generate loan production. It's just a matter of how much of our loans are paid off because of them being bad assets moving somewhere else or whatever.

Speaker #2: So we're seeing less payoffs in the second quarter. And that's just a seasonal thing that we, you know, I don't know. We do have some classified assets that Darren will talk about, but we anticipate some of those going away, which will hurt our overall loan growth.

Speaker #2: But our pipeline, I think, remains consistent, while not robust. It remains consistent. And so, we should be able to generate loan production; it's just a matter of how much of our loans are paid off because of them being bad assets, moving somewhere else, or whatever.

Speaker #4: And is your guide for mid-single-digit growth in the back half of the year, or for the full year?

Joseph Yanchunis: Is your guide for mid-single digit growth in the H2 of the year or for the full year?

Joe Yanchunis: Is your guide for mid-single digit growth in the H2 of the year or for the full year?

Speaker #2: Yeah, truly the back half.

John W. Bordelon: Yeah. Surely the H2.

John Bordelon: Yeah. Surely the H2.

Speaker #4: All right. And then one more from me here. So, capital remains a pretty clear strength. Yet, acquisition activity across the industry remains pretty subdued at the moment.

Joseph Yanchunis: All right. One more for me here. Capital remains a pretty clear strength, yet acquisition activity across the industry remains pretty subdued at the moment. Have your views on M&A opportunities changed over the past few months?

Joe Yanchunis: All right. One more for me here. Capital remains a pretty clear strength, yet acquisition activity across the industry remains pretty subdued at the moment. Have your views on M&A opportunities changed over the past few months?

Speaker #4: You know, have your views on M&A opportunities changed over the, you know, the past few months?

Speaker #2: Not really. I agree that we're hearing a lot less noise than we heard in 2025. I'm not sure if that's because of potentially a rate increase by the Fed or what, but yes, it's definitely been much quieter.

John W. Bordelon: Not really. I agree that we're hearing a lot less noise than we heard in 2025. I'm not sure if that's because of potentially a rate increase by the Fed or what, but yeah, it's definitely been much quieter. We have our ears open and are ready to go, have a lot of dry power to utilize. We're looking for that right partner.

John Bordelon: Not really. I agree that we're hearing a lot less noise than we heard in 2025. I'm not sure if that's because of potentially a rate increase by the Fed or what, but yeah, it's definitely been much quieter. We have our ears open and are ready to go, have a lot of dry power to utilize. We're looking for that right partner.

Speaker #2: So we have our ears open and are ready to go, have a lot of drive power to utilize. So we're looking for that right partner.

Speaker #4: All right. Perfect. Well, thanks for taking my questions, gentlemen.

Joseph Yanchunis: All right, perfect. Well, thanks for taking my questions, gentlemen.

Joe Yanchunis: All right, perfect. Well, thanks for taking my questions, gentlemen.

Speaker #2: Thank you, Joe.

John W. Bordelon: Thank you, Joe.

John Bordelon: Thank you, Joe.

Speaker #5: Thanks, Joe.

David T. Kirkley: Thanks, Joe.

David Kirkley: Thanks, Joe.

Speaker #3: Thank you. And your next question comes from the line of Stephen Scouten from Piper Sandler. Please go ahead.

Operator: Thank you. Your next question comes from the line of Stephen Scouten from Piper Sandler. Please go ahead.

Speaker #6: Hey, good morning, everyone. Maybe just following up on that line of questioning. You know, if for for whatever reason M&A is not able to to come you know, across the finish line here, what would be kind of how you think about capital uses beyond M&A?

Stephen Scouten: Hey, good morning, everyone. Maybe just following up on that line of questioning. If for whatever reason M&A is not able to come across the finish line here, what would be how you think about capital uses beyond M&A? Because obviously your excess capital continues to build quarterly based on really strong profitability. Good problem to have, I guess, if we want to call it a problem, but just can you help us think about other uses for that capital as it builds?

Speaker #6: Because obviously your excess capital continues to build quarterly, based on really strong profitability. So, a good problem to have, I guess, if we want to call it a problem. But just—can you help us think about other uses for that capital as it builds?

Speaker #2: Yeah, I'll answer a little part, and then I'll turn it over to David. Surely, we've shown over our history as a public company that we have had periods where we've grown capital, and that was very handy for us to be able to utilize that capital in an M&A transaction.

John W. Bordelon: Yeah. I'll answer a little part, and then I'll turn it over to David. Surely we've shown over our history as a public company that we have had periods where we've grown capital, and that was very handy for us to be able to utilize that capital in a M&A transaction. We still anticipate that the primary use in that. Now I'll turn it over to David as far as dividends or buybacks.

John Bordelon: Yeah. I'll answer a little part, and then I'll turn it over to David. Surely we've shown over our history as a public company that we have had periods where we've grown capital, and that was very handy for us to be able to utilize that capital in a M&A transaction. We still anticipate that the primary use in that. Now I'll turn it over to David as far as dividends or buybacks.

Speaker #2: So, we still anticipate that the primary use is in that area. I'll turn it over to David as far as dividends or buybacks.

Speaker #5: So, we've been selective in buybacks based off of the stock price, and our stock price has had a nice run over the last couple of quarters.

David T. Kirkley: We've been selective in buybacks based off the stock price, and our stock price has had a nice run over the last couple of quarters. We've really been out of the buyback space, but we'll always evaluate that. We increased our dividend $0.01, which, from a capital management standpoint, deploys a little bit, but it's not really impacting the ratios. We're really looking, keeping the dry powder for M&A. Also we have our sub-debt, which is callable in 2027, which could potentially be an option given the M&A landscape.

David Kirkley: We've been selective in buybacks based off the stock price, and our stock price has had a nice run over the last couple of quarters. We've really been out of the buyback space, but we'll always evaluate that. We increased our dividend $0.01, which, from a capital management standpoint, deploys a little bit, but it's not really impacting the ratios. We're really looking, keeping the dry powder for M&A. Also we have our sub-debt, which is callable in 2027, which could potentially be an option given the M&A landscape.

Speaker #5: So, we've really been out of the buyback space, but we'll always evaluate that. We increased our dividend 1 cent, which, from a capital management standpoint, deploys a little bit, but it's not really impacting the ratios.

Speaker #5: So, we're really looking at keeping the dry powder for M&A, and also we have our sub debt, which is callable in 2027, which could potentially be an option, given the M&A landscape.

Speaker #6: Okay. And can you remind us what you're paying on that sub debt currently, and kind of what that could potentially do, maybe to your NIM, as you've modeled some of that out?

Stephen Scouten: Okay. Can you remind us what you're paying on that sub-debt currently and what that could potentially do maybe to your NIM as you've modeled some of that out?

David T. Kirkley: Our coupon rate is 575.

David Kirkley: Our coupon rate is 575.

Speaker #2: Our coupon rate is 5.75.

Speaker #6: Okay. And in terms of, you know, Fed rate hikes, can you remind us what you think if the Fed were to hike? And in fairness, I'm not really a believer in that personally, but if they do hike, what could that do to the trajectory of your NIM from here?

Stephen Scouten: Okay. In terms of Fed rate hikes, can you remind us what you think if the Fed were to hike? In fairness, I'm not really a believer in that personally, but if they do hike, what could that do to the trajectory of your NIM from here?

Speaker #2: Look, I think our balance sheet is very well positioned for rising rates. I think we've demonstrated when the Fed makes a move, we have a little bit of a blip with earning asset yields.

David T. Kirkley: Look, I think our balance sheet is very well positioned for rising rates. I think we've demonstrated when the Fed makes a move, we have a little bit of a blip with earning asset yields increasing 2 to 3 basis points, and then we adjust our deposit prices. You have probably a quarter of, let's call it a decline when deposit rates increase. Like I said, we have a good cash flow coming due. I think we'll be able to sustain as well as improve NIM with a quarter rate hike.

David Kirkley: Look, I think our balance sheet is very well positioned for rising rates. I think we've demonstrated when the Fed makes a move, we have a little bit of a blip with earning asset yields increasing 2 to 3 basis points, and then we adjust our deposit prices. You have probably a quarter of, let's call it a decline when deposit rates increase. Like I said, we have a good cash flow coming due. I think we'll be able to sustain as well as improve NIM with a quarter rate hike.

Speaker #2: Increasing 2 to 3 basis points, and then we adjust our deposit prices. So you have probably a a quarter of let's call it a a a decline when deposit rates increase, but then like I said, we have a good good cash flow coming due.

Speaker #2: So, I think we'll be able to sustain, as well as improve NIM, with a quarter-rate hike.

Speaker #5: I'd just add to that. That depends on the shape of the yield curve. Is it staying in its current normal shape, or do we go back towards a little more inverted?

John W. Bordelon: Let me just add to that. It depends on the shape of the yield curve. Is it staying in its current normal shape, or do we go back towards a little more inverted? What that could do is hurt NIMs on all banks because the deposit customers may be seeking a little bit higher yield. I'm more concerned about what happens with our deposits than with our loans really, because we are repricing loans at a better rate today. Deposits, because so many banks are at a very high loan-to-deposit ratio, they're paying up significantly. A rise in interest rates could cause a little bit of a run on the deposit side. We'll have to

John Bordelon: Let me just add to that. It depends on the shape of the yield curve. Is it staying in its current normal shape, or do we go back towards a little more inverted? What that could do is hurt NIMs on all banks because the deposit customers may be seeking a little bit higher yield. I'm more concerned about what happens with our deposits than with our loans really, because we are repricing loans at a better rate today. Deposits, because so many banks are at a very high loan-to-deposit ratio, they're paying up significantly. A rise in interest rates could cause a little bit of a run on the deposit side. We'll have to be competitive in that arena.

Speaker #5: So what that could do is hurt NIMs on all banks, because the deposit customers may be seeking a little bit higher yield. So, you know, I'm more concerned about what happens with our deposits than with our loans, really, because we are repricing loans at a better rate today.

Speaker #5: But deposits, because so many banks are at a very high loan-to-deposit ratio, they're paying up significantly. So a rise in interest rates could cause a little bit of a run on the deposit side.

Speaker #5: So we'll have to be competitive in that arena.

Stephen Scouten: Yeah

John W. Bordelon: be competitive in that arena.

Speaker #6: Yeah, yeah, I think that's a good point. And that's a big message we're hearing across the industry right now—just competitive dynamics. John, how would you say you feel like competition has been in your markets, and has it been relatively rational? Or where it isn't?

Stephen Scouten: Yeah, I think that's a good point. That's a big message we're hearing across the industry right now is just competitive dynamics. John, how would you say you feel like competition has been in your markets, and has it been relatively rational? Where it isn't, where are you seeing pressure? Is it more on rate, deposit rate, structure of loans? Where's the kind of tension points from a competitive environment perspective?

Speaker #6: Where are you seeing pressure? Is it more on rate, deposit rate, structure of loans? Where are the kind of tension points from a competitive environment perspective?

Speaker #2: I would see it at both loan and deposit. Texas is probably more competitive than Louisiana. We're seeing some—not as much maybe in the last month as it was in the first and second quarter—where loan rates were pretty low, but also deposit rates; there are four or five banks in the Texas market that were paying back up close to 4 percent.

John W. Bordelon: It was seen in both loan and deposit. Texas is probably more competitive than Louisiana. We're seeing some, not as much maybe the last month as it was Q1 and Q2, where loan rates were pretty low, but also deposit rates. There are four or five banks in the Texas market that were paying back up close to 4%. I think in Q1, we had two or three banks in Texas that were at 4.25%, so way above the market. Competing against those has been a little bit of a challenge. I still think we're going to have banks across all of our footprint that periodically are going to need more liquidity and are going to raise the rates.

John Bordelon: It was seen in both loan and deposit. Texas is probably more competitive than Louisiana. We're seeing some, not as much maybe the last month as it was Q1 and Q2, where loan rates were pretty low, but also deposit rates. There are four or five banks in the Texas market that were paying back up close to 4%. I think in Q1, we had two or three banks in Texas that were at 4.25%, so way above the market. Competing against those has been a little bit of a challenge. I still think we're going to have banks across all of our footprint that periodically are going to need more liquidity and are going to raise the rates.

Speaker #2: I think in the first quarter we had two or three banks in Texas that were at 4.25%. So, way above the market.

Speaker #2: And so, competing against those has been a little bit of a challenge. But I still think we're going to have banks across all of our footprint that, periodically, are going to need more liquidity and are going to raise the rates.

Speaker #6: Yeah, very good point. Great color—appreciate it. And congrats on a great quarter.

Stephen Scouten: Yeah, very good point. Great color, appreciate it, congrats on a great quarter.

Speaker #2: Thanks, Scott.

John W. Bordelon: Thanks, Scott.

John Bordelon: Thanks, Scott.

Speaker #3: Thank you. And your next question comes from the line of Fedi Strickland from Hofta Group. Please go ahead.

Operator: Thank you. Your next question comes from the line of Feddie Strickland from Hovde Group. Please go ahead.

Speaker #7: Hey, good morning. Just wanted to ask about the loan growth. Appreciate the overall guide, but in terms of mix, it seems like you had pretty healthy CRE, C&I, and multifamily growth in the quarter, and a step-down in construction.

Feddie Strickland: Hey, good morning. Just wanted to ask on loan growth, appreciate the overall guide. In terms of mix, it seems like you had pretty healthy CRE, C&I, multifamily growth in the quarter and a step down in construction. Should we expect more of the same in terms of the buckets of growth in the next couple quarters?

Speaker #7: Should we expect more of the same in terms of the buckets of growth in the next couple of quarters?

Speaker #5: Yeah. I you know, what it is surprising a little bit that the construction is continuing to head down when when rates were higher. It slowed down for sure.

John W. Bordelon: Yeah. It is surprising a little bit that the construction is continuing to head down. When rates were higher, it slowed down for sure. We're still seeing a little bit of reduction there. We've always been a very strong construction lender, so that is probably the biggest surprise in our balance sheet. Yes, I think we're doing well in other categories, trying to diversify our risk on as much as we can in the loan portfolio. You'll continue to see growth in other areas than just plain CRE.

John Bordelon: Yeah. It is surprising a little bit that the construction is continuing to head down. When rates were higher, it slowed down for sure. We're still seeing a little bit of reduction there. We've always been a very strong construction lender, so that is probably the biggest surprise in our balance sheet. Yes, I think we're doing well in other categories, trying to diversify our risk on as much as we can in the loan portfolio. You'll continue to see growth in other areas than just plain CRE.

Speaker #5: But we're still seeing a little bit of reduction there. We've always been a very strong construction lender, so that is probably the biggest surprise in our balance sheet.

Speaker #5: But yes, I think we're doing well in other categories, trying to diversify our risk as much as we can in the loan portfolio.

Speaker #5: So, you'll continue to see growth in other areas, not just in plain CRE.

Speaker #7: Got it.

Feddie Strickland: Got it.

Speaker #5: We've done a good job over the last—oh, I'm sorry. We've done a good job over the last, probably, four quarters of reducing our non-owner-occupied CRE and increasing our owner-occupied.

John W. Bordelon: We've done a good job over the last probably four quarters of reducing our non-owner occupied CRE and increasing our owner occupied. That was a goal of ours starting about two and a half years ago, and it's really paying off.

John Bordelon: We've done a good job over the last probably four quarters of reducing our non-owner occupied CRE and increasing our owner occupied. That was a goal of ours starting about two and a half years ago, and it's really paying off.

Speaker #5: So that was a goal of ours starting about two and a half years ago, and it's really paying off.

Speaker #7: Got it, appreciate that, John. And just switching gears on the expense side, again, appreciate the guidance there. I think you mentioned some of the expenses working through, like some of these credits, foreclosure expenses, what have you.

Feddie Strickland: Got it. Appreciate that, John. Just switching gears on the expense side. Again, appreciate the guide there. I think you mentioned some of the expenses working through some of these credits, foreclosure expenses, what have you, are keeping that a little elevated in the second half of the year. As we get into early 2027, and as you work through a good bit of these existing NPAs, assuming nothing new comes up, could we maybe see expenses overall decline a little bit just as you work through some of those problem assets?

Speaker #7: Are you keeping that a little elevated in the second half of the year? But as we get into early 2027 and as you work through a good bit of these existing MPAs, assuming nothing new comes up, could we maybe see expenses overall decline a little bit just as you work through some of those problem assets?

Speaker #2: Yeah, I'll touch up on it for a second. As we work through those, we're just going to have some elevated expenses on the OREO side.

David T. Kirkley: Yeah, I'll touch up on it for a second. As we work through those, we're just going to have some elevated expenses on the OREO side. In Q2 and Q1, we've had a little bit of elevated fraud activity on our deposits. I think we're getting that back down to a more normalized run rate going into Q3 and into Q4. You'll see a little bit of help from that. I think once we work through the OREO expenses, depending on the pipeline of how that shapes out, you'll see a little bit more normalized rate of our expense base.

David Kirkley: Yeah, I'll touch up on it for a second. As we work through those, we're just going to have some elevated expenses on the OREO side. In Q2 and Q1, we've had a little bit of elevated fraud activity on our deposits. I think we're getting that back down to a more normalized run rate going into Q3 and into Q4. You'll see a little bit of help from that. I think once we work through the OREO expenses, depending on the pipeline of how that shapes out, you'll see a little bit more normalized rate of our expense base.

Speaker #2: In Q2 and Q1, we've had a little bit of elevated fraud activity on our deposits. And I think we're getting that back down to a more normalized run rate going into Q3 and into Q4.

Speaker #2: So you'll see a little bit of help from that. But I think once we work through the OREO expenses, depending on the pipeline of how that shapes out, you'll see a little bit more normalized rate of our expense base.

Speaker #7: Got it. And just one last question from me real quick. It seems like you've got pretty good loan and deposit pipelines. But do you expect, you know, loans to deposits to kind of stay around that 90% to 92% range that you've been targeting?

Feddie Strickland: Got it. Just last question for me real quick. It seems like you've got pretty good loan and deposit pipelines, do you expect loans and deposits kind of stays around that 90% to 92% range that you've been targeting? Do you see anything that would cause you to kind of jump above or below that the next couple quarters?

Speaker #7: Do you see anything that would cause you to kind of jump above or below that in the next couple of quarters?

Speaker #2: No. On the deposit side, you know, we tried to lower our rates a little bit in the first quarter, and we lost about $60 million of CDs and such.

John W. Bordelon: No. On the deposit side, we tried to lower our rates a little bit in Q1, we lost about $60 million of CDs and such. We have not moved from there. We still are down for the year about $60 million in CDs. Holding our CDs intact, I think, is important to maintaining the growth. A lot of our growth is coming in the core deposit sector. We have to make sure that we don't lose our CDs to offset that. That's a big strategy for us the remaining part of this year and going into next year.

John Bordelon: No. On the deposit side, we tried to lower our rates a little bit in Q1, we lost about $60 million of CDs and such. We have not moved from there. We still are down for the year about $60 million in CDs. Holding our CDs intact, I think, is important to maintaining the growth. A lot of our growth is coming in the core deposit sector. We have to make sure that we don't lose our CDs to offset that. That's a big strategy for us the remaining part of this year and going into next year.

Speaker #2: And we have not moved from there. We still are down for the year about $60 million in CDs. So holding our CDs intact, I think, is important to maintaining the growth.

Speaker #2: So, a lot of our growth is coming in the core deposit sector. But we have to make sure that we don't lose our CDs to offset that.

Speaker #2: So that's a big strategy for us for the remaining part of this year and going into next year.

Speaker #7: Understood. That's helpful. Thanks for taking my questions.

Feddie Strickland: Understood. That's helpful. Thanks for taking my questions.

Speaker #2: Thank you. Have a good day.

John W. Bordelon: Thank you. Have a good day.

John Bordelon: Thank you. Have a good day.

Speaker #3: Thank you. Once again, if you have any questions, please press star followed by 1. Your next question comes from the line of Christopher Marinek from Breen Capital.

Operator: Thank you. Once again, if you have a question, please press star followed by one. Your next question comes from the line of Christopher Marinac from Green Capital. Please go ahead.

Speaker #3: Please go ahead.

Speaker #6: Hey, good morning. Thanks for hosting the call. I just had a question for Darren. In his new role, do you see additional hires or maybe an acceleration of lending hires as this next year-plus unfolds?

Christopher Marinac: Hey, good morning. Thanks for hosting the call. Just had a question for Darrin. In his new role, do you see additional hires or maybe an acceleration of kind of lending hires as this next year-plus unfolds?

Speaker #5: Yeah, we're not anticipating any major changes for us. We've got a strong crew; our executive team is strong. Our Chief Banking Officer has a really good crew.

John W. Bordelon: Yeah. We're not anticipating any major changes, Chris. We've got a strong crew. Our executive team is strong. Our chief banking officer has a really good crew. We haven't had much in terms of turnover, we're just looking to add good bankers when they're available, but no major plans for additions at this time.

John Bordelon: Yeah. We're not anticipating any major changes, Chris. We've got a strong crew. Our executive team is strong. Our chief banking officer has a really good crew. We haven't had much in terms of turnover, we're just looking to add good bankers when they're available, but no major plans for additions at this time.

Speaker #5: We haven't had much in terms of turnover, so we're just looking to add good bankers when they're available. But no major plans for additions at this time.

Speaker #6: All right. Very well. Thank you.

Christopher Marinac: All right. Very well. Thank you.

Speaker #2: We did just add one new RM in the Baton Rouge market, which is our slowest developing market, so hopefully that will help.

John W. Bordelon: We did just add one new RM in Baton Rouge market, which is our slowest developing market. Hopefully that will help.

John Bordelon: We did just add one new RM in Baton Rouge market, which is our slowest developing market. Hopefully that will help.

Speaker #6: Got it. All right. Thank you both for that. And then, just to go back on the criticized trends and any other comments related to that that you've already made, is there anything else in the pipeline, or any other trends you see kind of under the surface in terms of, you know, either risk ratings going back and getting upgraded, or additional items that may pop up over time?

Christopher Marinac: Got it. All right. Thank you both for that. Just to go back on the criticized trends that in other comments related to that that you've already made. Is there anything else in the pipeline or any other trends you see kind of under the surface in terms of either risk ratings going back and getting upgraded or additional items that may pop up over time?

Speaker #5: I can speak to what's in the watch list now. We've got, as John and David mentioned earlier, our Special Assets Group has been working on watch credits and has a significant number of resolutions in place.

Darrin Guidry: I can speak to what's in the watchlist now. We've got, as John and David mentioned earlier, our special assets group has been working on watch credits and has a significant number of resolutions in place. Specifically, we downgraded about $15 million this past quarter into special mention. We have resolutions in place that should occur by the end of the year amounting to about $22 million. In fact, more than half of that should occur within this quarter. Substandard credit resolutions including our longest-tenured classified loan is set to be resolved by the end of Q4 as well. We're really excited about that. Substandard resolutions should be a little more than $4 million through the end of the year. Finally, our non-performing assets we're expecting through payoffs, upgrades, and sales of other real estate owned, approximately $7 million of improvement there.

Darren Guidry: I can speak to what's in the watchlist now. We've got, as John and David mentioned earlier, our special assets group has been working on watch credits and has a significant number of resolutions in place. Specifically, we downgraded about $15 million this past quarter into special mention. We have resolutions in place that should occur by the end of the year amounting to about $22 million. In fact, more than half of that should occur within this quarter. Substandard credit resolutions including our longest-tenured classified loan is set to be resolved by the end of Q4 as well. We're really excited about that. Substandard resolutions should be a little more than $4 million through the end of the year. Finally, our non-performing assets we're expecting through payoffs, upgrades, and sales of other real estate owned, approximately $7 million of improvement there.

Speaker #5: Specifically, we downgraded about $15 million this past quarter into special mention. But we have resolutions in place that should occur by the end of the year.

Speaker #5: Amounting to about $22 million. In fact, more than half of that should occur within this quarter. Substandard credit resolutions, including our longest-tenured classified loan, are set to be resolved by the end of the fourth quarter as well.

Speaker #5: We're really excited about that. Substandard resolutions should be a little more than $4 million through the end of the year. And finally, for our non-performing assets, we're expecting, through payoffs, upgrades, and sales of other real estate owned, approximately $7 million of improvement there.

Speaker #5: So overall, between now and the end of the year, and with many happening throughout the next five months, we should exceed about $30 million of improvement in special assets.

Darrin Guidry: Overall, between now and the end of the year and many happening throughout the next five months, we should exceed about $30 million of improvement in special assets.

Darren Guidry: Overall, between now and the end of the year and many happening throughout the next five months, we should exceed about $30 million of improvement in special assets.

Speaker #6: Good. Thank you, Darren. That's very helpful. I appreciate it, and thanks again for hosting the call this morning.

Christopher Marinac: Good. Thank you, Darrin. That's very helpful. I appreciate it. Thanks again for hosting the call this morning.

Speaker #2: Thank you, Chris.

Darrin Guidry: Thank you, Chris.

Darren Guidry: Thank you, Chris.

Speaker #5: Thanks, Chris.

John W. Bordelon: Thanks, Chris.

John Bordelon: Thanks, Chris.

Speaker #3: Thank you. There are no further questions at this time. I would like to turn the conference back over to John for any closing remarks.

Operator: Thank you. There are no further questions at this time. I would like to turn the conference back over to John for any closing remarks.

Speaker #1: Once again, thank you very much for joining us today. We look forward to speaking with many of you in the coming days or weeks.

John W. Bordelon: Once again, thank you very much for joining us today. We look forward to speaking with many of you in the coming days or weeks and appreciate your interest in Home Bancorp. Have a great day.

John Bordelon: Once again, thank you very much for joining us today. We look forward to speaking with many of you in the coming days or weeks and appreciate your interest in Home Bancorp. Have a great day.

Speaker #1: And appreciate your interest in Home Bancorp. Have a great day.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may disconnect.

Q2 2026 Home Bancorp Inc Earnings Call

Request DemoDemo

Home Bank

Earnings