Home Bancorp, Inc.

Good morning, ladies and gentlemen, and welcome to the HomeBank Corp second quarter 2024 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 now like to turn the conference over to HomeBank Corp's Chairman President and CEO, John Borlone, and Chief Financial Officer, David Kirkley. Mr. Kirkley, please go ahead.

Thank you, Kenneth. Good morning and welcome to HomeBank's second quarter 2024 earnings call. Our earnings release and investor presentation are available on our website. I ask that everyone please refer to the disclaimer regarding forward-looking statements and investor presentation in our SEC filings. Now I'll hand it over to John to make a few comments about the second quarter. John?

Thanks, David. Good morning, and thank you for joining HomeBank's earning call today. We appreciate your interest in HomeBank as we discuss our results, expectations for the future, and our approach to creating long-term shareholder value. We reported second quarter net income of $8.1 million, or $1.02 per share. And most importantly... a slight improvement in our net interest margin, which appears to have stabilized. The NIM came in at 3.66%, which was two basis points higher than the first quarter. We're cautiously optimistic that continued steady increases in asset yields and stabilization in our cost of funds will continue to support net interest income growth and improving margins, even without any Fed rate cuts. We added $39.7 million of loans in the second quarter with growth in all sectors except for construction and land loans, which declined slightly. Given the strong loan growth we had in the first half of the year, we're still anticipating that 2024 loan growth will be between 4% and 6%. The duration of higher rates appears to now be negatively impacting our loan pipeline, but we're optimistic that if forecasted rate cuts occur, we could see loan demand pick back up. Deposits, including demand deposits, were stable from the last quarter after very strong growth in the fourth and first quarters. We were pleased to see 12.6 million of core deposit growth in our Houston market as our teams there brought over the operating accounts of a number of new clients. We relocated another one of our Houston branches and continue to look for opportunities to improve our coverage of the markets we serve by adding brick and mortar and talent. Despite all the negative headlines, we here at HomeBank are actually seeing improvements in credit. In the past few months, we have had a $5 million construction loan go from non-performing to performing with interest reserves after we worked with the borrower, who we've known for years, to manage through some delays and cost overruns. We also recently resolved a non-performing $3.4 million multifamily loan without any principal loss. We feel very good about a non-performing $4.7 million loan lending relationship that has about $2 million of equity behind it. A year ago, David and I were in New York, and we were both struck by the number of high-rise buildings with empty floors. We just don't have that same problem in our markets, and I know most of our colleagues at other community banks feel the same way. We lend to people we know in markets we know. We're not making the loans that are being written about in the financial press. Community banking is about providing our shareholders with an attractive, risk-adjusted return. We are not in the business of making loans that could result in huge losses on relationships that aren't the right fit. Finally, before I turn it back over to David, I'd like to welcome Mark Herpin to the Home Bank team, where he joins as Senior Executive Vice President and Chief Operations Officer. Mark has had a long and successful career in community banking, and we look forward to his contributions at Home Bank. I'd also like to congratulate Natalie Lemoine, our Chief Administrative Officer, and John Zollinger, our Chief Banking Officer, on their promotions to Senior Executive Vice President of the bank. With that, I'll turn it back over to David.