Home Bancorp, Inc.

Good morning, ladies and gentlemen, and welcome to the Home Bancorp's second quarter 2026 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the start 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 Darren Guidry, and Chief Financial Officer David Kirkley. Please go ahead, Mr. Kirkley.

Thank you, Ina. Good morning and welcome to HomeBank's second quarter 2026 earnings call. Earnings released in the investor presentation are available on our website. I ask that everyone please refer to the disclaimer regarding forward-looking statements in the investor presentation in our SEC files. I'll hand it over to John to make a few comments about the second quarter.

John? Thanks, David. Good morning, everyone, and thank you for joining me on this 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. Before I discuss our second quarter results, I want to take a moment to introduce Darren Guidry as HomeBank's new president. Darren 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. 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. 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 second quarter results. Yesterday afternoon, we reported second quarter net income of $11.6 million, or $1.48 per value of share. Earnings per share increased 2% from the first quarter and were up from $1.46 per share a year ago. Net interest margin expanded to 4.24% in the second quarter and return 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 Bank's 118-year history. This continued net interest income growth and margin expansion was driven by higher yields in our earning asset portfolio and stable funding costs. Our cost of deposits was stable at $1.66. and our peer group and reflects the continuous strength of our quarter-positive franchise. Loans grew by $50.7 million in the second quarter, approximately 7% annualized, which was a nice recovery from the slight contraction we saw in the first quarter. Our Houston market continues to lead the way, going at a 9% annualized grade year-to-date. The Tomball branch in northwest Houston, which opened in the first quarter, is gaining momentum and building its customer base. 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. 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 90-92 target range. The quality and stability of our department base remains one of HomeMate'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 increase during the four, primarily due to one C&I loan from a manufacturing company, which is paying as agreed and has a very strong guarantor. We continue to work through our classified assets toward improvement. As some of the loans are refinanced elsewhere, businesses are sold, some loans are moved to real estate owned, and eventually the assets 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 remain confident that our conservative underwriting and proactive management of challenge loans will minimize any losses we ultimately incur. Over the past two years, the financial transformation at HomeAid has been significant. Net interest margin has expanded approximately 58 basis points since the second quarter of 2024. Net interest income has increased by more than 7% year over year Thank you. Thanks, John.