Home Bancorp, Inc. (HBCP) Earnings

Management highlights

### Leadership Transition - Darren Guidry, former Chief Risk Officer with 33 years at Home Bancorp, was appointed as new President, separating the CEO and President roles to support sustained growth - As CEO, John Bordelon will focus on overall corporate strategy, capital planning, and shareholder relations, while Guidry will lead day-to-day execution of strategic priorities, maintaining discipline in credit quality, risk management, and customer service ### Financial Performance Highlights - Q2 2026 delivered record quarterly net interest income, driven by higher yields in the earning asset portfolio and stable funding costs - Net interest income has grown more than 7% YoY, with NIM expanding 58 basis points since Q2 2024 - Houston market leads loan growth at 9% annualized year-to-date, with the newly opened Tomball branch building customer base and gaining momentum - Deposits growth remains a key competitive strength, with core deposit growth offsetting a modest decline in certificates of deposit ### Credit Quality Management - Non-performing loans declined 26.3% QoQ, primarily due to the transfer of ~$10 million in non-performing loans to Other Real Estate Owned (OREO) - Criticized loans increased to $95.8 million (3.45% of total loans), driven by migration of 6 relationships to special mention and a $7.4 million increase in substandard loans, almost entirely from one $12.4 million C&I manufacturing loan that is current on payments and backed by a strong guarantor - Net charge-offs remain extremely low at 6 basis points annualized; management expects ~one-third of total classified assets (across 14 loans) to be resolved and removed from the balance sheet by year-end - Proactive credit management is expected to continue limiting actual loss exposure ### Capital Management - Since 2019, adjusted tangible book value per share has grown at a 9.7% annualized rate, EPS has grown at an 11%+ annualized rate, and the quarterly dividend has increased by almost 50% - 17% of outstanding shares have been repurchased since 2019; a new quarterly cash dividend of 32 cents per share (a 1 cent increase) was declared

Guidance

- Management expects continued mid-single-digit annualized loan growth in the second half of 2026, though timing of customer financing decisions has become increasingly hard to predict - NIM is expected to see continued small basis point expansion in Q3 2026 and Q4 2026 from ongoing repricing of lower-yielding maturing assets, with moderation of expansion starting in Q1 2027 - Quarterly non-interest income is expected to remain in the range of $3.8 million to $4.1 million - Non-interest expense is expected to stay in the range of $24 million to $24.8 million over the next several quarters due to elevated foreclosed asset working expenses - The loan-to-deposit ratio is expected to remain within the 90-92% target range over the coming quarters - Management expects ~$22 million in special mention credit resolutions, ~$4 million in substandard credit resolutions, and ~$7 million in non-performing asset resolutions to be completed by the end of 2026, with over half of special mention resolutions completed in Q3 2026

Segment performance

Home Bancorp is a single-segment commercial bank, so all performance metrics are consolidated: 1. Net income: $11.6 million, or $1.48 per diluted share, up 2% quarter-over-quarter (QoQ) and up year-over-year (YoY) from $1.46 per share. 2. Net interest income (NII): $35.8 million, an increase of $1.3 million QoQ and $2.5 million YoY, reaching the highest quarterly NII in the company's 118-year history. 3. Net interest margin (NIM): Expanded 8 basis points QoQ to 4.24%, up 58 basis points from Q2 2024. 4. Total loans: Grew $50.7 million in Q2 (7% annualized), recovering from a slight Q1 contraction; non-performing loans fell from $35.8 million to $26.4 million (from 1.31% to 0.95% of total loans). 5. Total deposits: Grew $46.6 million QoQ to $3.1 billion, maintaining the loan-to-deposit ratio in the 90-92% target range; cost of deposits remained stable at 1.66%. 6. Non-interest income: $3.9 million in Q2, up $181,000 QoQ. 7. Non-interest expense: $24.6 million in Q2, up $1.6 million QoQ, driven by higher compensation/benefit costs and foreclosed asset expenses. 8. Credit provisions: $762,000 in Q2, down from $922,000 in Q1; allowance for loan losses stands at $34 million (1.22% of total loans). 9. Capital: Tangible book value per share increased to $47.02, up 2.1% QoQ and 13% YoY; Tier 1 leverage ratio is 12.1%, total risk-based capital ratio is 15.6%.

Risks & headwinds

- Overall macroeconomic weakness is putting individual (rather than industry-wide) stress on some borrowers, leading to occasional credit downgrades and increased criticized loan balances - Competition is particularly intense in the Houston, Texas market, where some competing banks are offering significantly higher deposit rates, creating pressure to retain deposits - A potential Federal Reserve rate hike could increase deposit competition and raise funding costs; inverted yield curve resulting from a hike could hurt NIM across the industry, including for Home Bancorp - Elevated expenses from working through foreclosed OREO assets will keep non-interest expenses higher than normal through the second half of 2026 - There is continued uncertainty around the timing of customer financing decisions, which makes predicting actual loan growth outcomes challenging

Analyst Q&A

• Q: NIM has expanded well above management's prior 4.10-4.15% range; when will the benefit from fixed rate asset repricing moderate? /

  A: Management expects small additional NIM increases in Q3 and Q4 2026, as new loan originations continue to close at rates above the current portfolio average, leaving ongoing repricing room. Repricing benefits are expected to moderate after Q4 2026, entering 2027. This is driven by lower yielding loans continuing to roll off the balance sheet in size through the end of 2026.

• Q: If M&A activity remains slow, what alternative uses does management see for the bank's strong excess capital position? /

  A: Management prioritizes holding dry powder for attractive M&A opportunities, which the bank has sufficient capital capacity to pursue. Share repurchases have been paused recently after a strong run-up in the stock price, but will be re-evaluated going forward. The bank could also potentially call its callable sub-debt (with a 5.75% coupon) maturing in 2027 to optimize capital structure, and the 1 cent dividend increase deploys a small amount of incremental capital.

• Q: How competitive are market conditions in Home Bancorp's operating regions, and where is the most competitive pressure? /

  A: Competitive pressure exists on both loan and deposit pricing, with more intense competition in the Texas market than in Louisiana. Earlier in 2026, several large competitors in Texas offered deposit rates as high as 4.25%, well above market averages, creating challenges for deposit retention. This pressure has eased slightly over the past month, but periodic rate increases from competitors seeking additional liquidity are expected to continue.

• Q: Is there any underlying trend in criticized credit risk beyond the disclosed quarterly changes? /

  A: The special assets team has clear resolution plans in place for nearly all watchlist credits. Approximately $22 million in special mention resolutions, over $4 million in substandard resolutions (including the bank's longest-tenured classified loan), and $7 million in non-performing asset resolutions are expected by the end of 2026, with more than half of the special mention resolutions closing this quarter. No unexpected broad-based risk trends have emerged.