Home Bancorp earnings declined in the third quarter of 2026 as credit problems, higher deposit costs and rising operating expenses weighed on results. The parent of Home Bank reported net income of $10.1 million, or $1.28 per diluted share, on October 19, down from $11.6 million, or $1.48 per share, in the preceding quarter.
Key Takeaways
- Diluted earnings fell to $1.28 per share from $1.48 in the second quarter.
- Nonperforming assets rose 37% after six loan relationships moved to nonaccrual status.
- Net interest income held near $35.9 million despite a narrower lending margin.
Table of Contents
- Home Bancorp earnings face higher credit and operating costs
- Six loan relationships drive the increase in problem assets
- Deposit costs narrow the margin despite steady interest income
- Conclusion
Home Bancorp earnings face higher credit and operating costs
Home Bancorp’s third-quarter 2026 results announcement showed that stable net interest income was not enough to sustain the previous quarter’s profit. Noninterest expense increased $1.8 million to $26.3 million, primarily reflecting a $1.7 million increase in foreclosed-asset expenses and higher franchise and shares tax.
Noninterest income provided a partial offset, rising $282,000 to $4.2 million as other income and service fees increased. The provision for loan losses also rose, reaching $1.0 million compared with $762,000 in the second quarter.
The results show a distinction between the bank’s relatively steady interest earnings and its weaker bottom line: higher operating expenses and credit provisions absorbed more of that income.
| Item | Details |
|---|---|
| Total loans | $2.8 billion at September 30, down $4.0 million from June 30. |
| Total deposits | $3.1 billion, down $15.4 million during the quarter. |
| Core deposits | $2.3 billion, down $28.3 million during the quarter. |
| Shareholders’ equity | $453.1 million, compared with $453.5 million at June 30. |
| Preliminary capital ratios | Tier 1 leverage ratio of 12.33%; total risk-based capital ratio of 16.09%. |
Six loan relationships drive the increase in problem assets
Nonperforming assets totaled $53.7 million at September 30, up from $39.2 million at June 30. They represented 1.49% of total assets, compared with 1.09% three months earlier.
The increase primarily reflected six loan relationships totaling $19.5 million that were placed on nonaccrual status, partially offset by payoffs and paydowns. President Darren E. Guidry said management did not anticipate sizable losses from those relationships based on its current assessment. That is management’s expectation, not a confirmed recovery outcome.
Net loan charge-offs increased to $586,000 from $448,000. The allowance for loan losses reached $34.4 million, or 1.24% of total loans, versus $34.0 million, or 1.22%, at the end of June.
Deposit costs narrow the margin despite steady interest income
Net interest income increased $110,000 to $35.9 million, while net interest margin declined five basis points to 4.19%. The company attributed the margin pressure primarily to credit-related interest reversals and higher funding costs.
Loans transferred to nonaccrual status generated approximately $862,000 of interest income reversals. Meanwhile, the average rate paid on interest-bearing deposits increased to 2.33% from 2.28%. Loan pricing, portfolio mix and balance-sheet management helped offset some of those pressures.
The board declared a quarterly cash dividend of $0.32 per share, payable November 13, 2026, to shareholders of record on November 2. Home Bancorp also repurchased 350 shares during the quarter at an average price of $69.34; another 382,820 shares remained eligible for purchase under its 2025 plan.
Conclusion
Home Bancorp maintained its net interest income, but higher expenses and deteriorating credit measures reduced quarterly profit. Management’s scheduled October 20, 2026, earnings call at 10:30 a.m. CDT is the next confirmed opportunity for discussion of the problem loans and funding-cost pressures.
Read More News
Disclaimer
This FinanceVelix article provides general information, not personalized financial, investment, legal, or tax advice. Market prices, interest rates and economic conditions can change; investments carry a risk of loss. Facts reflect the material available when published and may change. Check important information independently and consult a qualified professional when needed. Mentioning an asset, company, or service is not an endorsement.
