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What changed in HOME BANCORP, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of HOME BANCORP, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+147 added−157 removedSource: 10-K (2025-03-12) vs 10-K (2024-03-08)

Top changes in HOME BANCORP, INC.'s 2024 10-K

147 paragraphs added · 157 removed · 129 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe Bank cannot predict the impact the changes to the CRA will have on its operations at this time. The Community Reinvestment Act requires all institutions insured by the Federal Deposit Insurance Corporation to publicly disclose their rating. The Bank received an “Outstanding” Community Reinvestment Act rating in its most recent federal examination. Limitations on Dividends .
Biggest changeThe applicability date for the majority of the provisions in the CRA regulations is January 1, 2026, and additional requirements will be applicable on January 1, 2027. 5 The Community Reinvestment Act requires all institutions insured by the Federal Deposit Insurance Corporation to publicly disclose their rating.
Leverage capital, also known as “core” capital, must equal at least 4.0% of adjusted total assets. Core capital generally consists of common stockholders’ equity (including retained earnings). Under the risk-based capital requirement, “total” capital (a combination of core and “supplementary” capital) must equal at least 8.0% of “risk-weighted” 4 assets.
Leverage capital, also known as “core” capital, must equal at least 4.0% of adjusted total assets. Core capital generally consists of common stockholders’ equity (including retained earnings). Under the risk-based capital requirement, “total” capital (a combination of core and “supplementary” capital) must equal at least 8.0% of “risk-weighted” assets.
A bank that has experienced rapid growth in commercial real estate lending, has notable exposure to a specific type of commercial real estate loan, or is approaching or exceeding the following supervisory criteria may be identified for further supervisory analysis with respect to real estate concentration risk: • Total reported loans for construction, land development and other land represent 100% or more of the bank’s total regulatory capital; or • Total commercial real estate loans (as defined in the guidance) represent 300% or more of the bank’s total regulatory capital and the outstanding balance of the bank’s commercial real estate loan portfolio has increased 50% or more during the prior 36 months.
A bank that has experienced rapid growth in commercial real estate lending, has notable exposure to a specific type of commercial real estate loan, or is approaching or exceeding the following supervisory criteria may be identified for further supervisory analysis with respect to real estate concentration risk: 6 • Total reported loans for construction, land development and other land represent 100% or more of the bank’s total regulatory capital; or • Total commercial real estate loans (as defined in the guidance) represent 300% or more of the bank’s total regulatory capital and the outstanding balance of the bank’s commercial real estate loan portfolio has increased 50% or more during the prior 36 months.
A bank’s failure to comply with the provisions of the Community 5 Reinvestment Act could, at a minimum, result in denial of certain corporate applications such as branches or mergers, or in restrictions on its activities. In addition, the Equal Credit Opportunity Act and the Fair Housing Act prohibit lenders from discriminating in their lending practices.
A bank’s failure to comply with the provisions of the Community Reinvestment Act could, at a minimum, result in denial of certain corporate applications such as branches or mergers, or in restrictions on its activities. In addition, the Equal Credit Opportunity Act and the Fair Housing Act prohibit lenders from discriminating in their lending practices.
Community Reinvestment Act and Fair Lending Laws. All insured depository institutions have a responsibility under the Community Reinvestment Act and related regulations to help meet the credit needs of their communities, including low- and moderate-income borrowers. The Office of the Comptroller of the Currency is required to assess the Bank’s record of compliance with the Community Reinvestment Act.
Community Reinvestment Act and Fair Lending Laws. All insured depository institutions have a responsibility under the Community Reinvestment Act and related regulations to help meet the credit needs of their communities, including low- and moderate-income borrowers. The Office of the Comptroller of the Currency is required to assess the Bank’s record of compliance with the Community Reinvestment Act ("CRA").
Since completing its initial public offering of stock in October 2008, the Company has acquired six other financial institutions. On March 26, 2022 the Company completed the acquisition of Friendswood Capital Corporation ("Friendswood"), the former holding company of Texan Bank, N.A. ("Texan Bank") of Houston, Texas, expanding the Company's market area to Houston.
Since completing its initial public offering of stock in October 2008, the Company has acquired six financial institutions. On March 26, 2022, the Company completed the acquisition of Friendswood Capital Corporation ("Friendswood"), the former holding company of Texan Bank, N.A. ("Texan Bank") of Houston, Texas, expanding the Company's market area to Houston.
FDIC-insured institutions with $10 billion or less in assets, like the Bank, continue to be examined by their applicable bank regulators. 6 Commercial Real Estate Lending Concentrations. The federal banking agencies have issued guidance on sound risk management practices for concentrations in commercial real estate lending.
FDIC-insured institutions with $10 billion or less in assets, like the Bank, continue to be examined by their applicable bank regulators. Commercial Real Estate Lending Concentrations. The federal banking agencies have issued guidance on sound risk management practices for concentrations in commercial real estate lending.
Specifically, the new rules require a banking organization to notify its primary federal regulator as soon as possible, and no later than 36 hours after, the banking organization 7 determines that a “computer-security incident” rising to the level of a “notification incident” has occurred.
Specifically, the new rules require a banking organization to notify its primary federal regulator as soon as possible, and no later than 36 hours after, the banking organization determines that a “computer-security incident” rising to the level of a “notification incident” has occurred.
The Bank does not have any assets assigned to a risk category over 400%. National banks must value securities available for sale at amortized cost for regulatory capital purposes.
The Bank does not have any assets assigned to a risk category over 400%. 4 National banks must value securities available for sale at amortized cost for regulatory capital purposes.
The Company is a bank holding company, subject to regulation, supervision and examination by the Federal Reserve. The Federal Reserve has enforcement authority with respect to the Company similar to that of the OCC over the Bank.
General . The Company is a bank holding company, subject to regulation, supervision and examination by the Federal Reserve. The Federal Reserve has enforcement authority with respect to the Company similar to that of the OCC over the Bank.
The Bank currently operates 18 banking offices in Acadiana, four banking offices in Baton Rouge, six banking offices in the Greater New Orleans area, six banking offices in the Northshore region, three banking offices in Natchez, and five banking offices in the Houston area.
The Bank currently operates 18 banking offices in Acadiana, four banking offices in Baton Rouge, six banking offices in the Greater New Orleans area, six banking offices in the Northshore region, three banking offices in Natchez, and six banking offices in the Houston area.
In addition, undercapitalized institutions are subject to various regulatory restrictions, and the appropriate federal banking agency also may take any number of discretionary supervisory actions. As of December 31, 2023, the Bank was deemed a well-capitalized institution for purposes of the above regulations and as such is not subject to the above mentioned restrictions.
In addition, undercapitalized institutions are subject to various regulatory restrictions, and the appropriate federal banking agency also may take any number of discretionary supervisory actions. As of December 31, 2024, the Bank was deemed a well-capitalized institution for purposes of the above regulations and as such is not subject to the above mentioned restrictions.
The Bank, which is headquartered in Lafayette, Louisiana and is a wholly-owned subsidiary of the Company, currently conducts business through 42 banking offices in the Acadiana, Baton Rouge, Greater New Orleans and Northshore (of Lake Pontchartrain) regions of south Louisiana, the Natchez region of west Mississippi and Houston region of Texas.
The Bank, which is headquartered in Lafayette, Louisiana and is a wholly-owned subsidiary of the Company, currently conducts business through 43 banking offices in the Acadiana, Baton Rouge, Greater New Orleans and Northshore (of Lake Pontchartrain) regions of south Louisiana, the Natchez region of west Mississippi and the Houston region of Texas.
The regulatory capital requirements generally applicable to a bank holding company are the same as the capital requirements for its subsidiary bank. For a description of the Bank's capital requirements, see “Regulation of Home Bank, N.A. - Recent Regulatory Capital Regulations.” Federal Securities Laws.
The regulatory capital requirements generally applicable to a bank holding company are the same as the capital requirements for its subsidiary bank. For a description of the Bank's capital requirements, see “Regulation of Home Bank, N.A. - Regulatory Capital Requirements.” Federal Securities Laws.
The Bank currently is subject to Sections 22(g) and (h) of the Federal Reserve Act, and as of December 31, 2023 was in compliance with the above restrictions. Consumer Financial Services.
The Bank currently is subject to Sections 22(g) and (h) of the Federal Reserve Act, and as of December 31, 2024 was in compliance with the above restrictions. Consumer Financial Services.
Information on our website should not be considered a part of this Annual Report on Form 10-K. Human Capital Resources At December 31, 2023, we had 467 full-time employees and ten part-time employees. None of our employees are represented by a collective bargaining group, and we believe that the Company's relationship with its employees is good.
Information on our website should not be considered a part of this Annual Report on Form 10-K. Human Capital Resources At December 31, 2024, we had 471 full-time employees and ten part-time employees. None of our employees are represented by a collective bargaining group, and we believe that the Company's relationship with its employees is good.
No institution may pay a dividend if it is in default on its federal deposit insurance assessment. As of December 31, 2023, assessment rates ranged from five basis points to 32 basis points for all institutions, subject to adjustments for unsecured debt issued by the institution, unsecured debt issued by other FDIC-insured institutions, and brokered deposits held by the institution.
No institution may pay a dividend if it is in default on its federal deposit insurance assessment. As of December 31, 2024, assessment rates ranged from 2.5 basis points to 32 basis points for all institutions, subject to adjustments for unsecured debt issued by the institution, unsecured debt issued by other FDIC-insured institutions, and brokered deposits held by the institution.
Commercial real estate loans and commercial and industrial loans are deemed attractive due to their generally higher yields and shorter anticipated lives compared to single-family residential mortgage loans.
Commercial real estate loans and commercial and industrial loans are deemed attractive due to their generally higher yields and shorter anticipated lives compared to one- to four-family residential mortgage loans.
As of December 31, 2023, the Bank had $11.1 million in FHLB stock, which was in compliance with this requirement. Federal Reserve System . The FRB requires all depository institutions to maintain reserves against their transaction accounts and non-personal time deposits. Effective March 26, 2020, the Federal Reserve Board reduced reserve requirement ratios to zero percent. Privacy and Cyber Security.
As of December 31, 2024, the Bank had $8.6 million in FHLB stock, which was in compliance with this requirement. Federal Reserve System . The FRB requires all depository institutions to maintain reserves against their transaction accounts and non-personal time deposits. Effective March 26, 2020, the Federal Reserve Board reduced reserve requirement ratios to zero percent.
OCC regulations impose various restrictions on the ability of the Bank to pay dividends. The Bank generally may pay dividends during any calendar year in an amount up to 100% of net income for the year-to-date plus retained net income for the two preceding years, so long as it is well-capitalized after the distribution.
The Bank generally may pay dividends during any calendar year in an amount up to 100% of net income for the year-to-date plus retained net income for the two preceding years, so long as it is well-capitalized after the distribution.
Financial institutions are required to disclose their policies for collecting and protecting confidential information. Customers generally may prevent financial institutions from sharing personal financial information with nonaffiliated third parties except for third parties that market the institutions’ own products and services.
At December 31, 2024, the reserve requirement remained at zero percent. Privacy and Cyber Security. Financial institutions are required to disclose their policies for collecting and protecting confidential information. Customers generally may prevent financial institutions from sharing personal financial information with nonaffiliated third parties except for third parties that market the institutions’ own products and services.
As of December 31, 2023, the Bank had $192.7 million of FHLB advances and $1.0 billion available on its line of credit with the FHLB.
As of December 31, 2024, the Bank had $175.5 million of FHLB advances and $1.1 billion available on its line of credit with the FHLB.
At December 31, 2023, the Bank exceeded all of its regulatory capital requirements, with Tier 1, Tier 1 common equity, Tier 1 common equity (to risk-weighted assets) and total risk-based capital ratios of 10.98%, 12.98%, 12.98% and 14.23%, respectively.
At December 31, 2024, the Bank exceeded all of its regulatory capital requirements, with Tier 1, Tier 1 common equity, Tier 1 common equity (to risk-weighted assets) and total risk-based capital ratios of 11.38%, 13.28%, 13.28% and 14.51%, respectively.
Removed
Extraordinary growth in insured deposits during the first and second quarters of 2020 caused the Deposit Insurance Fund reserve ratio to decline below the statutory minimum of 1.35 percent as of June 30, 2020.
Added
The FDIC adopted a final rule in October 2022, to increase initial base deposit insurance assessment rates by two basis points beginning in the first quarterly assessment period of 2023. The FDIC has the authority to increase insurance assessments in the future.
Removed
In September 2020, the FDIC Board of Directors adopted a Restoration Plan to restore the reserve ratio to at least 1.35 percent within eight years, absent extraordinary circumstances, as required by the Federal Deposit Insurance Act.
Added
A significant increase in insurance premiums would have an adverse effect on the operating expenses and results of operations of the Bank.
Removed
The Restoration Plan maintained the assessment rate schedules in place at the time and required the FDIC to update its analysis and projections for the deposit insurance fund balance and reserve ratio at least semiannually.
Added
The Bank received an “Satisfactory” Community Reinvestment Act rating in its most recent federal examination. Limitations on Dividends . OCC regulations impose various restrictions on the ability of the Bank to pay dividends.
Removed
In the semiannual update for the Restoration Plan in June 2022, the FDIC projected that the reserve ratio was at risk of not reaching the statutory minimum of 1.35 percent by September 30, 2028, the statutory deadline to restore the reserve ratio.
Added
The Securities and Exchange Commission adopted rules requiring registrants to disclose material cybersecurity incidents they experience and to disclose on an annual basis material information regarding their cybersecurity risk management, strategy, and governance.
Removed
Based on this update, the FDIC Board approved an Amended Restoration Plan, and concurrently proposed an increase in initial base deposit insurance assessment rate schedules uniformly by 2 basis points, applicable to all insured depository institutions.
Added
The rules require registrants to disclose on the new Item 1.05 of Form 8-K any cybersecurity incident they determine to be material and to describe the material aspects of the incident's nature, scope, and timing, as well as its material impact or reasonably likely material impact on the registrant.
Removed
In October 2022, the FDIC Board finalized the increase with an effective date of January 1, 2023, applicable to the first quarterly assessment period of 2023. The revised assessment rate schedules are intended to increase the likelihood that the reserve ratio of the Deposit Insurance Fund reaches the statutory minimum level of 1.35 percent by September 30, 2028.
Added
An Item 1.05 Form 8-K will generally be due four business days after a registrant determines that a cybersecurity incident is material. See Item 1C. Cybersecurity for annual disclosures. 7

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur lending activities include loans secured by commercial real estate and commercial and industrial loans. Our commercial and industrial loans, multi-family residential loans, and commercial real estate loans increased by an aggregate of 119.6%, 95.5% and 65.0% respectively, from December 31, 2019 through December 31, 2023.
Biggest changeOur lending activities include loans secured by commercial real estate and commercial and industrial loans. Our multi-family residential loans, commercial real estate loans and commercial and industrial loans, increased by an aggregate of 104.5%, 54.4% and 0.2% respectively, from December 31, 2020 through December 31, 2024.
If the Bank is forced to liquidate the collateral associated with such loans at values less than the remaining loan balance, it could have a significant impact on our results of operations. 8 Risks Related to Our Deposit Activities Municipal deposits are an important source of cost-effective funds for us, and a reduced level of such deposits may hurt our profits.
If the Bank is forced to liquidate the collateral associated with such loans at values less than the remaining loan balance, it could have a significant impact on our results of operations. Risks Related to Our Deposit Activities Municipal deposits are an important source of cost-effective funds for us, and a reduced level of such deposits may hurt our profits.
To the extent that we must work through the resolution of assets, economic problems may cause us to incur losses and adversely affect our capital, liquidity and financial condition. Risks Related to Accounting Matters Our allowance for credit losses may not be adequate to cover losses over the life of our financial assets.
To the extent that we must work through the resolution of assets, economic problems may cause us to incur losses and adversely affect our capital, liquidity and financial condition. 10 Risks Related to Accounting Matters Our allowance for credit losses may not be adequate to cover losses over the life of our financial assets.
We have established an allowance for credit losses, which includes the allowance for loans losses and losses on unfunded lending commitments, based upon various assumptions and judgments about the collectability of our loan portfolio which we 10 believe is adequate to offset expected losses on our existing financial assets.
We have established an allowance for credit losses, which includes the allowance for loans losses and losses on unfunded lending commitments, based upon various assumptions and judgments about the collectability of our loan portfolio which we believe is adequate to offset expected losses on our existing financial assets.
CECL requires expected credit related losses for available for sale debt securities to be recorded through an allowance for credit losses, while non-credit related losses will continue to be recognized through other comprehensive income. The Company’s held to maturity debt securities are also required to utilize the CECL approach to estimate expected credit losses.
Current expected credit losses ("CECL") requires expected credit related losses for available for sale debt securities to be recorded through an allowance for credit losses, while non-credit related losses will continue to be recognized through other comprehensive income. The Company’s held to maturity debt securities are also required to utilize the CECL approach to estimate expected credit losses.
If we are forced to pay higher rates on our municipal deposits to retain those funds, or if we are unable to retain those funds, it could have an adverse effect our net income. Risks Related to Market Interest Rates Changes in interest rates could have a material adverse effect on our operations.
If we are forced to pay higher rates on our municipal deposits to retain those funds, or if we are unable to retain those funds, it could have an adverse effect our net income and profitability.. Risks Related to Market Interest Rates Changes in interest rates could have a material adverse effect on our operations.
In assessing the realizability of DTAs, management considers whether it is more likely than not that some portion or all of the DTAs will not be realized. Assessing the need for, or the sufficiency of, a valuation allowance requires management to evaluate all available evidence, both negative and positive, including the recent trend of quarterly earnings.
In assessing the realizability of Deferred tax assets ("DTAs"), management considers whether it is more likely than not that some portion or all of the DTAs will not be realized. Assessing the need for, or the sufficiency of, a valuation allowance requires management to evaluate all available evidence, both negative and positive, including the recent trend of quarterly earnings.
Construction and land loans generally have a higher risk of loss than single-family residential mortgage loans due primarily to the critical nature of the initial estimates of a property’s value upon completion of construction compared to the estimated costs, including interest, of construction as well as other assumptions.
Construction and land loans generally have a higher risk of loss than one- to four-family residential mortgage loans due primarily to the critical nature of the initial estimates of a property’s value upon completion of construction compared to the estimated costs, including interest, of construction as well as other assumptions.
Continued fluctuations in crude oil prices could adversely affect our operations and economic conditions in some of our markets during 2024 and future periods, which could adversely affect our future results of operations.
Continued fluctuations in crude oil prices could adversely affect our operations and economic conditions in some of our markets during 2025 and future periods, which could adversely affect our future results of operations.
As of December 31, 2023, we had $31.4 million of accumulated other comprehensive losses. 11 Impairment of investment securities, goodwill, other intangible assets, or deferred tax assets could require charges to earnings, which could result in a negative impact on our results of operations.
As of December 31, 2024, we had $30.0 million of accumulated other comprehensive losses. 11 Impairment of investment securities, goodwill, other intangible assets, or deferred tax assets could require charges to earnings, which could result in a negative impact on our results of operations.
At December 31, 2023, we had goodwill of $81.5 million, which represents approximately 22.2% of shareholders’ equity. See Notes 2 and 8 to the Consolidated Financial Statements for additional information concerning our goodwill and the required impairment test.
At December 31, 2024, we had goodwill of $81.5 million, which represents approximately 20.6% of shareholders’ equity. See Notes 2 and 8 to the Consolidated Financial Statements for additional information concerning our goodwill and the required impairment test.
As of December 31, 2023, commercial real estate mortgage loans comprised approximately 46.2% of our loan portfolio. Commercial real estate mortgage loans generally involve a greater degree of credit risk than residential real estate mortgage loans because they typically have larger balances and are more affected by adverse conditions in the economy.
As of December 31, 2024, commercial real estate mortgage loans comprised approximately 42.6% of our loan portfolio. Commercial real estate mortgage loans generally involve a greater degree of credit risk than residential real estate mortgage loans because they typically have larger balances and are more affected by adverse conditions in the economy.
The placement of these institutions into receivership has resulted in market disruption and increased concerns that diminished depositor confidence across the banking industry in general could lead to deposit outflows that could destabilize other institutions. At December 31, 2023, we had $75.8 million in cash and cash equivalents.
The placement of these institutions into receivership has resulted in market disruption and increased concerns that diminished depositor confidence across the banking industry in general could lead to deposit outflows that could destabilize other institutions. At December 31, 2024, we had $98.5 million in cash and cash equivalents.
We had an additional $37.8 million in unfunded loan commitments to companies in the energy sector at such date. At December 31, 2023, $1.4 million of our loans in the energy sector were on nonaccrual status, and $1.0 million of our total allowance for loan losses was attributable to energy sector loans.
We had an additional $21.4 million in unfunded loan commitments to companies in the energy sector at such date. At December 31, 2024, $965,000 of our loans in the energy sector were on nonaccrual status, and $1.4 million of our total allowance for loan losses was attributable to energy sector loans.
Although the Company attempts to mitigate risk by diversifying its borrower base, approximately $75.2 million, or 2.9% of the Company’s loan portfolio, at December 31, 2023 was comprised of loans to borrowers in the oil and gas industry (which is also referred to as the “energy sector”).
Although the Company attempts to mitigate risk by diversifying its borrower base, approximately $94.6 million, or 3.5% of the Company’s loan portfolio, at December 31, 2024 was comprised of loans to borrowers in the oil and gas industry (which is also referred to as the “energy sector”).
As of December 31, 2023, the largest outstanding balances of our commercial and industrial, multi-family residential and commercial real estate loans were $18.6 million, $10.6 million and $20.9 million respectively. If a large loan were to become non-performing, as we have experienced in the past, it can have a significant impact on our results of operations.
As of December 31, 2024, the largest outstanding balances of our commercial real estate, commercial and industrial, and multi-family residential loans were $20.1 million, $17.8 million, and $14.3 million, respectively. If a large loan were to become non-performing, as we have experienced in the past, it can have a significant impact on our results of operations.
The announced special assessment, as well as any future additional special assessments, increases in assessment rates or required prepayments in FDIC insurance premiums, to the extent that they result in increased deposit insurance costs, would reduce our profitability. Item 1B. Unresolved Staff Comments . Not applicable.
While this special assessment does not apply to us, any future special assessments, increases in assessment rates or required prepayments in FDIC insurance premiums, to the extent that they result in increased deposit insurance costs, would reduce our profitability. Item 1B. Unresolved Staff Comments . Not applicable.
As of December 31, 2023, our allowance for loan losses amounted to $31.5 million, or 1.22% of total loans and our total allowance for credit losses amounted to $34.1 million, or 1.32% of total loans. See Note 2 to the Consolidated Financial Statements for a detailed discussion of the Company's methodologies for estimating expected credit losses.
As of December 31, 2024, our allowance for loan losses amounted to $32.9 million, or 1.21% of total loans and our total allowance for credit losses amounted to $35.6 million, or 1.31% of total loans. See Note 2 to the Consolidated Financial Statements for a detailed discussion of the Company's methodologies for estimating expected credit losses.
Following the placement of Silicon Valley Bank and Signature Bank into FDIC receivership, the federal banking regulators also issued a joint statement providing that the losses to support the uninsured deposits of those banks would be recovered via a special assessment on banks.
Following the placement of Silicon Valley Bank and Signature Bank into FDIC receivership, the federal banking regulators also issued a joint statement providing that the losses to support the uninsured deposits of those banks would be recovered via a special assessment on banks with $5.0 billion or more in total consolidated assets.
Excluding PPP loans, our commercial and industrial loans increased by an aggregate of 116.6% over the same time period. Generally, multi-family residential, commercial and industrial and commercial real estate lending involve a higher degree of risk than single-family residential lending due to a variety of factors.
Excluding Paycheck Protection Program ("PPP") loans, our commercial and industrial loans increased by an aggregate of 111.5% over the same time period. Generally, multi-family residential, commercial and industrial and commercial real estate lending involve a higher degree of risk than one- to four-family residential lending due to a variety of factors.
Municipal deposits are an important source of our cost-effective funds, and we intend to continue to solicit municipal deposits following the completion of the conversion and stock offering. As of December 31, 2023, the Bank held $175.7 million in municipal deposits, consisting of public funds on deposit from local government entities domiciled in the States of Louisiana, Mississippi and Texas.
Municipal deposits are an important source of our cost-effective funds, and we intend to continue to solicit municipal deposits. As of December 31, 2024, the Bank held $182.5 million in municipal deposits, consisting of public funds on deposit 8 from local government entities domiciled in the States of Louisiana, Mississippi and Texas.
As of December 31, 2023, the Bank’s construction and land loans amounted to $340.7 million, or 13.2% of our loan portfolio.
As of December 31, 2024, the Bank’s construction and land loans amounted to $352.3 million, or 13.0% of our loan portfolio.
We have ceased originating LIBOR-based products effective December 2021 and transitioning all remaining LIBOR based products to an alternative benchmark over the next 18 months.
We have ceased originating LIBOR-based products effective December 2021 and have transitioned all remaining LIBOR based products to an alternative benchmarks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe Bank owns 33 of its 42 banking offices. The Bank leases the land for one banking office in our Northshore market, and leases one banking office in Acadiana, Baton Rouge, Mississippi and Greater New Orleans, respectively and five banking centers in the Houston market.
Biggest changeThe Bank owns 33 of its 43 banking offices. The Bank leases the land for one banking office in our Northshore market, and leases one banking office in Acadiana, Baton Rouge, Mississippi and Greater New Orleans, respectively, and five banking centers in the Houston market.
Item 2. Properties . We currently conduct business from 18 banking offices in Acadiana, four banking offices in Baton Rouge, six banking offices in Greater New Orleans, six banking offices in the Northshore (of Lake Pontchartrain) region of Louisiana, three banking offices in Natchez, Mississippi, and five banking offices in the Houston area.
Item 2. Properties . We currently conduct business from 18 banking offices in Acadiana, four banking offices in Baton Rouge, six banking offices in Greater New Orleans, six banking offices in the Northshore (of Lake Pontchartrain) region of Louisiana, three banking offices in Natchez, Mississippi, and six banking offices in the Houston area.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs of December 31, 2023, 31,446 shares remain to be purchased under the Company's 2021 Repurchase Plan. 18 Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs October 1 - October 31, 2023 15,918 $ 32.53 15,918 437,062 November 1 - November 30, 2023 601 36.56 601 436,461 December 1 - December 31, 2023 15 38.51 15 436,446 Total 16,534 $ 32.68 16,534 436,446 Item 6.
Biggest changeThe Company’s purchases of its common stock made during the fourth quarter of 2024 (which were made pursuant to the 2023 Repurchase Plan) are set forth in the following table. 18 Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs October 1 - October 31, 2024 1,000 $ 48.21 1,000 312,812 November 1 - November 30, 2024 1,000 50.00 1,000 311,812 December 1 - December 31, 2024 — — — 311,812 Total 2,000 $ 49.11 2,000 311,812 Item 6.
Information used was obtained from S&P Global Market Intelligence, Charlottesville, Virginia. The Company assumes no responsibility for any errors or omissions in such information. The Company did not sell any of its equity securities during 2023 that were not registered under the Securities Act of 1933. For information regarding the Company’s equity compensation plans, see Item 12 .
Information used was obtained from S&P Global Market Intelligence, Charlottesville, Virginia. The Company assumes no responsibility for any errors or omissions in such information. The Company did not sell any of its equity securities during 2024 that were not registered under the Securities Act of 1933. For information regarding the Company’s equity compensation plans, see Item 12 .
The graph below represents $100 invested in our common stock at its closing price on December 31, 2018.
The graph below represents $100 invested in our common stock at its closing price on December 31, 2019.
As of the close of business on December 31, 2023, there were 8,158,281 shares of common stock outstanding, held by approximately 613 shareholders of record, not including the number of persons or entities whose stock is held in nominee or “street” name through various brokerage firms and banks. 17 The following graph shows a comparison of the cumulative total returns for the common stock of Home Bancorp, Inc., the Nasdaq Composite Index, and the S&P US Small Cap Banks Index for the period beginning December 31, 2018 and ending December 31, 2023.
As of the close of business on December 31, 2024, there were 8,091,522 shares of common stock outstanding, held by approximately 596 shareholders of record, not including the number of persons or entities whose stock is held in nominee or “street” name through various brokerage firms and banks. 17 The following graph shows a comparison of the cumulative total returns for the common stock of Home Bancorp, Inc., the Nasdaq Composite Index, and the S&P US Small Cap Banks Index for the period beginning December 31, 2019 and ending December 31, 2024.
Period Ending Index 12/31/18 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 Home Bancorp, Inc. 100.00 113.27 83.57 127.01 125.41 135.43 NASDAQ Composite 100.00 136.27 195.74 237.60 158.96 227.98 S&P US Small Cap Banks 100.00 125.46 113.94 158.62 139.85 140.55 The stock price information shown above is not necessarily indicative of future price performance.
Period Ending Index 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Home Bancorp, Inc. 100.00 73.79 112.14 110.73 119.56 134.82 NASDAQ Composite 100.00 144.07 174.88 117.00 167.80 215.86 S&P US Small Cap Banks 100.00 90.82 126.43 111.47 112.03 132.44 The stock price information shown above is not necessarily indicative of future price performance.
Removed
Shares repurchases under the 2023 Repurchase Plan will commence upon the completion of the Company's 2021 Repurchase Plan. The Company’s purchases of its common stock made during the fourth quarter of 2023 (which were made pursuant to the 2021 Repurchase Plan) are set forth in the following table.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeDecember 31, 2023 2022 2021 2020 2019 (dollars in thousands) Amount % Loans Amount % Loans Amount % Loans Amount % Loans Amount % Loans One-to four-family first mortgage $ 3,255 16.8 % $ 2,883 16.0 % $ 1,944 19.1 % $ 3,065 20.0 % $ 2,715 25.1 % Home equity loans and lines 688 2.7 624 2.6 508 3.2 676 3.4 1,084 4.6 Commercial real estate 14,805 46.2 13,814 47.4 10,454 43.6 18,851 37.9 6,541 42.2 Construction and land 5,415 13.2 4,680 12.9 3,572 14.1 4,155 11.2 2,670 11.4 Multi-family residential 474 4.1 572 4.1 457 4.9 1,077 4.4 572 3.2 Commercial and industrial 6,166 15.7 6,024 15.6 3,520 13.3 4,276 21.1 3,694 10.8 Consumer 734 1.3 702 1.4 634 1.8 863 2.0 592 2.7 Total $ 31,537 100.0 % $ 29,299 100.0 % $ 21,089 100.0 % $ 32,963 100.0 % $ 17,868 100.0 % The following table shows credit ratios at and for the periods indicated and each component of the ratio's calculation: For the Years Ended December 31, 2023 2022 2021 2020 2019 Allowance for loan losses as a percentage of total loans outstanding 1.22% 1.21% 1.15% 1.66% 1.04% Allowance for loan losses $ 31,537 $ 29,299 $ 21,089 $ 32,963 $ 17,868 Total loans outstanding $ 2,581,638 $ 2,430,750 $ 1,840,093 $ 1,979,954 $ 1,714,361 Nonaccrual loans as a percentage of total loans outstanding 0.34% 0.43% 0.72% 0.94% 1.42% Total nonaccrual loans $ 8,814 $ 10,513 $ 13,269 $ 18,677 $ 24,386 Total loans outstanding $ 2,581,638 $ 2,430,750 $ 1,840,093 $ 1,979,954 $ 1,714,361 Allowance for loan losses as a percentage of nonaccrual loans 357.81% 278.69% 158.93% 176.49% 73.27% Allowance for loan losses $ 31,537 $ 29,299 $ 21,089 $ 32,963 $ 17,868 Total nonaccrual loans $ 8,814 $ 10,513 $ 13,269 $ 18,677 $ 24,386 Net charge-offs during period to average loans outstanding: One-to four family residential loans 0.01% (0.01)% (0.04)% (0.02)% —% Net charge-offs $ 31 $ (41) $ (131) $ (86) $ (4) Average loans outstanding $ 414,780 $ 367,570 $ 372,207 $ 422,156 $ 441,183 Net charge-offs during period to average loans outstanding: Home equity loans and lines 0.01% 0.02% 0.03% (0.76)% (0.03)% Net charge-offs $ 6 $ 14 $ 19 $ (559) $ (26) Average loans outstanding $ 66,428 $ 60,023 $ 62,957 $ 73,396 $ 80,994 Net charge-offs during period to average loans outstanding: Commercial real estate 0.01 % (0.03) % (0.17) % 0.01 % (0.05) % Net charge-offs $ 71 $ (270) $ (1,337) $ 50 $ (360) Average loans outstanding $ 1,170,475 $ 1,024,610 $ 769,950 $ 728,959 $ 686,442 26 For the Years Ended December 31, 2023 2022 2021 2020 2019 Net charge-offs during period to average loans outstanding: Construction and land — % — % 0.03 % (0.33) % — % Net charge-offs $ — $ — $ 63 $ (688) $ (6) Average loans outstanding $ 328,218 $ 297,218 $ 241,725 $ 205,591 $ 194,976 Net charge-offs during period to average loans outstanding: Multi-family residential — % — % — % — % — % Net charge-offs $ — $ — $ — $ — $ — Average loans outstanding $ 104,166 $ 97,753 $ 87,101 $ 72,906 $ 50,474 Net charge-offs during period to average loans outstanding: Commercial and industrial (0.02) % (0.10) % (0.08) % (0.24) % (0.49) % Net charge-offs $ (75) $ (283) $ (286) $ (878) $ (868) Average loans outstanding $ 392,397 $ 294,459 $ 356,180 $ 360,930 $ 178,236 Net charge-offs during period to average loans outstanding: Consumer (0.40) % (0.34) % (0.12) % (0.25) % (0.47) % Net charge-offs $ (136) $ (114) $ (41) $ (105) $ (230) Average loans outstanding $ 33,837 $ 33,334 $ 35,647 $ 41,350 $ 49,297 Asset Quality One of management’s key objectives has been, and continues to be, maintaining a high level of asset quality.
Biggest changeThe following table presents the allocation of the allowance for loan losses as of December 31 for the years indicated. 25 December 31, 2024 2023 2022 2021 2020 (dollars in thousands) Amount % Loans Amount % Loans Amount % Loans Amount % Loans Amount % Loans One-to four-family first mortgage $ 4,430 18.4 % $ 3,255 16.8 % $ 2,883 16.0 % $ 1,944 19.1 % $ 3,065 20.0 % Home equity loans and lines 801 2.9 688 2.7 624 2.6 508 3.2 676 3.4 Commercial real estate 13,521 42.6 14,805 46.2 13,814 47.4 10,454 43.6 18,851 37.9 Construction and land 5,484 13.0 5,415 13.2 4,680 12.9 3,572 14.1 4,155 11.2 Multi-family residential 1,090 6.6 474 4.1 572 4.1 457 4.9 1,077 4.4 Commercial and industrial 6,861 15.4 6,166 15.7 6,024 15.6 3,520 13.3 4,276 21.1 Consumer 729 1.1 734 1.3 702 1.4 634 1.8 863 2.0 Total $ 32,916 100.0 % $ 31,537 100.0 % $ 29,299 100.0 % $ 21,089 100.0 % $ 32,963 100.0 % The following table shows credit ratios at and for the periods indicated and each component of the ratio's calculation: For the Years Ended December 31, 2024 2023 2022 2021 2020 Allowance for loan losses as a percentage of total loans outstanding 1.21% 1.22% 1.21% 1.15% 1.66% Allowance for loan losses $ 32,916 $ 31,537 $ 29,299 $ 21,089 $ 32,963 Total loans outstanding $ 2,718,185 $ 2,581,638 $ 2,430,750 $ 1,840,093 $ 1,979,954 Nonaccrual loans as a percentage of total loans outstanding 0.50% 0.34% 0.43% 0.72% 0.94% Total nonaccrual loans $ 13,582 $ 8,814 $ 10,513 $ 13,269 $ 18,677 Total loans outstanding $ 2,718,185 $ 2,581,638 $ 2,430,750 $ 1,840,093 $ 1,979,954 Allowance for loan losses as a percentage of nonaccrual loans 242.35% 357.81% 278.69% 158.93% 176.49% Allowance for loan losses $ 32,916 $ 31,537 $ 29,299 $ 21,089 $ 32,963 Total nonaccrual loans $ 13,582 $ 8,814 $ 10,513 $ 13,269 $ 18,677 Net charge-offs during period to average loans outstanding: One-to four family residential loans —% 0.01% (0.01)% (0.04)% (0.02)% Net charge-offs $ 4 $ 31 $ (41) $ (131) $ (86) Average loans outstanding $ 458,984 $ 414,780 $ 367,570 $ 372,207 $ 422,156 Net charge-offs during period to average loans outstanding: Home equity loans and lines 0.02% 0.01% 0.02% 0.03% (0.76)% Net charge-offs $ 14 $ 6 $ 14 $ 19 $ (559) Average loans outstanding $ 73,955 $ 66,428 $ 60,023 $ 62,957 $ 73,396 Net charge-offs during period to average loans outstanding: Commercial real estate — % 0.01 % (0.03) % (0.17) % 0.01 % Net charge-offs $ — $ 71 $ (270) $ (1,337) $ 50 Average loans outstanding $ 1,203,114 $ 1,170,475 $ 1,024,610 $ 769,950 $ 728,959 26 For the Years Ended December 31, 2024 2023 2022 2021 2020 Net charge-offs during period to average loans outstanding: Construction and land (0.04) % — % — % 0.03 % (0.33) % Net charge-offs $ (123) $ — $ — $ 63 $ (688) Average loans outstanding $ 336,020 $ 328,218 $ 297,218 $ 241,725 $ 205,591 Net charge-offs during period to average loans outstanding: Multi-family residential 0.01 % — % — % — % — % Net charge-offs $ 12 $ — $ — $ — $ — Average loans outstanding $ 134,664 $ 104,166 $ 97,753 $ 87,101 $ 72,906 Net charge-offs during period to average loans outstanding: Commercial and industrial (0.17) % (0.02) % (0.10) % (0.08) % (0.24) % Net charge-offs $ (712) $ (75) $ (283) $ (286) $ (878) Average loans outstanding $ 414,362 $ 392,397 $ 294,459 $ 356,180 $ 360,930 Net charge-offs during period to average loans outstanding: Consumer (0.73) % (0.40) % (0.34) % (0.12) % (0.25) % Net charge-offs $ (231) $ (136) $ (114) $ (41) $ (105) Average loans outstanding $ 31,570 $ 33,837 $ 33,334 $ 35,647 $ 41,350 Asset Quality One of management’s key objectives has been, and continues to be, maintaining a high level of asset quality.
Generally, the policy statement recommends that institutions have effective systems and controls to 28 identify, monitor and address asset quality problems; that management analyze all significant factors that affect the collectability of the portfolio in a reasonable manner; and that management establish acceptable allowance evaluation processes that meet the objectives set forth in the policy statement.
Generally, the policy statement recommends that institutions have effective systems and controls to identify, monitor and address asset quality problems; that management analyze all significant factors that affect the collectability of the portfolio in a reasonable manner; and that management establish acceptable allowance evaluation 28 processes that meet the objectives set forth in the policy statement.
Property valuations are ordered through, and are reviewed by, an appraisal officer at the Bank. The Company typically orders an “as is” valuation for collateral property if a loan is in a criticized loan classification. The Board of Directors is provided with monthly reports on individually evaluated loans.
Property valuations are ordered through, and are reviewed by, an appraisal officer at the Bank. The Bank typically orders an “as is” valuation for collateral property if a loan is in a criticized loan classification. The Board of Directors is provided with monthly reports on individually evaluated loans.
The amount maintained in the allowance reflects management’s continuing evaluation of the credit losses expected to be recognized over the life of the loans in our portfolio. The allowance for credit losses on loans is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans.
The amount maintained in the allowance reflects management’s continuing evaluation of the credit losses expected to be recognized over the life of the loans in our portfolio. The allowance for loan losses is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans.
The Asset-Liability Committee (“ALCO”), comprised of the Chief Executive Officer, Chief Financial Officer, Chief Operations Officer, Chief Risk Officer and Director of Financial Management, monitors investment activity and ensures that investments are consistent with the Investment Policy. The Board of Directors of the Company reviews investment activity monthly.
The Asset-Liability Committee (“ALCO”), comprised of the Chief Executive Officer, Chief Financial Officer, Chief Operations Officer, Chief 29 Risk Officer and Director of Financial Management, monitors investment activity and ensures that investments are consistent with the Investment Policy. The Board of Directors of the Company reviews investment activity monthly.
We primarily have utilized the following strategies in our efforts to manage interest rate risk: • we have increased our originations of shorter term loans, particularly commercial real estate and commercial and industrial loans; • we generally sell our conforming long-term (30-year) fixed-rate single-family residential mortgage loans into the secondary market; and • we have invested in securities, consisting primarily of mortgage-backed securities and collateral mortgage obligations, with relatively short average lives, generally three to five years, and we maintain adequate amounts of liquid assets.
We primarily have utilized the following strategies in our efforts to manage interest rate risk: • we have increased our originations of shorter term loans, particularly commercial real estate and commercial and industrial loans; • we generally sell our conforming long-term (30-year) fixed-rate one- to four--family residential mortgage loans into the secondary market; and • we have invested in securities, consisting primarily of mortgage-backed securities and collateral mortgage obligations, with relatively short average lives, generally three to five years, and we maintain adequate amounts of liquid assets.
During 2023 and 2022, such derivatives were used to hedge the variable cost associated with existing variable rate liabilities. Refer to Note 14. Derivatives and Hedging Activities of the Consolidated Financial Statements for more information on the effects of the derivative financial instruments on the consolidated financial statements.
During 2024 and 2023, such derivatives were used to hedge the variable cost associated with existing variable rate liabilities. Refer to Note 14. Derivatives and Hedging Activities of the Consolidated Financial Statements for more information on the effects of the derivative financial instruments on the consolidated financial statements.
At December 31, 2023 and 2022, loans identified as individually evaluated for expected losses were $4.2 million and $5.0 million, respectively. Due to the adoption of ASC 326, total loans identified as impaired and individually evaluated at December 31, 2023 included $1.4 million of acquired loans, of which none were acquired with deteriorated credit quality.
At December 31, 2024 and 2023, loans identified as individually evaluated for expected losses were $5.0 million and $4.2 million, respectively. Due to the adoption of ASC 326, total loans identified as impaired and individually evaluated at December 31, 2024 included $1.3 million of acquired loans, of which none were acquired with deteriorated credit quality.
Based on the Company’s interest rate risk model, the table below sets forth the results of immediate and sustained changes in interest rates as of December 31, 2023.
Based on the Company’s interest rate risk model, the table below sets forth the results of immediate and sustained changes in interest rates as of December 31, 2024.
The Notes are intended to qualify as Tier 2 capital for regulatory purposes. The carrying value of subordinated debt was $54.2 million and $54.0 million at December 31, 2023 and December 31, 2022, respectively. The subordinated debt was recorded net of issuance costs, which is being amortized using the straight-line method over five years.
The Notes are intended to qualify as Tier 2 capital for regulatory purposes. The carrying value of subordinated debt was $54.5 million and $54.2 million at December 31, 2024 and December 31, 2023, respectively. The subordinated debt was recorded net of issuance costs, which is being amortized using the straight-line method over five years.
Total interest expense increased $35.1 million, or 442.9%, in 2023 compared to 2022 primarily related higher FHLB advances during 2023 compared to 2022, increased costs in interest-bearing deposits and a full year of interest expense on our subordinated debt issued in 2022. The average cost of total interest-bearing deposits increased by 128 basis points to 1.56% in 2023.
Total interest expense increased $35.1 million, or 442.9%, in 2023 compared to 2022 primarily related to higher FHLB advances during 2023 compared to 2022, increased costs in interest-bearing deposits and a full year of interest expense on our subordinated debt issued in 2022. The average cost of total interest-bearing deposits in 2023 totaled 1.56%, up 128 basis points from 2022.
The required payments under such commitments and other contractual cash commitments as of December 31, 2023 are shown in the following table.
The required payments under such commitments and other contractual cash commitments as of December 31, 2024 are shown in the following table.
In addition to classified assets, assets which do not currently expose the Bank to sufficient risk to be classified may be categorized as "special mention." Special mention assets have an existing weakness that could cause future impairment. At December 31, 2023 and 2022, we had a total of $28.2 million and $21.5 million, respectively, in loans classified as substandard.
In addition to classified assets, assets which do not currently expose the Bank to sufficient risk to be classified may be categorized as "special mention." Special mention assets have an existing weakness that could cause future impairment. At December 31, 2024 and 2023, we had a total of $35.8 million and $28.2 million, respectively, in loans classified as substandard.
A reconciliation of GAAP to non-GAAP disclosures is included in the table below. 21 Non-GAAP Reconciliation As of or For the Years Ended December 31, (dollars in thousands, except per share data) 2023 2022 2021 2020 2019 Book value per common share $ 45.04 $ 39.82 $ 41.27 $ 36.82 $ 34.19 Less: Intangibles 10.59 10.62 7.27 7.22 6.97 Tangible book value per common share 34.45 29.20 34.00 29.60 27.22 Net Income 40,240 34,072 48,621 24,765 27,932 Add: CDI amortization, net of tax 1,264 1,266 919 1,074 1,251 Non-GAAP tangible income 41,504 35,338 49,540 25,839 29,183 Return on common equity 11.59 % 10.16 % 14.38 % 7.83 % 8.95 % Add: Intangibles 4.36 3.77 3.60 2.41 2.88 Return on average tangible common equity 15.95 % 13.93 % 17.98 % 10.24 % 11.83 % CRITICAL ACCOUNTING ESTIMATES SEC guidance requires disclosure of “critical accounting estimates.” The SEC defines “critical accounting estimates” as those estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the registrant.
A reconciliation of GAAP to non-GAAP disclosures is included in the table below. 21 Non-GAAP Reconciliation As of or For the Years Ended December 31, (dollars in thousands, except per share data) 2024 2023 2022 2021 2020 Book value per common share $ 48.95 $ 45.04 $ 39.82 $ 41.27 $ 36.82 Less: Intangibles 10.51 10.59 10.62 7.27 7.22 Tangible book value per common share 38.44 34.45 29.20 34.00 29.60 Net Income 36,427 40,240 34,072 48,621 24,765 Add: CDI amortization, net of tax 1,049 1,264 1,266 919 1,074 Non-GAAP tangible income 37,476 41,504 35,338 49,540 25,839 Return on common equity 9.56 % 11.59 % 10.16 % 14.38 % 7.83 % Add: Intangibles 3.12 4.36 3.77 3.60 2.41 Return on average tangible common equity 12.68 % 15.95 % 13.93 % 17.98 % 10.24 % CRITICAL ACCOUNTING ESTIMATES SEC guidance requires disclosure of “critical accounting estimates.” The SEC defines “critical accounting estimates” as those estimates made in accordance with generally accepted accounting principles that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the registrant.
Taxable equivalent (“TE”) ratios have been calculated using a marginal tax rate of 21%. 19 As of December 31, (dollars in thousands) 2023 2022 2021 2020 2019 Selected Financial Condition Data: Total assets $ 3,320,122 $ 3,228,280 $ 2,938,244 $ 2,591,850 $ 2,200,465 Cash and cash equivalents 75,831 87,401 601,443 187,952 39,847 Interest-bearing deposits in banks 99 349 349 349 449 Investment securities: Available for sale 433,926 486,518 327,632 254,752 257,321 Held to maturity 1,065 1,075 2,102 2,934 7,149 Loans receivable, net 2,550,101 2,401,451 1,819,004 1,946,991 1,696,493 Intangible assets 86,372 87,973 61,949 63,112 64,472 Deposits 2,670,624 2,633,181 2,535,849 2,213,821 1,820,975 Other borrowings 5,539 5,539 5,539 5,539 5,539 Subordinated debt, net of issuance cost 54,241 54,013 — — — Federal Home Loan Bank advances 192,713 176,213 26,046 28,824 40,620 Shareholders’ equity 367,444 329,954 351,903 321,842 316,329 For the Years Ended December 31, (dollars in thousands, except per share data) 2023 2022 2021 2020 2019 Selected Operating Data: Interest income $ 163,663 $ 125,930 $ 106,902 $ 104,129 $ 102,208 Interest expense 42,971 7,915 5,913 11,918 16,212 Net interest income 120,692 118,015 100,989 92,211 85,996 Provision (reversal) for loan losses 2,341 7,489 (10,161) 12,728 3,014 Net interest income after provision for loan losses 118,351 110,526 111,150 79,483 82,982 Noninterest income 14,636 13,885 16,271 14,305 14,415 Noninterest expense 82,841 81,909 66,982 62,981 63,605 Income before income taxes 50,146 42,502 60,439 30,807 33,792 Income taxes 9,906 8,430 11,818 6,042 5,860 Net income $ 40,240 $ 34,072 $ 48,621 $ 24,765 $ 27,932 Earnings per share - basic $ 5.02 $ 4.19 $ 5.80 $ 2.86 $ 3.08 Earnings per share - diluted $ 4.99 $ 4.16 $ 5.77 $ 2.85 $ 3.05 Cash dividends per share $ 1.00 $ 0.93 $ 0.91 $ 0.88 $ 0.84 As of or For the Years Ended December 31, 2023 2022 2021 2020 2019 Selected Operating Ratios: (1) Average yield on interest-earning assets (TE) 5.28 % 4.19 % 4.11 % 4.48 % 5.07 % Average rate on interest-bearing liabilities 2.08 0.41 0.35 0.76 1.13 Average interest rate spread (TE)(2) 3.20 3.78 3.76 3.72 3.94 Net interest margin (TE)(3) 3.89 3.92 3.88 3.96 4.26 Average interest-earning assets to average interest-bearing liabilities 148.73 154.87 152.48 146.05 140.07 Noninterest expense to average assets 2.54 2.58 2.42 2.53 2.89 Efficiency ratio (4) 61.21 62.10 57.12 59.13 63.34 Return on average assets 1.23 1.07 1.76 0.99 1.27 Return on average common equity 11.59 10.16 14.38 7.83 8.95 20 As of or For the Years Ended December 31, 2023 2022 2021 2020 2019 Return on average tangible common equity (Non-GAAP) (8) 15.95 13.93 17.98 10.24 11.83 Common stock dividend payout ratio 20.04 22.36 15.77 30.88 27.54 Average equity to average assets 10.64 10.55 12.22 12.69 14.19 Book value per common share $ 45.04 $ 39.82 $ 41.27 $ 36.82 $ 34.19 Tangible book value per common share (Non-GAAP) (9) 34.45 29.20 34.00 29.60 27.22 Asset Quality Ratios: (5) (6) Non-performing loans as a percent of total loans receivable 0.34 % 0.43 % 0.72 % 0.61 % 1.17 % Non-performing assets as a percent of total assets 0.31 0.34 0.49 0.95 0.95 Allowance for loan losses as a percent of non-performing loans as of end of period 357.8 278.64 158.9 110.0 110.0 Allowance for loan losses as a percent of net loans as of end of period 1.22 1.15 1.15 1.29 1.29 Capital Ratios: (5) (7) Tier 1 risk-based capital ratio 12.98 % 12.43 % 14.66 % 13.92 % 14.22 % Leverage capital ratio 10.98 10.43 9.77 9.68 11.17 Total risk-based capital ratio 14.23 13.63 15.85 15.18 15.28 (1) With the exception of end-of-period ratios, all ratios are based on average daily balances during the respective periods.
Taxable equivalent (“TE”) ratios have been calculated using a marginal tax rate of 21%. 19 As of December 31, (dollars in thousands) 2024 2023 2022 2021 2020 Selected Financial Condition Data: Total assets $ 3,443,668 $ 3,320,122 $ 3,228,280 $ 2,938,244 $ 2,591,850 Cash and cash equivalents 98,548 75,831 87,401 601,443 187,952 Interest-bearing deposits in banks — 99 349 349 349 Investment securities: Available for sale 402,792 433,926 486,518 327,632 254,752 Held to maturity 1,065 1,065 1,075 2,102 2,934 Loans receivable, net 2,685,269 2,550,101 2,401,451 1,819,004 1,946,991 Intangible assets 85,044 86,372 87,973 61,949 63,112 Deposits 2,780,696 2,670,624 2,633,181 2,535,849 2,213,821 Other borrowings 5,539 5,539 5,539 5,539 5,539 Subordinated debt, net of issuance cost 54,459 54,241 54,013 — — Federal Home Loan Bank advances 175,546 192,713 176,213 26,046 28,824 Shareholders’ equity 396,088 367,444 329,954 351,903 321,842 For the Years Ended December 31, (dollars in thousands, except per share data) 2024 2023 2022 2021 2020 Selected Operating Data: Interest income $ 184,767 $ 163,663 $ 125,930 $ 106,902 $ 104,129 Interest expense 64,505 42,971 7,915 5,913 11,918 Net interest income 120,262 120,692 118,015 100,989 92,211 Provision (reversal) for loan losses 2,415 2,341 7,489 (10,161) 12,728 Net interest income after provision for loan losses 117,847 118,351 110,526 111,150 79,483 Noninterest income 14,625 14,636 13,885 16,271 14,305 Noninterest expense 87,289 82,841 81,909 66,982 62,981 Income before income taxes 45,183 50,146 42,502 60,439 30,807 Income taxes 8,756 9,906 8,430 11,818 6,042 Net income $ 36,427 $ 40,240 $ 34,072 $ 48,621 $ 24,765 Earnings per share - basic $ 4.58 $ 5.02 $ 4.19 $ 5.80 $ 2.86 Earnings per share - diluted $ 4.55 $ 4.99 $ 4.16 $ 5.77 $ 2.85 Cash dividends per share $ 1.01 $ 1.00 $ 0.93 $ 0.91 $ 0.88 As of or For the Years Ended December 31, 2024 2023 2022 2021 2020 Selected Operating Ratios: (1) Average yield on interest-earning assets (TE) 5.74 % 5.28 % 4.19 % 4.11 % 4.48 % Average rate on interest-bearing liabilities 2.90 2.08 0.41 0.35 0.76 Average interest rate spread (TE)(2) 2.84 3.20 3.78 3.76 3.72 Net interest margin (TE)(3) 3.71 3.89 3.92 3.88 3.96 Average interest-earning assets to average interest-bearing liabilities 143.29 148.73 154.87 152.48 146.05 Noninterest expense to average assets 2.58 2.54 2.58 2.42 2.53 Efficiency ratio (4) 64.71 61.21 62.10 57.12 59.13 Return on average assets 1.08 1.23 1.07 1.76 0.99 Return on average common equity 9.56 11.59 10.16 14.38 7.83 20 As of or For the Years Ended December 31, 2024 2023 2022 2021 2020 Return on average tangible common equity (Non-GAAP) (7) 12.68 15.95 13.93 17.98 10.24 Common stock dividend payout ratio 22.20 20.04 22.36 15.77 30.88 Average equity to average assets 11.26 10.64 10.55 12.22 12.69 Book value per common share $ 48.95 $ 45.04 $ 39.82 $ 41.27 $ 36.82 Tangible book value per common share (Non-GAAP) (8) 38.44 34.45 29.20 34.00 29.60 Asset Quality Ratios: (5) Non-performing loans as a percent of total loans receivable 0.50 % 0.34 % 0.43 % 0.72 % 0.61 % Non-performing assets as a percent of total assets 0.45 0.31 0.34 0.49 0.95 Allowance for loan losses as a percent of non-performing loans as of end of period 242.1 357.81 278.6 158.9 110.0 Allowance for loan losses as a percent of net loans as of end of period 1.21 1.22 1.15 1.15 1.29 Capital Ratios: (5) (6) Tier 1 risk-based capital ratio 13.28 % 12.98 % 12.43 % 14.66 % 13.92 % Leverage capital ratio 11.38 10.98 10.43 9.77 9.68 Total risk-based capital ratio 14.51 14.23 13.63 15.85 15.18 (1) With the exception of end-of-period ratios, all ratios are based on average daily balances during the respective periods.
We use our liquidity to fund existing and future loan commitments, to fund maturing certificates of deposit and demand deposit withdrawals, to invest in other interest-earning assets and to meet operating expenses. At December 31, 2023, certificates of deposit maturing within the next 12 months totaled $544.5 million.
We use our liquidity to fund existing and future loan commitments, to fund maturing certificates of deposit and demand deposit withdrawals, to invest in other interest-earning assets and to meet operating expenses. At December 31, 2024, certificates of deposit maturing within the next 12 months totaled $693.3 million.
For the Years Ended December 31, (dollars in thousands) 2023 2022 2021 2020 2019 Allowance for loan losses: Beginning balance $ 29,299 $ 21,089 $ 32,963 $ 17,868 $ 16,348 ASC 326 adoption impact — — — 4,633 — Provision for acquired PCD loans — 1,415 — — — Provision for loan losses 2,341 7,489 (10,161) 12,728 3,014 Loans charged off: One- to four-family first mortgage (12) (80) (176) (99) (4) Home equity loans and lines — — (6) (575) (42) Commercial real estate (29) (270) (1,337) (5) (360) Construction and land — — — (688) (6) Multi-family residential — — — — — Commercial and industrial (255) (792) (599) (984) (893) Consumer (175) (256) (187) (250) (272) Recoveries on charged off loans 368 704 592 335 83 Ending balance - allowance for loan losses $ 31,537 $ 29,299 $ 21,089 $ 32,963 $ 17,868 Allowance for unfunded lending commitments: Beginning balance $ 2,093 $ 1,815 $ 1,425 $ — $ — ASC 326 adoption impact — — — 1,425 — Provision for losses on unfunded commitments 501 278 390 — — Ending balance - allowance for unfunded commitments 2,594 2,093 1,815 1,425 — Total allowance for credit losses $ 34,131 $ 31,392 $ 22,904 $ 34,388 $ 17,868 At December 31, 2023, the ALL totaled $31.5 million, or 1.22% of total loans, and the ACL, which includes the reserve for unfunded lending commitments, totaled $34.1 million, or 1.32% of total loans.
For the Years Ended December 31, (dollars in thousands) 2024 2023 2022 2021 2020 Allowance for loan losses: Beginning balance $ 31,537 $ 29,299 $ 21,089 $ 32,963 $ 17,868 ASC 326 adoption impact — — — — 4,633 Provision for acquired PCD loans — — 1,415 — — Provision for loan losses 2,415 2,341 7,489 (10,161) 12,728 Loans charged off: One- to four-family first mortgage — (12) (80) (176) (99) Home equity loans and lines (22) — — (6) (575) Commercial real estate — (29) (270) (1,337) (5) Construction and land (123) — — — (688) Multi-family residential — — — — — Commercial and industrial (875) (255) (792) (599) (984) Consumer (265) (175) (256) (187) (250) Recoveries on charged off loans 249 368 704 592 335 Ending balance - allowance for loan losses $ 32,916 $ 31,537 $ 29,299 $ 21,089 $ 32,963 Allowance for unfunded lending commitments: Beginning balance $ 2,594 $ 2,093 $ 1,815 $ 1,425 $ — ASC 326 adoption impact — — — — 1,425 Provision for losses on unfunded commitments 106 501 278 390 — Ending balance - allowance for unfunded commitments 2,700 2,594 2,093 1,815 1,425 Total allowance for credit losses $ 35,616 $ 34,131 $ 31,392 $ 22,904 $ 34,388 At December 31, 2024, the ALL totaled $32.9 million, or 1.21% of total loans, and the ACL, which includes the reserve for unfunded lending commitments, totaled $35.6 million, or 1.31% of total loans.
Under terms of the collateral agreement with the FHLB, we may pledge residential mortgage loans and mortgage-backed securities as well as our stock in the FHLB as collateral for such advances. For the year ended December 31, 2023, the average balance of our outstanding FHLB advances was $243.5 million.
Under terms of the collateral agreement with the FHLB, we may pledge residential mortgage loans and mortgage-backed securities as well as our stock in the FHLB as collateral for such advances. For the year ended December 31, 2024, the average balance of our outstanding FHLB advances was $57.0 million.
At December 31, 2023, we had $192.7 million in outstanding FHLB advances and $1.0 billion in additional FHLB advances available to us. Liquidity management is both a daily and long-term function of business management. Excess liquidity is generally invested in short-term investments such as overnight deposits.
At December 31, 2024, we had $175.5 million in outstanding FHLB advances and $1.1 billion in additional FHLB advances available to us. Liquidity management is both a daily and long-term function of business management. Excess liquidity is generally invested in short-term investments such as overnight deposits.
Provision for Loan Losses For the year ended December 31, 2023, the Company provisioned $2.3 million to the allowance for loan losses compared to a provision of $7.5 million and a reversal of $10.2 million for 2022 and 2021, respectively.
Provision for Loan Losses For the year ended December 31, 2024, the Company provisioned $2.4 million to the allowance for loan losses compared to a provision of $2.3 million and $7.5 million for 2023 and 2022, respectively.
Shift in Interest Rates (in bps) % Change in Projected Net Interest Income +200 1.9 +100 1.1 -100 (1.8) -200 (3.9) The actual impact of changes in interest rates will depend on many factors.
Shift in Interest Rates (in bps) % Change in Projected Net Interest Income +200 0.4 +100 0.3 -100 (1.0) -200 (2.3) The actual impact of changes in interest rates will depend on many factors.
We attempt to manage credit risk through our loan underwriting and oversight policies. 38 The principal objective of our interest rate risk management function is to evaluate the interest rate risk embedded in certain balance sheet accounts, determine the level of risk appropriate given our business strategy, operating environment, capital and liquidity requirements, performance objectives and interest rate environment and manage the risk consistent with approved guidelines.
The principal objective of our interest rate risk management function is to evaluate the interest rate risk embedded in certain balance sheet accounts, determine the level of risk appropriate given our business strategy, operating environment, capital and liquidity requirements, performance objectives and interest rate environment and manage the risk consistent with approved guidelines.
These factors include the Company’s ability to achieve expected growth in interest-earning assets and maintain a desired mix of interest-earning assets and interest-bearing liabilities, the actual timing of asset and liability repricing, the magnitude of interest rate changes and corresponding movement in interest rate spreads and the level of success of asset/liability management strategies.
These factors include the Company’s ability to achieve expected growth in interest-earning assets and maintain a desired mix of interest-earning assets and interest-bearing liabilities, the actual timing of asset and liability repricing, the magnitude of interest rate changes and corresponding movement in interest rate spreads and the level of success of asset/liability management strategies. 38 Market risk is the risk of loss from adverse changes in market prices and rates.
The investment securities portfolio decreased by an aggregate of $52.6 million, or 10.8%, during 2023. Securities available for sale made up 99.8% of the investment securities portfolio as of December 31, 2023. The following table sets forth the amortized cost and market value of our investment securities portfolio as of the dates indicated.
The investment securities portfolio decreased by an aggregate of $31.1 million, or 7.2%, during 2024. Securities available for sale made up 99.7% of the investment securities portfolio as of December 31, 2024. The following table sets forth the amortized cost and market value of our investment securities portfolio as of the dates indicated.
December 31, (dollars in thousands) 2023 2022 2021 2020 2019 Real estate loans: One- to four-family first mortgage $ 433,401 $ 389,616 $ 350,843 $ 395,638 $ 430,820 Home equity loans and lines 68,977 61,863 60,312 67,700 79,812 Commercial real estate 1,192,691 1,152,537 801,624 750,623 722,807 Construction and land 340,724 313,175 259,652 221,823 195,748 Multi-family residential 107,263 100,588 90,518 87,332 54,869 Total real estate loans 2,143,056 2,017,779 1,562,949 1,523,116 1,484,056 Other loans: Commercial and industrial 405,659 377,894 244,123 417,926 184,701 Consumer 32,923 35,077 33,021 38,912 45,604 Total other loans 438,582 412,971 277,144 456,838 230,305 Total loans $ 2,581,638 $ 2,430,750 $ 1,840,093 $ 1,979,954 $ 1,714,361 The following table reflects contractual loan maturities as of December 31, 2023, unadjusted for scheduled principal reductions, prepayments, or repricing opportunities.
December 31, (dollars in thousands) 2024 2023 2022 2021 2020 Real estate loans: One- to four-family first mortgage $ 501,225 $ 433,401 $ 389,616 $ 350,843 $ 395,638 Home equity loans and lines 79,097 68,977 61,863 60,312 67,700 Commercial real estate 1,158,781 1,192,691 1,152,537 801,624 750,623 Construction and land 352,263 340,724 313,175 259,652 221,823 Multi-family residential 178,568 107,263 100,588 90,518 87,332 Total real estate loans 2,269,934 2,143,056 2,017,779 1,562,949 1,523,116 Other loans: Commercial and industrial 418,627 405,659 377,894 244,123 417,926 Consumer 29,624 32,923 35,077 33,021 38,912 Total other loans 448,251 438,582 412,971 277,144 456,838 Total loans $ 2,718,185 $ 2,581,638 $ 2,430,750 $ 1,840,093 $ 1,979,954 The following table reflects contractual loan maturities as of December 31, 2024, unadjusted for scheduled principal reductions, prepayments, or repricing opportunities.
Certificates of deposit in the amount of $250,000 and over increased $121.3 million, or 174.7%, from $69.4 million at December 31, 2022 to $190.7 million at December 31, 2023. The following table details the remaining maturity of large-denomination certificates of deposit of $250,000 and over as of the dates indicated.
Certificates of deposit in the amount of $250,000 and over increased $37.7 million, or 19.7%, from $190.7 million at December 31, 2023 to $228.4 million at December 31, 2024. The following table details the remaining maturity of large-denomination certificates of deposit of $250,000 and over as of the dates indicated.
December 31, (dollars in thousands) 2023 2022 2021 3 months or less $ 46,372 $ 19,826 $ 19,481 3 - 6 months 33,421 13,646 13,586 6 - 12 months 89,262 26,620 21,631 12 - 36 months 20,366 8,040 7,355 More than 36 months 1,312 1,310 1,168 Total certificates of deposit greater than $250,000 $ 190,733 $ 69,442 $ 63,221 Subordinated Debt On June 30, 2022, the Company issued $ 55.0 million in aggregate principal amount of its 5.75% Fixed-to-Floating Rate Subordinated Notes (the "Notes") due 2032.
December 31, (dollars in thousands) 2024 2023 2022 3 months or less $ 134,885 $ 46,372 $ 19,826 3 - 6 months 45,424 33,421 13,646 6 - 12 months 38,623 89,262 26,620 12 - 36 months 8,538 20,366 8,040 More than 36 months 922 1,312 1,310 Total certificates of deposit greater than $250,000 $ 228,392 $ 190,733 $ 69,442 Subordinated Debt On June 30, 2022, the Company issued $ 55.0 million in aggregate principal amount of its 5.75% Fixed-to-Floating Rate Subordinated Notes due 2032 (the "Notes").
December 31, 2023 (dollars in thousands) Recorded Investment Allowance for Loan Losses Allowance to Total Loans Loans Individually Evaluated One- to four-family first mortgage $ — $ — — % Home equity loans and lines — — — Commercial real estate 3,957 201 5.08 Construction and land 147 123 83.67 Multi-family residential — — — Commercial and industrial 112 95 84.82 Consumer — — — Total $ 4,216 $ 419 9.94 % December 31, 2022 (dollars in thousands) Recorded Investment Allowance for Loan Losses Allowance to Total Loans Loans Individually Evaluated One- to four-family first mortgage $ — $ — — % Home equity loans and lines — — — Commercial real estate 4,743 550 11.60 Construction and land — — — Multi-family residential — — — Commercial and industrial 204 171 83.82 Consumer 86 — — Total $ 5,033 $ 721 14.33 % Federal regulations and our policies require that we utilize an internal asset classification system as a means of reporting problem and potential problem assets.
December 31, 2024 (dollars in thousands) Recorded Investment Allowance for Loan Losses Allowance to Total Loans Loans Individually Evaluated One- to four-family first mortgage $ — $ — — % Home equity loans and lines — — — Commercial real estate 4,718 200 4.24 Construction and land — — — Multi-family residential — — — Commercial and industrial 254 248 97.64 Consumer — — — Total $ 4,972 $ 448 9.01 % December 31, 2023 (dollars in thousands) Recorded Investment Allowance for Loan Losses Allowance to Total Loans Loans Individually Evaluated One- to four-family first mortgage $ — $ — — % Home equity loans and lines — — — Commercial real estate 3,957 201 5.08 Construction and land 147 123 83.67 Multi-family residential — — — Commercial and industrial 112 95 84.82 Consumer — — — Total $ 4,216 $ 419 9.94 % Federal regulations and our policies require that we utilize an internal asset classification system as a means of reporting problem and potential problem assets.
The Company incurred $2.0 million in pre-tax merger-related expenses during 2022. SELECTED FINANCIAL DATA Set forth below is selected summary historical financial and other data of the Company. When you read this summary historical financial data, it is important that you also read the historical financial statements and related notes contained in Item 8 of this Form 10-K.
SELECTED FINANCIAL DATA Set forth below is selected summary historical financial and other data of the Company. When you read this summary historical financial data, it is important that you also read the historical financial statements and related notes contained in Item 8 of this Form 10-K.
The provision for loan losses during 2023 reflected our assessment of the change in expected losses due primarily to loan growth during the year. Net charge-offs were $103,000 for 2023, compared to net charge-offs of $694,000 and $1.7 million for 2022 and 2021, respectively. Net loan charge-offs for 2023 were primarily attributable to originated commercial and industrial and consumer loans.
The provision for loan losses during 2024 reflected our assessment of the change in expected losses due primarily to loan growth during the year. Net charge-offs were $1.0 million for 2024, compared to net charge-offs of $103,000 and $694,000 for 2023 and 2022, respectively.
For the year ended December 31, 2023, the Company provisioned $2.3 million of the allowance for loan losses compared to a provision of $7.5 million for the year ended December 31, 2022. The provision for loan losses during 2023 primarily reflected our loan growth during the year.
For the year ended December 31, 2024, the Company provisioned $2.4 million of the allowance for loan losses compared to a provision of $2.3 million for the year ended December 31, 2023. The increase in the provision for loan losses during 2024 and 2023 primarily reflected our loan growth during the year.
December 31, (dollars in thousands) 2023 2022 2021 Fixed rate: Available for sale $ 451,517 $ 511,960 $ 300,923 Held to maturity 1,065 1,075 2,102 Total fixed rate 452,582 513,035 303,025 Adjustable rate: Available for sale 25,840 29,327 27,362 Total adjustable rate 25,840 29,327 27,362 Total investment securities $ 478,422 $ 542,362 $ 330,387 30 The following table sets forth the amount of investment securities which mature during each of the periods indicated and the weighted average yields for each range of maturities as of December 31, 2023.
December 31, (dollars in thousands) 2024 2023 2022 Fixed rate: Available for sale $ 420,577 $ 451,517 $ 511,960 Held to maturity 1,065 1,065 1,075 Total fixed rate 421,642 452,582 513,035 Adjustable rate: Available for sale 23,227 25,840 29,327 Total adjustable rate 23,227 25,840 29,327 Total investment securities $ 444,869 $ 478,422 $ 542,362 30 The following table sets forth the amount of investment securities which mature during each of the periods indicated and the weighted average yields for each range of maturities as of December 31, 2024.
EXECUTIVE OVERVIEW The Company reported net income for 2023 of $40.2 million, or $4.99 diluted EPS compared to $34.1 million, or $4.16 diluted EPS, reported for 2022.
EXECUTIVE OVERVIEW The Company reported net income for 2024 of $36.4 million, or $4.55 diluted EPS compared to $40.2 million, or $4.99 diluted EPS, reported for 2023.
At December 31, 2023, shareholders’ equity totaled $367.4 million, up $37.5 million, or 11.4%, compared to $330.0 million at December 31, 2022. The increase was primarily due to the Company’s earnings for the year ended December 31, 2023 and a reduction in other comprehensive loss, partially offset by shareholders' dividends and repurchases of shares of the Company's common stock.
At December 31, 2024, shareholders’ equity totaled $396.1 million, up $28.6 million, or 7.8%, compared to $367.4 million at December 31, 2023. The increase was primarily due to the Company’s earnings for the year ended December 31, 2024 and a reduction in accumulated other comprehensive loss, partially offset by shareholders' dividends and repurchases of shares of the Company's common stock.
Contract Amount (dollars in thousands) 2023 2022 Standby letters of credit $ 7,289 $ 6,969 Available portion of lines of credit 368,398 367,167 Undisbursed portion of loans in process 221,997 194,182 Commitments to originate loans 127,076 164,682 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.
Contract Amount (dollars in thousands) 2024 2023 Standby letters of credit $ 6,502 $ 7,289 Available portion of lines of credit 488,930 368,398 Undisbursed portion of loans in process 76,424 221,997 Commitments to originate loans 161,482 127,076 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.
For the year ended December 31, 2023, the Company provisioned $2.3 million of the allowance for loan losses compared to a provision of $7.5 million for the year ended December 31, 2022. The provision during 2022 was significantly impacted by the acquisition of Friendswood. Net income in 2022 was $34.1 million, down $14.5 million, or 29.9%, compared to 2021.
For the year ended December 31, 2023, the Company provisioned $2.3 million to the allowance for loan losses compared to a provision of $7.5 million for the year ended December 31, 2022. The provision during 2022 was significantly impacted by the acquisition of Friendswood.
Key components of the Company's performance in 2023 are summarized below. • Assets increased $91.8 million, or 2.8%, from December 31, 2022 to $3.3 billion at December 31, 2023. • Loans increased by $150.9 million, or 6.2%, from December 31, 2022 to $2.6 billion at December 31, 2023. • During the year ended December 31, 2023, the Company provisioned $2.3 million of the allowance for loan losses compared to a $7.5 million provisioned for the year ended December 31, 2022.
Key components of the Company's performance in 2024 are summarized below. • Assets increased $123.5 million, or 3.7%, from December 31, 2023 to $3.4 billion at December 31, 2024. • Loans increased by $136.5 million, or 5.3%, from December 31, 2023 to $2.7 billion at December 31, 2024. • During the year ended December 31, 2024, the Company provisioned $2.4 million of the allowance for loan losses compared to a $2.3 million provisioned for the year ended December 31, 2023. • The ALL totaled $32.9 million, or 1.21% of total loans, at December 31, 2024.
Single-family residential mortgage loan applications and consumer loan applications are taken at any of the Bank’s branch offices. Applications for other loans typically are taken personally by one of our loan officers, although they may be received by a branch office initially and then referred to a loan officer.
Applications for other loans typically are taken personally by one of our loan officers, although they may be received by a branch office initially and then referred to a loan officer. All loan applications are processed and underwritten centrally at the Bank’s main office.
This non-GAAP information should be considered in addition to the Company’s financial information prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results.
Management believes that the non-GAAP information provides useful data in understanding the Company’s operations and in comparing the Company’s results to peers. This non-GAAP information should be considered in addition to the Company’s financial information prepared in accordance with GAAP, and is not a substitute for, or superior to, GAAP results.
The Company had $150.0 million short-term FHLB advances as of December 31, 2023, down $5.0 million, or 3.2%, compared to $155.0 million as of December 31, 2022. Long-term FHLB advances totaled $42.7 million as of December 31, 2023, up $21.5 million, or 101.4%, compared to $21.2 million as of December 31, 2022.
The Company had $137.2 million short-term FHLB advances as of December 31, 2024, down $12.8 million, or 8.5%, compared to $150.0 million as of December 31, 2023. Long-term FHLB advances totaled $38.3 million as of December 31, 2024, down $4.4 million, or 10.3%, compared to $42.7 million as of December 31, 2023.
(dollars in thousands) 2023 2022 2023 vs 2022 Percent Increase (Decrease) 2021 2022 vs 2021 Percent Increase (Decrease) Noninterest income: Service fees and charges $ 4,992 $ 4,920 1.5 % $ 4,702 4.6 % Bank card fees 7,051 6,279 12.3 5,935 5.8 Gain on sale of loans, net 816 663 23.1 2,518 (73.7) Income from bank-owned life insurance 1,045 915 14.2 2,603 (64.8) Loss on sale of securities, net (249) — — — — (Loss) gain on sale of assets, net (27) 26 (203.8) (504) (105.2) Other income 1,008 1,082 (6.8) 1,017 6.4 Total noninterest income $ 14,636 $ 13,885 5.4 % $ 16,271 (14.7) % 2023 compared to 2022 Noninterest income for 2023 totaled $14.6 million, up $751,000, or 5.4%, compared to 2022.
(dollars in thousands) 2024 2023 2024 vs 2023 Percent Increase (Decrease) 2022 2023 vs 2022 Percent Increase (Decrease) Noninterest income: Service fees and charges $ 5,118 $ 4,992 2.5 % $ 4,920 1.5 % Bank card fees 6,525 7,051 (7.5) 6,279 12.3 Gain on sale of loans, net 470 816 (42.4) 663 23.1 Income from bank-owned life insurance 1,100 1,045 5.3 915 14.2 Loss on sale of securities, net — (249) (100.0) — — Gain (loss) on sale of assets, net 33 (27) (222.2) 26 (203.8) Other income 1,379 1,008 36.8 1,082 (6.8) Total noninterest income $ 14,625 $ 14,636 (0.1) % $ 13,885 5.4 % 2024 compared to 2023 Noninterest income for 2024 totaled $14.6 million, down $11,000, or 0.1%, compared to 2023.
(dollars in thousands) 2023 2022 2023 vs 2022 Percent Increase (Decrease) 2021 2022 vs 2021 Percent Increase (Decrease) Noninterest expense: Compensation and benefits $ 48,933 $ 47,750 2.5 % $ 39,151 22.0 % Occupancy 9,674 8,715 11.0 6,970 25.0 Marketing and advertising 2,146 2,263 (5.2) 1,871 21.0 Data processing and communication 9,372 9,307 0.7 8,500 9.5 Professional services 1,690 1,740 (2.9) 1,178 47.7 Forms, printing and supplies 781 766 2.0 644 18.9 Franchise and shares tax 1,755 2,108 (16.7) 1,475 42.9 Regulatory fees 2,040 2,122 (3.9) 1,317 61.1 Foreclosed assets, net (547) 523 (204.6) 453 15.5 Amortization of acquisition intangible 1,601 1,602 (0.1) 1,163 37.7 Provision for credit losses on unfunded commitments 501 278 80.2 390 (28.7) Other expenses 4,895 4,735 3.4 3,870 22.4 Total noninterest expense $ 82,841 $ 81,909 1.1 % $ 66,982 22.3 % 2023 compared to 2022 Noninterest expense for 2023 totaled $82.8 million, up $932,000, or 1.1%, from 2022.
(dollars in thousands) 2024 2023 2024 vs 2023 Percent Increase (Decrease) 2022 2023 vs 2022 Percent Increase (Decrease) Noninterest expense: Compensation and benefits $ 51,330 $ 48,933 4.9 % $ 47,750 2.5 % Occupancy 10,131 9,674 4.7 8,715 11.0 Marketing and advertising 2,000 2,146 (6.8) 2,263 (5.2) Data processing and communication 10,241 9,372 9.3 9,307 0.7 Professional services 1,922 1,690 13.7 1,740 (2.9) Forms, printing and supplies 794 781 1.7 766 2.0 Franchise and shares tax 1,863 1,755 6.2 2,108 (16.7) Regulatory fees 1,954 2,040 (4.2) 2,122 (3.9) Foreclosed assets, net 341 (547) 162.3 523 (204.6) Amortization of acquisition intangible 1,328 1,601 (17.1) 1,602 (0.1) Provision for credit losses on unfunded commitments 106 501 (78.8) 278 80.2 Other expenses 5,279 4,895 7.8 4,735 3.4 Total noninterest expense $ 87,289 $ 82,841 5.4 % $ 81,909 1.1 % 2024 compared to 2023 Noninterest expense for 2024 totaled $87.3 million, up $4.4 million, or 5.4%, from 2023.
Average FHLB advances were $243.5 million during 2023, up $210.8 million, or 643.3%, from 2022. Shareholders’ Equity Shareholders’ equity provides a source of permanent funding, allows for future growth and provides the Company with a cushion to withstand unforeseen adverse developments.
Average FHLB advances were $57.0 million during 2024, down $186.6 million, or 76.6%, from 2023. Shareholders’ Equity Shareholders’ equity provides a source of permanent funding, allows for future growth and provides the Company with a cushion to withstand unforeseen adverse developments.
December 31, 2023 2022 2021 (dollars in thousands) Amortized Cost Market Value Amortized Cost Market Value Amortized Cost Market Value Available for sale: U.S. agency mortgage-backed $ 314,569 $ 283,853 $ 355,014 $ 316,832 $ 234,720 $ 233,773 Collateralized mortgage obligations 82,764 79,262 91,217 86,345 31,356 31,912 Municipal bonds 53,891 46,674 67,476 57,625 51,094 50,719 U.S. government agency 19,151 18,049 20,600 19,333 5,615 5,614 Corporate bonds 6,982 6,088 6,980 6,383 5,500 5,614 Total available for sale 477,357 433,926 541,287 486,518 328,285 327,632 Held to maturity: Municipal bonds 1,065 1,066 1,075 1,072 2,102 2,132 Total held to maturity 1,065 1,066 1,075 1,072 2,102 2,132 Total investment securities $ 478,422 $ 434,992 $ 542,362 $ 487,590 $ 330,387 $ 329,764 The following table sets forth the fixed versus adjustable rate profile of the investment securities portfolio as of the dates indicated.
December 31, 2024 2023 2022 (dollars in thousands) Amortized Cost Market Value Amortized Cost Market Value Amortized Cost Market Value Available for sale: U.S. agency mortgage-backed $ 291,351 $ 261,873 $ 314,569 $ 283,853 $ 355,014 $ 316,832 Collateralized mortgage obligations 73,931 71,389 82,764 79,262 91,217 86,345 Municipal bonds 53,458 45,829 53,891 46,674 67,476 57,625 U.S. government agency 18,079 17,128 19,151 18,049 20,600 19,333 Corporate bonds 6,985 6,573 6,982 6,088 6,980 6,383 Total available for sale 443,804 402,792 477,357 433,926 541,287 486,518 Held to maturity: Municipal bonds 1,065 1,065 1,065 1,066 1,075 1,072 Total held to maturity 1,065 1,065 1,065 1,066 1,075 1,072 Total investment securities $ 444,869 $ 403,857 $ 478,422 $ 434,992 $ 542,362 $ 487,590 The following table sets forth the fixed versus adjustable rate profile of the investment securities portfolio as of the dates indicated.
For the Years Ended December 31, (dollars in thousands) 2023 2022 2021 Average Balance Interest Average Yield/ Rate Average Balance Interest Average Yield/ Rate Average Balance Interest Average Yield/ Rate Interest-earning assets: Loans receivable (1) $ 2,510,301 $ 149,338 5.88 % $ 2,174,967 $ 112,660 5.12 % $ 1,925,767 $ 101,577 5.22 % Investment securities (TE) Taxable 485,201 11,537 2.38 455,757 9,647 2.12 263,459 4,301 1.63 Tax-exempt 19,322 367 2.41 24,371 481 2.50 19,506 339 2.20 Total investment securities 504,523 11,904 2.38 480,128 10,128 2.14 282,965 4,640 1.67 Other interest-earning assets 54,323 2,421 4.46 325,429 3,142 0.97 367,241 685 0.19 Total interest-earning assets (TE) 3,069,147 163,663 5.28 2,980,524 125,930 4.19 2,575,973 106,902 4.11 Noninterest-earning assets 193,673 198,338 189,905 Total assets $ 3,262,820 $ 3,178,862 $ 2,765,878 Interest-bearing liabilities: Deposits: Savings, checking and money market $ 1,294,655 $ 13,424 1.04 % $ 1,499,981 $ 3,541 0.24 % $ 1,317,993 $ 2,882 0.22 % Certificates of deposit 465,710 14,080 3.02 358,729 1,674 0.47 338,487 2,348 0.69 Total interest-bearing deposits 1,760,365 27,504 1.56 1,858,710 5,215 0.28 1,656,480 5,230 0.32 Other borrowings 5,567 214 3.84 5,603 213 3.80 5,581 212 3.81 Subordinated debt 54,128 3,390 6.26 27,396 1,710 6.24 — — — FHLB advances 243,513 11,863 4.81 32,762 777 2.36 27,319 471 1.72 Total interest-bearing liabilities 2,063,573 42,971 2.08 1,924,471 7,915 0.41 1,689,380 5,913 0.35 Noninterest-bearing liabilities 851,942 918,937 738,491 Total liabilities 2,915,515 2,843,408 2,427,871 Shareholders’ equity 347,305 335,454 338,007 Total liabilities and shareholders’ equity $ 3,262,820 $ 3,178,862 $ 2,765,878 Net interest-earning assets $ 1,005,574 $ 1,056,053 $ 886,593 Net interest income; net interest spread (TE) $ 120,692 3.20 % $ 118,015 3.78 % $ 100,989 3.76 % Net interest margin (TE) 3.89 % 3.92 % 3.88 % (1) Nonperforming loans are included in the respective average loan balances, net of deferred fees, discounts and loans in process.
For the Years Ended December 31, (dollars in thousands) 2024 2023 2022 Average Balance Interest Average Yield/ Rate Average Balance Interest Average Yield/ Rate Average Balance Interest Average Yield/ Rate Interest-earning assets: Loans receivable (1) $ 2,652,669 $ 170,255 6.33 % $ 2,510,301 $ 149,338 5.88 % $ 2,174,967 $ 112,660 5.12 % Investment securities (TE) Taxable 443,523 10,618 2.39 485,201 11,537 2.38 455,757 9,647 2.12 Tax-exempt 16,262 290 2.26 19,322 367 2.41 24,371 481 2.50 Total investment securities 459,785 10,908 2.39 504,523 11,904 2.38 480,128 10,128 2.14 Other interest-earning assets 71,498 3,604 5.04 54,323 2,421 4.46 325,429 3,142 0.97 Total interest-earning assets (TE) 3,183,952 184,767 5.74 3,069,147 163,663 5.28 2,980,524 125,930 4.19 Noninterest-earning assets 202,769 193,673 198,338 Total assets $ 3,386,721 $ 3,262,820 $ 3,178,862 Interest-bearing liabilities: Deposits: Savings, checking and money market $ 1,277,083 $ 21,200 1.66 % $ 1,294,655 $ 13,424 1.04 % $ 1,499,981 $ 3,541 0.24 % Certificates of deposit 704,981 31,580 4.48 465,710 14,080 3.02 358,729 1,674 0.47 Total interest-bearing deposits 1,982,064 52,780 2.66 1,760,365 27,504 1.56 1,858,710 5,215 0.28 Other borrowings 128,699 6,094 4.74 5,567 214 3.84 5,603 213 3.80 Subordinated debt 54,348 3,381 6.22 54,128 3,390 6.26 27,396 1,710 6.24 FHLB advances 56,956 2,250 3.92 243,513 11,863 4.81 32,762 777 2.36 Total interest-bearing liabilities 2,222,067 64,505 2.90 2,063,573 42,971 2.08 1,924,471 7,915 0.41 Noninterest-bearing liabilities 783,458 851,942 918,937 Total liabilities 3,005,525 2,915,515 2,843,408 Shareholders’ equity 381,196 347,305 335,454 Total liabilities and shareholders’ equity $ 3,386,721 $ 3,262,820 $ 3,178,862 Net interest-earning assets $ 961,885 $ 1,005,574 $ 1,056,053 Net interest income; net interest spread (TE) $ 120,262 2.84 % $ 120,692 3.20 % $ 118,015 3.78 % Net interest margin (TE) 3.71 % 3.89 % 3.92 % (1) Nonperforming loans are included in the respective average loan balances, net of deferred fees, discounts and loans in process.
Total deposits were $2.7 billion as of December 31, 2023, up $37.4 million, or 1.4%, compared to December 31, 2022. Certificates of deposits totaled $644.7 million as of December 31, 2023, up $309.3 million, or 92.2%, compared to December 31, 2022. The following table sets forth the composition of the Company’s deposits as of the dates indicated.
Total deposits were $2.8 billion as of December 31, 2024, up $110.1 million, or 4.1%, compared to December 31, 2023. Certificates of deposits totaled $733.9 million as of December 31, 2024, up $89.2 million, or 13.8%, compared to December 31, 2023. The following table sets forth the composition of the Company’s deposits as of the dates indicated.
For the Years Ended December 31, (dollars in thousands) 2023 2022 2021 Average Balance Interest Expense Average Rate Paid Average Balance Interest Expense Average Rate Paid Average Balance Interest Expense Average Rate Paid Noninterest-bearing demand deposits $ 821,592 $ 894,103 $ 717,536 Interest-bearing deposits Interest-bearing demand deposits 265,850 $ 1,079 0.41 % 313,151 413 0.13 % 274,359 367 0.13 % Savings 638,846 5,464 0.86 745,463 1,941 0.26 689,991 1,940 0.28 Money market accounts 389,959 6,881 1.76 441,367 1,187 0.27 353,643 575 0.16 Certificates of deposit 465,710 14,080 3.02 358,729 1,674 0.47 338,487 2,348 0.69 Total interest-bearing deposits 1,760,365 27,504 1.56 % 1,858,710 5,215 0.28 % 1,656,480 5,230 0.32 % Total deposits $ 2,581,957 $ 2,752,813 $ 2,374,016 The total amount of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) were $748.6 million at December 31, 2023 and $830.9 million at December 31, 2022.
For the Years Ended December 31, (dollars in thousands) 2024 2023 2022 Average Balance Interest Expense Average Rate Paid Average Balance Interest Expense Average Rate Paid Average Balance Interest Expense Average Rate Paid Noninterest-bearing demand deposits $ 747,640 $ 821,592 $ 894,103 Interest-bearing deposits Interest-bearing demand deposits 625,005 8,008 1.28 % 638,846 5,464 0.86 % 745,463 1,941 0.26 % Savings 219,880 1,209 0.55 265,850 1,079 0.41 313,151 413 0.13 Money market accounts 432,198 11,983 2.77 389,959 6,881 1.76 441,367 1,187 0.27 Certificates of deposit 704,981 31,580 4.48 465,710 14,080 3.02 358,729 1,674 0.47 Total interest-bearing deposits 1,982,064 52,780 2.66 % 1,760,365 27,504 1.56 % 1,858,710 5,215 0.28 % Total deposits $ 2,729,704 $ 2,581,957 $ 2,752,813 The total amount of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) were $813.6 million at December 31, 2024 and $748.6 million at December 31, 2023.
(dollars in thousands) Available for Sale Held to Maturity Balance, December 31, 2022 $ 486,518 $ 1,075 Sales (14,011) — Principal maturities, prepayments and calls (49,554) — Amortization of premiums and accretion of discounts (364) (10) Increase in market value 11,337 Balance, December 31, 2023 $ 433,926 $ 1,065 As of December 31, 2023, the Company had a net unrealized loss on its available for sale investment securities portfolio of $43.4 million, compared to a net unrealized loss of $54.8 million as of December 31, 2022.
(dollars in thousands) Available for Sale Held to Maturity Balance, December 31, 2023 $ 433,926 $ 1,065 Purchases 10,507 — Principal maturities, prepayments and calls (43,779) — Amortization of premiums and accretion of discounts (281) — Increase in market value 2,419 Balance, December 31, 2024 $ 402,792 $ 1,065 As of December 31, 2024, the Company had a net unrealized loss on its available for sale investment securities portfolio of $41.0 million, compared to a net unrealized loss of $43.4 million as of December 31, 2023.
The table distinguishes between (i) changes attributable to volume (changes in average volume between periods times prior year rate), (ii) changes attributable to rate (changes in average rate between periods times prior year volume) and (iii) total increase (decrease). 2023 Compared to 2022 Change Attributable To 2022 Compared to 2021 Change Attributable To (dollars in thousands) Rate Volume Total Increase (Decrease) Rate Volume Total Increase (Decrease) Interest income: Loans receivable $ 18,114 $ 18,564 $ 36,678 $ 4,086 $ 6,997 $ 11,083 Investment securities 972 804 1,776 2,505 2,983 5,488 Other interest-earning assets 1,401 (2,122) (721) 1,599 858 2,457 Total interest income 20,487 17,246 37,733 8,190 10,838 19,028 Interest expense: Savings, checking and money market accounts 6,501 3,382 9,883 314 345 659 Certificates of deposit 7,296 5,110 12,406 (451) (223) (674) Other borrowings 1 — 1 — 1 1 Subordinated debt 630 1,050 1,680 — 1,710 1,710 FHLB advances 4,461 6,625 11,086 157 149 306 Total interest expense 18,889 16,167 35,056 20 1,982 2,002 Increase (decrease) in net interest income $ 1,598 $ 1,079 $ 2,677 $ 8,170 $ 8,856 $ 17,026 Interest income includes interest income earned on earning assets as well as applicable loan fees earned.
The table distinguishes between (i) changes attributable to volume (changes in average volume between periods times prior year rate), (ii) changes attributable to rate (changes in average rate between periods times prior year volume) and (iii) total increase (decrease). 2024 Compared to 2023 Change Attributable To 2023 Compared to 2022 Change Attributable To (dollars in thousands) Rate Volume Total Increase (Decrease) Rate Volume Total Increase (Decrease) Interest income: Loans receivable $ 10,851 $ 10,066 $ 20,917 $ 18,114 $ 18,564 $ 36,678 Investment securities (359) (637) (996) 972 804 1,776 Other interest-earning assets 535 648 1,183 1,401 (2,122) (721) Total interest income 11,027 10,077 21,104 20,487 17,246 37,733 Interest expense: Savings, checking and money market accounts 4,719 3,057 7,776 6,501 3,382 9,883 Certificates of deposit 8,693 8,807 17,500 7,296 5,110 12,406 Other borrowings 2,350 3,530 5,880 1 — 1 Subordinated debt (9) — (9) 630 1,050 1,680 FHLB advances (3,570) (6,043) (9,613) 4,461 6,625 11,086 Total interest expense 12,183 9,351 21,534 18,889 16,167 35,056 Increase (decrease) in net interest income $ (1,156) $ 726 $ (430) $ 1,598 $ 1,079 $ 2,677 Interest income includes interest income earned on earning assets as well as applicable loan fees earned.
December 31, (dollars in thousands) 2023 2022 2021 2020 2019 Nonaccrual loans (1) : Real estate loans: One- to four-family first mortgage $ 1,600 $ 2,300 $ 3,575 $ 3,838 $ 3,948 Home equity loans and lines 208 34 38 63 1,244 Commercial real estate 5,203 6,945 8,431 12,298 13,325 Construction and land 1,181 315 258 469 2,469 Multi-family residential — — — — — Other loans: Commercial and industrial 331 378 763 1,717 3,224 Consumer 291 541 204 292 176 Total nonaccrual loans 8,814 10,513 13,269 18,677 24,386 Accruing loans 90 days or more past due — 2 6 2 — Total nonperforming loans 8,814 10,515 13,275 18,679 24,386 Foreclosed assets and ORE 1,575 461 1,189 1,302 4,156 Total nonperforming assets 10,389 10,976 14,464 19,981 28,542 Performing troubled debt restructurings (2) — 6,205 4,963 2,085 2,378 Total nonperforming assets and troubled debt restructurings $ 10,389 $ 17,181 $ 19,427 $ 22,066 $ 30,920 Nonperforming loans to total loans 0.34 % 0.43 % 0.72 % 0.94 % 1.42 % Nonperforming loans to total assets 0.27 % 0.33 % 0.45 % 0.72 % 1.11 % Nonaccrual loans to total loans 0.34 % 0.43 % 0.72 % 0.94 % 1.42 % Nonperforming assets to total assets 0.31 % 0.34 % 0.49 % 0.77 % 1.30 % Total loans outstanding $ 2,581,638 $ 2,430,750 $ 1,840,093 $ 1,979,954 $ 1,714,361 Total assets outstanding $ 3,320,122 $ 3,228,280 $ 2,938,244 $ 2,591,850 $ 2,200,465 (1) Prior to January 1, 2020, PCD loans were classified as PCI under ASC 310-30 and excluded from nonperforming loans because they continued to earn interest income from the accretable yield at the pool level regardless of their status as past due or otherwise not in compliance with their contractual terms.
December 31, (dollars in thousands) 2024 2023 2022 2021 2020 Nonaccrual loans: Real estate loans: One- to four-family first mortgage $ 7,039 $ 1,600 $ 2,300 $ 3,575 $ 3,838 Home equity loans and lines 279 208 34 38 63 Commercial real estate 3,304 5,203 6,945 8,431 12,298 Construction and land 1,622 1,181 315 258 469 Multi-family residential — — — — — Other loans: Commercial and industrial 1,311 331 378 763 1,717 Consumer 27 291 541 204 292 Total nonaccrual loans 13,582 8,814 10,513 13,269 18,677 Accruing loans 90 days or more past due 16 — 2 6 2 Total nonperforming loans 13,598 8,814 10,515 13,275 18,679 Foreclosed assets and ORE 2,010 1,575 461 1,189 1,302 Total nonperforming assets 15,608 10,389 10,976 14,464 19,981 Performing troubled debt restructurings (1) — — 6,205 4,963 2,085 Total nonperforming assets and troubled debt restructurings $ 15,608 $ 10,389 $ 17,181 $ 19,427 $ 22,066 Nonperforming loans to total loans 0.50 % 0.34 % 0.43 % 0.72 % 0.94 % Nonperforming loans to total assets 0.39 % 0.27 % 0.33 % 0.45 % 0.72 % Nonaccrual loans to total loans 0.50 % 0.34 % 0.43 % 0.72 % 0.94 % Nonperforming assets to total assets 0.45 % 0.31 % 0.34 % 0.49 % 0.77 % Total loans outstanding $ 2,718,185 $ 2,581,638 $ 2,430,750 $ 1,840,093 $ 1,979,954 Total assets outstanding $ 3,443,668 $ 3,320,122 $ 3,228,280 $ 2,938,244 $ 2,591,850 (1) With the adoption of ASU 2022-02, effective January 1, 2023, TDR accounting has been eliminated.
The ACL, which is comprised of the allowance for loan losses plus the allowance for unfunded lending commitments, totaled $34.1 million, or 1.32% of total loans, at December 31, 2023. • Total deposits increased $37.4 million, or 1.4%, from December 31, 2022 to $2.7 billion at December 31, 2023, primarily due to increase in certificate of deposits, which was partially offset with decreases in core deposits. • The Company repurchased 164,272 shares of common stock at an average price of $32.01 per share during 2023. • The net interest margin was 3.89% for the year ended December 31, 2023, down 3 bps compared to 2022, primarily due to an increase in the average cost of interest-bearing liabilities, partially offset with an increase in the average yield earned on interest-earning assets during 2023. • The average rate paid on total interest-bearing deposits during 2023 was 1.56%, up 128 bps compared to 2022. • Noninterest income increased $751,000, or 5.4%, in 2023 compared to 2022, primarily due to an increase in bank card fees and gain on sale of loans. • Noninterest expense increased $932,000, or 1.1%, in 2023 compared to 2022 primarily due to increase in compensation and benefits, occupancy and provision for credit losses on unfunded commitments, which were partially offset with a recovery of foreclosed assets expense and lower franchise and shares tax expense.
The ACL, which is comprised of the allowance for loan losses plus the allowance for unfunded lending commitments, totaled $35.6 million, or 1.31% of total loans, at December 31, 2024. • Total deposits increased $110.1 million, or 4.1%, from December 31, 2023 to $2.8 billion at December 31, 2024, primarily due to increases in certificate of deposits and money market accounts. • The Company repurchased 124,634 shares of common stock at an average price of $37.79 per share during 2024. • The net interest margin was 3.71% for the year ended December 31, 2024, down 18 bps compared to 2023, primarily due to an increase in the average cost of interest-bearing liabilities, partially offset with an increase in the average yield earned on interest-earning assets during 2024. • The average rate paid on total interest-bearing deposits during 2024 was 2.66%, up 110 bps compared to 2023. • Noninterest income decreased $11,000, or 0.1%, in 2024 compared to 2023, primarily due to a decrease in bank card fees and gain on sale of loans, which were offset by an increase in other noninterest income. • Noninterest expense increased $4.4 million, or 5.4%, in 2024 compared to 2023 primarily due to an increase in compensation and benefits, foreclosed assets (primarily due to the absence of a $769,000 foreclosed asset recovery of a previous loss on a OREO sale that occurred during the first quarter of 2023), data processing and communications, and occupancy expenses, which were partially offset by a decrease in the provision for credit losses on unfunded commitments.
Foreclosed assets and ORE were up $1.1 million, or 241.6%, from December 31, 2022. 29 Investment Securities The Company invests in securities pursuant to our Investment Policy, which has been approved by our Board of Directors.
As of December 31, 2024, total nonperforming loans were up $4.8 million, or 54.3%, from December 31, 2023. Foreclosed assets and ORE were up $435,000, or 27.6%, from December 31, 2023. Investment Securities The Company invests in securities pursuant to our Investment Policy, which has been approved by our Board of Directors.
The average cost of total interest-bearing deposits in 2022 totaled 0.28%, down 4 basis points from 2021. The Company’s net interest margin, which is net interest income as a percentage of average interest-earning assets, was 3.89%, 3.92%, and 3.88% during the years ended December 31, 2023, 2022, and 2021, respectively.
The Company’s net interest margin, which is net interest income as a percentage of average interest-earning assets, was 3.71%, 3.89%, and 3.92% during the years ended December 31, 2024, 2023, and 2022, respectively.
RESULTS OF OPERATIONS Net income in 2023 was $40.2 million, up $6.2 million, or 18.1%, compared to 2022. Diluted EPS for 2023 was $4.99, up $0.83, or 20.0%, from 2022.
For the year ended December 31, 2024, the Company provisioned $2.4 million to the allowance for loan losses compared to a provision of $2.3 million for the year ended December 31, 2023. Net income in 2023 was $40.2 million, up $6.2 million, or 18.1%, compared to 2022. Diluted EPS for 2023 was $4.99, up $0.83, or 20.0% from 2022.
Excluding PPP loans, total loans increased by $152.0 million, or 6.3%. 23 The following table summarizes the composition of the Company’s loan portfolio as of the dates indicated.
Excluding PPP loans, total loans increased by $139.5 million, or 5.4% for the year ended December 31, 2024. 23 The following table summarizes the composition of the Company’s loan portfolio as of the dates indicated.
At December 31, 2023, the total recorded net investment in PPP loans was $5.5 million, which is included in commercial and industrial loans. The recorded investment in PPP loans is net of $60,000 in deferred lender fees, which will be amortized into interest income over the life of the loans.
The recorded investment in PPP loans is net of $16,000 in deferred lender fees, which will be amortized into interest income over the life of the loans.
Compensation and benefits expense for 2023 was up $1.2 million, or 2.5%, compared to 2022 primarily due to increased salaries and compensation expense. Occupancy expense for 2023 was up $959,000, or 11.0%, compared to 2022 primarily due to the additional offices in the Houston market area.
Occupancy expense for 2023 was up $959,000, or 11.0%, compared to 2022, primarily due to the additional offices in the Houston market area. Provision for credit losses on unfunded commitments increased $223,000, or 80.2%, compared to 2022, primarily due to increased funding commitments.
Market risk is the risk of loss from adverse changes in market prices and rates. Our market risk arises primarily from the interest rate risk, which is inherent in our lending and deposit taking activities. To that end, management actively monitors and manages interest rate risk exposure.
Our market risk arises primarily from the interest rate risk, which is inherent in our lending and deposit taking activities. To that end, management actively monitors and manages interest rate risk exposure. In addition to market risk, our primary risk is credit risk on our loan portfolio. We attempt to manage credit risk through our loan underwriting and oversight policies.
Income from bank-owned life insurance in 2023 increased $130,000 primarily due to full year of income for insurance policies purchase purchased late in the third quarter of 2022. 2022 compared to 2021 Noninterest income for 2022 totaled $13.9 million, down $2.4 million, or 14.7%, compared to 2021.
Income from bank-owned life insurance for 2023 increased $130,000 primarily due to full year of income for insurance policies purchase purchased late in the third quarter of 2022. 36 Noninterest Expense The following table illustrates the primary components of noninterest expense for the years indicated.
The Company’s net interest spread was 3.20%, 3.78% and 3.76% for the years ended December 31, 2023, 2022, and 2021, respectively. Net interest income totaled $120.7 million in 2023, up $2.7 million, or 2.3%, compared to $118.0 million in 2022. The increase was primarily due to the impact of a full year of Friendswood's interest-earning assets and loan growth.
The Company’s net interest spread was 2.84%, 3.20% and 3.78% for the years ended December 31, 2024, 2023, and 2022, respectively. Net interest income totaled $120.3 million in 2024, down $430,000, or 0.4%, compared to $120.7 million in 2023.
In 2023, the Company recorded a $547,000 reversal to expenses related to foreclosed assets, primarily due to a $769,000 recovery of a previous loss on a foreclosed asset, compared to a $523,000 expense in 2022. 2022 compared to 2021 Noninterest expense for 2022 totaled $81.9 million, up $14.9 million, or 22.3%, from 2021.
In 2023, the Company recorded a $547,000 reversal to expenses related to foreclosed assets, primarily due to a $769,000 recovery of a previous loss on a foreclosed asset, compared to a $523,000 expense in 2022. 37 Income Taxes For the years ended December 31, 2024, 2023 and 2022, the Company incurred income tax expense of $8.8 million, $9.9 million and $8.4 million, respectively.
(7) Capital ratios are for Home Bank only. (8) Tangible calculation eliminates goodwill, core deposit intangible and the corresponding amortization expense, net of tax. (9) Tangible calculation eliminates goodwill and core deposit intangible. This Selected Financial Data contains financial information prepared other than in accordance with generally accepted accounting principles (“GAAP”).
(8) Tangible calculation eliminates goodwill and core deposit intangible. This Selected Financial Data contains financial information prepared other than in accordance with generally accepted accounting principles (“GAAP”). The Company uses these non-GAAP financial measures in its analysis of the Company’s performance.
Charge-offs during 2022 were primarily attributable to an originated commercial and industrial loan and one acquired Friendswood commercial relationship. Item 7.
Net loan charge-offs for 2024 were primarily attributable to originated commercial and industrial, consumer and construction and land loans. Charge-offs during 2023 were primarily attributable to an originated commercial and industrial loan and consumer loans. Item 7.
The Company’s lending activities are subject to underwriting standards and loan origination procedures established by our Board of Directors and management. Loan originations are obtained through a variety of sources, primarily existing customers as well as new customers obtained from referrals and local advertising and promotional efforts.
The Company’s lending activities are subject to underwriting standards and loan origination procedures established by our Board of Directors and management.
The Company’s effective tax rate was 19.8%, 19.8% and 19.6% for 2023, 2022 and 2021, respectively. 37 The Company's effective tax rate in 2023 remained consistent with 2022. The Company's effective tax rate in 2022 increased compared to 2021 due to the absence of certain non-recurring transactions.
The Company’s effective tax rate was 19.4%, 19.8%, and 19.8% for 2024, 2023 and 2022, respectively. The Company's effective tax rate in 2024 decreased compared to 2023 due to variances in items that are non-taxable or non-deductible. The Company's effective tax rate in 2023 remained consistent with 2022.
Noninterest expense for 2022 included merger-related expenses from the Friendswood acquisition totaling $2.0 million (pre-tax). The increase in noninterest expense in 2023 primarily reflects the overall growth of the Company and the impact of the Friendswood acquisition for a full year.
The increase in noninterest expense in 2023, primarily reflects the overall growth of the Company and the impact of the Friendswood acquisition for a full year. Compensation and benefits expense for 2023 was up $1.2 million, or 2.5%, compared to 2022, primarily due to increased salaries and compensation expense.
Income from bank card fees for 2022 was up $344,000, or 5.8%, from 2021 primarily due to to increased transaction activity by our cardholders. Gain on sale of loans for 2022 decreased $1.9 million, or 73.7%, compared to 2021. The origination of mortgage loans held for sale slowed in 2022 due to the current rate environment.
Income from bank card fees for 2024 was down $526,000, or 7.5%, from 2023 primarily due to decreased transaction activity by our cardholders. Gain on sale of loans for 2024 decreased $346,000, or 42.4%, compared to 2023, primarily due to less sales of SBA loans in 2024 compared to 2023.
All loan applications are processed and underwritten centrally at the Bank’s main office. Total loans in portfolio (which does not include mortgage loans held for sale) increased $150.9 million, or 6.2%, from December 31, 2022 to $2.6 billion at December 31, 2023.
Total loans in portfolio (which does not include mortgage loans held for sale) increased $136.5 million, or 5.3%, from December 31, 2023 to $2.7 billion at December 31, 2024. At December 31, 2024, the total recorded net investment in PPP loans was $2.6 million, which is included in commercial and industrial loans.
December 31, Increase/(Decrease) (dollars in thousands) 2023 2022 Amount Percent Demand deposit $ 744,424 $ 904,301 $ (159,877) (17.7) % Savings 231,624 305,871 (74,247) (24.3) Money market 408,024 423,990 (15,966) (3.8) NOW 641,818 663,574 (21,756) (3.3) Certificates of deposit 644,734 335,445 309,289 92.2 Total deposits $ 2,670,624 $ 2,633,181 $ 37,443 1.4 % The following table shows the daily average balances of deposits by type and weighted-average rate paid for the periods indicated.
December 31, Increase/(Decrease) (dollars in thousands) 2024 2023 Amount Percent Demand deposit $ 733,073 $ 744,424 $ (11,351) (1.5) % Savings 210,977 231,624 (20,647) (8.9) Money market 457,483 408,024 49,459 12.1 NOW 645,246 641,818 3,428 0.5 Certificates of deposit 733,917 644,734 89,183 13.8 Total deposits $ 2,780,696 $ 2,670,624 $ 110,072 4.1 % The following table shows the daily average balances of deposits by type and weighted-average rate paid for the periods indicated.
(4) The efficiency ratio represents noninterest expense as a percentage of total revenues. Total revenues is the sum of net interest income and noninterest income. (5) Asset quality and capital ratios are end-of-period ratios. (6) Due to the adoption of ASC 326, asset quality ratios are based on total non-performing assets at December 31, 2023, 2022, 2021 and 2020.
(4) The efficiency ratio represents noninterest expense as a percentage of total revenues. Total revenues is the sum of net interest income and noninterest income. (5) Asset quality and capital ratios are end-of-period ratios. (6) Capital ratios are for Home Bank only. (7) Tangible calculation eliminates goodwill, core deposit intangible and the corresponding amortization expense, net of tax.
During 2021, the Company recognized a life insurance benefit of $1.7 million following the death of an employee during the third quarter of 2021. LIQUIDITY AND CAPITAL RESOURCES Our primary sources of funds are from deposits, amortization of loans, loan prepayments and the maturity of loans, investment securities and other investments and other funds provided from operations.
See Note 1 5 to the Consolidated Financial Statements for additional information concerning our income taxes. LIQUIDITY AND CAPITAL RESOURCES Our primary sources of funds are from deposits, amortization of loans, loan prepayments and the maturity of loans, investment securities and other investments and other funds provided from operations.
(2) With the adoption of ASU 2022-02, effective January 1, 2023, TDR accounting has been eliminated. Total nonperforming assets decreased by $587,000, or 5.3%, to $10.4 million at December 31, 2023, compared to $11.0 million at December 31, 2022. The ratio of nonperforming assets to total assets was 0.31% at December 31, 2023, compared to 0.34% at December 31, 2022.
Total nonperforming assets increased by $5.2 million, or 50.2%, to $15.6 million at December 31, 2024, compared to $10.4 million at December 31, 2023. The ratio of nonperforming assets to total assets was 0.45% at December 31, 2024, compared to 0.31% at December 31, 2023.
In the opinion of management, after consultation with legal counsel, the ultimate disposition of these matters is not expected to have a material effect on the financial position or results of operations of the Company. 39 The following table summarizes our outstanding commitments to originate loans and to advance additional amounts pursuant to outstanding letters of credit, lines of credit and the undisbursed portion of construction loans as of December 31, 2023.
These lines of credit usually do not contain a specified maturity date and may not be drawn upon to the total extent to which the Company is committed. 39 The following table summarizes our outstanding commitments to originate loans and to advance additional amounts pursuant to outstanding letters of credit, lines of credit and the undisbursed portion of construction loans as of December 31, 2024.
Amounts as of December 31, 2023 which mature in: (dollars in thousands) One Year or Less After One Year Through Five Years After Five Through Ten Years Over Ten Years Total Available for sale: U.S. agency mortgage-backed $ 236 $ 82,757 $ 85,306 $ 146,270 $ 314,569 Collateralized mortgage obligations 432 62,779 576 18,977 82,764 Municipal bonds — 1,889 28,161 23,841 53,891 U.S. government agency — 5,232 13,664 255 19,151 Corporate bonds — — 6,982 — 6,982 Total available for sale 668 152,657 134,689 189,343 477,357 Weighted average yield 5.29 % 2.59 % 2.52 % 2.04 % 2.36 % Held to maturity: Municipal bonds — 1,065 — — 1,065 Total held to maturity — 1,065 — — 1,065 Weighted average yield — % 4.00 % — % — % 4.00 % Total investment securities $ 668 $ 153,722 $ 134,689 $ 189,343 $ 478,422 Weighted average yield 5.29 % 2.60 % 2.52 % 2.04 % 2.36 % The following table summarizes activity in the Company’s investment securities portfolio during 2023.
Amounts as of December 31, 2024 which mature in: (dollars in thousands) One Year or Less After One Year Through Five Years After Five Through Ten Years Over Ten Years Total Available for sale: U.S. agency mortgage-backed $ 3,988 $ 83,825 $ 68,941 $ 134,597 $ 291,351 Collateralized mortgage obligations 7,034 50,283 449 16,165 73,931 Municipal bonds — 9,270 31,367 12,821 53,458 U.S. government agency 5,000 49 12,984 46 18,079 Corporate bonds — — 6,985 — 6,985 Total available for sale 16,022 143,427 120,726 163,629 443,804 Weighted average yield 3.13 % 2.50 % 2.68 % 2.17 % 2.45 % Held to maturity: Municipal bonds — 1,065 — — 1,065 Total held to maturity — 1,065 — — 1,065 Weighted average yield — % 4.00 % — % — % 4.00 % Total investment securities $ 16,022 $ 144,492 $ 120,726 $ 163,629 $ 444,869 Weighted average yield 3.13 % 2.51 % 2.68 % 2.17 % 2.45 % The following table summarizes activity in the Company’s investment securities portfolio during 2024.
The increase in net interest income for 2022 compared to 2021 was primarily due to the addition of Friendswood's interest-earning assets. Total interest expense increased $2.0 million, or 33.9%, in 2022 compared to 2021 primarily related to the subordinated debt we issued on June 30, 2022.
The increase in net interest income for 2023 compared to 2022 was primarily due to the impact of a full year of Friendswood's interest-earning assets and loan growth.
Noninterest expense for 2022 and 2021 included merger-related expenses from the Friendswood acquisition totaling $2.0 million and $299,000 (pre-tax), respectively. The increase in noninterest expense in 2022 primarily reflected the overall growth of the Company's employee base and higher occupancy, data processing and regulatory costs due to the Friendswood acquisition.
Provision for credit losses on unfunded commitments decreased $395,000, or 78.8%, compared to 2023, primarily due to a decrease in unfunded commitments. 2023 compared to 2022 Noninterest expense for 2023 totaled $82.8 million, up $932,000, or 1.1%, from 2022. Noninterest expense for 2022 included merger-related expenses from the Friendswood acquisition totaling $2.0 million (pre-tax).
Removed
The provision charged in 2022 included $3.8 million for loans acquired in the Friendswood acquisition. • The ALL totaled $31.5 million, or 1.22% of total loans, at December 31, 2023.
Added
Loan originations are obtained through a variety of sources, primarily existing customers as well as new customers obtained from referrals and local advertising and promotional efforts. one- to four-family residential mortgage loan applications and consumer loan applications are taken at any of the Bank’s branch offices.
Removed
For the periods prior to January 1, 2020, asset quality ratios represent originated non-performing assets. Acquired nonimpaired loans, which were on nonaccrual or 90 days or more past due, and acquired assets, which were foreclosed assets or ORE, are not included for periods prior to January 1, 2020.
Added
Amounts as of December 31, 2024 which mature in: (dollars in thousands) One year or less After one but within five years After five but within fifteen years After fifteen years Total One- to four-family first mortgage $ 27,818 $ 144,637 $ 64,680 $ 264,090 $ 501,225 Home equity loans and lines 5,010 10,928 6,356 56,803 79,097 Commercial real estate 155,821 533,981 342,225 126,754 1,158,781 Construction and land 124,404 149,607 43,820 34,432 352,263 Multi-family residential 27,414 127,086 13,573 10,495 178,568 Commercial and industrial 150,405 170,820 97,170 232 418,627 Consumer 4,280 12,568 11,766 1,010 29,624 Total $ 495,152 $ 1,149,627 $ 579,590 $ 493,816 $ 2,718,185 Loans with fixed interest rates: One- to four-family first mortgage $ 115,593 $ 35,395 $ 106,851 $ 257,839 Home equity loans and lines 2,807 4,977 193 7,977 Commercial real estate 467,292 254,196 7,365 728,853 Construction and land 65,339 10,476 — 75,815 Multi-family residential 116,693 11,280 3,466 131,439 Commercial and industrial 89,496 59,134 1 148,631 Consumer 9,556 11,149 806 21,511 Total $ 866,776 $ 386,607 $ 118,682 $ 1,372,065 Loans with variable interest rates: One- to four-family first mortgage $ 29,044 $ 29,285 $ 157,239 $ 215,568 Home equity loans and lines 8,121 1,379 56,610 66,110 Commercial real estate 66,689 88,029 119,389 274,107 Construction and land 84,268 33,344 34,432 152,044 Multi-family residential 10,393 2,293 7,029 19,715 Commercial and industrial 81,324 38,036 231 119,591 24 Amounts as of December 31, 2024 which mature in: (dollars in thousands) One year or less After one but within five years After five but within fifteen years After fifteen years Total Consumer 3,012 617 204 3,833 Total $ 282,851 $ 192,983 $ 375,134 $ 850,968 Allowance for Credit Losses Effective January 1, 2020, the Company adopted the guidance under ASC 326, Financial Instruments — Credit Losses , which introduced a new model known as CECL.

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