HBCP 10-Q Quarterly Report March 31, 2025

HOME BANCORP, INC.

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hbcp-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended: March 31, 2025


☐			Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to

Commission File Number: 001-34190

HOME BANCORP, INC.

(Exact name of Registrant as specified in its charter)


Louisiana			71-1051785
(State or Other Jurisdiction of Incorporation or Organization)			(I.R.S. Employer Identification Number)
503 Kaliste Saloom Road , Lafayette , Louisiana			70508
(Address of Principal Executive Offices)			(Zip Code)

Registrant’s telephone number, including area code: ( 337 ) 237-1960

Not Applicable

(Former Name, Former Address and Former Fiscal Year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Exchange Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common Stock	HBCP	NASDAQ Stock Market

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

At April 30, 2025, the registrant had 7,801,368 shares of common stock, $0.01 par value, outstanding.

HOME BANCORP, INC. and SUBSIDIARY

TABLE OF CONTENTS



PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	Page
	Consolidated Statements of Financial Condition	1
	Consolidated Statements of Income	2
	Consolidated Statements of Comprehensive Income	3
	Consolidated Statements of Changes in Shareholders’ Equity	4
	Consolidated Statements of Cash Flows	5
	Notes to Unaudited Consolidated Financial Statements	6
Item 2.	Management 's Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	42
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	44
SIGNATURES		45

HOME BANCORP, INC. and SUBSIDIARY

GLOSSARY OF DEFINED TERMS

Below is a listing of certain acronyms, abbreviations and defined terms, among others, used throughout this Quarterly Report on Form 10-Q, including in "Item 1. Financial Statements" and "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations." The terms "we," "our" or "us" refer to Home Bancorp, Inc. and its consolidated subsidiaries, unless the context otherwise requires.


ACL	–	Allowance for credit losses
ALL	–	Allowance for loan losses
AOCI	–	Accumulated other comprehensive income
ASC	–	Accounting Standards Codification
ASU	–	Accounting Standards Update
Bank	–	Home Bank, N. A., a wholly-owned subsidiary of the Company
BOLI	–	Bank-owned life insurance
bps	–	basis points, 100 basis points being equal to 1.0%
BTFP	–	Bank Term Funding Program
C&D	–	Construction and land
C&I	–	Commercial and industrial
CARES Act	–	Coronavirus Aid, Relief, and Economic Security Act
CECL	–	Current expected credit losses
Company	–	Home Bancorp, Inc., a Louisiana corporation and the holding company for Home Bank, N. A.
COVID-19	–	The novel coronavirus
CRE	–	Commercial real estate
EPS	–	Earnings per common share
FASB	–	Financial Accounting Standards Board
FHLB	–	Federal Home Loan Bank
GAAP	–	Generally Accepted Accounting Principles
LTV	–	Loan-to-value
NPA(s)	–	Nonperforming asset(s)
OCI	–	Other comprehensive income
ORE	–	Other real estate
PCD	–	Purchased credit deteriorated

PPP	–	Paycheck Protection Program
SBA	–	U.S. Small Business Association
SEC	–	U.S. Securities and Exchange Commission
TE	–	Taxable equivalent
U.S.	–	United States

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION


	(Unaudited)		(Audited)
(dollars in thousands)	March 31, 2025		December 31, 2024
Assets
Cash and cash equivalents	$	110,662	$	98,548

Investment securities available for sale, at fair value (amortized cost $ 434,553 and $ 443,804 , respectively)	400,553		402,792
Investment securities held to maturity (fair values of $ 1,066 and $ 1,065 , respectively)	1,065		1,065
Mortgage loans held for sale	1,855		832
Loans, net of unearned income	2,747,277		2,718,185
Allowance for loan losses	( 33,278 )		( 32,916 )
Total loans, net of unearned income and allowance for loan losses	2,713,999		2,685,269
Office properties and equipment, net	45,327		42,324
Cash surrender value of bank-owned life insurance	48,699		48,421
Goodwill and core deposit intangibles	84,751		85,044
Accrued interest receivable and other assets	78,542		79,373
Total Assets	$	3,485,453	$	3,443,668
Liabilities
Deposits:
Noninterest-bearing	$	754,955	$	733,073
Interest-bearing	2,072,252		2,047,623
Total Deposits	2,827,207		2,780,696
Other borrowings	5,539		5,539
Subordinated debt, net of issuance cost	54,513		54,459
Short-term Federal Home Loan Bank advances	150,000		137,220
Long-term Federal Home Loan Bank advances	13,259		38,326
Accrued interest payable and other liabilities	32,104		31,340
Total Liabilities	3,082,622		3,047,580
Shareholders’ Equity
Preferred stock, $ 0.01 par value - 10,000,000 shares authorized; none issued	—		—
Common stock, $ 0.01 par value - 40,000,000 shares authorized; 7,926,331 and 8,091,522 shares issued and outstanding, respectively	79		81
Additional paid-in capital	167,231		168,138
Unallocated common stock held by:
Employee Stock Ownership Plan (ESOP)	( 1,250 )		( 1,339 )

Retained earnings	261,856		259,190
Accumulated other comprehensive loss	( 25,085 )		( 29,982 )
Total Shareholders’ Equity	402,831		396,088
Total Liabilities and Shareholders’ Equity	$	3,485,453	$	3,443,668

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended March 31,
(dollars in thousands, except per share data)	2025		2024
Interest Income
Loans, including fees	$	44,032	$	40,567
Investment securities:
Taxable interest	2,592		2,715
Tax-exempt interest	72		73
Other investments and deposits	505		771
Total interest income	47,201		44,126
Interest Expense
Deposits	12,622		12,132
Other borrowings	53		1,486
Subordinated debt expense	845		845
Short-term Federal Home Loan Bank advances	1,655		436
Long-term Federal Home Loan Bank advances	277		326
Total interest expense	15,452		15,225
Net interest income	31,749		28,901
Provision for loan losses	394		141
Net interest income after provision for loan losses	31,355		28,760
Noninterest Income
Service fees and charges	1,309		1,254
Bank card fees	1,578		1,575
Gain on sale of loans, net	377		87
Income from bank-owned life insurance	278		266

Gain on sale of assets, net	9		6
Other income	458		361
Total noninterest income	4,009		3,549
Noninterest Expense
Compensation and benefits	12,652		12,170
Occupancy	2,561		2,454
Marketing and advertising	429		466
Data processing and communication	2,642		2,514
Professional services	405		475
Forms, printing and supplies	200		205
Franchise and shares tax	476		488
Regulatory fees	516		469
Foreclosed assets and ORE, net	227		65
Amortization of acquisition intangible	293		353

Other expenses	1,178		1,209
Total noninterest expense	21,579		20,868
Income before income tax expense	13,785		11,441
Income tax expense	2,821		2,242
Net Income	$	10,964	$	9,199
Earnings per share:
Basic	$	1.38	$	1.15
Diluted	$	1.37	$	1.14
Cash dividends declared per common share	$	0.27	$	0.25

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
(dollars in thousands)	2025		2024
Net Income	$	10,964	$	9,199
Other Comprehensive Income (Loss)
Unrealized gains (losses) on available for sale investment securities	7,012		( 3,160 )
Unrealized (losses) gains on cash flow hedges	( 814 )		478

Tax effect	( 1,301 )		563
Other comprehensive income (loss), net of taxes	4,897		( 2,119 )
Comprehensive Income	$	15,861	$	7,080

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)


(dollars in thousands, except per share data)	Common stock		Additional Paid-in capital		Unallocated Common Stock Held by ESOP		Unallocated Common Stock Held by RRP		Retained Earnings		Accumulated Other Comprehensive Loss		Total
Balance, December 31, 2023	$	81	$	165,823	$	( 1,696 )	$	( 1 )	$	234,619	$	( 31,382 )	$	367,444
Net income									9,199				9,199
Other comprehensive loss											( 2,119 )		( 2,119 )
Purchase of Company’s common stock at cost, 21,303 shares	—		( 213 )						( 613 )				( 826 )
Cash dividends declared, $ 0.25 per share									( 2,038 )				( 2,038 )
Common Stock issued under incentive plans, net of shares surrendered in payment, including tax benefit, 3,402 shares	—		14						( 15 )				( 1 )

RRP shares released for allocation			( 1 )				1						—
ESOP shares released for allocation			301		89								390
Share-based compensation cost			236										236
Balance, March 31, 2024	$	81	$	166,160	$	( 1,607 )	$	—	$	241,152	$	( 33,501 )	$	372,285
Balance, December 31, 2024	$	81	$	168,138	$	( 1,339 )	$	—	$	259,190	$	( 29,982 )	$	396,088
Net income									10,964				10,964
Other comprehensive income											4,897		4,897
Purchase of Company’s common stock at cost, 173,497 shares	( 2 )		( 1,733 )						( 6,098 )				( 7,833 )
Cash dividends declared, $ 0.27 per share									( 2,186 )				( 2,186 )
Common Stock issued under incentive plans, net of shares surrendered in payment, including tax benefit, 8,056 shares	—		158						( 14 )				144
Exercise of stock options	—		11										11

ESOP shares released for allocation			366		89								455
Share-based compensation cost			291										291
Balance, March 31, 2025	$	79	$	167,231	$	( 1,250 )	$	—	$	261,856	$	( 25,085 )	$	402,831

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	For the Three Months Ended March 31,
(dollars in thousands)	2025		2024
Cash flows from operating activities:
Net income	$	10,964	$	9,199
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	394		141
Depreciation	834		888
Amortization and accretion of purchase accounting valuations and intangibles	651		806

Federal Home Loan Bank stock dividends	( 71 )		( 213 )
Net amortization of discount on investments	54		74
Amortization of subordinated debt issuance cost	54		53

Gain on loans sold, net	( 377 )		( 87 )
Proceeds, including principal payments, from loans held for sale	11,201		9,479
Originations of loans held for sale	( 12,157 )		( 9,677 )
Gain on sale of assets, net	( 9 )		( 6 )
Non-cash compensation	746		626
Deferred income tax benefit	( 175 )		( 24 )
Increase in accrued interest receivable and other assets	( 19 )		( 893 )
Increase in cash surrender value of bank-owned life insurance	( 278 )		( 266 )
Increase in accrued interest payable and other liabilities	764		223
Net cash provided by operating activities	12,576		10,323
Cash flows from investing activities:
Purchases of securities available for sale	( 2,908 )		—
Proceeds from maturities, prepayments and calls on securities available for sale	12,105		8,879


Increase in loans, net	( 29,764 )		( 40,913 )
Decrease in interest-bearing deposits in banks	—		99
Proceeds from sale of foreclosed assets	65		112
Purchases of office properties and equipment	( 3,873 )		( 1,250 )




Proceeds from sale of office properties and equipment	44		8
Purchase of Federal Home Loan Bank stock	( 1,582 )		—
Proceeds from redemption of Federal Home Loan Bank stock	1,093		7,335
Net cash used in investing activities	( 24,820 )		( 25,730 )
Cash flows from financing activities:
Increase in deposits, net	46,509		52,022
Borrowings on Federal Home Loan Bank advances	2,737,425		490,400
Repayments of Federal Home Loan Bank advances	( 2,749,712 )		( 644,506 )
Proceeds from other borrowings	—		135,000

Proceeds from exercise of stock options	11		—
Issuance of stock under incentive plans, net	144		( 1 )
Dividends paid to shareholders	( 2,186 )		( 2,038 )
Purchase of Company’s common stock	( 7,833 )		( 826 )
Net cash provided by financing activities	24,358		30,051
Net change in cash and cash equivalents	12,114		14,644
Cash and cash equivalents, beginning	98,548		75,831
Cash and cash equivalents, ending	$	110,662	$	90,475
Supplementary cash flow information:
Interest paid on deposits and borrowed funds	$	16,370	$	14,200
Income taxes paid	1,430		—

The accompanying Notes are an integral part of these Consolidated Financial Statements.

HOME BANCORP, INC. AND SUBSIDIARY

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presentation

The accompanying unaudited consolidated financial statements of the Company were prepared in accordance with instructions for Form 10-Q and Regulation S-X and do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, comprehensive income, changes in shareholders’ equity and cash flows in conformity with accounting principles generally accepted in the United States of America. However, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial statements have been included. Certain reclassifications have been made to prior period balances to conform to the current period presentation. The results of operations for the three months ended March 31, 2025 and 2024 are not necessarily indicative of the results which may be expected for the entire fiscal year. These statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2024.

Critical Accounting Policies and Estimates

Critical accounting policies are defined as those that are reflective of significant judgments and uncertainties and could reflect materially different results under different assumptions and conditions. Methodologies the Company uses when applying critical accounting policies and developing critical accounting estimates are included in its Annual Report on Form 10-K for the year ended December 31, 2024.

There have been no material changes from the critical accounting policies previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. In preparing its financial statements, the Company is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Reclassifications

Certain reclassifications have been made to prior period balances to conform to the current period presentation.

2. Recent Accounting Pronouncements

Accounting Standards Adopted in 2025

ASU No. 2023-07, " Improvements to Reportable Segment Disclosures " ("ASU 2023-07") primarily will require enhanced disclosures about significant segment expenses. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted, and are to be applied on a retrospective basis. The adoption of ASU 2023-07 did not have a significant impact on our consolidated financial statements.

ASU No. 2023-09, " Improvements to Income Tax Disclosures " ("ASU 2023-09") is intended to enhance the transparency and decision usefulness of income tax disclosures primarily through changes to the rate reconciliation and income taxes paid information. This update is effective for annual periods beginning after December 15, 2024, though early adoption is permitted. The adoption of ASU 2023-09 did not have a significant impact on our consolidated financial statements.

Issued but Not Yet Adopted Accounting Standards

ASU 2023-06, " Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative " ("ASU 2023-06") related to disclosure or presentation requirements for various subtopics in the FASB’s Accounting Standards Codification (“Codification”). The amendments in the update are intended to align the requirements in the Codification with the U.S. Securities and Exchange Commission's (“SEC”) regulations and facilitate the application of GAAP for all entities. The effective date for each amendment is the date on which the SEC's removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or if the SEC has not removed the requirements by June 30, 2027, this amendment will be removed from the Codification and will not become effective for any entity. Early adoption is prohibited. We do not expect this update to have a material impact on our consolidated financial statements.

ASU 2024-03, " Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures " (ASU 2024-03") requires the disaggregation of certain expenses in the notes to the financial statements, to provide enhanced transparency into the expense captions presented on the face of the income statement. The amendments in ASU 2024-03 are effective for annual reporting periods beginning after December 31, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this ASU may be applied either prospectively or retrospectively. The Company is currently evaluating the impact that this update will have on its disclosures in the consolidated financial statements.

3. Investment Securities

The following tables summarize the Company’s available for sale and held to maturity investment securities at March 31, 2025 and December 31, 2024.


(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
March 31, 2025
Available for sale:
U.S. agency mortgage-backed	$	287,468	$	178	$	24,516	$	263,130
Collateralized mortgage obligations	71,880		1		1,873		70,008
Municipal bonds	53,349		4		6,764		46,589
U.S. government agency	16,871		—		672		16,199
Corporate bonds	4,985		—		358		4,627
Total available for sale	$	434,553	$	183	$	34,183	$	400,553
Held to maturity:
Municipal bonds	$	1,065	$	1	$	—	$	1,066
Total held to maturity	$	1,065	$	1	$	—	$	1,066


(dollars in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
December 31, 2024
Available for sale:
U.S. agency mortgage-backed	$	291,351	$	45	$	29,523	$	261,873
Collateralized mortgage obligations	73,931		1		2,543		71,389
Municipal bonds	53,458		1		7,630		45,829
U.S. government agency	18,079		—		951		17,128
Corporate bonds	6,985		—		412		6,573
Total available for sale	$	443,804	$	47	$	41,059	$	402,792
Held to maturity:
Municipal bonds	$	1,065	$	1	$	1	$	1,065
Total held to maturity	$	1,065	$	1	$	1	$	1,065

The estimated fair value and amortized cost by contractual maturity of the Company’s investment securities as of March 31, 2025 are shown in the following tables. Securities are classified according to their contractual maturities without consideration of principal amortization, potential prepayments or call options. The expected maturity of a security may differ from its contractual maturity because of prepayments or the exercise of call options. Accordingly, actual maturities may differ from contractual maturities. The Company’s investment securities portfolio had an effective duration of 3.7 years and 3.9 years at March 31, 2025 and December 31, 2024, respectively.


(dollars in thousands)	One Year or Less		After One Year through Five Years		After Five Years through Ten Years		After Ten Years		Total
Fair Value
Available for sale:
U.S. agency mortgage-backed	$	11,899	$	70,801	$	65,427	$	115,003	$	263,130
Collateralized mortgage obligations	13,505		41,159		526		14,818		70,008
Municipal bonds	—		8,749		31,473		6,367		46,589
U.S. government agency	4,993		2,077		9,084		45		16,199
Corporate bonds	—		—		4,627		—		4,627
Total available for sale	$	30,397	$	122,786	$	111,137	$	136,233	$	400,553
Held to maturity:
Municipal bonds	$	535	$	531	$	—	$	—	$	1,066
Total held to maturity	$	535	$	531	$	—	$	—	$	1,066

(dollars in thousands)	One Year or Less		After One Year through Five Years		After Five Years through Ten Years		After Ten Years		Total
Amortized Cost
Available for sale:
U.S. agency mortgage-backed	$	12,036	$	75,591	$	68,342	$	131,499	$	287,468
Collateralized mortgage obligations	13,618		42,261		540		15,461		71,880
Municipal bonds	—		9,248		36,599		7,502		53,349
U.S. government agency	5,000		2,272		9,553		46		16,871
Corporate bonds	—		—		4,985		—		4,985
Total available for sale	$	30,654	$	129,372	$	120,019	$	154,508	$	434,553
Held to maturity:
Municipal bonds	$	535	$	530	$	—	$	—	$	1,065
Total held to maturity	$	535	$	530	$	—	$	—	$	1,065

Management evaluates securities for impairment from credit losses at least quarterly, and more frequently when economic and market conditions warrant such evaluations. Consideration is given to numerous factors including, but not limited to, the extent to which the fair value is less than the amortized cost basis; adverse conditions causing changes in the financial condition of the issuer of the security or underlying loan guarantors; changes to the rating of the security by a rating agency; and the Company’s intent to sell a security or whether it is more likely than not the Company will be required to sell the security before the recovery of its amortized cost, which may extend to maturity.

The Company performs a process to determine whether the decline in the fair value of securities has resulted from credit losses or other factors. This process involves evaluating each security for impairment by monitoring credit performance, collateral type, collateral geography, bond credit support, loan-to-value ratios, credit scores, loss severity levels, pricing levels, downgrades by rating agencies, cash flow projections and other factors as indicators of potential credit issues. If this evaluation indicates the existence of credit losses, the Company compares the present value of cash flows expected to be collected from the security with the amortized cost basis. If the present value of expected cash flows is less than the amortized cost basis, an ACL is recorded, limited by the amount that the fair value of the security is less than its amortized cost.

The Company's investment securities with unrealized losses, aggregated by type and length of time that individual securities have been in a continuous loss position, are summarized in the following tables.


(dollars in thousands)	Less Than 1 Year				Over 1 Year				Total
March 31, 2025	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for sale:
U.S. agency mortgage-backed	$	10,634	$	139	$	239,169	$	24,377	$	249,803	$	24,516
Collateralized mortgage obligations	—		—		69,964		1,873		69,964		1,873
Municipal bonds	1,426		21		44,659		6,743		46,085		6,764
U.S. government agency	—		—		16,199		672		16,199		672
Corporate bonds	—		—		4,627		358		4,627		358
Total available for sale	$	12,060	$	160	$	374,618	$	34,023	$	386,678	$	34,183


(dollars in thousands)	Less Than 1 Year				Over 1 Year				Total
December 31, 2024	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Available for sale:
U.S. agency mortgage-backed	$	16,024	$	336	$	240,693	$	29,187	$	256,717	$	29,523
Collateralized mortgage obligations	—		—		71,342		2,543		71,342		2,543
Municipal bonds	1,435		14		43,893		7,616		45,328		7,630
U.S. government agency	—		—		17,128		951		17,128		951
Corporate bonds	—		—		6,573		412		6,573		412
Total available for sale	$	17,459	$	350	$	379,629	$	40,709	$	397,088	$	41,059

At March 31, 2025, 240 of the Company’s debt securities had unrealized losses totaling 8.1 % of the individual securities’ amortized cost basis and 7.8 % of the Company’s total amortized cost basis of the investment securities portfolio. At such date, 229 of the 240 securities had been in a continuous loss position for over 12 months. Management has determined that the declines in the fair value of these securities were not attributable to credit losses. As a result, no ACL was recorded for available for sale investment securities at March 31, 2025.

At March 31, 2025, it was determined that no ACL was required for the Company's held-to-maturity investment securities. The Company monitors credit quality of debt securities held-to-maturity through the use of credit ratings. The following tables present the amortized cost of the Company's held-to-maturity securities by credit quality rating at March 31, 2025 and December 31, 2024.


	Credit Ratings
(dollars in thousands)	AAA/AA/A		BBB/BB/B		Total
March 31, 2025
Held to maturity:
Municipal bonds	$	1,065	$	—	$	1,065


	Credit Ratings
(dollars in thousands)	AAA/AA/A		BBB/BB/B		Total
December 31, 2024
Held to maturity:
Municipal bonds	$	1,065	$	—	$	1,065

Accrued interest receivable on the Company's investment securities was $ 1,222,000 and $ 1,471,000 at March 31, 2025 and December 31, 2024, respectively. These amounts are recorded in accrued interest receivable and other assets on the Consolidated Statements of Financial Condition.

At March 31, 2025 and December 31, 2024, the Company had $ 142,011,000 and $ 134,887,000 , respectively, of securities pledged to secure public deposits.

4. Earnings Per Share

Earnings per common share was computed based on the following:


	Three Months Ended March 31,
(in thousands, except per share data)	2025		2024
Numerator:
Net income available to common shareholders	$	10,964	$	9,199
Denominator:
Weighted average common shares outstanding	7,949		7,984
Effect of dilutive securities:
Restricted stock	48		31
Stock options	30		24
Weighted average common shares outstanding – assuming dilution	8,027		8,039
Basic earnings per common share	$	1.38	$	1.15
Diluted earnings per common share	$	1.37	$	1.14

Options for 1,668 and 58,392 shares of common stock were not included in the computation of diluted EPS for the three months ended March 31, 2025 and 2024, respectively, because the effect of those shares was anti-dilutive.

5. Credit Quality and Allowance for Credit Losses

The Company’s loans, net of unearned income, consisted of the following as of the dates indicated.


(dollars in thousands)	March 31, 2025		December 31, 2024
Real estate loans:
One- to four-family first mortgage	$	504,356	$	501,225
Home equity loans and lines	77,417		79,097
Commercial real estate	1,193,364		1,158,781
Construction and land	346,987		352,263
Multi-family residential	183,792		178,568
Total real estate loans	2,305,916		2,269,934
Other loans:
Commercial and industrial	411,363		418,627
Consumer	29,998		29,624
Total other loans	441,361		448,251
Total loans	$	2,747,277	$	2,718,185

The net discount on the Company’s acquired loans was $ 2,116,000 and $ 2,469,000 at March 31, 2025 and December 31, 2024, respectively. In addition, loan balances as of March 31, 2025 and December 31, 2024 are reported net of unearned income of $ 5,225,000 and $ 5,122,000 , respectively.

Accrued interest receivable on the Company's loans was $ 13,049,000 and $ 13,314,000 at March 31, 2025 and December 31, 2024, respectively, and is excluded from the estimate of the ACL. Those amounts are recorded in accrued interest receivable and other assets on the Consolidated Statements of Financial Condition.

Allowance for Credit Losses

The ACL, which includes the ALL and the ACL on unfunded lending commitments, and recorded investment in loans as of the dates indicated are as follows.


	March 31, 2025
(dollars in thousands)	Collectively Evaluated		Individually Evaluated		Total
Allowance for credit losses:
One- to four-family first mortgage	$	4,459	$	—	$	4,459
Home equity loans and lines	795		—		795
Commercial real estate	13,478		439		13,917
Construction and land	5,383		—		5,383
Multi-family residential	1,088		—		1,088
Commercial and industrial	6,413		326		6,739
Consumer	756		141		897
Total allowance for loan losses	$	32,372	$	906	$	33,278

Unfunded lending commitments (1)	$	2,700	$	—	$	2,700
Total allowance for credit losses	$	35,072	$	906	$	35,978


	March 31, 2025
(dollars in thousands)	Collectively Evaluated		Individually Evaluated (2)		Total
Loans:
One- to four-family first mortgage	$	504,356	$	—	$	504,356
Home equity loans and lines	77,417		—		77,417
Commercial real estate	1,191,051		2,313		1,193,364
Construction and land	346,987		—		346,987
Multi-family residential	183,792		—		183,792
Commercial and industrial	410,717		646		411,363
Consumer	29,857		141		29,998
Total loans	$	2,744,177	$	3,100	$	2,747,277


	December 31, 2024
(dollars in thousands)	Collectively Evaluated		Individually Evaluated		Total
Allowance for credit losses:
One- to four-family first mortgage	$	4,430	$	—	$	4,430
Home equity loans and lines	801		—		801
Commercial real estate	13,321		200		13,521
Construction and land	5,484		—		5,484
Multi-family residential	1,090		—		1,090
Commercial and industrial	6,613		248		6,861
Consumer	729		—		729
Total allowance for loan losses	$	32,468	$	448	$	32,916

Unfunded lending commitments (1)	$	2,700	$	—	$	2,700
Total allowance for credit losses	$	35,168	$	448	$	35,616

	December 31, 2024
(dollars in thousands)	Collectively Evaluated		Individually Evaluated (2)		Total
Loans:
One- to four-family first mortgage	$	501,225	$	—	$	501,225
Home equity loans and lines	79,097		—		79,097
Commercial real estate	1,154,063		4,718		1,158,781
Construction and land	352,263		—		352,263
Multi-family residential	178,568		—		178,568
Commercial and industrial	418,373		254		418,627
Consumer	29,624		—		29,624
Total loans	$	2,713,213	$	4,972	$	2,718,185

(1) The ACL on unfunded lending commitments is recorded within accrued interest payable and other liabilities on the Consolidated Statements of Financial Condition.

(2) One PCD loan was individually evaluated at March 31, 2025 and December 31, 2024, respectively.

A summary of activity in the ACL for the three months ended March 31, 2025 and March 31, 2024 follows.


	Three Months Ended March 31, 2025
(dollars in thousands)	Beginning Balance		Charge-offs		Recoveries		Provision (Reversal)		Ending Balance
Allowance for credit losses:
One- to four-family first mortgage	$	4,430	$	—	$	7	$	22	$	4,459
Home equity loans and lines	801		—		—		( 6 )		795
Commercial real estate	13,521		—		—		396		13,917
Construction and land	5,484		—		—		( 101 )		5,383
Multi-family residential	1,090		—		—		( 2 )		1,088
Commercial and industrial	6,861		( 195 )		153		( 80 )		6,739
Consumer	729		( 31 )		34		165		897
Total allowance for loan losses	$	32,916	$	( 226 )	$	194	$	394	$	33,278

Unfunded lending commitments	$	2,700	$	—	$	—	$	—	$	2,700
Total allowance for credit losses	$	35,616	$	( 226 )	$	194	$	394	$	35,978


	Three Months Ended March 31, 2024
(dollars in thousands)	Beginning Balance		Charge-offs		Recoveries		Provision (Reversal)		Ending Balance
Allowance for credit losses:
One- to four-family first mortgage	$	3,255	$	—	$	—	$	20	$	3,275
Home equity loans and lines	688		—		1		12		701
Commercial real estate	14,805		—		—		258		15,063
Construction and land	5,415		( 124 )		—		( 4 )		5,287
Multi-family residential	474		—		—		110		584
Commercial and industrial	6,166		( 64 )		15		( 311 )		5,806
Consumer	734		( 53 )		8		56		745
Total allowance for loan losses	$	31,537	$	( 241 )	$	24	$	141	$	31,461

Unfunded lending commitments	$	2,594	$	—	$	—	$	—	$	2,594
Total allowance for credit losses	$	34,131	$	( 241 )	$	24	$	141	$	34,055

Credit Quality

The following tables present the Company’s loan portfolio by credit quality classification and origination year as of March 31, 2025 and December 31, 2024.


	March 31, 2025
	Term Loans by Origination Year
(dollars in thousands)	2025		2024		2023		2022		2021		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
One- to four-family first mortgage:
Pass	$	18,069	$	70,748	$	91,436	$	106,915	$	74,348	$	111,918	$	21,636	$	1,624	$	496,694
Special Mention	—		—		146		489		185		—		—		—		820
Substandard	—		54		878		2,785		416		2,709		—		—		6,842
Doubtful	—		—		—		—		—		—		—		—		—
Total one- to four-family first mortgages	$	18,069	$	70,802	$	92,460	$	110,189	$	74,949	$	114,627	$	21,636	$	1,624	$	504,356
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Home equity loans and lines:
Pass	$	122	$	1,243	$	1,210	$	2,272	$	1,368	$	3,913	$	64,740	$	2,177	$	77,045
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		64		—		181		127		—		372
Doubtful	—		—		—		—		—		—		—		—		—
Total home equity loans and lines	$	122	$	1,243	$	1,210	$	2,336	$	1,368	$	4,094	$	64,867	$	2,177	$	77,417
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate:
Pass	$	32,364	$	159,475	$	144,753	$	304,865	$	211,399	$	292,639	$	25,199	$	4,226	$	1,174,920
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		517		2,638		15,289		—		—		18,444
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial real estate loans	$	32,364	$	159,475	$	144,753	$	305,382	$	214,037	$	307,928	$	25,199	$	4,226	$	1,193,364
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction and land:
Pass	$	25,262	$	157,794	$	110,787	$	28,516	$	3,691	$	7,056	$	8,186	$	( 19 )	$	341,273
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		387		134		1,182		253		—		—		3,758		5,714
Doubtful	—		—		—		—		—		—		—		—		—
Total construction and land loans	$	25,262	$	158,181	$	110,921	$	29,698	$	3,944	$	7,056	$	8,186	$	3,739	$	346,987
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—


	March 31, 2025
	Term Loans by Origination Year
(dollars in thousands)	2025		2024		2023		2022		2021		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Multi-family residential:
Pass	$	13,107	$	38,538	$	25,504	$	49,383	$	22,201	$	31,234	$	1,229	$	1,340	$	182,536
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		325		—		1		930		—		1,256
Doubtful	—		—		—		—		—		—		—		—		—
Total multi-family residential loans	$	13,107	$	38,538	$	25,504	$	49,708	$	22,201	$	31,235	$	2,159	$	1,340	$	183,792
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial:
Pass	$	12,957	$	71,949	$	56,283	$	54,550	$	14,159	$	9,436	$	185,804	$	2,604	$	407,742
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		1,314		271		352		345		1		17		1,321		3,621
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial and industrial loans	$	12,957	$	73,263	$	56,554	$	54,902	$	14,504	$	9,437	$	185,821	$	3,925	$	411,363
Current period gross charge-offs	$	—	$	19	$	—	$	9	$	—	$	—	$	167	$	—	$	195
Consumer:
Pass	$	2,892	$	4,491	$	2,347	$	1,609	$	306	$	9,150	$	8,965	$	78	$	29,838
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		5		2		3		144		4		—		2		160
Doubtful	—		—		—		—		—		—		—		—		—
Total consumer loans	$	2,892	$	4,496	$	2,349	$	1,612	$	450	$	9,154	$	8,965	$	80	$	29,998
Current period gross charge-offs	$	—	$	3	$	3	$	—	$	—	$	—	$	25	$	—	$	31
Total loans:
Pass	$	104,773	$	504,238	$	432,320	$	548,110	$	327,472	$	465,346	$	315,759	$	12,030	$	2,710,048
Special Mention	—		—		146		489		185		—		—		—		820
Substandard	—		1,760		1,285		5,228		3,796		18,185		1,074		5,081		36,409
Doubtful	—		—		—		—		—		—		—		—		—
Total loans	$	104,773	$	505,998	$	433,751	$	553,827	$	331,453	$	483,531	$	316,833	$	17,111	$	2,747,277
Current period gross charge-offs	$	—	$	22	$	3	$	9	$	—	$	—	$	192	$	—	$	226


	December 31, 2024
	Term Loans by Origination Year
(dollars in thousands)	2024		2023		2022		2021		2020		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
One- to four-family first mortgage:
Pass	$	71,582	$	95,261	$	108,853	$	76,116	$	31,482	$	88,472	$	20,042	$	1,560	$	493,368
Special Mention	—		146		491		186		—		—		—		—		823
Substandard	56		1,040		2,316		575		340		2,707		—		—		7,034
Doubtful	—		—		—		—		—		—		—		—		—
Total one- to four-family first mortgages	$	71,638	$	96,447	$	111,660	$	76,877	$	31,822	$	91,179	$	20,042	$	1,560	$	501,225
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Home equity loans and lines:
Pass	$	1,833	$	1,249	$	2,359	$	1,409	$	627	$	3,535	$	65,597	$	2,209	$	78,818
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		65		—		—		185		29		—		279
Doubtful	—		—		—		—		—		—		—		—		—
Total home equity loans and lines	$	1,833	$	1,249	$	2,424	$	1,409	$	627	$	3,720	$	65,626	$	2,209	$	79,097
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	22	$	—	$	22
Commercial real estate:
Pass	$	151,397	$	130,833	$	298,344	$	217,602	$	153,122	$	162,925	$	25,820	$	197	$	1,140,240
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		1,754		1,405		2,788		12,594		—		—		18,541
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial real estate loans	$	151,397	$	130,833	$	300,098	$	219,007	$	155,910	$	175,519	$	25,820	$	197	$	1,158,781
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Construction and land:
Pass	$	141,926	$	131,483	$	51,789	$	4,529	$	6,656	$	2,925	$	7,749	$	( 18 )	$	347,039
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	30		135		1,201		253		3		—		—		3,602		5,224
Doubtful	—		—		—		—		—		—		—		—		—
Total construction and land loans	$	141,956	$	131,618	$	52,990	$	4,782	$	6,659	$	2,925	$	7,749	$	3,584	$	352,263
Current period gross charge-offs	$	—	$	—	$	123	$	—	$	—	$	—	$	—	$	—	$	123
Multi-family residential:
Pass	$	38,559	$	25,331	$	48,047	$	22,401	$	14,523	$	27,549	$	1,228	$	—	$	177,638
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		930		—		930


	December 31, 2024
	Term Loans by Origination Year
(dollars in thousands)	2024		2023		2022		2021		2020		Prior		Revolving Loans		Revolving Loans Converted to Term Loans		Total
Doubtful	—		—		—		—		—		—		—		—		—
Total multi-family residential loans	$	38,559	$	25,331	$	48,047	$	22,401	$	14,523	$	27,549	$	2,158	$	—	$	178,568
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial:
Pass	$	75,576	$	59,626	$	60,175	$	17,993	$	6,547	$	4,482	$	188,676	$	1,797	$	414,872
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	1,344		284		368		345		46		19		49		1,300		3,755
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial and industrial loans	$	76,920	$	59,910	$	60,543	$	18,338	$	6,593	$	4,501	$	188,725	$	3,097	$	418,627
Current period gross charge-offs	$	—	$	17	$	317	$	53	$	—	$	17	$	471	$	—	$	875
Consumer:
Pass	$	5,815	$	2,952	$	1,842	$	371	$	585	$	9,056	$	8,850	$	126	$	29,597
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		6		4		4		—		11		—		2		27
Doubtful	—		—		—		—		—		—		—		—		—
Total consumer loans	$	5,815	$	2,958	$	1,846	$	375	$	585	$	9,067	$	8,850	$	128	$	29,624
Current period gross charge-offs	$	7	$	39	$	24	$	—	$	10	$	8	$	177	$	—	$	265
Total loans:
Pass	$	486,688	$	446,735	$	571,409	$	340,421	$	213,542	$	298,944	$	317,962	$	5,871	$	2,681,572
Special Mention	—		146		491		186		—		—		—		—		823
Substandard	1,430		1,465		5,708		2,582		3,177		15,516		1,008		4,904		35,790
Doubtful	—		—		—		—		—		—		—		—		—
Total loans	$	488,118	$	448,346	$	577,608	$	343,189	$	216,719	$	314,460	$	318,970	$	10,775	$	2,718,185
Current period gross charge-offs	$	7	$	56	$	464	$	53	$	10	$	25	$	670	$	—	$	1,285

The above classifications follow regulatory guidelines and can generally be described as follows:

• Pass loans are of satisfactory quality.

• Special mention loans have an existing weakness that could cause future impairment, including the deterioration of financial ratios, past due status, questionable management capabilities and possible reduction in the collateral values.

• Substandard loans have an existing specific and well-defined weakness that may include poor liquidity and deterioration of financial performance. Such loans may be past due and related deposit accounts experiencing overdrafts. Immediate corrective action is necessary.

• Doubtful loans have specific weaknesses that are severe enough to make collection or liquidation in full highly questionable and improbable.

In addition, residential loans are classified using an inter-agency regulatory methodology that incorporates, among other factors, the extent of delinquencies and loan-to-value ratios. These classifications were the most current available as of the dates indicated and were generally updated within the quarter.

Age analysis of past due loans as of the dates indicated are as follows.


	March 31, 2025
(dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current Loans		Total Loans



























Real estate loans:
One- to four-family first mortgage	$	3,466	$	815	$	4,928	$	9,209	$	495,147	$	504,356
Home equity loans and lines	78		—		127		205		77,212		77,417
Commercial real estate	2,743		—		1,001		3,744		1,189,620		1,193,364
Construction and land	2,520		314		5,362		8,196		338,791		346,987
Multi-family residential	—		—		930		930		182,862		183,792
Total real estate loans	8,807		1,129		12,348		22,284		2,283,632		2,305,916
Other loans:
Commercial and industrial	766		473		611		1,850		409,513		411,363
Consumer	152		32		156		340		29,658		29,998
Total other loans	918		505		767		2,190		439,171		441,361
Total loans	$	9,725	$	1,634	$	13,115	$	24,474	$	2,722,803	$	2,747,277


	December 31, 2024
(dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days Past Due		Total Past Due		Current Loans		Total Loans



























Real estate loans:
One- to four-family first mortgage	$	4,208	$	382	$	5,850	$	10,440	$	490,785	$	501,225
Home equity loans and lines	224		—		129		353		78,744		79,097
Commercial real estate	1,454		—		1,960		3,414		1,155,367		1,158,781
Construction and land	767		240		1,399		2,406		349,857		352,263
Multi-family residential	330		—		—		330		178,238		178,568
Total real estate loans	6,983		622		9,338		16,943		2,252,991		2,269,934
Other loans:
Commercial and industrial	491		2,110		649		3,250		415,377		418,627
Consumer	353		42		13		408		29,216		29,624
Total other loans	844		2,152		662		3,658		444,593		448,251
Total loans	$	7,827	$	2,774	$	10,000	$	20,601	$	2,697,584	$	2,718,185

There were $ 77,000 and $ 16,000 of loans greater than 90 days past due and accruing at March 31, 2025 and December 31, 2024, respectively.

The following tables summarize information pertaining to nonaccrual loans as of dates indicated.


	March 31, 2025
(dollars in thousands)		With Related Allowance		Without Related Allowance		Total
Nonaccrual loans (1) :
One- to four-family first mortgage		$	6,368	$	—	$	6,368
Home equity loans and lines		372		—		372
Commercial real estate		4,349		—		4,349
Construction and land		5,584		—		5,584
Multi-family residential		930		—		930
Commercial and industrial		1,206		—		1,206
Consumer		161		—		161
Total		$	18,970	$	—	$	18,970

	December 31, 2024
(dollars in thousands)		With Related Allowance		Without Related Allowance		Total
Nonaccrual loans (1) :
One- to four-family first mortgage		$	7,039	$	—	$	7,039
Home equity loans and lines		279		—		279
Commercial real estate		3,304		—		3,304
Construction and land		1,622		—		1,622
Multi-family residential		—		—		—
Commercial and industrial		1,311		—		1,311
Consumer		27		—		27
Total		$	13,582	$	—	$	13,582

(1) Nonaccrual acquired loans include PCD loans of $ 1,228,000 and $ 1,256,000 at March 31, 2025 and December 31, 2024, respectively.

All interest accrued but not received for loans placed on nonaccrual status is reversed against interest income. All payments received while on nonaccrual status are applied against the principal balance of nonaccrual loans. The Company does not recognize interest income while loans are on nonaccrual status.

Collateral Dependent Loans

The Company held loans that were individually evaluated for credit losses at March 31, 2025 and December 31, 2024 for which the repayment, on the basis of our assessment at the reporting date, is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. The ACL for these collateral-dependent loans is primarily based on the fair value of the underlying collateral at the reporting date. The following describes the types of collateral that secure collateral dependent loans:

• One- to four-family first mortgages are primarily secured by first liens on residential real estate.

• Home equity loans and lines are primarily secured by first and junior liens on residential real estate.

• Commercial real estate loans are primarily secured by office and industrial buildings, warehouses, retail shopping facilities and various special purpose properties, including hotels and restaurants.

• Construction and land loans are primarily secured by residential and commercial properties, which are under construction and/or redevelopment, and by raw land.

• Commercial and industrial loans considered collateral dependent are primarily secured by accounts receivable, inventory and equipment.

The tables below summarize collateral dependent loans and the related ACL at March 31, 2025 and December 31, 2024.


	March 31, 2025
(dollars in thousands)	Loans		ACL
One- to four-family first mortgage	$	—	$	—
Home equity loans and lines	—		—
Commercial real estate	2,313		439
Construction and land	—		—
Multi-family residential	—		—
Commercial and industrial	646		326
Consumer	141		141
Total	$	3,100	$	906

	December 31, 2024
(dollars in thousands)	Loans		ACL
One- to four-family first mortgage	$	—	$	—
Home equity loans and lines	—		—
Commercial real estate	4,718		200
Construction and land	—		—
Multi-family residential	—		—
Commercial and industrial	254		248
Consumer	—		—
Total	$	4,972	$	448

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

Occasionally, the Company modifies loans to borrowers in financial distress by providing certain concessions, such as principal forgiveness, term extension, an other-than-insignificant payment delay, interest only for a specified period of time, an interest rate reduction, or a combination of such concessions. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. Upon the Company's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is charged-off. The balance of loan modifications, segregated by type of modification, to borrowers experiencing financial difficulty are set forth in the tables below for the periods indicated.


	Three Months Ended March 31, 2025
(dollars in thousands)	Payment Deferral		Principal Forgiveness		Term Extension		Interest Rate Reduction		Combination Term Extension and Principal Forgiveness		Combination Term Extension and Interest Rate Reduction		Percent of Total Class of Loans
One-to four-family first mortgage	$	—	$	—	$	23	$	—	$	—	$	—	—	%
Home equity loans and lines	—		—		—		—		—		—		—
Commercial real estate	—		—		957		—		—		—		0.1
Construction and land	—		—		2		—		—		—		—
Multi-family residential	—		—		—		—		—		—		—
Commercial and industrial	—		—		2,190		—		—		—		0.5
Consumer	—		—		—		—		—		—		—
Total	$	—	$	—	$	3,172	$	—	$	—	$	—	0.1	%


	Three Months Ended March 31, 2024
(dollars in thousands)	Payment Deferral		Principal Forgiveness		Term Extension		Interest Rate Reduction		Combination Term Extension and Principal Forgiveness		Combination Term Extension and Interest Rate Reduction		Percent of Total Class of Loans
One-to four-family first mortgage	$	—	$	—	$	668	$	—	$	—	$	—	0.2	%
Home equity loans and lines	—		—		—		—		—		—		—
Commercial real estate	—		—		1,081		—		—		—		0.1
Construction and land	—		—		29		—		—		—		—
Multi-family residential	—		—		—		—		—		—		—
Commercial and industrial	—		—		—		—		—		—		—
Consumer	—		—		—		—		—		—		—
Total	$	—	$	—	$	1,778	$	—	$	—	$	—	0.1	%

During the three months ended March 31, 2025 and 2024, no loan experienced a default subsequent to being granted a payment deferral or term extension. Default is defined as movement to past due 90 days, foreclosure or charge-off, whichever occurs first.

The following table details the financial impacts of loan modifications made to borrowers experiencing financial difficulty for the periods presented.


	Three Months Ended March 31, 2025		Three Months Ended March 31, 2024
	Minimum Term Extensions ( in months )	Maximum Term Extensions ( in months )	Minimum Term Extensions ( in months )	Maximum Term Extensions ( in months )
One-to four-family first mortgage	60	60	12	96
Home equity loans and lines	0	0	0	0
Commercial real estate	12	12	12	12
Construction and land	3	3	12	12
Multi-family residential	0	0	0	0
Commercial and industrial	3	3	0	0
Consumer	0	0	0	0

The table below reflects the performance of loans that have been modified in the last 12 months.


(dollars in thousands)	30-89 Days Past Due		90+ Days Past Due		Nonaccrual		Current		Total
March 31, 2025
One-to four-family first mortgage	$	—	$	—	$	373	$	23	$	396
Home equity loans and lines	—		—		—		—		—
Commercial real estate	—		—		957		—		957
Construction and land	—		—		215		2		217
Multi-family residential	—		—		—		—		—
Commercial and industrial	—		—		—		3,296		3,296
Consumer	—		—		—		—		—
Total	$	—	$	—	$	1,545	$	3,321	$	4,866

The loan modifications reported in the table above did not significantly impact the Company's allowance for loan losses during 2025.

Foreclosed Assets and ORE

Foreclosed assets and ORE include real property and other assets that have been acquired as a result of foreclosure, and real property no longer used in the Bank's business. Foreclosed assets and ORE totaled $ 2,424,000 and $ 2,010,000 at March 31, 2025 and December 31, 2024, respectively. These amounts are recorded in accrued interest receivable and other assets on the Consolidated Statements of Financial Condition.

The carrying amount of foreclosed residential real estate properties held at March 31, 2025 and December 31, 2024 totaled $ 2,410,000 and $ 2,010,000 , respectively. Loans secured by single family residential real estate that were in the process of foreclosure at March 31, 2025 and December 31, 2024 totaled $ 1,843,000 and $ 4,472,000 , respectively.

6. Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates.

The Company’s existing credit derivatives result from loan participation arrangements, therefore, are not used to manage interest rate risk in the Company’s assets or liabilities. The Company occasionally enters into credit risk participation agreements with counterparty banks to accept a portion of the credit risk related to interest rate swaps. The agreements, which are typically executed in conjunction with a participation in a loan with the same customer, allow customers to execute an interest rate swap with one bank while allowing for the distribution of the credit risk among participating members. Collateral used to support the credit risk for the underlying lending relationship is also available to offset the risk of credit risk participations and customer derivative positions.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. As part of its efforts to accomplish this objective, the Company entered into certain interest rate swap agreements as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Such derivatives were used to hedge the variable cash flows associated with existing variable rate liabilities.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income related to

derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable rate liabilities. During the next twelve months, the Company estimates that an additional $ 1,607,000 will be reclassified as additional interest expense.

Non-designated Hedges

Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain customers. The Company executes interest rate swaps with commercial banking customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet hedge accounting requirements, changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings through other income.

Fair Values of Derivative Instruments

The tables below present the fair value of the Company’s derivative financial instruments as well as their classification on the Consolidated Statement of Financial Condition as of March 31, 2025 and December 31, 2024.


	March 31, 2025
	Derivative Assets (1)				Derivative Liabilities (1)
(dollars in thousands)	Notional Amount		Fair Value		Notional Amount		Fair Value
Derivatives designated as hedging instruments:
Interest rate swaps - variable rate liabilities	$	80,000	$	2,411	$	—	$	—

Derivatives not designated as hedging instruments:
Interest rate contracts	$	9,000	$	202	$	9,000	$	229
Risk participation agreements	—		—		11,487		1

Netting adjustments			—				—


Net derivative amounts			$	2,613			$	230


	December 31, 2024
	Derivative Assets (1)				Derivative Liabilities (1)
(dollars in thousands)	Notional Amount		Fair Value		Notional Amount		Fair Value
Derivatives designated as hedging instruments:
Interest rate swaps - variable rate liabilities	$	80,000	$	3,241	$	—	$	—

Derivatives not designated as hedging instruments:
Interest rate contracts	9,000		26		9,000		42
Risk participation agreements	—		—		11,550		—

Netting adjustments			—				—


Net derivative amounts			$	3,267			$	42

(1) Derivative assets and liabilities are reported at fair value in accrued interest receivable and other assets and accrued interest payable and other liabilities, respectively, in the Consolidated Statements of Financial Condition.

At March 31, 2025 and December 31, 2024, accumulated unrealized gains, net of taxes, on derivative instruments totaled $ 1,775,000 and $ 2,418,000 , respectively.

Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income and the Consolidated Statements of Income

The tables below present the effect of cash flow hedge accounting on Accumulated Other Comprehensive Income and the Consolidated Statements of Income as of March 31, 2025 and March 31, 2024.


	Three Months Ended March 31, 2025
	Amount of Loss Recognized in OCI				Location of Gain Reclassified from AOCI into Income	Amount of Gain Reclassified from AOCI into Income
(dollars in thousands)	Total		Included Component			Total		Included Component
Derivatives in cash flows hedging relationships:
Interest rate swaps - variable rate liabilities	$	( 307 )	$	( 307 )	Interest income	$	507	$	507


	Three Months Ended March 31, 2024
	Amount of Gain Recognized in OCI				Location of Gain Reclassified from AOCI into Income	Amount of Gain Reclassified from AOCI into Income
(dollars in thousands)	Total		Included Component			Total		Included Component
Derivatives in cash flows hedging relationships:
Interest rate swaps - variable rate liabilities	$	1,084	$	1,084	Interest income	$	606	$	606

Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Income

The table below presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the Consolidated Statements of Income as of March 31, 2025 and March 31, 2024.

(dollars in thousands)

Location of Loss Recognized on Non-designated Hedges

Three Months Ended March 31, 2025

Effects of non-designated hedges

Interest rate contracts

Other noninterest expense

( 11 )

Risk participation agreements

Other noninterest expense

—

(dollars in thousands)

Location of Income Recognized on Non-designated Hedges

Three Months Ended March 31, 2024

Effects of non-designated hedges

Risk participation agreements

Other noninterest income

Credit-risk-related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a provision to the effect that, if the Company (either) defaults (or is capable of being declared in default) on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.

The Company has agreements with certain of its derivative counterparties that contain a provision to the effect that, if the Company fails to maintain its status as a well or adequately capitalized institution, then the Company could be required to post additional collateral.

As of March 31, 2025, there were no derivatives with credit-risk-related contingent features in a net liability position. Such derivatives are measured at fair value, which includes accrued interest but excludes any adjustment for nonperformance risk. If the Company had breached any provisions at March 31, 2025, it would not have been required to settle any obligations under the agreements since the termination value was $ 0 .

7. Long-term Debt and Borrowings

Subordinated Debt

On June 30, 2022, the Company issued $ 55,000,000 in aggregate principal amount of its 5.75 % Fixed-to-Floating Rate Subordinated Notes (the "Notes") due 2032. The Notes were issued at a price equal to 100 % of the aggregate principal amount. The Notes have a stated maturity date of June 30, 2032 and bear interest at a fixed rate of 5.75 % per year from and including the issue date to but excluding June 30, 2027. From June 30, 2027, the Notes will bear interest at a floating rate equal to the then current three-month term secured overnight financing rate (“SOFR”), plus 282 basis points. The Notes may be redeemed by the Company, in whole or in part, on or after June 30, 2027. The Notes are intended to qualify as Tier 2 capital for regulatory purposes.

The carrying value of the Notes was $ 54,513,000 and $ 54,459,000 at March 31, 2025 and December 31, 2024, respectively. The Note was recorded net of issuance costs which is being amortized using the straight-line method over five years .

Other Borrowings

Other borrowings at March 31, 2025 and December 31, 2024 included a $ 5,539,000 note payable with a rate of 3.83 % on the Company’s investment in a new market tax credit entity. The note payable is a 20-year leverage loan with interest-only payments for the first seven years . The note was originated in October 2018.

Federal Home Loan Bank Advances

The average balance of total FHLB advances was $ 180,658,000 for the first quarter of 2025, an increase of $ 108,954,000 compared to the first quarter of 2024.

The Company had short-term FHLB advances in the amount of $ 150,000,000 as of March 31, 2025 compared to $ 137,220,000 as of December 31, 2024. At March 31, 2025 and December 31, 2024, the Company had $ 13,259,000 and $ 38,326,000 in long-term FHLB advances, respectively, and $ 1,140,061,000 and $ 1,088,068,000 in additional FHLB advances available, respectively.

The following table summarizes long-term FHLB advances as of March 31, 2025 and December 31, 2024.


	March 31, 2025				December 31, 2024
(dollars in thousands)	Amount		Weighted Average Rate		Amount		Weighted Average Rate
Fixed rate advances maturing in:
2025	$	10,156	4.19	%	$	35,194	3.49	%
2026	3,103		1.55		3,132		1.55

Total FHLB advances	$	13,259	3.57	%	$	38,326	3.33	%

8. Fair Value Measurements and Disclosures

The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The Company groups assets and liabilities measured or disclosed at fair value in three levels as required by ASC 820, Fair Value Measurements and Disclosures . Under this guidance, fair value should be based on the assumptions market participants would use when pricing the asset or liability and establishes a fair value hierarchy that prioritizes the inputs used to develop those assumptions and measure fair value. The hierarchy requires companies to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels used to measure fair value are as follows:

• Level 1 – Quoted prices in active markets for identical assets or liabilities.

• Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

• Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

An asset’s or liability’s categorization within the fair value hierarchy is based upon the lowest level that is significant to the fair value measurement. Management reviews and updates the fair value hierarchy classifications of the Company’s assets and liabilities quarterly.

Recurring Basis

Investment Securities Available for Sale

Fair values of investment securities available for sale are primarily measured using information from a third-party pricing service. This pricing service provides pricing information by utilizing pricing models supported with market data information. Standard inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities bids, offers and other reference data from market research publications. If quoted prices are available in an active market, investment securities are classified as Level 1 measurements. If quoted prices are not available in an active market, fair values are estimated primarily by the use of pricing models. Level 2 investment securities are primarily comprised of mortgage-backed securities issued by government agencies and U.S. government-sponsored enterprises. In certain cases, where there is limited or less transparent information provided by the Company’s third-party pricing service, fair value is estimated by the use of secondary pricing services or through the use of non-binding third-party broker quotes. Investment securities are classified within Level 3 when little or no market activity supports the fair value.

Management primarily identifies investment securities which may have traded in illiquid or inactive markets, by identifying instances of a significant decrease in the volume and frequency of trades, relative to historical levels, as well as instances of a significant widening of the bid-ask spread in the brokered markets. Investment securities that are deemed to have been trading in illiquid or inactive markets may require the use of significant unobservable inputs. For example, management may use quoted prices for similar investment securities in the absence of a liquid and active market for the investment securities being valued. As of March 31, 2025, management did not make adjustments to prices provided by the third-party pricing service as a result of illiquid or inactive markets.

Derivative Assets and Liabilities

Derivative assets and liabilities are reported at fair value in accrued interest receivable and other assets and accrued interest payable and other liabilities, respectively, in the Consolidated Statements of Financial Condition. The fair value of these derivative financial instruments is obtained from a third-party pricing service that uses widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. The analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The Company has determined that its derivative valuations are classified in Level 2 of the fair value hierarchy.

The following tables present the balances of assets measured for fair value on a recurring basis as of March 31, 2025 and December 31, 2024.


(dollars in thousands)	March 31, 2025		Level 1		Level 2		Level 3
Assets
Available for sale securities:
U.S. agency mortgage-backed	$	263,130	$	—	$	263,130	$	—
Collateralized mortgage obligations	70,008		—		70,008		—
Municipal bonds	46,589		—		46,589		—
U.S. government agency	16,199		—		16,199		—
Corporate bonds	4,627		—		4,627		—
Total	$	400,553	$	—	$	400,553	$	—

Derivative assets	$	2,613	$	—	$	2,613	$	—
Total	$	403,166	$	—	$	403,166	$	—

Liabilities
Derivative liabilities	$	230	$	—	$	230	$	—


(dollars in thousands)	December 31, 2024		Level 1		Level 2		Level 3
Assets
Available for sale securities:
U.S. agency mortgage-backed	$	261,873	$	—	$	261,873	$	—
Collateralized mortgage obligations	71,389		—		71,389		—
Municipal bonds	45,829		—		45,829		—
U.S. government agency	17,128		—		17,128		—
Corporate bonds	6,573		—		6,573		—
Total	$	402,792	$	—	$	402,792	$	—

Derivative assets	$	3,267	$	—	$	3,267	$	—
Total	$	406,059	$	—	$	406,059	$	—

Liabilities
Derivative liabilities	$	42	$	—	$	42	$	—

Nonrecurring Basis

The Company records loans individually evaluated for credit losses at fair value on a nonrecurring basis. Fair value is measured at the fair value of the collateral for collateral-dependent loans. For non-collateral-dependent loans, fair value is measured by present valuing expected future cash flows. Loans individually evaluated are classified as Level 3 assets when measured using appraisals from third parties of the collateral less any prior liens and when there is no observable market price.

Foreclosed assets and ORE are also recorded at fair value on a nonrecurring basis. Foreclosed assets are initially recorded at fair value less estimated costs to sell. ORE is recorded at the lower of its net book value or fair value at the date of transfer to ORE. The fair value of foreclosed assets and ORE is based on property appraisals and an analysis of similar properties available. As such, the Company classifies foreclosed and ORE assets as Level 3 assets.

The Company has segregated all financial assets that are measured at fair value on a nonrecurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date as reflected in the table below.


			Fair Value Measurements Using
(dollars in thousands)	March 31, 2025		Level 1		Level 2		Level 3
Assets
Loans individually evaluated	$	2,194	$	—	$	—	$	2,194
Foreclosed assets and ORE	2,424		—		—		2,424
Total	$	4,618	$	—	$	—	$	4,618

			Fair Value Measurements Using
(dollars in thousands)	December 31, 2024		Level 1		Level 2		Level 3
Assets
Loans individually evaluated	$	4,524	$	—	$	—	$	4,524
Foreclosed assets and ORE	2,010		—		—		2,010
Total	$	6,534	$	—	$	—	$	6,534

The following table shows significant unobservable inputs used in the fair value measurement of Level 3 assets.

(dollars in thousands)

Fair Value

Valuation Technique

Unobservable Inputs

Range of Discounts

Weighted Average Discount

March 31, 2025

Loans individually evaluated

2,194

Third party appraisals and discounted cash flows

Collateral values, market discounts and estimated costs to sell

16 % - 100 %

29 %

Foreclosed assets and ORE

2,424

Third party appraisals, sales contracts, broker price opinions

Collateral values, market discounts and estimated costs to sell

6 % - 99 %

11 %

(dollars in thousands)

Fair Value

Valuation Technique

Unobservable Inputs

Range of
Discounts

Weighted Average Discount

December 31, 2024

Loans individually evaluated

4,524

Third party appraisals and discounted cash flows

Collateral values, market discounts and estimated costs to sell

0 % - 100 %

9 %

Foreclosed assets and ORE

2,010

Third party appraisals, sales contracts, broker price opinions

Collateral values, market discounts and estimated costs to sell

19 % - 69 %

23 %

ASC 820, Fair Value Measurements and Disclosures , requires the disclosure of each class of financial instruments for which it is practicable to estimate. The fair value of a financial instrument is the current amount that would be exchanged between willing parties, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. ASC 820 excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial statements. These estimates are subjective in nature, involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates included herein are based on existing on- and off-balance-sheet financial instruments without attempting to estimate the value of anticipated future business and the fair value of assets and liabilities that are not required to be recorded or disclosed at fair value like premises and equipment. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

Methods and assumptions used to estimate fair value of each class of financial instruments for which it is practicable to estimate fair value are described in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. The fair value of subordinated debt is estimated based on current market rates on similar debt in the market. The Company classifies this debt in Level 2 of the fair value table. There have been no other material changes from the fair value estimate methods and assumptions previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

The following table presents estimated fair values of the Company’s financial instruments as of the dates indicated.


			Fair Value Measurements at March 31, 2025
(dollars in thousands)	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	110,662	$	110,662	$	110,662	$	—	$	—

Investment securities available for sale	400,553		400,553		—		400,553		—
Investment securities held to maturity	1,065		1,066		—		1,066		—
Mortgage loans held for sale	1,855		1,855		—		1,855		—
Loans, net	2,713,999		2,671,726		—		2,669,532		2,194
Cash surrender value of BOLI	48,699		48,699		48,699		—		—
Derivative assets (1)	2,613		2,613		—		2,613		—
Financial Liabilities
Deposits	$	2,827,207	$	2,824,743	$	2,072,954	$	751,789	$	—
Other borrowings	5,539		5,529		—		5,529		—
Subordinated debt, net of issuance cost	54,513		52,979		—		52,979		—
Short-term FHLB advances	150,000		150,000		150,000		—		—
Long-term FHLB advances	13,259		13,153		—		13,153		—
Derivative liabilities (1)	230		230		—		230		—


			Fair Value Measurements at December 31, 2024
(dollars in thousands)	Carrying Amount		Total		Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	98,548	$	98,548	$	98,548	$	—	$	—
Interest-bearing deposits in banks	—		—		—		—		—
Investment securities available for sale	402,792		402,792		—		402,792		—
Investment securities held to maturity	1,065		1,065		—		1,065		—
Mortgage loans held for sale	832		832		—		832		—
Loans, net	2,685,269		2,617,254		—		2,612,730		4,524
Cash surrender value of BOLI	48,421		48,421		48,421		—		—
Derivative assets (1)	3,267		3,267		—		3,267		—
Financial Liabilities
Deposits	$	2,780,696	$	2,778,056	$	2,046,779	$	731,277	$	—
Other borrowings	5,539		5,528		—		5,528		—
Subordinated debt, net of issuance cost	54,459		49,563		—		49,563		—
Short-term FHLB advances	137,220		137,220		137,220		—		—
Long-term FHLB advances	38,326		38,111		—		38,111		—
Derivative liabilities (1)	42		42		—		42		—


Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The purpose of this discussion and analysis is to focus on significant changes in the financial condition of the Company and the Bank from December 31, 2024 through March 31, 2025 and on its results of operations for the three months ended March 31, 2025 and 2024. This discussion and analysis is intended to highlight and supplement information presented elsewhere in this quarterly report on Form 10-Q, particularly the consolidated financial statements and related notes appearing in Item 1.

Forward-Looking Statements

To the extent that statements in this Form 10-Q relate to future plans, objectives, financial results or performance of the Company or Bank, these statements are deemed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements, which are based on management’s current information, estimates and assumptions and the current economic environment, are generally identified by the use of words such as “plan”, “believe”, “expect”, “intend”, “anticipate”, “estimate”, “project” or similar expressions, or by future or conditional terms such as “will”, “would”, “should”, “could”, “may”, “likely”, “probably”, or “possibly”. The Company’s or the Bank’s actual strategies and results in future periods may differ materially from those currently expected due to various risks and uncertainties. Certain risks, uncertainties and other factors, including those set forth under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2024 and any subsequent Quarterly Report on Form 10-Q or Current Report on Form 8-K, may cause actual results to differ materially from the results discussed in the forward-looking statements appearing in this discussion and analysis and may include factors such as, but not limited to, our lending activities, our use of municipal deposits as a source of funds, credit quality and risk, industry and technological changes, cyber incidents or other failures, disruptions or security breaches, interest rates, commercial and residential real estate values, economic and market conditions in the markets we operate in or generally in the United States, funds availability, accounting estimates and risk management processes, legislative and regulatory changes, the fair values of our acquired assets and our investment securities portfolio, business strategy execution, key personnel, competition, mortgage markets, fraud, environmental liability and severe weather, natural disasters, acts of war or terrorism or other external events. The Company undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.

EXECUTIVE OVERVIEW

The Company reported net income for the first quarter of 2025 of $11.0 million, or $1.37 diluted EPS, up $1.8 million compared to the first quarter of 2024. Net income for the first quarter of 2024 totaled $9.2 million, or $1.14 diluted EPS.

Key components of the Company’s performance during the three months ended March 31, 2025 include:

• Assets increased $41.8 million, or 1.2%, from December 31, 2024 to $3.5 billion at March 31, 2025.

• Total loans were $2.7 billion at March 31, 2025, up $29.1 million, or 1.1%, from December 31, 2024.

• During the three months ended March 31, 2025, the Company provisioned $394,000 to the allowance for loan losses, primarily due to loan growth. During the three months ended March 31, 2024, the Company provisioned $141,000 to the allowance for loan losses.

• The ALL totaled $33.3 million, or 1.21% of total loans, at March 31, 2025 compared to $32.9 million, or 1.21% of total loans, at December 31, 2024. The ACL, which is comprised of the allowance for loan losses plus the allowance for unfunded lending commitments, totaled $36.0 million, or 1.31% of total loans, at March 31, 2025 compared to $35.6 million, or 1.31% of total loans, at December 31, 2024.

• Nonperforming assets increased $5.9 million, or 37.6%, from $15.6 million, or 0.45% of total assets, at December 31, 2024 to $21.5 million, or 0.62% of total assets, at March 31, 2025. The increase in nonperforming assets was primarily due to two loan relationships, which were classified as substandard in 2024 and moved to nonaccrual status in the first quarter of 2025.

• Total deposits amounted to $2.8 billion at March 31, 2025, an increase of $46.5 million, or 1.7%, from December 31, 2024.

• The net interest margin was 3.91% for the three months ended March 31, 2025, up 27 bps from the three months ended March 31, 2024. The increase was primarily due to increase in interest-earning assets.

• The average rate paid on total interest-bearing deposits was 2.51% for the first quarter of 2025, which was down 1 bps from the first quarter of 2024.

• Total interest expense for the first quarter of 2025 was up $227,000, or 1.5%, compared to the first quarter of 2024, primarily due to higher cost of deposits.

• Noninterest income for the first quarter of 2025 was up $460,000, or 13.0%, compared to the first quarter of 2024, primarily due to increases in gain on sale of loans (up $290,000), other income (up $97,000), and service fees and charges (up $55,000).

• Noninterest expense for the first quarter of 2025 was up $711,000, or 3.4%, compared to the first quarter of 2024, primarily due to increases in compensation and benefits (up $482,000), foreclosed assets, net (up $162,000), data processing and communication (up $128,000), and occupancy (up $107,000), which were partially offset by decreases in professional services (down $70,000) and marketing and advertising (down $37,000).

FINANCIAL CONDITION

Loans, Allowance for Credit Losses and Asset Quality

Loans

Total loans at March 31, 2025 were $2.7 billion, up $29.1 million, or 1.1%, from December 31, 2024.

The following table summarizes the composition of the Company’s loan portfolio as of the dates indicated.


(dollars in thousands)	March 31, 2025		December 31, 2024		Increase/(Decrease)
Real estate loans:
One-to four-family first mortgage	$	504,356	$	501,225	$	3,131	0.6	%
Home equity loans and lines	77,417		79,097		(1,680)		(2.1)
Commercial real estate	1,193,364		1,158,781		34,583		3.0
Construction and land	346,987		352,263		(5,276)		(1.5)
Multi-family residential	183,792		178,568		5,224		2.9
Total real estate loans	2,305,916		2,269,934		35,982		1.6	%
Other loans:
Commercial and industrial	411,363		418,627		(7,264)		(1.7)
Consumer	29,998		29,624		374		1.3
Total other loans	441,361		448,251		(6,890)		(1.5)
Total loans	$	2,747,277	$	2,718,185	$	29,092	1.1	%

Allowance for Credit Losses

The ACL which equals the sum of the ALL and the ACL on unfunded lending commitments, is established through provisions for credit losses. Management recalculates the ACL at least quarterly to reassess the estimate of credit losses for the total portfolio at the relevant reporting date. Under ASC Topic 326, the ACL is measured on a pool basis when similar risk characteristics exist. For each pool of loans, management also evaluates and applies qualitative adjustments to the calculated ACL based on several factors, including, but not limited to, changes in current and expected future economic conditions, changes in industry experience and industry loan concentrations, changes in the volume and severity of NPAs, changes in lending policies and personnel and changes in the competitive and regulatory environment of the banking industry. Loans that do not share similar risk characteristics are individually evaluated and are excluded from the pooled loan analysis.

The ACL policy described above is supplemented by periodic reviews and validations performed by independent loan reviewers. The results of the reviews are reported to the Audit Committee of the Board of Directors. The establishment of the ACL is significantly affected by management judgment. There is likelihood that different amounts would be reported under different conditions or assumptions. Federal regulatory agencies, as an integral part of their examination process, periodically review our ACL. Such agencies may require management to make additional provisions for estimated losses based upon judgments different from those of management.

We continue to monitor and modify our ACL as conditions warrant. No assurance can be given that our level of ACL will cover all of the losses on our loans or that future adjustments to the ACL will not be necessary if economic and other conditions differ substantially from the assumptions used by management to determine the current level of the ACL.

At March 31, 2025, the ALL totaled $33.3 million, or 1.21% of total loans, up $362,000 from $32.9 million, or 1.21% of total loans, at December 31, 2024. During the three months ended March 31, 2025, the Company provisioned $394,000 of the allowance loan losses primarily due to loan growth. Net loan charge-offs totaled $32,000 for the three months ended March 31, 2025.

Asset Quality

One of management’s key objectives has been, and continues to be, maintaining a high level of asset quality. In addition to maintaining credit standards for new loan originations, we proactively monitor loans and collection and workout processes of

delinquent or problem loans. When a borrower fails to make a scheduled payment, we attempt to cure the deficiency by making personal contact with the borrower. Initial contacts are generally made within 10 days after the date payment is due. In most cases, deficiencies are promptly resolved. If the delinquency continues, late charges are assessed and additional efforts are made to collect the deficiency. All loans which are designated as “special mention,” classified or which are delinquent 90 days or more are reported to the Board of Directors of the Bank monthly. For loans where the collection of principal or interest payments is doubtful, the accrual of interest income ceases. It is our policy, with certain limited exceptions, to discontinue accruing interest and reverse any interest accrued on any loan which is 90 days or more past due. On occasion, this action may be taken earlier if the financial condition of the borrower raises significant concern with regard to their ability to service the debt in accordance with the terms of the loan agreement. Interest income is not accrued on these loans until the borrower’s financial condition and payment record demonstrate an ability to service the debt.

Under our allowance policy, credit losses are measured on a pool basis when similar risk characteristics exist. Loans that do not share similar risk characteristics are individually evaluated for credit losses and are excluded from the pooled loan analysis. At least quarterly, management evaluates the loan portfolio to determine which loans should be individually evaluated for credit losses. Management's evaluation involves an analysis of larger (i.e., loans with balances of $500,000 or greater) commercial real estate loans, multi-family residential loans, construction and land loans and commercial and industrial loans. Third party property valuations are obtained at the time of origination for real estate secured loans. When a determination is made that a loan has deteriorated to the point of becoming a problem loan, updated valuations may be ordered to determine if a short-fall exists, which may lead to a recommendation for partial charge off or appropriate allowance allocation. 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. Loans individually evaluated for credit losses are reported to the Board of Directors monthly.

At March 31, 2025 and December 31, 2024, loans identified as credit deteriorated loans and individually evaluated for expected losses were $3.1 million and $5.0 million, respectively. The following tables provide a summary of loans individually evaluated for credit losses as of the dates indicated.


	March 31, 2025
(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	2,313		439		18.98
Construction and land	—		—		—
Multi-family residential	—		—		—
Commercial and industrial	646		326		50.46
Consumer	141		141		100.00
Total	$	3,100	$	906	29.23	%

	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	%

Federal regulations and our policies require that we utilize an internal asset classification system as a means of reporting problem and potential problem assets. We have incorporated an internal asset classification system, substantially consistent with Federal banking regulations, as a part of our credit monitoring system. Federal banking regulations set forth a classification scheme for problem and potential problem assets as “substandard,” “doubtful” or “loss” assets. An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the insured institution will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted.

At March 31, 2025 and December 31, 2024, loans classified as substandard totaled $36.4 million and $35.8 million, respectively. There were no assets classified as doubtful at either date. For additional information, refer to Note 5 to the Consolidated Financial Statements.

The following tables provide a summary of loans classified as special mention and substandard as of the dates indicated.


(dollars in thousands)	March 31, 2025		December 31, 2024		Increase/(Decrease)
Special Mention Loans
One- to four-family first mortgage	$	820	$	823	$	(3)	(0.4)	%
Home equity loans and lines	—		—		—		—
Commercial real estate	—		—		—		—
Construction and land	—		—		—		—
Multi-family residential	—		—		—		—
Commercial and industrial	—		—		—		—
Consumer	—		—		—		—
Total special mention loans	$	820	$	823	$	(3)	(0.4)	%


(dollars in thousands)	March 31, 2025		December 31, 2024		Increase/(Decrease)
Substandard Loans
One- to four-family first mortgage	$	6,842	$	7,034	$	(192)	(2.7)	%
Home equity loans and lines	372		279		93		33.3
Commercial real estate	18,444		18,541		(97)		(0.5)
Construction and land	5,714		5,224		490		9.4
Multi-family residential	1,256		930		326		35.1
Commercial and industrial	3,621		3,755		(134)		(3.6)
Consumer	160		27		133		492.6
Total substandard loans	$	36,409	$	35,790	$	619	1.7	%

Total nonperforming loans increased by $5.4 million, or 40.1%, to $19.0 million at March 31, 2025, compared to $13.6 million at December 31, 2024. The primary reason for the increase was two loan relationships with an aggregate outstanding balance of $5.6 million at March 31, 2025 that became nonperforming during the first quarter of 2025.

A bank’s determination as to the classification of its assets and the amount of its valuation allowances is subject to review by Federal bank regulators which can order the establishment of additional general or specific loss allowances. The Federal banking agencies have adopted an interagency policy statement on the allowance for loan and lease losses. The policy statement provides guidance for financial institutions on both the responsibilities of management for the assessment and establishment of allowances and guidance for banking agency examiners to use in determining the adequacy of general valuation guidelines.

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 processes that meet the objectives set forth in the policy statement. Management maintains, based on current and forecasted information, an ACL that reflects a current estimate of expected credit losses for the estimated life of the loan portfolio at reporting periods subsequent to the adoption date. For all reporting periods, actual losses are uncertain and dependent upon future events and, as such, further additions to the level of ACL may become necessary.

The following table sets forth the composition of the Company’s nonperforming assets as of the dates indicated.


	March 31, 2025							December 31, 2024
(dollars in thousands)	Originated		Acquired (1)		Total			Originated		Acquired (1)		Total
Nonaccrual loans:
Real estate loans:
One- to four-family first mortgage	$	4,420	$	1,948	$	6,368		$	5,348	$	1,691	$	7,039
Home equity loans and lines	339		33		372			245		34		279
Commercial real estate	1,055		3,294		4,349			1,058		2,246		3,304
Construction and land	5,584		—		5,584			1,619		3		1,622
Multi-family residential	930		—		930			—		—		—
Other loans:
Commercial and industrial	611		595		1,206			705		606		1,311
Consumer	151		10		161			16		11		27
Total nonaccrual loans	13,090		5,880		18,970			8,991		4,591		13,582
Accruing loans 90 days or more past due	77		—		77			16		—		16
Total nonperforming loans	13,167		5,880		19,047			9,007		4,591		13,598
Foreclosed assets and ORE	2,424		—		2,424			1,963		47		2,010
Total nonperforming assets	15,591		5,880		21,471			10,970		4,638		15,608



Nonperforming loans to total loans					0.69		%					0.50		%
Nonperforming loans to total assets					0.55		%					0.39		%
Nonperforming assets to total assets					0.62		%					0.45		%

(1) Nonaccrual acquired loans include PCD loans of $1.2 million and $1.3 million at March 31, 2025 and December 31, 2024, respectively.

Foreclosed assets and ORE includes real property and other assets that have been acquired as a result of foreclosure, and real property no longer used in the Bank's business. Foreclosed assets and ORE are classified as such until sold or disposed. Foreclosed assets are recorded at fair value less estimated selling costs based on third party property valuations which are obtained at the time the asset is repossessed and periodically until the property is liquidated. ORE is recorded at the lower of its net book value or fair value at the date of transfer to ORE. Foreclosed assets and ORE holding costs are charged to expense. Gains and losses on the sale of foreclosed assets and ORE are charged to operations, as incurred. Costs associated with acquiring and improving a foreclosed property or ORE are capitalized to the extent that the carrying value does not exceed fair value less estimated selling costs.

Investment Securities

The Company’s investment securities portfolio totaled $401.6 million as of March 31, 2025, a decrease of $2.2 million, or 0.6%, from December 31, 2024. During the first quarters of 2025 and 2024, the Company had no gains or losses related to the sale of available-for-sale investment securities. At March 31, 2025, the Company had a net unrealized loss on its available for sale investment securities portfolio of $34.0 million, compared to a net unrealized loss of $41.0 million at December 31, 2024. The Company’s investment securities portfolio had an effective duration of 3.7 years and 3.9 years at March 31, 2025 and December 31, 2024, respectively.

The following table summarizes activity in the Company’s investment securities portfolio during the three months ended March 31, 2025.


(dollars in thousands)	Available for Sale		Held to Maturity
Balance, December 31, 2024	$	402,792	$	1,065
Purchases	2,908		—
Sales	—		—
Principal maturities, prepayments and calls	(12,105)		—
Amortization of premiums and accretion of discounts	(54)		—
Increase in market value	7,012		—
Balance, March 31, 2025	$	400,553	$	1,065

Funding Sources

Deposits

Deposits totaled $2.8 billion at March 31, 2025, an increase of $46.5 million, or 1.7%, compared to December 31, 2024. The following table summarizes the changes in the Company’s deposits from December 31, 2024 to March 31, 2025.


(dollars in thousands)	March 31, 2025		December 31, 2024		Increase/(Decrease)
Demand deposit	$	754,955	$	733,073	$	21,882	3.0	%
Savings	212,053		210,977		1,076		0.5
Money market	464,659		457,483		7,176		1.6
NOW	641,287		645,246		(3,959)		(0.6)
Certificates of deposit	754,253		733,917		20,336		2.8
Total deposits	$	2,827,207	$	2,780,696	$	46,511	1.7	%

The average rate paid on interest-bearing deposits was 2.51% for the first quarter of 2025, down 1 bps compared to the first quarter of 2024. At March 31, 2025, certificates of deposit maturing within the next 12 months totaled $708.2 million.

We obtain most of our deposits from individuals, small businesses and public funds in our market areas. The following table presents our deposits per customer type for the periods indicated.


	March 31, 2025	December 31, 2024
Individuals	53%	53%
Small businesses	36	37
Public funds	8	7
Broker	3	3
Total	100%	100%

The total amounts of our uninsured deposits (deposits in excess of $250,000, as calculated in accordance with FDIC regulations) were $844.2 million at March 31, 2025 and $813.6 million at December 31, 2024. Public funds in excess of the FDIC insurance limits are fully collateralized.

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 were issued at a price equal to 100% of the aggregate principal amount. The Notes have a stated maturity date of June 30, 2032 and bear interest at a fixed rate of 5.75% per year from and including the issue date to but excluding June 30, 2027. From June 30, 2027, the Notes will bear interest at a floating rate equal to the then current three-month term secured overnight financing rate (“SOFR”), plus 282 basis points. The Notes may be redeemed by the

Company, in whole or in part, on or after June 30, 2027. The Notes are intended to qualify as Tier 2 capital for regulatory purposes.

The carrying value of the Notes was $54.5 million and $54.5 million at March 31, 2025 and December 31, 2024, respectively. The subordinated debt was recorded net of issuance costs and amortized using the straight-line method over five years.

Other Borrowings

Other borrowings at March 31, 2025 and December 31, 2024 included a $5,539,000 note payable with a rate of 3.83% on the Company’s investment in a new market tax credit entity. The note payable is a 20-year leverage loan with interest-only payments for the first seven years. The note was originated in October 2018.

Federal Home Loan Bank Advances

The average balance of total FHLB advances was $180.7 million for the first quarter of 2025, up $109.0 million compared to the first quarter of 2024. We reduced our FHLB advances in 2024 primarily due to our increased utilization of BTFP loans as an alternative source of funds.

The Company had $150.0 million short-term FHLB advances as of March 31, 2025, up $12.8 million, or 9.3%, compared to $137.2 million as of December 31, 2024. At March 31, 2025 and December 31, 2024, the Company had $13.3 million and $38.3 million in long-term FHLB advances, respectively, and $1.1 billion and $1.1 billion in additional FHLB advances available, respectively.

Shareholders’ Equity

Total shareholders’ equity increased $6.7 million, or 1.7%, from $396.1 million at December 31, 2024 to $402.8 million at March 31, 2025. Shareholders' equity increased primarily due to net income of $11.0 million and a decrease in accumulated other comprehensive loss on available for sale investment securities, which were partially offset by cash dividends and share repurchases during the three months ended March 31, 2025.

At March 31, 2025, the Company and the Bank had regulatory capital amounts that were well in excess of regulatory requirements. The following table presents actual and required capital ratios for the Company and the Bank under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of March 31, 2025 based on the required capital levels as of January 1, 2019 when the Basel III Capital Rules were fully phased-in. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.


	Actual				Minimum Capital Required – Basel III Fully Phased-In				To Be Well Capitalized Under Prompt Corrective Action Provisions
(dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Company:
Tier 1 risk-based capital	$	343,165	11.85	%	$	246,103	8.50	%	N/A		N/A
Total risk-based capital	433,456		14.97		304,009		10.50		N/A		N/A
Tier 1 leverage capital	343,165		10.20		134,589		4.00		N/A		N/A

Bank:
Common equity Tier 1 capital (to risk-weighted assets)	$	385,061	13.34	%	$	202,004	7.00	%	$	187,575	6.50	%
Tier 1 risk-based capital	385,061		13.34		245,290		8.50		230,861		8.00
Total risk-based capital	420,839		14.58		303,005		10.50		288,577		10.00
Tier 1 leverage capital	385,061		11.48		134,219		4.00		167,773		5.00

LIQUIDITY AND ASSET/LIABILITY MANAGEMENT

Liquidity Management

Liquidity management encompasses our ability to ensure that funds are available to meet the cash flow requirements of depositors and borrowers, while also ensuring adequate cash flow exists to meet the Company’s needs, including operating, strategic and capital. The Company develops its liquidity management strategies as part of its overall asset/liability management process. 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. While scheduled payments from the amortization of loans and investment securities and maturing investment securities are relatively predictable sources of funds, deposit flows and loan prepayments can be greatly influenced by general interest rates, economic conditions and competition. The Company also maintains excess funds in short-term, interest-bearing assets that provide additional liquidity.

The Company uses its 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 March 31, 2025, certificates of deposit maturing within the next 12 months totaled $708.2 million. Based upon historical experience, the Company anticipates that a significant portion of the maturing certificates of deposit will be redeposited with us.

In addition to cash flow from loan and securities payments and prepayments as well as from sales of securities available for sale, the Company has significant borrowing capacity available to fund liquidity needs. In recent years, the Company has utilized borrowings as a cost efficient addition to deposits as a source of funds. Borrowings consist of advances from the FHLB of Dallas, of which the Company is a member. Under terms of the collateral agreement with the FHLB, the Company pledges residential mortgage loans and investment securities as well as the Company’s stock in the FHLB as collateral for such advances. For the three months ended March 31, 2025, the average balance of outstanding FHLB advances was $180.7 million. At March 31, 2025, the Company had $163.3 million in total outstanding FHLB advances.

The following table summarizes the Company's primary and secondary sources of liquidity which were available at March 31, 2025.


(dollars in thousands)	March 31, 2025
Cash and cash equivalents	$	110,662
Unencumbered investment securities, amortized cost	68,179
FHLB advance availability	1,140,061
Amounts available from unsecured lines of credit	55,000

Federal Reserve discount window availability	500
Total primary and secondary sources of available liquidity	$	1,374,402

Asset/Liability Management

The objective of asset/liability management is to implement strategies for the funding and deployment of the Company’s financial resources that are expected to maximize soundness and profitability over time at acceptable levels of risk. Interest rate sensitivity is the potential impact of changing rate environments on both net interest income and cash flows. The Company measures its interest rate sensitivity over the near term primarily by running net interest income simulations. Our interest rate sensitivity also is monitored by management through the use of a model which generates estimates of the change in its net interest income over a range of interest rate scenarios. 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 March 31, 2025.


Shift in Interest Rates (in bps)						% Change in Projected Net Interest Income


+200						1.9%
+100						1.1%
-100						(1.7)%
-200						(3.8)%

The actual impact of changes in interest rates will depend on many factors. These factors include the Company’s ability to achieve expected growth in earning assets and maintain a desired mix of 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.

The Company periodically has entered into interest rate swap agreements as part of its interest rate risk management strategy. The Company’s objectives in using interest rate derivatives are to manage its exposure to interest rate movements. During 2025 and 2024, such derivatives were used to hedge the variable cost associated with existing variable rate liabilities. Refer to Note 6 of the Consolidated Financial Statements for more information on the effects of the derivative financial instruments on the consolidated financial statements.

To meet the financing needs of its customers, the Company issues financial instruments which represent conditional obligations that are not recognized, wholly or in part, in the statements of financial condition. These financial instruments include commitments to extend credit and standby letters of credit. Such instruments expose the Company to varying degrees of credit and interest rate risk in much the same way as funded loans. The same credit policies are used in these commitments as for on-balance sheet instruments. At both March 31, 2025 and December 31, 2024, the Company's allowance for credit losses on unfunded commitments totaled $2.7 million.

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 undisbursed construction loans as of the periods indicated.


	Contract Amount
(dollars in thousands)	March 31, 2025		December 31, 2024
Standby letters of credit	$	5,957	$	6,502
Available portion of lines of credit	471,304		488,930
Undisbursed portion of loans in process	84,207		76,424
Commitments to originate loans	152,370		161,482

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. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments are expected to be drawn upon, the total commitment amounts generally represent future cash requirements.

Unfunded commitments under commercial lines of credit, revolving credit lines and overdraft protection agreements are commitments for possible future extensions of credit to existing customers. 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.

The Company is subject to certain claims and litigation arising in the ordinary course of business. 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 condition or results of operations of the Company.

RESULTS OF OPERATIONS

Net income for the first quarter of 2025 was $11.0 million, up $1.8 million compared to the first quarter of 2024. Diluted EPS for the first quarter of 2025 was $1.37, up $0.23 compared to the first quarter of 2024.

During the three months ended March 31, 2025, the Company provisioned $394,000 to the allowance for loan losses primarily due to loan growth. During the three months ended March 31, 2024, the Company provisioned $141,000 to the allowance for loan losses primarily due to loan growth.

Net Interest Income

Net interest income is the difference between the interest income earned on interest-earning assets, such as loans and investment securities, and the interest expense paid on interest-bearing liabilities, such as deposits and borrowings. The Company’s net interest income is largely determined by our net interest spread, which is the difference between the average yield earned on interest-earning assets and the average rate paid on interest-bearing liabilities, and the relative amounts of interest-earning assets and interest-bearing liabilities. The Company’s tax-equivalent net interest spread was 3.10% and 2.81% for the quarters ended March 31, 2025 and 2024, respectively.

Net interest income totaled $31.7 million for the first quarter of 2025, up $2.8 million, or 9.9%, compared to the first quarter of 2024.

The Company’s tax-equivalent net interest margin, which is net interest income as a percentage of average interest-earning assets, was 3.91% and 3.64% for the quarters ended March 31, 2025 and 2024, respectively. For the same periods, the average loan yield was 6.43% and 6.18%, respectively.

Acquired loan discount accretion included in interest income totaled $356,000 and $525,000 for the quarters ended March 31, 2025 and 2024, respectively.

The following table sets forth, for the periods indicated, information regarding (i) the total dollar amount of interest income of the Company from interest-earning assets and the resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rate; (iii) net interest income; (iv) net interest spread; and (v) net interest margin. Information is based on average monthly balances during the indicated periods. Taxable equivalent yields are calculated using a marginal tax rate of 21%.


	Three Months Ended March 31,
	2025						2024
(dollars in thousands)	Average Balance		Interest		Average Yield/Rate		Average Balance		Interest		Average Yield/Rate
Interest-earning assets:
Loans receivable (1)	$	2,745,212	$	44,032	6.43	%	$	2,602,941	$	40,567	6.18	%
Investment securities
Taxable	423,412		2,592		2.45		456,246		2,715		2.38
Tax-exempt (TE)	16,144		72		2.26		16,332		73		2.26
Total investment securities	439,556		2,664		2.44		472,578		2,788		2.38
Other interest-earning assets	55,851		505		3.67		57,103		771		5.43
Total interest-earning assets (TE)	3,240,619		$	47,201	5.84		3,132,622		$	44,126	5.60
Noninterest-earning assets	208,853						201,261
Total assets	$	3,449,472					$	3,333,883
Interest-bearing liabilities:
Deposits:
Savings, checking and money market	$	1,306,602	$	5,401	1.68	%	$	1,269,293	$	4,800	1.52	%
Certificates of deposit	732,079		7,221		4.00		668,353		7,332		4.41
Total interest-bearing deposits	2,038,681		12,622		2.51		1,937,646		12,132		2.52
Other borrowings	5,539		53		3.89		125,979		1,486		4.74
Subordinated debt	54,485		845		6.20		54,268		845		6.22
Short-term FHLB advances	149,043		1,655		4.44		31,831		436		5.42
Long term FHLB advances	31,615		277		3.51		39,873		326		3.27
Total interest-bearing liabilities	2,279,363		$	15,452	2.74		2,189,597		$	15,225	2.79
Noninterest-bearing liabilities	766,605						773,525
Total liabilities	3,045,968						2,963,122
Shareholders’ equity	403,504						370,761
Total liabilities and shareholders' equity	$	3,449,472					$	3,333,883
Net interest-earning assets	$	961,256					$	943,025
Net interest spread (TE)			$	31,749	3.10	%			$	28,901	2.81	%
Net interest margin (TE)					3.91	%					3.64	%

(1) Nonperforming loans are included in the respective average loan balances, net of deferred fees, discounts and loans in process.

The following table displays the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. 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).


	Three Months Ended March 31,
	2025 Compared to 2024
	Change Attributable To
(dollars in thousands)	Rate		Volume		Increase/ (Decrease)
Interest income:
Loans receivable	$	1,398	$	2,067	$	3,465
Investment securities	75		(199)		(124)
Other interest-earning assets	(249)		(17)		(266)
Total interest income	1,224		1,851		3,075
Interest expense:
Savings, checking and money market accounts	319		282		601
Certificates of deposit	(741)		630		(111)
Other borrowings	(145)		(1,288)		(1,433)
Subordinated debt	(3)		3		—
FHLB advances	(203)		1,373		1,170
Total interest expense	(773)		1,000		227
Increase in net interest income	$	1,997	$	851	$	2,848

Noninterest Income

Noninterest income for the first quarter of 2025 totaled $4.0 million, up $460,000, or 13.0%, from $3.5 million earned for the same period in 2024. Noninterest income increased over the comparable periods primarily due to increases in gain on the sale of loans (up $290,000 primarily due to gain on sale of SBA loans), other income (up $97,000), and service fees and charges (up $55,000).

Noninterest Expense

Noninterest expense for the first quarter of 2025 totaled $21.6 million, up $711,000, or 3.4%, from the first quarter of 2024. Noninterest expense increased over the comparable quarters primarily due to increases in compensation and benefits (up $482,000, primarily due to increases in salaries), foreclosed assets, net (up $162,000), data processing and communication (up $128,000), and occupancy (up $107,000), which were partially offset by decreases in professional services (down $70,000) and marketing and advertising (down $37,000).

Income Taxes

Income tax expense for the three months ended March 31, 2025 totaled $2.8 million compared to $2.2 million for the three months ended March 31, 2024. Income tax expense increased over the prior comparable quarter primarily due to increased taxable earnings. The Company's effective tax rates for the first quarters of 2025 and 2024 were 20.5% and 19.6%, respectively.

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.

We follow financial accounting and reporting policies that are in accordance with accounting principles generally accepted in the United States. Our accounting policies are discussed in detail in Note 1 - Basis of Presentation in the accompanying notes to the consolidated financial statements included elsewhere in this report and in our 2024 Annual Report on Form 10-K. Not all

significant accounting policies require management to make difficult, subjective or complex judgments. However, management believes the policy noted below meets the SEC’s definition of a critical accounting policy.

Allowance for Credit Losses

Management considers the policies related to the allowance for credit losses as the most critical to the financial statement presentation. The total allowance for credit losses includes activity related to allowances calculated in accordance with Accounting Standards Codification 326, Credit Losses. The allowance for credit losses is established through a provision for credit losses charged to current earnings. 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. For purposes of determining the allowance for credit losses, the loan portfolio is segregated by product types in order to recognize differing risk profiles among categories. Loans that do not share risk characteristics are evaluated on an individual basis and are not included in the collective evaluation. Management estimates the allowance balance using relevant available information from internal and external sources relating to past events, current conditions and reasonable and supportable forecasts. Adjustments to historical loss information are made to incorporate our reasonable and supportable forecast of future losses at the portfolio segment level, as well as any necessary qualitative adjustments, including, but not limited to, changes in current and expected future economic conditions, changes in industry experience and industry loan concentrations, changes in the volume and severity of nonperforming assets, changes in lending policies and personnel and changes in the competitive and regulatory environment of the banking industry. Loans that do not share similar risk characteristics are individually evaluated and are excluded from the pooled loan analysis.


Item 3.			Quantitative and Qualitative Disclosures About Market Risk.

Quantitative and qualitative disclosures about market risk are presented in the Company’s Annual Report on Form 10-K filed with the SEC for the year ended December 31, 2024, under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Asset/Liability Management and Market Risk”. Additional information at March 31, 2025 is included herein under Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Asset/Liability Management”.


Item 4.			Controls and Procedures.

Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations and are operating in an effective manner.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15(d)-15(f) under the Securities Exchange Act of 1934) occurred during the first quarter of 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION


Item 1.			Legal Proceedings .

Not applicable.


Item 1A.			Risk Factors .

There have been no material changes from the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission.


Item 2.			Unregistered Sales of Equity Securities and the Use of Proceeds .

(a) Not applicable.

(b) Not applicable.

(c) The Company’s purchases of its common stock made during the quarter ended March 31, 2025 consisted of stock repurchases under the Company’s approved plans and are set forth in the following table.


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 Plan or Programs (1)
January 1 – January 31, 2025	—	$	—	—	311,812
February 1 – February 28, 2025	—	—		—	311,812
March 1 – March 31, 2025	173,497	44.72		173,497	138,315
Total	173,497	$	44.72	173,497	138,315

(1) On October 18, 2023, the Company announced the approval of a new repurchase program (the “2023 Repurchase Plan”). Under the 2023 Repurchase Plan, the Company may purchase up to 405,000 shares, or approximately 5% of the Company’s outstanding common stock. On April 21, 2025, the Company announced the approval of a new share repurchase plan (the “2025 Repurchase Plan”). Under the 2025 Repurchase Plan, the Company may purchase up to an additional 400,000 shares, or approximately 5% of the Company’s outstanding common stock. Share repurchases under the 2025 Repurchase Plan may commence upon the completion of the Company’s 2023 Repurchase Plan.


Item 3.			Defaults Upon Senior Securities .

(a) Not applicable.

(b) Not applicable.


Item 4.			Mine Safety Disclosures .

Not applicable.


Item 5.			Other Information .

(a) Not applicable.

(b) Not applicable.

(c) During the fiscal quarter ended March 31, 2025, none of our directors or executive officers adopted , terminated or modified a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement.


Item 6.			Exhibits and Financial Statement Schedules .

No.

Description

Location

4.1

Indenture, dated June 30, 2022, by and between Home Bancorp, Inc. and UMB Bank, National Association, as trustee for the 5.75% Fixed-to-Floating Rate Subordinated Notes Due 2032.

(incorporated by reference from the like-numbered exhibit included in Home Bancorp’s Current Report on Form 8-K, dated as of June 30, 2022 and filed July 1, 2022 (SEC File No. 001-34190))

31.1

Rule 13(a)-14(a) Certification of the Chief Executive Officer

Filed herewith

31.2

Rule 13(a)-14(a) Certification of the Chief Financial Officer

Filed herewith

32. 1

Section 1350 Certification

Filed herewith

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definitions Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

HOME BANCORP, INC.

May 2, 2025

By:

/s/ John W. Bordelon

John W. Bordelon

Chairman of the Board, President and Chief Executive Officer

May 2, 2025

By:

/s/ David T. Kirkley

David T. Kirkley

Senior Executive Vice President and Chief Financial Officer

May 2, 2025

By:

/s/ Mary H. Hopkins

Mary H. Hopkins

Home Bank, N. A. Senior Vice President and Director of Financial Management

TABLE OF CONTENTS

Item 2. Management S Discussion and Analysis Of Financial Condition and Results Of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. Controls and Procedures Part II. Other Information Item 1. Legal Proceedings Item 1A. Risk Factors Item 2. Unregistered Sales Of Equity Securities and The Use Of Proceeds Item 3. Defaults Upon Senior Securities Item 4. Mine Safety Disclosures Item 5. Other Information Item 6. Exhibits and Financial Statement Schedules

Exhibits

31.1 Rule 13(a)-14(a) Certification of the Chief Executive Officer Filed herewith 31.2 Rule 13(a)-14(a) Certification of the Chief Financial Officer Filed herewith 32.1 Section1350 Certification Filed herewith

HBCP 10-Q Quarter ended March 31, 2025

Exhibits