HOME BANCORP, INC. (HBCP) stock intrinsic value fair value estimate & owner earnings analysis

Home Bancorp is the holding company for Home Bank, a community bank founded in 1908 that gathers deposits and makes commercial real estate, commercial, residential and consumer loans mainly in south Louisiana, greater Houston and parts of Mississippi. Earnings come from the gap between interest earned on loans and securities and interest paid on deposits, plus roughly $15 million a year of fees and mortgage income. It has grown by acquisition and organically; the last large deal (Friends Bank, late 2020) is now fully in the numbers. How we measured earnings. We start from cash generated by operations, remove swings in receivables, payables and mortgages held for sale (which can move cash by $5-10 million in a year without changing what the bank earns), subtract stock-based pay as a real cost, and subtract the part of building and equipment spending needed just to stand still. On that basis, owner earnings per diluted share were $5.25 (2021), $5.54 (2022), $5.90 (2023), $5.04 (2024) and $5.10 (2025). We use the median of these five years, $5.25, because 2021 is the first full year after the Friends Bank acquisition. 2025 reported net income rose 26% to $46.1 million, but owner earnings were flat because premises spending jumped to $10.2 million from $4.1 million; we treated almost all of it as maintenance, which is conservative. Six-month 2026 net income of $23.0 million (versus $22.3 million) and stronger operating cash flow are consistent with the anchor holding, but do not move it. Growth. Trailing owner-earnings growth in 2025 was about 1%. We credit 1.2% in year 1 (at, not above, the trailing rate) and 1.5% a year on average over the decade, well below what the bank's retained earnings could fund; the bank keeps roughly 80% of profits after a $1.14 dividend and has been repurchasing shares. We give no credit for new markets, share gains, wider margins or acquisitions. After year 10 we hold earnings flat rather than growing them, on the strength of a 117-year-old deposit franchise; nothing further is assumed. Base case: $95 per share. Owner earnings of about $5.25 growing about 1.5% a year, then flat. Bear case: $65 per share. Named risks are a loan book concentrated in commercial real estate and in Gulf Coast markets, and thin capital cushions typical of a leveraged bank; 2020 showed earnings falling by about half in a stress year. We assume owner earnings of $3.20 for three years, then a permanent step down to $4.20 (20% below normal) with no recovery or growth. Bull case: $124 per share. The bank returns to its 2023 level of about $5.90 and compounds at 3% a year for ten years, funded by retained earnings, then holds flat. This is the bank's own demonstrated best year, not a market recovery. What would make this wrong: a credit cycle in Louisiana or Houston commercial property worse than 2020, sustained deposit-cost pressure, or the higher premises spending proving to be a new permanent run rate. Note that the 2025 build-out spending could not be separated into growth versus maintenance from the filings, so all of it (net of a small formula-based growth allowance) is charged against earnings. The margin-of-safety price of $60 sits below the bear case, reflecting the leverage inherent in banking.