Company: HBCP
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001436425-25-000012
Chunk: 160

Company: HOME BANCORP, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 7
Chunk 160
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 term primarily by running net interest income simulations.

Our interest rate sensitivity is also monitored by management through the use of models which generate 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 December 31, 2024.

Shift in Interest Rates(in bps)% Change in ProjectedNet Interest Income+2000.4+1000.3-100(1.0)-200(2.3)

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 interest-earning assets and maintain a desired mix of interest-earning assets and interest-bearing liabilities, the actual timing of asset and liability repricing, the magnitude of interest rate changes and corresponding movement in interest rate spreads and the level of success of asset/liability management strategies.

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Market risk is the risk of loss from adverse changes in market prices and rates. Our market risk arises primarily from the interest rate risk, which is inherent in our lending and deposit taking activities. To that end, management actively monitors and manages interest rate risk exposure. In addition to market risk, our primary risk is credit risk on our loan portfolio. We attempt to manage credit risk through our loan underwriting and oversight policies.

The principal objective of our interest rate risk management function is to evaluate the interest rate risk embedded in certain balance sheet accounts, determine the level of risk appropriate given our business strategy, operating environment, capital and liquidity requirements, performance objectives and interest rate environment and manage the risk consistent with approved guidelines. We seek to manage our exposure to risks from changes in interest rates while at the same time trying to improve our net interest spread. We monitor interest rate risk as such risk relates to our operating strategies. ALCO is responsible for reviewing our asset/liability and investment policies and interest rate risk position. ALCO meets at least quarterly. The extent of the movement of interest rates is an uncertainty that could have a negative impact on future earnings.

We primarily have utilized the following strategies in our efforts to manage interest rate risk:

•we have increased our originations of shorter term loans, particularly commercial real estate and commercial and industrial loans;

•we generally sell our conforming long-term (30-year) fixed-rate one- to four--family residential mortgage loans into the secondary market; and

•we have invested in securities, consisting primarily of mortgage-backed securities and collateral mortgage