Company: HBCP
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001436425-25-000012
Chunk: 93

Company: HOME BANCORP, INC.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 1A
Chunk 93
---
Item 1A.    Risk Factors.

In analyzing whether to make or to continue an investment in our securities, investors should consider, among other factors, the following risk factors.

Risks Related to Our Lending Activities

There are increased risks involved with commercial real estate, including multi-family residential, commercial and industrial and construction and land lending activities.

Our lending activities include loans secured by commercial real estate and commercial and industrial loans. Our multi-family residential loans, commercial real estate loans and commercial and industrial loans, increased by an aggregate of 104.5%, 54.4% and 0.2% respectively, from December 31, 2020 through December 31, 2024. Excluding Paycheck Protection Program ("PPP") loans, our commercial and industrial loans increased by an aggregate of 111.5% over the same time period. Generally, multi-family residential, commercial and industrial and commercial real estate lending involve a higher degree of risk than one- to four-family residential lending due to a variety of factors. Due to the larger loan balances typically involved in these loans, an adverse development with respect to one loan or one borrower relationship can expose us to greater risk of loss compared to an adverse development with respect to a one- to four-family residential mortgage loan. As of December 31, 2024, the largest outstanding balances of our commercial real estate, commercial and industrial, and multi-family residential loans  were $20.1 million, $17.8 million, and $14.3 million, respectively. If a large loan were to become non-performing, as we have experienced in the past, it can have a significant impact on our results of operations. Because we intend to continue our growth in  multi-family residential, commercial and industrial and commercial real estate loans, our credit risk exposure may increase and we may need to make additional provisions to our allowance for loan losses, which could adversely affect our future results of operations.

As of December 31, 2024, commercial real estate mortgage loans comprised approximately 42.6% of our loan portfolio. Commercial real estate mortgage loans generally involve a greater degree of credit risk than residential real estate mortgage loans because they typically have larger balances and are more affected by adverse conditions in the economy. Because payments on loans secured by commercial real estate often depend upon the successful operation and management of the properties and the businesses which operate from within them, repayment of such loans may be affected by factors outside the borrower’s control, such as adverse conditions in the real estate market