HYNE

Hoyne Bancorp, Inc. 10-Q Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended September 30, 2025. Hoyne Bancorp, Inc. was formed to serve as the stock holding company for Hoyne Savings Bank in connection with a conversion from a mutual holding company (Hoyne Savings, MHC) to a stock form of organization. As of the reporting date, the reorganization had not been completed; consequently, Hoyne Bancorp, Inc. had no assets or liabilities. The financial statements presented relate solely to the consolidated results of Hoyne Savings, MHC, Hoyne Financial Corporation, and Hoyne Savings Bank.

Key Financial Metrics

Material Changes vs. Prior Period

• Profitability Turnaround: The Company reported a net income of $70,063 for Q3 2025, a significant improvement from a net loss of $397,298 in Q3 2024. For the nine months ended September 30, 2025, net income was $31,086 compared to a net loss of $1.5 million in the prior year period.
• Interest Income Growth: Total interest income increased by $815,000 (19.5%) in Q3 2025 compared to Q3 2024, driven primarily by a $1.1 million increase in loan interest income due to commercial loan portfolio growth.
• Interest Expense Reduction: Interest expense on deposits decreased by $222,000 (12.3%) in Q3 2025, attributed to lower interest rates on certain accounts despite relatively stable deposit balances.
• Asset Composition: Total assets increased by $5.3 million (1.2%) year-over-year. This was driven by an $11.6 million increase in cash and cash equivalents and an $8.5 million increase in net loans, offset by decreases in investment securities.
• Real Estate Owned (REO): REO assets increased by $729,000 (525.2%) to $868,000, primarily due to the transfer of a closed branch location to REO status.

Guidance, Outlook, and Risks

• Conversion Status: The conversion to a stock holding company structure is pending. The SEC declared the Registration Statement effective on September 30, 2025. The stock is priced at $10 per share. Deferred conversion costs totaled approximately $1.7 million as of November 13, 2025.
• Capital Position: The Bank is "well capitalized" under the Community Bank Leverage Ratio Framework (CBLRF). The Tier 1 leverage ratio was 20.2% as of September 30, 2025, significantly exceeding the 9.0% requirement.
• Liquidity: The Bank maintains strong liquidity with $26.9 million in cash and equivalents and borrowing capacity of approximately $67.6 million from the Federal Home Loan Bank of Chicago.
• Interest Rate Risk: Management utilizes Net Portfolio Value (NPV) analysis. A 300 basis point increase in interest rates is projected to decrease NPV by 13.8% and Net Interest Income by 13.3% over the next 12 months.
• Risk Factors: Key risks include general economic conditions, loan delinquencies, funding costs, real estate market fluctuations, and the successful execution of the corporate conversion.

Investor Verification Checklist

• Conversion Completion: Verify the final closing date of the mutual-to-stock conversion and the issuance of shares to the public.
• Expense Trajectory: Monitor noninterest expenses, which are expected to increase post-conversion due to new stock benefit plans and operational expansion.
• Commercial Loan Quality: Review the performance of the growing commercial loan portfolio, which drove recent interest income but also increased the provision for credit losses.
• Deposit Retention: Assess the renewal rate of certificates of deposit, $152.5 million of which are scheduled to mature within one year.
• REO Disposition: Track the sale of the closed branch location currently classified as Real Estate Owned.