HYNE

Hoyne Bancorp, Inc. (HYNE) - Q2 2026 10-Q Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended June 30, 2026. Hoyne Bancorp, Inc. serves as the holding company for Hoyne Savings Bank, an Illinois-chartered institution. The company completed its mutual-to-stock conversion on December 3, 2025, and began trading on the NASDAQ Capital Market under the symbol "HYNE" on December 4, 2025. The company is classified as a non-accelerated filer, a smaller reporting company, and an emerging growth company.

Key Financial Metrics

Material Changes vs. Prior Period

• Profitability: For the three months ended June 30, 2026, net income decreased 18.6% to $96,000 from $118,000 in the prior year period. For the six months ended June 30, 2026, the net loss narrowed to $22,000 compared to a $47,000 loss in the prior year period.
• Interest Income: Increased $414,000 (8.3%) for the quarter and $890,000 (9.1%) year-to-date, driven primarily by a $626,000 increase in loan interest income due to commercial loan portfolio growth.
• Interest Expense: Decreased significantly, dropping $650,000 (40.1%) for the quarter and $1.3 million (38.3%) year-to-date, attributed to lower deposit balances and reduced interest rates paid.
• Noninterest Expense: Increased $1.3 million (39.5%) for the quarter and $2.4 million (35.8%) year-to-date, primarily due to higher compensation costs (raises and bonuses) and increased audit, consulting, and legal fees.
• Balance Sheet: Total assets decreased $9.4 million (1.9%) from year-end 2025. This was driven by a $22.2 million decrease in cash and cash equivalents and a $5.8 million decrease in available-for-sale securities, partially offset by a $14.3 million increase in net loans.

Outlook, Risks, and Management Commentary

• Capital Position: The Bank is considered "well capitalized" under the Community Bank Leverage Ratio Framework (CBLRF). The Tier 1 leverage ratio was 27.3% as of June 30, 2026, significantly exceeding the 9.0% requirement.
• Liquidity: Management maintains adequate liquidity. As of June 30, 2026, the Bank had no outstanding FHLB advances but had borrowing capacity of approximately $57.9 million from the FHLB of Chicago and $23.0 million from Bankers Bank.
• Asset Quality: The allowance for credit losses increased to $2.95 million. There were no charge-offs during the six months ended June 30, 2026. Non-accrual loans totaled $1.46 million, primarily in the one-to-four residential category.
• Interest Rate Risk: Net Portfolio Value (NPV) analysis indicates that a 300 basis point increase in interest rates would decrease NPV by 12.6% and Net Interest Income by 5.2% over the next 12 months.
• Forward-Looking Risks: Risks include general economic conditions, changes in interest rates affecting margins, loan delinquencies, competition, and the ability to access cost-effective funding.

Key Investor Verification Points

• Expense Growth: Verify the sustainability of the 39.5% increase in noninterest expenses, specifically regarding compensation and professional fees, and its impact on future margins.
• Deposit Trends: Monitor the $9.0 million decline in total deposits and the shift from certificates of deposit to NOW and money market accounts to assess funding stability.
• Loan Portfolio Composition: Review the shift in loan mix, noting the $28.6 million net growth in commercial loans offset by a $13.8 million decrease in residential loans.
• Capital Ratios: Confirm continued compliance with the CBLRF leverage ratio requirements, especially given the proposed regulatory reduction of the minimum threshold to 8% effective July 1, 2026.
• Unrealized Losses: Assess the impact of unrealized losses on available-for-sale securities ($15.8 million gross unrealized losses) on Accumulated Other Comprehensive Loss (AOCL).